Tricky Day And The COT Data Points To Some Strength
After NEM's Very Short Term Cycle High at 42.14 early today, it did an Elliot Wave ABC down up down pattern that ended shortly before session's end, which caused me to sell the XAU Puts I bought earlier today at a modest profit. I ended up closing my XAU Puts position right at session's end (did a day trade) because of NEM's ABC down up down pattern (which points to early strength on Monday), the latest modestly bullish COT (Commitments Of Traders) data, and, today's NEM Lead Indicator at -0.14% vs the XAU was only slightly bearish.
The latest COT (Commitments Of Traders) data (see http://www.cftc.gov/dea/options/deacmxsof.htm) is modestly bullish, because the non contrarian gold Commercial Traders traded modestly net long and the contrarian Speculators traded modestly net short. Also, most of the gold Commercial Traders net long increase was short covering, they only added 836 long futures and options contracts and covered 3416 short futures and options contracts.
NEM's Very Short Term Cycle High cycle high at 42.14 was a Wave 5 cycle high for the Very Short Term Upcycle that began on Wednesday at 39.84, see http://finance.yahoo.com/q/ta?s=nem&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. The Very Short Term Upcycle rolled over/flattened out dramatically yesterday, which suggested that NEM was peaking. NEM and the XAU's large gaps to the downside that occurred on Tuesday were breakaway gaps (see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=), which meant they probably wouldn't get filled so soon after occurring, so, that was another sign that weakness was likely today.
NEM and the XAU have unfilled downside gaps from yesterday's open at 40.83 and 122.06 that will probably get filled next week.
The XAU's Secular Bull Market/very long term upcycle trendline is currently at 85-90ish (see second chart at http://www.joefrocks.com/GoldStockCharts.html), so, please keep that in mind. Therefore, the XAU is still 30-35 points above it's primary Secular Bull Market/very long term upcycle (since October 2000) trendline, which is about 25-30%!
The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 and reliable lead indicator NEM has been in a Wave 2 Cyclical Bear Market since 1-31-06 (may have ended at 39.84 on Wednesday). Reliable lead indicator NEM made a new Wave 2 Cyclical Bear Market (since 1-31-06) cycle low at 39.84 on Wednesday.
NEM's Secular Bull Market/very long term upcycle trendline is currently at 39.84ish (see first chart at http://www.joefrocks.com/GoldStockCharts.html). The past sixteen weeks the NEM Lead Indicator is a very bearish -16.80% versus the XAU. The NEM Lead Indicator was a slightly bearish -0.14% versus the XAU today.
A vicious multi week decline, similar to the one that occurred from 5-11-06 until 6-13-06 for HUI/NEM/XAU, began on 9-6 for HUI/XAU and on 9-5 for reliable lead indicator NEM. Wave C down/another brutal decline began on Thursday 9-28 for HUI/XAU, in which Wave A of their Cyclical Bear Market since 5-11-06 bottoms, probably in the 100-110 range for the XAU. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/
HUI NEM XAU
The latest COT (Commitments Of Traders) data (see http://www.cftc.gov/dea/options/deacmxsof.htm) is modestly bullish, because the non contrarian gold Commercial Traders traded modestly net long and the contrarian Speculators traded modestly net short. Also, most of the gold Commercial Traders net long increase was short covering, they only added 836 long futures and options contracts and covered 3416 short futures and options contracts.
NEM's Very Short Term Cycle High cycle high at 42.14 was a Wave 5 cycle high for the Very Short Term Upcycle that began on Wednesday at 39.84, see http://finance.yahoo.com/q/ta?s=nem&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. The Very Short Term Upcycle rolled over/flattened out dramatically yesterday, which suggested that NEM was peaking. NEM and the XAU's large gaps to the downside that occurred on Tuesday were breakaway gaps (see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=), which meant they probably wouldn't get filled so soon after occurring, so, that was another sign that weakness was likely today.
NEM and the XAU have unfilled downside gaps from yesterday's open at 40.83 and 122.06 that will probably get filled next week.
The XAU's Secular Bull Market/very long term upcycle trendline is currently at 85-90ish (see second chart at http://www.joefrocks.com/GoldStockCharts.html), so, please keep that in mind. Therefore, the XAU is still 30-35 points above it's primary Secular Bull Market/very long term upcycle (since October 2000) trendline, which is about 25-30%!
The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 and reliable lead indicator NEM has been in a Wave 2 Cyclical Bear Market since 1-31-06 (may have ended at 39.84 on Wednesday). Reliable lead indicator NEM made a new Wave 2 Cyclical Bear Market (since 1-31-06) cycle low at 39.84 on Wednesday.
NEM's Secular Bull Market/very long term upcycle trendline is currently at 39.84ish (see first chart at http://www.joefrocks.com/GoldStockCharts.html). The past sixteen weeks the NEM Lead Indicator is a very bearish -16.80% versus the XAU. The NEM Lead Indicator was a slightly bearish -0.14% versus the XAU today.
A vicious multi week decline, similar to the one that occurred from 5-11-06 until 6-13-06 for HUI/NEM/XAU, began on 9-6 for HUI/XAU and on 9-5 for reliable lead indicator NEM. Wave C down/another brutal decline began on Thursday 9-28 for HUI/XAU, in which Wave A of their Cyclical Bear Market since 5-11-06 bottoms, probably in the 100-110 range for the XAU. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/
HUI NEM XAU
posted by Joe Ferrazzano at
1:23 PM
