..........Why HUI/XAU Probably Haven't Bottomed
HUI failed to take out it's June cycle low yesterday, while the XAU did so, with a cycle low at 117.44 versus 119.11 on June 13. In Wave C (began on 9-6-06 for HUI/XAU, the decline from 5-11-06 until 6-13-06 was Wave A OF Wave A of HUI/XAU's Cyclical Bear Market since 5-11-06) typically the cycle low will occur well below the cycle low that occurred in Wave A, so, it's unlikely that yesterday's cycle lows are important Wave A cycle lows for HUI/XAU's Wave 2 Cyclical Bear Market since 5-11-06.
My Wave A target range as most of you know is 100-110 for the XAU. Reliable lead indicator NEM's new Wave 2 Cyclical Bear Market (since 1-31-06) cycle low at 39.84 yesterday is likely to be the final Bear Market cycle low, or, if a lower cycle low occurs, it's likely to be only modestly below 39.84 because NEM hit it's Secular Bull Market/very long term upcycle trendline.
The XAU Put/Call Ratio fell to 0.66506 today from 0.68105 yesterday, which is a sharp rise in complacency that portends some weakness today. Also, the complacent/low fear level at 0.66506 is a bad sign, because it's way below the high fear level well above 1.00000.
The XAU Put/Call Ratio plunged yesterday to 0.68105 (October expiration) from 0.87094 on Tuesday, which is an unusually large (> 6%) rise in complacency that correctly portended some strength yesterday, BUT, the fact that the gold/silver stock market is still complacent is a BAD sign. Traders aggressively bought XAU October Call Options (total jumped to 32,337 versus 25,213 the day before, today the total jumped again to 34,726), apparently thinking that a major cycle low had occurred. The fact that traders are aggressively buying Call Options as opposed to Puts is a bad sign.
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 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 yesterday).
Reliable lead indicator NEM made a new Wave 2 Cyclical Bear Market (since 1-31-06) cycle low at 39.84 yesterday. 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 fifteen weeks and three days the NEM Lead Indicator is a very bearish -16.76% versus the XAU.
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
My Wave A target range as most of you know is 100-110 for the XAU. Reliable lead indicator NEM's new Wave 2 Cyclical Bear Market (since 1-31-06) cycle low at 39.84 yesterday is likely to be the final Bear Market cycle low, or, if a lower cycle low occurs, it's likely to be only modestly below 39.84 because NEM hit it's Secular Bull Market/very long term upcycle trendline.
The XAU Put/Call Ratio fell to 0.66506 today from 0.68105 yesterday, which is a sharp rise in complacency that portends some weakness today. Also, the complacent/low fear level at 0.66506 is a bad sign, because it's way below the high fear level well above 1.00000.
The XAU Put/Call Ratio plunged yesterday to 0.68105 (October expiration) from 0.87094 on Tuesday, which is an unusually large (> 6%) rise in complacency that correctly portended some strength yesterday, BUT, the fact that the gold/silver stock market is still complacent is a BAD sign. Traders aggressively bought XAU October Call Options (total jumped to 32,337 versus 25,213 the day before, today the total jumped again to 34,726), apparently thinking that a major cycle low had occurred. The fact that traders are aggressively buying Call Options as opposed to Puts is a bad sign.
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 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 yesterday).
Reliable lead indicator NEM made a new Wave 2 Cyclical Bear Market (since 1-31-06) cycle low at 39.84 yesterday. 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 fifteen weeks and three days the NEM Lead Indicator is a very bearish -16.76% versus the XAU.
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
7:11 AM
