...........XAU Implied Volatility Is Collapsing
I expected some weakness today, but, the collapse of XAU Implied Volatility the previous two sessions (from 39.400 on Thursday to 36.355 yesterday), while the XAU has actually fallen the past two sessions (-2.08% on Friday and +1.24% yesterday = -0.84%), is a very sharp rise in complacency that partly accounts for today's early weakness, and, is making me cautious, as is an overbought condition. NEM's cycle low yesterday at 42.36 held today, since today's cycle low so far is 42.60, and, it looks like 42.60 will hold today. NEM filled today's upside gap at 43.25.
There's just too much risk to trade long right now (in general), with HUI/NEM/XAU overbought (William's %R near 0, Stochastics overbought), and, with the collapse of XAU Implied Volatility the previous two sessions. Monthly cycle and short term cycle traders should generally be looking to sell right now. There are a few gold/silver stocks that one could trade long right now on a short term cycle basis, but, it probably makes sense to wait for HUI/NEM/XAU to put in monthly cycle lows in the next few weeks. A monthly cycle high for HUI/NEM/XAU will probably occur this week, and, might occur today, for the monthly upcycle since 10-4-06.
The NEM Lead Indicator was a bullish +0.62% versus the XAU yesterday, but, turned bearish late in the session, since it had been +1.50% versus the XAU earlier in the session. Reliable lead indicator NEM's Wave 5 short term upcycle (for the monthly upcycle since 10-4-06) began last Wednesday at 42.09. HUI/XAU's Wave 5 short term upcycle started shortly after yesterday's open. Keep in mind that the Wave 5 short term upcycle may peak today or tomorrow.
The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see third chart at http://www.joefrocks.com/GoldStockCharts.html). 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
There's just too much risk to trade long right now (in general), with HUI/NEM/XAU overbought (William's %R near 0, Stochastics overbought), and, with the collapse of XAU Implied Volatility the previous two sessions. Monthly cycle and short term cycle traders should generally be looking to sell right now. There are a few gold/silver stocks that one could trade long right now on a short term cycle basis, but, it probably makes sense to wait for HUI/NEM/XAU to put in monthly cycle lows in the next few weeks. A monthly cycle high for HUI/NEM/XAU will probably occur this week, and, might occur today, for the monthly upcycle since 10-4-06.
The NEM Lead Indicator was a bullish +0.62% versus the XAU yesterday, but, turned bearish late in the session, since it had been +1.50% versus the XAU earlier in the session. Reliable lead indicator NEM's Wave 5 short term upcycle (for the monthly upcycle since 10-4-06) began last Wednesday at 42.09. HUI/XAU's Wave 5 short term upcycle started shortly after yesterday's open. Keep in mind that the Wave 5 short term upcycle may peak today or tomorrow.
The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see third chart at http://www.joefrocks.com/GoldStockCharts.html). 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
9:11 AM
