HUI And The XAU Modestly Exceeded Their Cycle Highs On 11-9-06
HUI and the XAU modestly exceeded their cycle highs on 11-9-06 that appeared to be monthly cycle highs. In order for "Trade the Cycles" to turn bullish HUI/XAU would have to break their Wave 2 Cyclical Bear Market declining peaks downtrend lines since 5-11-06, AND, they would have to follow through by 5%+ in order to flash a major buy signal.
Given an extremely bearish one year NEM Lead Indicator (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem) and a very bearish short term NEM Lead Indicator (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem) as well as the very bearish COT (Commitments Of Traders) data in recent weeks (see three paragraphs below), this big spike/short term upcycle since early last Friday 11-17 (see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==) is probably important spiking/peaking action. A vicious 3-6 week 30-40% decline is likely that will probably see HUI/XAU fall to their Secular Bull Market/very long term upcycle trendlines in place since November (HUI)/October (XAU) 2000 (conclude their Wave 2 Cyclical Bear Market that began 5-11-06).
The NEM Lead Indicator was a bearish -0.76% versus the XAU today/on 11-24, was a very bearish -1.03% on 11-22, and, was a very bearish -1.30% on 11-21. So, the very large spike move since early Friday 11-17 was probably the last gasp of the monthly upcycle since 10-4-06. It's peaking in dramatic rollover/flattening out mode.
HUI's very flat action that occurred for a few hours today after the large spike at the open (see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==) is a sign that an important cycle high may have occurred today.
The COT (Commitments Of Traders) data (five day period ending 11-14) again jives with the vicious decline scenario, since the non contrarian gold Commercial Traders traded significantly net short, while the contrarian/clueless gold Speculators traded significantly net long, see http://www.cftc.gov/dea/options/deacmxsof.htm. The non contrarian gold Commercial Traders aggressively shorted gold again this week, adding 18,336 short futures and options contracts after adding 25,249 short futures and options contracts the week before, while also correctly anticipating that there would be some significant strength, because they added 8,943 long futures and options contracts.
HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be the start of Wave A down of the likely 3-6 weekish vicious decline for HUI/XAU.
It's very unlikely that they're in a monthly upcycle now because HUI/XAU have rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, and, appear to have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), HUI/XAU may experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 2 and 4 at http://www.joefrocks.com/GoldStockCharts.html.
HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 2 and 4 at http://www.joefrocks.com/GoldStockCharts.html. NEM's Wave 2 Cyclical Bear Market that began on 1-31-06 ended on 10-4-06 at 39.84, so, reliable lead indicator NEM is probably in a 5 yearish Wave 3 Cyclical Bull Market since 10-4-06, see chart 3 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Given an extremely bearish one year NEM Lead Indicator (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem) and a very bearish short term NEM Lead Indicator (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem) as well as the very bearish COT (Commitments Of Traders) data in recent weeks (see three paragraphs below), this big spike/short term upcycle since early last Friday 11-17 (see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==) is probably important spiking/peaking action. A vicious 3-6 week 30-40% decline is likely that will probably see HUI/XAU fall to their Secular Bull Market/very long term upcycle trendlines in place since November (HUI)/October (XAU) 2000 (conclude their Wave 2 Cyclical Bear Market that began 5-11-06).
The NEM Lead Indicator was a bearish -0.76% versus the XAU today/on 11-24, was a very bearish -1.03% on 11-22, and, was a very bearish -1.30% on 11-21. So, the very large spike move since early Friday 11-17 was probably the last gasp of the monthly upcycle since 10-4-06. It's peaking in dramatic rollover/flattening out mode.
HUI's very flat action that occurred for a few hours today after the large spike at the open (see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==) is a sign that an important cycle high may have occurred today.
The COT (Commitments Of Traders) data (five day period ending 11-14) again jives with the vicious decline scenario, since the non contrarian gold Commercial Traders traded significantly net short, while the contrarian/clueless gold Speculators traded significantly net long, see http://www.cftc.gov/dea/options/deacmxsof.htm. The non contrarian gold Commercial Traders aggressively shorted gold again this week, adding 18,336 short futures and options contracts after adding 25,249 short futures and options contracts the week before, while also correctly anticipating that there would be some significant strength, because they added 8,943 long futures and options contracts.
HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be the start of Wave A down of the likely 3-6 weekish vicious decline for HUI/XAU.
It's very unlikely that they're in a monthly upcycle now because HUI/XAU have rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, and, appear to have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), HUI/XAU may experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 2 and 4 at http://www.joefrocks.com/GoldStockCharts.html.
HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 2 and 4 at http://www.joefrocks.com/GoldStockCharts.html. NEM's Wave 2 Cyclical Bear Market that began on 1-31-06 ended on 10-4-06 at 39.84, so, reliable lead indicator NEM is probably in a 5 yearish Wave 3 Cyclical Bull Market since 10-4-06, see chart 3 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, XAU
posted by Joe Ferrazzano at
10:36 AM
