...............HUI/NEM/XAU Have Fallen Off A Cliff
HUI has quickly fallen off a cliff (fell about 5% already) after hitting a monthly cycle high at 341+ on 11-9, 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==. This fits well with the vicious decline scenario, but, it's too early to tell.
If reliable lead indicator NEM fails to fill today's upside gap at 45.77 (created at the open) today or tomorrow that will be another sign pointing to the vicious decline scenario (breakaway gap to the downside). The good news is if the vicious decline scenario occurs it should be the end of HUI/XAU's Wave 2 Cyclical Bear Market (began 5-11-06). NEM's ended on 10-4-06 at 39.84, so, reliable lead indicator NEM should be in a five yearish Wave 3 Cyclical Bull Market.
Reliable lead indicator NEM has a bearish triple top formation, since NEM hit a monthly cycle high at 46.89 on 11-1 and Thursday's cycle high at 46.86 was a bearish Wave B triple top (see chart 1 at http://www.joefrocks.com/GoldStockCharts.html), with the third cycle high at 46.80 on 11-3. As discussed previously, since Thursday's Wave B cycle high at 46.86 was so close to the monthly cycle high, Wave C of NEM's monthly downcycle is probably going to basically be like a complete monthly downcycle, so, NEM will probably have a relatively well defined Wave B up in an Elliot Wave ABC down up down pattern in it's Wave C. It's almost as if NEM's monthly downcycle began just before Thursday's close. HUI/XAU probably hit monthly cycle highs on 11-9. The big 4%+ spikes are typical of important cycle highs.
So, the fact that reliable lead indicator NEM peaked more than a week before HUI/XAU (on 11-1 versus 11-9), and, is probably going to have a big long Wave C short term downcycle (instead of the usual 2-4 session Wave C) that will be similar to but probably more severe than a typical entire two weekish monthly downcycle, is a major negative for HUI/XAU, because, it means that their Wave A short term downcycle will probably be a severe long two weekish one versus the usual 2-4 session Wave A.
Given that HUI/XAU rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines in the latest monthly upcycle, and, appear to be about to enter Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), HUI/XAU may be about to 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.
The very bearish one year NEM Lead Indicator suggests that a vicious decline is likely in the near future, and, may have begun on 11-9-06, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem.
The other scenario is the 2 weekish monthly downcycle scenario where HUI/XAU drop 8-15%. If the vicious decline scenario occurs short term there should soon be some big down days of 3-5%+. It should make itself obvious.
The NEM Lead Indicator was a slightly bullish +0.09% versus the XAU on 11-10, was a bearish -0.47% on 11-9, was -0.15% on 11-8, and, was a bearish -0.61% on 11-7.
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
If reliable lead indicator NEM fails to fill today's upside gap at 45.77 (created at the open) today or tomorrow that will be another sign pointing to the vicious decline scenario (breakaway gap to the downside). The good news is if the vicious decline scenario occurs it should be the end of HUI/XAU's Wave 2 Cyclical Bear Market (began 5-11-06). NEM's ended on 10-4-06 at 39.84, so, reliable lead indicator NEM should be in a five yearish Wave 3 Cyclical Bull Market.
Reliable lead indicator NEM has a bearish triple top formation, since NEM hit a monthly cycle high at 46.89 on 11-1 and Thursday's cycle high at 46.86 was a bearish Wave B triple top (see chart 1 at http://www.joefrocks.com/GoldStockCharts.html), with the third cycle high at 46.80 on 11-3. As discussed previously, since Thursday's Wave B cycle high at 46.86 was so close to the monthly cycle high, Wave C of NEM's monthly downcycle is probably going to basically be like a complete monthly downcycle, so, NEM will probably have a relatively well defined Wave B up in an Elliot Wave ABC down up down pattern in it's Wave C. It's almost as if NEM's monthly downcycle began just before Thursday's close. HUI/XAU probably hit monthly cycle highs on 11-9. The big 4%+ spikes are typical of important cycle highs.
So, the fact that reliable lead indicator NEM peaked more than a week before HUI/XAU (on 11-1 versus 11-9), and, is probably going to have a big long Wave C short term downcycle (instead of the usual 2-4 session Wave C) that will be similar to but probably more severe than a typical entire two weekish monthly downcycle, is a major negative for HUI/XAU, because, it means that their Wave A short term downcycle will probably be a severe long two weekish one versus the usual 2-4 session Wave A.
Given that HUI/XAU rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines in the latest monthly upcycle, and, appear to be about to enter Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), HUI/XAU may be about to 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.
The very bearish one year NEM Lead Indicator suggests that a vicious decline is likely in the near future, and, may have begun on 11-9-06, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem.
The other scenario is the 2 weekish monthly downcycle scenario where HUI/XAU drop 8-15%. If the vicious decline scenario occurs short term there should soon be some big down days of 3-5%+. It should make itself obvious.
The NEM Lead Indicator was a slightly bullish +0.09% versus the XAU on 11-10, was a bearish -0.47% on 11-9, was -0.15% on 11-8, and, was a bearish -0.61% on 11-7.
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
posted by Joe Ferrazzano at
8:04 AM
