............More Weakness Is Likely On Monday
The NEM Lead Indicator was a modestly bearish -0.28% versus the XAU today, which points to more weakness on Monday. HUI/XAU are probably in Wave A of Wave A of a likely vicious (30-40%) 3-6 weekish decline since monthly cycle highs occurred on 11-9-06, in which their Wave 2 Cyclical Bear Market since 5-11-06 should bottom. Please see yesterday's posts for all the details.
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.
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 have entered 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.
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
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.
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 have entered 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.
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
1:11 PM
