The NEM Lead Indicator Was A Modestly Bearish -0.42% Versus The XAU Today
The NEM Lead Indicator was a modestly bearish -0.42% versus the XAU today/11-14 (correction from -0.53%), was a modestly bearish -0.38% versus the XAU on 11-13, was a slightly bullish +0.09% 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.
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, when HUI/XAU hit monthly cycle highs for the monthly cycle that began on 10-4-06, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem.
HUI is in Wave C of it's Wave A short term downcycle since Thursday 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==), so, more potentially severe weakness is likely tomorrow.
Unfortunately a lot of ex gold/silver bugs will probably be created in the next 3-6 weeks, because HUI and the XAU will probably fall 30-40% and reach (the good news) 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 US Dollar is in an uptrend, having hit a Cyclical Bear Market cycle low a bit above 80 in late December 2004. The US Dollar is in a Cyclical Bull Market. It's pretty basic that gold runs counter to the US Dollar on a very long term cycle basis, and, gold's huge spike to $735ish in May of this year was obviously a very important cycle high (Wave 1 Cyclical Bull Market/five year cycle high).
Also, the fact that gold hasn't reached it's Secular Bull Market/very long term upcycle trendline (since April 2001), currently at $525ish, should have been a good reason for gold writers to be cautious, given a US Dollar Cyclical Bull Market. Primary cycle trendlines are basic technical analysis. One should ignore any analyst who doesn't at least discuss the primary Secular Bull Market/very long term upcycle trendline.
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 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 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.
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 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, when HUI/XAU hit monthly cycle highs for the monthly cycle that began on 10-4-06, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem.
HUI is in Wave C of it's Wave A short term downcycle since Thursday 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==), so, more potentially severe weakness is likely tomorrow.
Unfortunately a lot of ex gold/silver bugs will probably be created in the next 3-6 weeks, because HUI and the XAU will probably fall 30-40% and reach (the good news) 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 US Dollar is in an uptrend, having hit a Cyclical Bear Market cycle low a bit above 80 in late December 2004. The US Dollar is in a Cyclical Bull Market. It's pretty basic that gold runs counter to the US Dollar on a very long term cycle basis, and, gold's huge spike to $735ish in May of this year was obviously a very important cycle high (Wave 1 Cyclical Bull Market/five year cycle high).
Also, the fact that gold hasn't reached it's Secular Bull Market/very long term upcycle trendline (since April 2001), currently at $525ish, should have been a good reason for gold writers to be cautious, given a US Dollar Cyclical Bull Market. Primary cycle trendlines are basic technical analysis. One should ignore any analyst who doesn't at least discuss the primary Secular Bull Market/very long term upcycle trendline.
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 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 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.
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
1:32 PM
