Reliable Lead Indicator NEM Probably Peaked Wednesday, While HUI/XAU May Hit A Monthly Cycle High Today
Reliable lead indicator NEM probably hit a monthly cycle high on Wednesday, while HUI/XAU may hit a monthly cycle high today, with help from the Fed's index fund trader (computerized program trading) punch spiking ($10.75 Billion one day Repo, http://www.newyorkfed.org/markets/omo/dmm/temp.cfm) the day before the election. This manipulation helps gold/silver stocks, because, many gold/silver stocks are in indexes (NEM, FCX are in the S & P 500), which you'll never hear from the manipulation theory gold writers.
Manipulation isn't worth discussing unless it's truly harming the precious metals market. Gold did 30-35%/year in it's five year Wave 1 Cyclical Bull Market (nearly tripled) and silver did 35-40%/year in it's 4.5 year Wave 1 Cyclical Bull Market (nearly quadrupled). There's obviously no major manipulation/suppression going on/worth talking about. HUI/NEM/XAU may all be (or soon will be) in a 2-4 session (from today) Wave A short term downcycle, in which they'll probably fall more than 5%.
The NEM lead indicator was a bearish -0.52% versus the XAU on Friday after being -0.20% on Thursday (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem). Wave A should bottom this week. Wave B should peak next week, and, Wave C should bottom late next week or early in the week after that. A monthly cycle low will probably occur for HUI/NEM/XAU in the next two weeks or so.
Reliable lead indicator NEM's big gap up to 46.25 from 45.27 last Wednesday is probably a mini/short term breakaway gap and not a major breakaway gap that would imply that HUI/XAU's Wave 2 Cyclical Bear Market since 5-11-06 has ended. Today is probably just another very good test of the monthly upcycle's highs (see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=b&p=&a=m26-12-9,p12,fs,w14&c=). Today is probably simply the flat choppy/topping/retest part of the monthly cycle.
With my "Trade the Cycles" system I wait for HUI/NEM/XAU to fall in excess of 5% in the 2-4 session Wave A short term downcycle before looking to short/buy puts during Wave B up, so, I wouldn't have gotten faked out by this action anyway, but, since NEM is such a good lead indicator for gold/silver stocks and had a large potentially important breakaway gap to the upside on Wednesday (XAU's was a breakaway candidate but not as good/large as NEM's), I would have waited for NEM to fill it's downside gap at 45.27 before looking to short/buy puts.
So, one must wait for reliable lead indicator NEM to fill it's downside gap at 45.27 to confirm that NEM didn't experience a major breakout, and, with my "Trade the Cycles" system I wait for HUI/NEM/XAU to fall in excess of 5% in the 2-4 session Wave A short term downcycle before looking to short/buy puts during Wave B up anyway.
The monthly cycle since 10-4-06 is probably the start of the 3-6 monthish Wave B up of HUI/XAU's Wave 2 Cyclical Bear Market since 5-11-06, see the first chart 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 4 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Manipulation isn't worth discussing unless it's truly harming the precious metals market. Gold did 30-35%/year in it's five year Wave 1 Cyclical Bull Market (nearly tripled) and silver did 35-40%/year in it's 4.5 year Wave 1 Cyclical Bull Market (nearly quadrupled). There's obviously no major manipulation/suppression going on/worth talking about. HUI/NEM/XAU may all be (or soon will be) in a 2-4 session (from today) Wave A short term downcycle, in which they'll probably fall more than 5%.
The NEM lead indicator was a bearish -0.52% versus the XAU on Friday after being -0.20% on Thursday (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem). Wave A should bottom this week. Wave B should peak next week, and, Wave C should bottom late next week or early in the week after that. A monthly cycle low will probably occur for HUI/NEM/XAU in the next two weeks or so.
Reliable lead indicator NEM's big gap up to 46.25 from 45.27 last Wednesday is probably a mini/short term breakaway gap and not a major breakaway gap that would imply that HUI/XAU's Wave 2 Cyclical Bear Market since 5-11-06 has ended. Today is probably just another very good test of the monthly upcycle's highs (see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=b&p=&a=m26-12-9,p12,fs,w14&c=). Today is probably simply the flat choppy/topping/retest part of the monthly cycle.
With my "Trade the Cycles" system I wait for HUI/NEM/XAU to fall in excess of 5% in the 2-4 session Wave A short term downcycle before looking to short/buy puts during Wave B up, so, I wouldn't have gotten faked out by this action anyway, but, since NEM is such a good lead indicator for gold/silver stocks and had a large potentially important breakaway gap to the upside on Wednesday (XAU's was a breakaway candidate but not as good/large as NEM's), I would have waited for NEM to fill it's downside gap at 45.27 before looking to short/buy puts.
So, one must wait for reliable lead indicator NEM to fill it's downside gap at 45.27 to confirm that NEM didn't experience a major breakout, and, with my "Trade the Cycles" system I wait for HUI/NEM/XAU to fall in excess of 5% in the 2-4 session Wave A short term downcycle before looking to short/buy puts during Wave B up anyway.
The monthly cycle since 10-4-06 is probably the start of the 3-6 monthish Wave B up of HUI/XAU's Wave 2 Cyclical Bear Market since 5-11-06, see the first chart 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 4 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .
HUI NEM XAU
posted by Joe Ferrazzano at
7:40 AM
