The Short Covering/Dumb Money Spike Is Over
Yesterday's short covering/dumb money panic, most of which occurred in about an hour's time, has ended, and, it doesn't look like reliable lead indicator NEM will fill today's upside gap at 46.85 short term, since NEM gapped down at the open to 46.70 and is approaching 46 right now, so, that upside gap is probably a breakaway gap to the downside that will get filled in the next monthly upcycle.
This confirms that NEM did hit a monthly cycle high at 46.89 on 11-1 and yesterday's cycle high at 46.85 was a bearish Wave B triple top, with the third cycle high at 46.80 on 11-3. Since yesterday's Wave B cycle high at 46.85 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 today.
HUI/XAU probably hit monthly cycle highs yesterday. The big 4%+ spikes are typical of important cycle highs. The big question now is will HUI/XAU experience the vicious 3-6 week 30-40% decline that the one year NEM Lead Indicator suggests is likely (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem), or, will HUI/XAU experience a two weekish 8-15% monthly downcycle and try to do another monthly upcycle?
Looking at HUI's declining peaks downtrend since it's Wave 2 Cyclical Bear Market began on 5-11-06, it doesn't look like there's enough room for another healthy monthly upcycle before HUI/XAU hit resistance at the Bear Market downtrend lines, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=1y&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=. Yesterday's bar isn't on the chart, but the cycle high was at 341ish.
Given how well the NEM Lead Indicator works and the fact that HUI/XAU approached their Wave 2 Cyclical Bear Market downtrend lines in the latest monthly upcycle, it makes sense that HUI/XAU will experience a vicious 3-6 week 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market since 5-11-06. Of course, their Secular Bull Market/very long term upcycle trendlines must hold. HUI's is at 200ish (but may turn up some, HUI is more volatile/parabolic than the XAU) and the XAU's is at 90ish.
HUI/XAU have rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, 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), so, since reliable lead indicator NEM probably completed it's Wave 2 Cyclical Bear Market (began 1-31-06) on 10-4-06 at 39.84, it makes sense that HUI/XAU are about to experience a vicious decline, that should mark the end of their Wave 2 Cyclical Bear Market, because they've rallied toward their Wave 2 Cyclical Bear Market downtrend lines. 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 bearish -0.47% versus the XAU yesterday, was -0.15% on 11-8, and, was -0.61% on 11-7.
HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 3 and 5 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
This confirms that NEM did hit a monthly cycle high at 46.89 on 11-1 and yesterday's cycle high at 46.85 was a bearish Wave B triple top, with the third cycle high at 46.80 on 11-3. Since yesterday's Wave B cycle high at 46.85 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 today.
HUI/XAU probably hit monthly cycle highs yesterday. The big 4%+ spikes are typical of important cycle highs. The big question now is will HUI/XAU experience the vicious 3-6 week 30-40% decline that the one year NEM Lead Indicator suggests is likely (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem), or, will HUI/XAU experience a two weekish 8-15% monthly downcycle and try to do another monthly upcycle?
Looking at HUI's declining peaks downtrend since it's Wave 2 Cyclical Bear Market began on 5-11-06, it doesn't look like there's enough room for another healthy monthly upcycle before HUI/XAU hit resistance at the Bear Market downtrend lines, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=1y&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=. Yesterday's bar isn't on the chart, but the cycle high was at 341ish.
Given how well the NEM Lead Indicator works and the fact that HUI/XAU approached their Wave 2 Cyclical Bear Market downtrend lines in the latest monthly upcycle, it makes sense that HUI/XAU will experience a vicious 3-6 week 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market since 5-11-06. Of course, their Secular Bull Market/very long term upcycle trendlines must hold. HUI's is at 200ish (but may turn up some, HUI is more volatile/parabolic than the XAU) and the XAU's is at 90ish.
HUI/XAU have rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, 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), so, since reliable lead indicator NEM probably completed it's Wave 2 Cyclical Bear Market (began 1-31-06) on 10-4-06 at 39.84, it makes sense that HUI/XAU are about to experience a vicious decline, that should mark the end of their Wave 2 Cyclical Bear Market, because they've rallied toward their Wave 2 Cyclical Bear Market downtrend lines. 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 bearish -0.47% versus the XAU yesterday, was -0.15% on 11-8, and, was -0.61% on 11-7.
HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 3 and 5 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
7:13 AM
