.................Something To GIve Thanks For
The NEM Lead Indicator. Note how NEM led the past five sessions, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem, and, note how NEM correctly pointed to the two vicious declines this year, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem, and, is currently pointing to another one, that probably began on 11-9-06 when HUI/XAU hit monthly cycle highs (NEM did so on 11-1-06 at 46.89 and put in a bearish Wave B triple top at 46.86 on 11-9-06).
One can do very well trading any market sector using cycle trendlines/channels in concert with Elliot Wave patterns and gaps, which is the crux of my "Trade the Cycles" market timing system, but, having the NEM Lead Indicator is a great asset for trading the precious metals sector. It's a great "finetuner."
The very bearish one year NEM Lead Indicator (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem) and the very bearish COT data in recent weeks (see next paragraph) support the vicious decline scenario.
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.
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
One can do very well trading any market sector using cycle trendlines/channels in concert with Elliot Wave patterns and gaps, which is the crux of my "Trade the Cycles" market timing system, but, having the NEM Lead Indicator is a great asset for trading the precious metals sector. It's a great "finetuner."
The very bearish one year NEM Lead Indicator (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem) and the very bearish COT data in recent weeks (see next paragraph) support the vicious decline scenario.
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.
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
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, XAU
posted by Joe Ferrazzano at
10:33 PM
