Weakness Followed By An Oversold Bounce Followed By Weakness
HUI/NEM/XAU bounced when an oversold condition occurred early today, since Williams %R hit an extremely oversold -100. Use cycle channels (and cycle trendlines of course, you have to know where the upcycle and/or downcycle trendlines are, in a downcycle the top of a channel is the downtrend line and in an upcycle the bottom of the channel is the uptrend line) to gauge when to buy/sell/cover/short, keeping in mind that they usually become more sharply declining in downcycles or sharply rising in upcycles. They're "parabolic" in other words.
The vicious decline scenario appears to be unfolding for HUI/XAU, in which they will probably decline 30-40%. Please see the previous post for all the details.
Reliable lead indicator NEM probably put in a very important Wave 2 Cyclical Bear Market cycle low at 39.84 on 10-4-06, which is great news for precious metals bugs. NEM will probably fall to 40-41 in it's monthly downcycle since 11-1-06 (monthly cycle high at 46.89). This makes sense cyclewise because NEM's five yearish (hopefully, Wave 1 was about five and a half years) Wave 3 Cyclical Bull Market will probably begin relatively flat.
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 vicious decline scenario appears to be unfolding for HUI/XAU, in which they will probably decline 30-40%. Please see the previous post for all the details.
Reliable lead indicator NEM probably put in a very important Wave 2 Cyclical Bear Market cycle low at 39.84 on 10-4-06, which is great news for precious metals bugs. NEM will probably fall to 40-41 in it's monthly downcycle since 11-1-06 (monthly cycle high at 46.89). This makes sense cyclewise because NEM's five yearish (hopefully, Wave 1 was about five and a half years) Wave 3 Cyclical Bull Market will probably begin relatively flat.
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
8:11 AM
