.......The Fed Is Spiking The Punch For Christmas!
The Fed has been spiking the index fund/program trader punch big time since Thursday 12-14, apparently in order to keep the S & P 5oo (SPX) (therefore most sectors) reasonable before Christmas, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE. Today they did the usual Thursday index fund/program trader punch spiking with probably the largest one day Fed Credit I've seen, a massive $25.50 Billion in Repos, but, $17 Billion of that was in the form of a huge 14 day $17 Billion Repo and there was an $8.50 Billion one day Repo, so, it was spread out.
In order to optimumly trade nearly (maybe all sectors) any sector one MUST also time SPX (S & P 5oo ), because of index fund program trading. SPX should soon plunge, because SPX's minor intermediate term upcycle since mid June appears to have peaked a few days ago based on Elliott Wave and dramatically deteriorating technical indicators (RSI, Stochastics, etc.), AND, based on Elliott Wave, the major (update from minor, it qualifies as a major now) intermediate term upcycle since mid June appears to be the final Wave 5 spike move of the Cyclical Bull Market since October 2002 (I did the chart and may post it). So, SPX (S & P 5oo) may have recently put in a very important cycle high.
Program selling due to major SPX weakness will probably play a major role during the next month or so in driving HUI/XAU way down to their primary Secular Bull Market/very long term upcycle trendlines in effect since late 2000 (at 200-220 for HUI (could turn up which explains the wide range) and 85-90 for the XAU), see charts 6 and 8 at http://www.joefrocks.com/GoldStockCharts.html.
The previous post is at
http://tradethecycles.blogspot.com/2006/12/nem-lead-indicator-was-bearish-076.html.
HUI/XAU are in Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06. In the next 3-6 weeks HUI/XAU should do exactly what reliable lead indicator NEM has already done, which is to decline to their primary multi-year Secular Bull Market/very long term upcycle trendlines, currently at 200-220ish (could turn up which is why there's a wide range) for HUI and at 85-90ish for the XAU, see charts 6 and 8 at http://www.joefrocks.com/GoldStockCharts.html. NEM did a Wave A down, a Wave B up, then it's Wave C did an ABC down up down pattern, which is exactly what HUI/XAU appear to be doing, with Wave C of Wave C probably having begun Tuesday 12-5, when minor intermediate term cycle highs occurred, see charts one and two at http://www.joefrocks.com/GoldStockCharts.html.
As a long term multi-year investor in any stock, commodity, etc. you want to buy near the primary multi-year Secular Bull Market/very long term upcycle trendline, for example NEM's is at 40ish right now, see chart 7 at http://www.joefrocks.com/GoldStockCharts.html. Therefore, NEM right now would be a great buy in the 40-42 range. Gold's primary multi-year Secular Bull Market/very long term upcycle trendline is at $525ish right now, so, gold would be a great buy in the $525-550 range. When the vast majority of gold writers say it's a great time to buy or are bullish, as they almost always are, it's rarely a good time for long term investors to buy. The vast majority of gold writers couldn't time their way out of a paper bag. They tend to be terrible.
HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 6 and 8 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 7 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .
HUI NEM XAU
In order to optimumly trade nearly (maybe all sectors) any sector one MUST also time SPX (S & P 5oo ), because of index fund program trading. SPX should soon plunge, because SPX's minor intermediate term upcycle since mid June appears to have peaked a few days ago based on Elliott Wave and dramatically deteriorating technical indicators (RSI, Stochastics, etc.), AND, based on Elliott Wave, the major (update from minor, it qualifies as a major now) intermediate term upcycle since mid June appears to be the final Wave 5 spike move of the Cyclical Bull Market since October 2002 (I did the chart and may post it). So, SPX (S & P 5oo) may have recently put in a very important cycle high.
Program selling due to major SPX weakness will probably play a major role during the next month or so in driving HUI/XAU way down to their primary Secular Bull Market/very long term upcycle trendlines in effect since late 2000 (at 200-220 for HUI (could turn up which explains the wide range) and 85-90 for the XAU), see charts 6 and 8 at http://www.joefrocks.com/GoldStockCharts.html.
The previous post is at
http://tradethecycles.blogspot.com/2006/12/nem-lead-indicator-was-bearish-076.html.
HUI/XAU are in Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06. In the next 3-6 weeks HUI/XAU should do exactly what reliable lead indicator NEM has already done, which is to decline to their primary multi-year Secular Bull Market/very long term upcycle trendlines, currently at 200-220ish (could turn up which is why there's a wide range) for HUI and at 85-90ish for the XAU, see charts 6 and 8 at http://www.joefrocks.com/GoldStockCharts.html. NEM did a Wave A down, a Wave B up, then it's Wave C did an ABC down up down pattern, which is exactly what HUI/XAU appear to be doing, with Wave C of Wave C probably having begun Tuesday 12-5, when minor intermediate term cycle highs occurred, see charts one and two at http://www.joefrocks.com/GoldStockCharts.html.
As a long term multi-year investor in any stock, commodity, etc. you want to buy near the primary multi-year Secular Bull Market/very long term upcycle trendline, for example NEM's is at 40ish right now, see chart 7 at http://www.joefrocks.com/GoldStockCharts.html. Therefore, NEM right now would be a great buy in the 40-42 range. Gold's primary multi-year Secular Bull Market/very long term upcycle trendline is at $525ish right now, so, gold would be a great buy in the $525-550 range. When the vast majority of gold writers say it's a great time to buy or are bullish, as they almost always are, it's rarely a good time for long term investors to buy. The vast majority of gold writers couldn't time their way out of a paper bag. They tend to be terrible.
HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 6 and 8 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 7 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
7:56 AM
