..................HUI Is Extremely Overbought
HUI Is extremely overbought (RSI at 80, Williams %R at 0, stochastics at 90ish), and, it's price trend is much stronger than the trend of it's technical indicators (since early November, look at the peaks versus HUI's) such as RSI, Williams %R, and stochastics, which is a very bearish divergence.
Reliable lead indicator NEM has made very little headway since hitting a monthly cycle high at 46.89 on 11-1-06, it closed today at 47.28, which is a huge negative.
The gold Commercial Traders have engaged in massive long liquidation recently while the US Dollar Commercial Traders have gone massively long. There are many major negatives right now.
The more important the cycle high the more rollover action can occur/patience is sometimes required, but, once it peaks the drop is likely to be vicious. The prior two vicious declines from May 11 until June 13 and from early September until October 4 for HUI/XAU literally fell of a cliff, and, if you remained long for a few sessions after the decline began you got absolutely crushed, 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=%5EGSPC.
The NEM Lead Indicator was a very bullish +0.92% versus the XAU on Friday, which correctly portended strength today. It was a slightly bearish -0.20% versus the XAU today, which means that more upside tomorrow won't be a big surprise, but, it was a bearish -1.35% versus the XAU last week ending 12-1 and was a very bearish -2.42% for the prior W/E 11-24. The one year NEM Lead Indicator is extremely bearish, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem.
HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be Wave A down of the likely 3-6 weekish vicious 30-45%+ decline for HUI/XAU. Since 10-4-06 HUI/XAU have rallied beyond (another reason one must understand cycles, it's very likely to be a major fakeout) their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, but, may have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), in which HUI/XAU may experience a vicious 3-6 weekish 30-45%+ 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 5 and 7 at http://www.joefrocks.com/GoldStockCharts.html.
HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 5 and 7 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 6 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Reliable lead indicator NEM has made very little headway since hitting a monthly cycle high at 46.89 on 11-1-06, it closed today at 47.28, which is a huge negative.
The gold Commercial Traders have engaged in massive long liquidation recently while the US Dollar Commercial Traders have gone massively long. There are many major negatives right now.
The more important the cycle high the more rollover action can occur/patience is sometimes required, but, once it peaks the drop is likely to be vicious. The prior two vicious declines from May 11 until June 13 and from early September until October 4 for HUI/XAU literally fell of a cliff, and, if you remained long for a few sessions after the decline began you got absolutely crushed, 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=%5EGSPC.
The NEM Lead Indicator was a very bullish +0.92% versus the XAU on Friday, which correctly portended strength today. It was a slightly bearish -0.20% versus the XAU today, which means that more upside tomorrow won't be a big surprise, but, it was a bearish -1.35% versus the XAU last week ending 12-1 and was a very bearish -2.42% for the prior W/E 11-24. The one year NEM Lead Indicator is extremely bearish, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem.
HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be Wave A down of the likely 3-6 weekish vicious 30-45%+ decline for HUI/XAU. Since 10-4-06 HUI/XAU have rallied beyond (another reason one must understand cycles, it's very likely to be a major fakeout) their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, but, may have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), in which HUI/XAU may experience a vicious 3-6 weekish 30-45%+ 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 5 and 7 at http://www.joefrocks.com/GoldStockCharts.html.
HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 5 and 7 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 6 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
1:08 PM
