HUI/NEM/XAU/SPX Weakness/Downtrend Occurred Early Today As Expected
HUI/NEM/XAU/SPX weakness occurred early today as expected, however, HUI/NEM/XAU spiked briefly at the open as opposed to the expected plunge based on my NEM Elliott Wave count. Since the expected plunge occurred soon after the spike at the open there wasn't a drastic difference in what I expected, but read on. The lesson learned is to take a good look at all three from an Elliott Wave perspective (HUI/NEM/XAU) and not just NEM.
HUI/NEM/XAU are experiencing a modest Wave B of Wave A rebound (began last Friday) before resuming the downside gap filling action discussed in recent days. HUI/NEM/XAU are doing a Wave B of Wave A move since putting in minor intermediate term cycle highs on 12-5 (HUI/XAU)/12-8 (NEM), in which NEM appears to have peaked early on Tuesday (see 5 day NEM chart at http://finance.yahoo.com/q/ta?s=nem&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==), while HUI/XAU are in Wave 4 down of the Wave B of Wave A move, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==. HUI has shorter Elliott Wave 12345 upcycle patterns leading up to the Wave 1 and Wave 3 cycle highs that occurred early on Tuesday and early today.
What I missed yesterday was that HUI/XAU did an Elliott Wave 1234 pattern since late Tuesday and put in a Wave 5 spike at today's open, which completed Wave 3 of the Wave B of Wave A upcycle since Friday (see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==). My count was based on reliable lead indicator NEM, which appeared to put in a very short term Wave B cycle high early yesterday, but probably did so early today. If I had taken a good hard look at HUI/XAU's Elliott Wave yesterday I would have concluded that early "strength" (at least a brief spike) was likely today. The NEM and WMT Lead Indicators correctly pointed to weakness/a downtrend being today's tone.
The NEM Lead Indicator was a very bearish -1.35% versus the XAU yesterday, which, combined with a very bearish WMT (Walmart) Lead Indicator at -0.59% versus the S & P 500 (SPX) yesterday (since WMT/SPX are much less volatile than HUI/NEM/XAU -0.59% is very bearish as opposed to bearish), points to potentially severe weakness today for HUI/NEM/XAU, and, points to significant weakness in SPX.
Tuesday's very bullish WMT (Walmart) Lead Indicator at +0.81% versus the S & P 500 (SPX) correctly portended significant SPX strength yesterday, which propped up HUI/NEM/XAU due to index fund program buying. The WMT (Walmart) Lead Indicator will probably help to finetune the NEM Lead Indicator for very short term timing, along with Elliott Wave of course.
Massive Fed Credit since 12-14 (see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE) has been keeping SPX's downtrend since 12-18 reasonable thanks to index fund program trading, and, so far has prevented HUI/NEM/XAU from experiencing any vicious 3-5%+ declines in a single session.
NEM has a bearish double top at 47.80 on 12-8 and 47.77 on 12-15, with 47.80 on 12-8 being a minor intermediate term cycle high for the cycle that began on 10-4-06. The next few sessions may bring brutal declines. For anyone to suggest that you shouldn't seriously consider taking profits now means they don't understand what's going on.
HUI could fall all the way to 200ish in the next few weeks (it's Secular Bull Market PRIMARY trendline, see chart 6 at http://www.joefrocks.com/GoldStockCharts.html), with much of that decline probably due to program selling related to SPX (S & P 500) weakness, notice how HUI has been following SPX the past 5 sessions, see http://finance.yahoo.com/q/ta?t=5d&s=%5EHUI&l=off&z=l&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=&c=%5EGSPC.
Many gold/silver stocks are likely to decline 30-40-50%+ FROM HERE in the next few weeks. You need to determine where the Secular Bull Market PRIMARY trendline is for your gold/silver stocks, see charts 6, 7, and 8 at http://www.joefrocks.com/GoldStockCharts.html for examples. I haven't seen a single gold/silver writer who understands that a Cyclical Bear Market is in effect right now.
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
HUI/NEM/XAU are experiencing a modest Wave B of Wave A rebound (began last Friday) before resuming the downside gap filling action discussed in recent days. HUI/NEM/XAU are doing a Wave B of Wave A move since putting in minor intermediate term cycle highs on 12-5 (HUI/XAU)/12-8 (NEM), in which NEM appears to have peaked early on Tuesday (see 5 day NEM chart at http://finance.yahoo.com/q/ta?s=nem&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==), while HUI/XAU are in Wave 4 down of the Wave B of Wave A move, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==. HUI has shorter Elliott Wave 12345 upcycle patterns leading up to the Wave 1 and Wave 3 cycle highs that occurred early on Tuesday and early today.
What I missed yesterday was that HUI/XAU did an Elliott Wave 1234 pattern since late Tuesday and put in a Wave 5 spike at today's open, which completed Wave 3 of the Wave B of Wave A upcycle since Friday (see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==). My count was based on reliable lead indicator NEM, which appeared to put in a very short term Wave B cycle high early yesterday, but probably did so early today. If I had taken a good hard look at HUI/XAU's Elliott Wave yesterday I would have concluded that early "strength" (at least a brief spike) was likely today. The NEM and WMT Lead Indicators correctly pointed to weakness/a downtrend being today's tone.
The NEM Lead Indicator was a very bearish -1.35% versus the XAU yesterday, which, combined with a very bearish WMT (Walmart) Lead Indicator at -0.59% versus the S & P 500 (SPX) yesterday (since WMT/SPX are much less volatile than HUI/NEM/XAU -0.59% is very bearish as opposed to bearish), points to potentially severe weakness today for HUI/NEM/XAU, and, points to significant weakness in SPX.
Tuesday's very bullish WMT (Walmart) Lead Indicator at +0.81% versus the S & P 500 (SPX) correctly portended significant SPX strength yesterday, which propped up HUI/NEM/XAU due to index fund program buying. The WMT (Walmart) Lead Indicator will probably help to finetune the NEM Lead Indicator for very short term timing, along with Elliott Wave of course.
Massive Fed Credit since 12-14 (see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE) has been keeping SPX's downtrend since 12-18 reasonable thanks to index fund program trading, and, so far has prevented HUI/NEM/XAU from experiencing any vicious 3-5%+ declines in a single session.
NEM has a bearish double top at 47.80 on 12-8 and 47.77 on 12-15, with 47.80 on 12-8 being a minor intermediate term cycle high for the cycle that began on 10-4-06. The next few sessions may bring brutal declines. For anyone to suggest that you shouldn't seriously consider taking profits now means they don't understand what's going on.
HUI could fall all the way to 200ish in the next few weeks (it's Secular Bull Market PRIMARY trendline, see chart 6 at http://www.joefrocks.com/GoldStockCharts.html), with much of that decline probably due to program selling related to SPX (S & P 500) weakness, notice how HUI has been following SPX the past 5 sessions, see http://finance.yahoo.com/q/ta?t=5d&s=%5EHUI&l=off&z=l&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=&c=%5EGSPC.
Many gold/silver stocks are likely to decline 30-40-50%+ FROM HERE in the next few weeks. You need to determine where the Secular Bull Market PRIMARY trendline is for your gold/silver stocks, see charts 6, 7, and 8 at http://www.joefrocks.com/GoldStockCharts.html for examples. I haven't seen a single gold/silver writer who understands that a Cyclical Bear Market is in effect right now.
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
7:30 AM
