......Index Fund Program Buying Was Huge Today
Today's modest HUI/NEM/XAU strength was largely due to index fund computer program buying due to significant S & P 500 (SPX) strength, with the Fed doing their usual Thursday punch spiking ($16.25 Billion in Repos, large even for a Thursday, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE). If today had been a significant down day for SPX, HUI/NEM/XAU would have probably been down over 2%. Their modest strength in the face of significant SPX strength, and, how bullish the NEM Lead Indicator has been recently (+0.22% versus the XAU on 12-13, +1.01% on 12-12, -0.10% on 12-11, +1.01% on 12-8, +0.87% on 12-7, +0.27% on 12-6, +1.19% on 12-5, ) is a very bearish sign.
HUI has been in a very flat downcycle since EARLY yesterday, how's that for bearish? 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==.
The XAU had what appeared to be a breakaway gap to the downside at 144.96 from Tuesday's open that got filled today. Most gaps get filled, which is why one should track them.
The NEM Lead Indicator became more bearish as the session progressed and closed at a bearish -0.58% versus the XAU today, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem. The US Dollar closed near it's session cycle high today at 83.35ish, up +0.29, versus a session cycle low at 82.85ish. Gold was near it's cycle low for the day after hours at $624.90, down -$1.20, versus a cycle high today at $628ish. Severe weakness may set in early tomorrow for HUI/NEM/XAU.
The non NEM dominated HUI (versus the NEM dominated (22-25%+ weighting) XAU) appears to have failed to put in a higher third/Wave 5 upcycle in the very short term Wave B upcycle since mid session on Tuesday, and, trended down after mid session, 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=, which is a very bearish sign.
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 chart one at http://www.joefrocks.com/GoldStockCharts.html.
The XAU has downside gaps at 138.37, and 132.67. NEM has downside gaps at 45.73, 44.88, 44.03, 42.21, 41.83, 41.09, and 40.83.
NEM clearly broke it's minor intermediate term upcycle trendline since 10-4-06 on Tuesday, so, the vicious decline may soon rear it's head in a big way. Option expiration is tomorrow, and, I think it's a triple or quadruple "witching" quarterly one, so, that will probably add to the volatility.
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 has been in a very flat downcycle since EARLY yesterday, how's that for bearish? 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==.
The XAU had what appeared to be a breakaway gap to the downside at 144.96 from Tuesday's open that got filled today. Most gaps get filled, which is why one should track them.
The NEM Lead Indicator became more bearish as the session progressed and closed at a bearish -0.58% versus the XAU today, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem. The US Dollar closed near it's session cycle high today at 83.35ish, up +0.29, versus a session cycle low at 82.85ish. Gold was near it's cycle low for the day after hours at $624.90, down -$1.20, versus a cycle high today at $628ish. Severe weakness may set in early tomorrow for HUI/NEM/XAU.
The non NEM dominated HUI (versus the NEM dominated (22-25%+ weighting) XAU) appears to have failed to put in a higher third/Wave 5 upcycle in the very short term Wave B upcycle since mid session on Tuesday, and, trended down after mid session, 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=, which is a very bearish sign.
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 chart one at http://www.joefrocks.com/GoldStockCharts.html.
The XAU has downside gaps at 138.37, and 132.67. NEM has downside gaps at 45.73, 44.88, 44.03, 42.21, 41.83, 41.09, and 40.83.
NEM clearly broke it's minor intermediate term upcycle trendline since 10-4-06 on Tuesday, so, the vicious decline may soon rear it's head in a big way. Option expiration is tomorrow, and, I think it's a triple or quadruple "witching" quarterly one, so, that will probably add to the volatility.
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
1:28 PM
