.......NEM Filled It's Downside Gap At 44.88 Today
NEM filled it's downside gap at 44.88 today. The NEM Lead Indicator was a modestly bearish -0.35% versus the XAU today, and, the Walmart (WMT) Lead Indicator was a modestly bullish +0.16% versus the S & P 500 (SPX) today. A weak close by SPX (S & P 500) today points to early HUI/NEM/XAU weakness on Tuesday due to program selling.
A strong close by the US Dollar near it's session cycle high today at 83.67 up +0.41, a modestly bearish NEM Lead Indicator today (-0.35% versus the XAU), and, a bearish WMT (Walmart) I Watch today (see http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=wmt), since the non contrarian/savvy institutional traders showed strong sell interest today, also point to HUI/NEM/XAU weakness early on Tuesday. WMT appears to be a great lead indicator for SPX (S & P 500), and, therefore also HUI/NEM/XAU, because SPX is the lead index due to program trading, which is 45% of the daily trading volume on the NYSE and 70% of the dollar volume (the actual money involved in the trading).
The gold manipulation theories are 95%+ nonsense, since gold follows SPX along with HUI/NEM/XAU due to program trading, though the primary cycles are vastly different. Gold is securitized in ETFs now (GLD and IAU), so, gold is directly affected by program trading since it's traded like a stock.
Practically none of the manipulation theories about gold or specific gold stocks have any value (if they do it's probably a very minor factor), because program trading makes gold and nearly all gold stocks subject to it's powerful Tsunami effect, 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.
Are there traders with enough clout to buck 70% of the dollar volume on the NYSE??? Gold averaged 30-35% each year in it's Wave 1 Cyclical Bull Market from April 2001 until May 2006, which is an extremely high rate of return. The reason why so many gold/silver writers discuss "manipulation" is probably to have an excuse when things don't go as expected, which is usually very often. Why should anyone invest in a suppressed market if it was the case??? Many gold/silver writers need to either get a clue or RETIRE.
NEM has downside gaps at 44.03, 42.21, 41.83, 41.09, and 40.83. The XAU has a downside gap at 132.67.
In the next few sessions NEM's downside gap at 44.03 may get filled and the XAU's downside gap at 132.67 may get filled. There may be a substantial bounce (Possibly Wave B of the vicious HUI/XAU downcycle or Wave B of Wave A) after that happens, but, I'll assess the situation once those gaps get filled.
Since SPX and WMT are less volatile than NEM/XAU a Walmart (WMT) Lead Indicator at -0.25% or more is clearly bearish, whereas an NEM Lead Indicator at -0.50% or more is clearly bearish.
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
A strong close by the US Dollar near it's session cycle high today at 83.67 up +0.41, a modestly bearish NEM Lead Indicator today (-0.35% versus the XAU), and, a bearish WMT (Walmart) I Watch today (see http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=wmt), since the non contrarian/savvy institutional traders showed strong sell interest today, also point to HUI/NEM/XAU weakness early on Tuesday. WMT appears to be a great lead indicator for SPX (S & P 500), and, therefore also HUI/NEM/XAU, because SPX is the lead index due to program trading, which is 45% of the daily trading volume on the NYSE and 70% of the dollar volume (the actual money involved in the trading).
The gold manipulation theories are 95%+ nonsense, since gold follows SPX along with HUI/NEM/XAU due to program trading, though the primary cycles are vastly different. Gold is securitized in ETFs now (GLD and IAU), so, gold is directly affected by program trading since it's traded like a stock.
Practically none of the manipulation theories about gold or specific gold stocks have any value (if they do it's probably a very minor factor), because program trading makes gold and nearly all gold stocks subject to it's powerful Tsunami effect, 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.
Are there traders with enough clout to buck 70% of the dollar volume on the NYSE??? Gold averaged 30-35% each year in it's Wave 1 Cyclical Bull Market from April 2001 until May 2006, which is an extremely high rate of return. The reason why so many gold/silver writers discuss "manipulation" is probably to have an excuse when things don't go as expected, which is usually very often. Why should anyone invest in a suppressed market if it was the case??? Many gold/silver writers need to either get a clue or RETIRE.
NEM has downside gaps at 44.03, 42.21, 41.83, 41.09, and 40.83. The XAU has a downside gap at 132.67.
In the next few sessions NEM's downside gap at 44.03 may get filled and the XAU's downside gap at 132.67 may get filled. There may be a substantial bounce (Possibly Wave B of the vicious HUI/XAU downcycle or Wave B of Wave A) after that happens, but, I'll assess the situation once those gaps get filled.
Since SPX and WMT are less volatile than NEM/XAU a Walmart (WMT) Lead Indicator at -0.25% or more is clearly bearish, whereas an NEM Lead Indicator at -0.50% or more is clearly bearish.
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
2:05 PM
