............NEM Filled Today's Upside Gap At 47.31
NEM filled today's upside gap at 47.31 (created at the open) late today, and, the XAU may try to fill today's upside gap at 144.96 (created at the open) early tomorrow, but the XAU appears to have peaked late today. HUI/NEM/XAU did an Elliott Wave 12345 up down up down up upcycle today after putting in a very short term Wave C cycle low during mid session, see 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=. It looks like weakness will resume early tomorrow, possibly with a vengeance.
NEM clearly broke it's minor intermediate term upcycle trendline since 10-4-06 today, so, the vicious decline may rear it's head in a big way the next few days. Option expiration is on Friday, and, I think it's a triple or quadruple "witching" quarterly one, so, that will probably add to the volatility. There's a good chance that the next few days will bring brutal declines (HUI was down about 3% at today's cycle low).
Fed Credit was well below average today at $2 Billion, on Friday at $2.5 Billion (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), and, fell -$1.641 Billion in the week ending 12-6-06, so index fund program buying probably won't help much tomorrow, unless the Fed spikes the punch in a big way.
To see yesterday's first post see: http://tradethecycles.blogspot.com/2006/12/some-strength-early-today-wasnt.html.
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.
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.
HUI/NEM/XAU should be in Wave A down of the likely 3-6 weekish vicious 35-45%+ decline for HUI/XAU. HUI/XAU may have entered Wave C of Wave C (Wave C is probably doing an Elliott Wave ABC down up down pattern), in which HUI/XAU may experience a vicious 3-6 weekish 35-45%+ 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 6 and 8 at http://www.joefrocks.com/GoldStockCharts.html.
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
NEM clearly broke it's minor intermediate term upcycle trendline since 10-4-06 today, so, the vicious decline may rear it's head in a big way the next few days. Option expiration is on Friday, and, I think it's a triple or quadruple "witching" quarterly one, so, that will probably add to the volatility. There's a good chance that the next few days will bring brutal declines (HUI was down about 3% at today's cycle low).
Fed Credit was well below average today at $2 Billion, on Friday at $2.5 Billion (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), and, fell -$1.641 Billion in the week ending 12-6-06, so index fund program buying probably won't help much tomorrow, unless the Fed spikes the punch in a big way.
To see yesterday's first post see: http://tradethecycles.blogspot.com/2006/12/some-strength-early-today-wasnt.html.
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.
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.
HUI/NEM/XAU should be in Wave A down of the likely 3-6 weekish vicious 35-45%+ decline for HUI/XAU. HUI/XAU may have entered Wave C of Wave C (Wave C is probably doing an Elliott Wave ABC down up down pattern), in which HUI/XAU may experience a vicious 3-6 weekish 35-45%+ 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 6 and 8 at http://www.joefrocks.com/GoldStockCharts.html.
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
1:11 PM
