NEM Did A Very Short Term Elliott Wave ABC Down Up Down Pattern
Reliable lead indicator NEM did a very short term Elliott Wave ABC down up down pattern since hitting a minor intermediate term cycle high at 47.80 on 12-8, so, NEM was in a very short term Wave C early today along with HUI and probably the XAU also. HUI/XAU hit a minor intermediate term cycle high early on 12-5, and, HUI hit a 2% follow through minor intermediate term cycle sell signal on 12-7, see the first chart at http://www.joefrocks.com/GoldStockCharts.html.
Fed Credit was well below average today at $2 Billion (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), so index fund program buying probably won't help much if at all.
Long term (multi year)/very long term (multi decade) investors should ALWAYS buy near the primary multi year or multi decade uptrend line. For example, NEM's Secular Bull Market/very long term upcycle trendline since October 2000 is at 40ish right now, see chart 7 at http://www.joefrocks.com/GoldStockCharts.html. Gold's Secular Bull Market/very long term upcycle trendline since April 2001 is at $525ish. For any investment a long term investor should buy near the primary multi year or multi decade uptrend line.
Too many gold writers are giving piss poor advice to long term investors, with some of the most well known gold writers being the worst offenders. Some of them are literally in a world of make believe, with every downturn being manipulation and every parabolic upcycle being a buying opportunity, when in fact it's a selling opportunity if you're trading that cycle timeframe.
Gold did 30-35% a year in it's 5 year one month Wave 1 Cyclical Bull Market from April 2001 until May 2006. Sound like a market that's being manipulated in a major way??? Silver did 35-40% a year in it's 4.5 year Wave 1 Cyclical Bull Market from late 2001 until May 2006. There's really much more POSITIVE "manipulation" in the form of Fed Credit, that often leads to massive program buying, and, is a huge influence on most sectors short/intermediate term.
The shorter parabolic upcycles are great trading opportunities NOT long term investing opportunities. The many goofy gold writers who think investors should have been buying gold recently are clueless, because gold's primary multi year uptrend line since April 2001 is at 525ish right now, and, more importantly, gold has been in a Wave 2 Cyclical Bear Market since mid May.
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 141.59, 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 Elliot 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
Fed Credit was well below average today at $2 Billion (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), so index fund program buying probably won't help much if at all.
Long term (multi year)/very long term (multi decade) investors should ALWAYS buy near the primary multi year or multi decade uptrend line. For example, NEM's Secular Bull Market/very long term upcycle trendline since October 2000 is at 40ish right now, see chart 7 at http://www.joefrocks.com/GoldStockCharts.html. Gold's Secular Bull Market/very long term upcycle trendline since April 2001 is at $525ish. For any investment a long term investor should buy near the primary multi year or multi decade uptrend line.
Too many gold writers are giving piss poor advice to long term investors, with some of the most well known gold writers being the worst offenders. Some of them are literally in a world of make believe, with every downturn being manipulation and every parabolic upcycle being a buying opportunity, when in fact it's a selling opportunity if you're trading that cycle timeframe.
Gold did 30-35% a year in it's 5 year one month Wave 1 Cyclical Bull Market from April 2001 until May 2006. Sound like a market that's being manipulated in a major way??? Silver did 35-40% a year in it's 4.5 year Wave 1 Cyclical Bull Market from late 2001 until May 2006. There's really much more POSITIVE "manipulation" in the form of Fed Credit, that often leads to massive program buying, and, is a huge influence on most sectors short/intermediate term.
The shorter parabolic upcycles are great trading opportunities NOT long term investing opportunities. The many goofy gold writers who think investors should have been buying gold recently are clueless, because gold's primary multi year uptrend line since April 2001 is at 525ish right now, and, more importantly, gold has been in a Wave 2 Cyclical Bear Market since mid May.
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 141.59, 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 Elliot 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
7:36 AM
