Reliable Lead Indicator NEM Trended Down The Entire Session
Reliable lead indicator NEM trended down the entire 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==), and really HUI/XAU did also (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==), because they failed to exceed the spikes that occurred at the open.
NEM put in a likely very short term Wave B cycle high early today versus the Wave B of Wave A cycle high that occurred early on Tuesday. NEM did a very anemic Wave B of Wave A (since putting in minor intermediate term cycle high on 12-8) that lasted less than a session (late Friday until Early Tuesday), 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==, so, NEM is leading to the downside as usual.
The NEM Lead Indicator was a bearish -0.70% versus the XAU today/on 12-28, was a very bearish -1.35% on 12-27, was -0.28% on 12-26, -0.35% on 12-22, +0.30% on 12-21, -0.76% on 12-20, -1.07% on 12-19, and was -0.31% on 12-18. The NEM Lead Indicator turned bearish again on 12-18, which is when SPX (S & P 500) peaked. This is no surprise since NEM is a component of SPX, and, a big part of the reason why it's such a great lead indicator is due to it being in the S & P 500, because index fund program trading is such a huge factor (about 70% of the dollar volume on the NYSE) that causes one to have to time SPX along with HUI/NEM/XAU.
HUI/XAU will probably spike early tomorrow and put in a Wave 5 cycle high for the Wave B of Wave A upcycle since last Friday.
The WMT lead indicator was a modestly bearish -0.18% versus SPX today/on 12-28. 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) correctly pointed to weakness being the tone today (downtrend after the spike at the open) for HUI/NEM/XAU, and, correctly pointed to some weakness in SPX, that probably would have been much worse if it wasn't for a massive $18.25 Billion in Fed Credit today, on top of massive Fed Credit since 12-14.
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.
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.
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
NEM put in a likely very short term Wave B cycle high early today versus the Wave B of Wave A cycle high that occurred early on Tuesday. NEM did a very anemic Wave B of Wave A (since putting in minor intermediate term cycle high on 12-8) that lasted less than a session (late Friday until Early Tuesday), 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==, so, NEM is leading to the downside as usual.
The NEM Lead Indicator was a bearish -0.70% versus the XAU today/on 12-28, was a very bearish -1.35% on 12-27, was -0.28% on 12-26, -0.35% on 12-22, +0.30% on 12-21, -0.76% on 12-20, -1.07% on 12-19, and was -0.31% on 12-18. The NEM Lead Indicator turned bearish again on 12-18, which is when SPX (S & P 500) peaked. This is no surprise since NEM is a component of SPX, and, a big part of the reason why it's such a great lead indicator is due to it being in the S & P 500, because index fund program trading is such a huge factor (about 70% of the dollar volume on the NYSE) that causes one to have to time SPX along with HUI/NEM/XAU.
HUI/XAU will probably spike early tomorrow and put in a Wave 5 cycle high for the Wave B of Wave A upcycle since last Friday.
The WMT lead indicator was a modestly bearish -0.18% versus SPX today/on 12-28. 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) correctly pointed to weakness being the tone today (downtrend after the spike at the open) for HUI/NEM/XAU, and, correctly pointed to some weakness in SPX, that probably would have been much worse if it wasn't for a massive $18.25 Billion in Fed Credit today, on top of massive Fed Credit since 12-14.
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.
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.
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
1:09 PM
