...............SPX Took Out The 11-22-06 Cycle High
SPX just took out the 11-22-06 cycle high, with massive Fed Credit recently ($20.75 Billion last Thursday) being a major factor, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE. HUI took out Friday's cycle high.
The important thing is that HUI/NEM/XAU and SPX (rolling over) are likely to be putting in important multi month cycle highs AND the most important consideration by far is HUI/XAU's Wave 2 Cyclical Bear Market (began 5-11-06). A reader suggested that I am counting heavily on a major SPX collapse that would result in major program selling, which isn't really true. In the vicious decline from early September until October 4 SPX trended UP, but, did have three short term downcycles AND triggered that vicious HUI/NEM/XAU decline, see chart one at http://www.joefrocks.com/GoldStockCharts.html.
The most important thing to keep in mind is HUI/XAU's Wave 2 Cyclical Bear Market (began 5-11-06). They HAVE TO hit/at least closely approach their primary Secular Bull Market/very long term upcycle trendlines. Primary Secular trendlines are basic technical analysis. As a very long term (7+ years) investor the ONLY time you should be buying is close to the primary Secular Bull Market trendline, currently at 200-220 for HUI, 40ish for NEM, 85-90 for the XAU, and at 525ish for gold.
HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be Wave A down of the likely 3-6 weekish vicious 30-45%+ decline for HUI/XAU. Since 10-4-06 HUI/XAU have rallied beyond (another reason one must understand cycles, it's very likely to be a major fakeout) their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, but, 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 30-45%+ 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 5 and 7 at http://www.joefrocks.com/GoldStockCharts.html.
HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 5 and 7 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 6 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .
HUI NEM XAU
The important thing is that HUI/NEM/XAU and SPX (rolling over) are likely to be putting in important multi month cycle highs AND the most important consideration by far is HUI/XAU's Wave 2 Cyclical Bear Market (began 5-11-06). A reader suggested that I am counting heavily on a major SPX collapse that would result in major program selling, which isn't really true. In the vicious decline from early September until October 4 SPX trended UP, but, did have three short term downcycles AND triggered that vicious HUI/NEM/XAU decline, see chart one at http://www.joefrocks.com/GoldStockCharts.html.
The most important thing to keep in mind is HUI/XAU's Wave 2 Cyclical Bear Market (began 5-11-06). They HAVE TO hit/at least closely approach their primary Secular Bull Market/very long term upcycle trendlines. Primary Secular trendlines are basic technical analysis. As a very long term (7+ years) investor the ONLY time you should be buying is close to the primary Secular Bull Market trendline, currently at 200-220 for HUI, 40ish for NEM, 85-90 for the XAU, and at 525ish for gold.
HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be Wave A down of the likely 3-6 weekish vicious 30-45%+ decline for HUI/XAU. Since 10-4-06 HUI/XAU have rallied beyond (another reason one must understand cycles, it's very likely to be a major fakeout) their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, but, 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 30-45%+ 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 5 and 7 at http://www.joefrocks.com/GoldStockCharts.html.
HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 5 and 7 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 6 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
10:34 AM
