There Is No Major Gold Or Silver Manipulation, To Put It Mildly
Since the gold/silver sector has been weak recently some manipulation articles are popping up like weeds. If gold or silver really was being suppressed in a major way (as opposed to soaring, which is what they really did for about five years in Wave 1 of this Secular Bull Market), why would anyone want to invest in a suppressed market??? The manipulation gold writers are not only dead wrong, but, are scaring people away from their own market. One has to wonder about those guys. The fact is that the US government WANTS the US Dollar to decline (in an orderly fashion) so that our vast foreign debt becomes cheaper.
A number of gold/silver writers make a habit of discussing "manipulation" of gold (and therefore gold stocks) despite the fact that gold did 30-35% each year in it's Wave 1 Cyclical Bull Market from April 2001 until May 2006. If you had an investment that AVERAGED 30-35% each year for slightly over FIVE years would you be screaming "manipulation" on a regular basis? The fact of the matter is that there is MUCH MORE positive "manipulation" in the form of Fed Credit that fuels massive program trading, which accounts for 45% of the daily trading volume on the NYSE and probably 70% or more of the daily dollar volume (the actual money involved in the trading) on the NYSE. Gold and silver are now securitized in the form of Exchange Traded Mutual Funds (ETFs) now (GLD and IAU are two gold ETFs and SLV is a silver ETF).
In the five day HUI vs SPX (S & P 500) chart one can see how SPX buying or selling has a major impact on HUI, see http://finance.yahoo.com/q/ta?t=5d&s=%5EGSPC&l=off&z=l&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=%5Ehui. In the five year HUI vs SPX (S & P 500) chart one can see that SPX weakness in mid 2002 and early 2003 led to HUI weakness (see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5y&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=%5EGSPC). Then substantial SPX strength during most of 2003 led to (was a major/huge factor, HUI was in the strong part of a Wave 3 long term upcycle) a great upcycle in HUI. In May 2004 SPX and HUI both experienced substantial corrections. In May/part of June this year SPX and HUI both experienced substantial corrections. In early September of this year the worst part of HUI's vicious correction from early September until October 4 occurred during significant short term SPX weakness thanks to program selling.
The fact is that there is much more positive "manipulation" in the form of Fed Credit, that fuels massive program trading, than any other potential "manipulation" that so many gold/silver writers love to talk about. Gold did 30-35% each year in it's Wave 1 Cyclical Bull Market from April 2001 until May 2006, so, "manipulation" with an invesment that did so well obviously isn't a major factor, and, is a very minor factor if it exists at all.
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.
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.
NEM clearly broke it's minor intermediate term upcycle trendline since 10-4-06 on Tuesday, so, the vicious decline may soon rear it's head in a big way. 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 number of gold/silver writers make a habit of discussing "manipulation" of gold (and therefore gold stocks) despite the fact that gold did 30-35% each year in it's Wave 1 Cyclical Bull Market from April 2001 until May 2006. If you had an investment that AVERAGED 30-35% each year for slightly over FIVE years would you be screaming "manipulation" on a regular basis? The fact of the matter is that there is MUCH MORE positive "manipulation" in the form of Fed Credit that fuels massive program trading, which accounts for 45% of the daily trading volume on the NYSE and probably 70% or more of the daily dollar volume (the actual money involved in the trading) on the NYSE. Gold and silver are now securitized in the form of Exchange Traded Mutual Funds (ETFs) now (GLD and IAU are two gold ETFs and SLV is a silver ETF).
In the five day HUI vs SPX (S & P 500) chart one can see how SPX buying or selling has a major impact on HUI, see http://finance.yahoo.com/q/ta?t=5d&s=%5EGSPC&l=off&z=l&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=%5Ehui. In the five year HUI vs SPX (S & P 500) chart one can see that SPX weakness in mid 2002 and early 2003 led to HUI weakness (see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5y&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=%5EGSPC). Then substantial SPX strength during most of 2003 led to (was a major/huge factor, HUI was in the strong part of a Wave 3 long term upcycle) a great upcycle in HUI. In May 2004 SPX and HUI both experienced substantial corrections. In May/part of June this year SPX and HUI both experienced substantial corrections. In early September of this year the worst part of HUI's vicious correction from early September until October 4 occurred during significant short term SPX weakness thanks to program selling.
The fact is that there is much more positive "manipulation" in the form of Fed Credit, that fuels massive program trading, than any other potential "manipulation" that so many gold/silver writers love to talk about. Gold did 30-35% each year in it's Wave 1 Cyclical Bull Market from April 2001 until May 2006, so, "manipulation" with an invesment that did so well obviously isn't a major factor, and, is a very minor factor if it exists at all.
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.
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.
NEM clearly broke it's minor intermediate term upcycle trendline since 10-4-06 on Tuesday, so, the vicious decline may soon rear it's head in a big way. 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
10:59 AM
