...........Thoughts About Today's HUI/XAU Action
First of all HUI/NEM/XAU appear to have hit minor intermediate term cycle highs today for the cycle that began on 10-4-06, which means that the expected 3-6 week 35-45% vicious decline for HUI/XAU may have begun. HUI plunged about -2.75% early today despite SPX (S & P 500) only experiencing very modest weakness, see http://finance.yahoo.com/q/ta?t=5d&s=%5EHUI&l=off&z=l&q=b&a=m26-12-9&a=p12&a=fs&a=w14&c=&c=%5EGSPC, which is a sign that HUI/XAU/NEM may have turned down, because SPX weakness will tend to have more effect when HUI/XAU/NEM are in important downcycles.
After the early sharp plunge HUI/XAU were only able to rally modestly, and, it appears that another decline may occur early tomorrow, because the modest rebound appears to have peaked near session's end, 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==.
The NEM lead Indicator was a very bullish +1.19% versus the XAU today/on 12-5, which means that some significant strength is likely tomorrow, possibly after early weakness. The fact that the Fed provided no credit today (rare) is a major factor pointing to early weakness tomorrow also, because index fund program traders may have run low on fuel.
Looking at HUI's five day chart , 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==, the short term upcycle spiked very sharply/nearly vertical from late last Wednesday until early Thursday, then rolled over/flattened out dramatically, and, appears to have peaked. The substantial strength appears to have been largely a result of aggressive program trading resulting from massive Fed credit ($20.75 Billion on Thursday).
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 35-45%+ 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 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 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
After the early sharp plunge HUI/XAU were only able to rally modestly, and, it appears that another decline may occur early tomorrow, because the modest rebound appears to have peaked near session's end, 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==.
The NEM lead Indicator was a very bullish +1.19% versus the XAU today/on 12-5, which means that some significant strength is likely tomorrow, possibly after early weakness. The fact that the Fed provided no credit today (rare) is a major factor pointing to early weakness tomorrow also, because index fund program traders may have run low on fuel.
Looking at HUI's five day chart , 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==, the short term upcycle spiked very sharply/nearly vertical from late last Wednesday until early Thursday, then rolled over/flattened out dramatically, and, appears to have peaked. The substantial strength appears to have been largely a result of aggressive program trading resulting from massive Fed credit ($20.75 Billion on Thursday).
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 35-45%+ 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 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 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
1:13 PM
