...........Gold Writers Continue To Drink KoolAid
Mark Hulbert reveals that complacency is running amuck amongst the generally clueless gold writers:
"Nevertheless, gold timers have so quickly jumped on the bullish bandwagon in recent weeks that contrarians are beginning to wonder about their forecast for the entire year.
Consider the Hulbert Gold Newsletter Sentiment Index (HGNSI), which reflects the average recommended gold market exposure among a subset of short-term gold timing newsletters tracked by the Hulbert Financial Digest. As of Monday night, the HGNSI stood at 67.9%. This is too high, no matter how you look at it.
For example, the HGNSI stood at 25% as of my Dec. 27 column. So, the editor of the average gold timing newsletter has become more than twice as bullish in the course of a month.
The high level of current bullishness is also evident in what happened to the HGNSI on Monday. Even though gold bullion fell during the day's trading session, the average gold timer became significantly more bullish. For the day, the HGNSI jumped more than 14 percentage points.
These developments are worrisome, according to contrarian analysis, because the markets rarely behave in the ways that the majority expects them to. Contrarians would be far more comfortable in forecasting a strong gold market if the gold timers on balance weren't so exuberant. "
For the complete article see http://www.marketwatch.com/news/story/contrarians-worry-because-gold-timers-too/story.aspx?guid=%7BD59E07D5%2D9225%2D41BE%2DA4F4%2D345F95920D9B%7D.
I neglected to mention in today's first post (see next link) that NEM created a downside gap at today's open at 43.88 and the XAU did so at 136.10. Those downside gaps should get filled this week.
For the previous post see http://tradethecycles.blogspot.com/2007/01/huinemxau-elliott-wave-count.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 8 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 $470ish right now, so, gold would be a great buy in the $470-500 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 7 and 9 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 8 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .
HUI NEM XAU
"Nevertheless, gold timers have so quickly jumped on the bullish bandwagon in recent weeks that contrarians are beginning to wonder about their forecast for the entire year.
Consider the Hulbert Gold Newsletter Sentiment Index (HGNSI), which reflects the average recommended gold market exposure among a subset of short-term gold timing newsletters tracked by the Hulbert Financial Digest. As of Monday night, the HGNSI stood at 67.9%. This is too high, no matter how you look at it.
For example, the HGNSI stood at 25% as of my Dec. 27 column. So, the editor of the average gold timing newsletter has become more than twice as bullish in the course of a month.
The high level of current bullishness is also evident in what happened to the HGNSI on Monday. Even though gold bullion fell during the day's trading session, the average gold timer became significantly more bullish. For the day, the HGNSI jumped more than 14 percentage points.
These developments are worrisome, according to contrarian analysis, because the markets rarely behave in the ways that the majority expects them to. Contrarians would be far more comfortable in forecasting a strong gold market if the gold timers on balance weren't so exuberant. "
For the complete article see http://www.marketwatch.com/news/story/contrarians-worry-because-gold-timers-too/story.aspx?guid=%7BD59E07D5%2D9225%2D41BE%2DA4F4%2D345F95920D9B%7D.
I neglected to mention in today's first post (see next link) that NEM created a downside gap at today's open at 43.88 and the XAU did so at 136.10. Those downside gaps should get filled this week.
For the previous post see http://tradethecycles.blogspot.com/2007/01/huinemxau-elliott-wave-count.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 8 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 $470ish right now, so, gold would be a great buy in the $470-500 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 7 and 9 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 8 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
10:02 AM
