HUI/NEM/XAU's Wave B Appears To Have Begun
Wave B of HUI/XAU's major downcycle since 12-5-06 (NEM's minor intermediate term downcycle since 12-8-06) appears to have begun today, which isn't a big deal since all this means is that NEM should fill it's upside gaps at 43.65 and 44, and, the XAU should fill it's upside gaps at 134.41 and 136.95. Of course one should look for an Elliott Wave 12345 up down up down up pattern in Wave B and should get your shorts on in Wave 5 if that's what you're looking to do.
Shortly after NEM and the XAU finish their upside gap filling action HUI/XAU's major downcycle since 12-5-06 (NEM's minor intermediate term downcycle since 12-8-06) should resume with a vengeance (The final Wave C in which HUI/XAU's Cyclical Bear Market since 5-11-06 should bottom at 200-220 for HUI and at 85-90 for the XAU, see charts 6 and 8 at http://www.joefrocks.com/GoldStockCharts.html). It probably makes more sense to use Wave B to "get your shorts on" than to trade long, unless you're a very short term trader.
The WMT (Walmart) Lead Indicator was a very bullish +0.88% versus the S & P 500 (SPX) today, which correctly pointed to some SPX strength that "propped up" HUI/NEM/XAU due to index fund program buying. The NEM Lead Indicator was a very bullish +0.85% versus the XAU today. The very bullish lead indicators today and last week indicates that Wave B up probably began today.
The NEM Lead Indicator was a very bullish +3.25% versus the XAU last week, and, the WMT Lead Indicator was a very bullish +3.23% versus the S & P 500 (SPX) last week.
NEM was in a very short term Wave C down at session's end, 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==, which points to some probably brief weakness early tomorrow.
Gold, which tends to lag gold stocks (Secular Bull began in April 2001 about six months after HUI/NEM/XAU's did), should underperform gold stocks for much of this week due to the bearish COT data.
The latest COT (Commitments Of Traders) data released yesterday is clearly bearish, see last data at http://www.cftc.gov/dea/options/deacmxsof.htm, since the savvy non contrarian gold Commercial Traders traded significantly net short, while the clueless/contrarian gold Speculators traded significantly net long, and, note that they made a relatively aggressive long trade of 10,244 futures and options contracts shortly before gold plunged.
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. 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
Shortly after NEM and the XAU finish their upside gap filling action HUI/XAU's major downcycle since 12-5-06 (NEM's minor intermediate term downcycle since 12-8-06) should resume with a vengeance (The final Wave C in which HUI/XAU's Cyclical Bear Market since 5-11-06 should bottom at 200-220 for HUI and at 85-90 for the XAU, see charts 6 and 8 at http://www.joefrocks.com/GoldStockCharts.html). It probably makes more sense to use Wave B to "get your shorts on" than to trade long, unless you're a very short term trader.
The WMT (Walmart) Lead Indicator was a very bullish +0.88% versus the S & P 500 (SPX) today, which correctly pointed to some SPX strength that "propped up" HUI/NEM/XAU due to index fund program buying. The NEM Lead Indicator was a very bullish +0.85% versus the XAU today. The very bullish lead indicators today and last week indicates that Wave B up probably began today.
The NEM Lead Indicator was a very bullish +3.25% versus the XAU last week, and, the WMT Lead Indicator was a very bullish +3.23% versus the S & P 500 (SPX) last week.
NEM was in a very short term Wave C down at session's end, 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==, which points to some probably brief weakness early tomorrow.
Gold, which tends to lag gold stocks (Secular Bull began in April 2001 about six months after HUI/NEM/XAU's did), should underperform gold stocks for much of this week due to the bearish COT data.
The latest COT (Commitments Of Traders) data released yesterday is clearly bearish, see last data at http://www.cftc.gov/dea/options/deacmxsof.htm, since the savvy non contrarian gold Commercial Traders traded significantly net short, while the clueless/contrarian gold Speculators traded significantly net long, and, note that they made a relatively aggressive long trade of 10,244 futures and options contracts shortly before gold plunged.
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. 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
1:11 PM
