HUI's Short Term Upcycle/Wave B Of Wave A Since 1-10-07 Has Probably Peaked
HUI's Short Term Upcycle/Wave B of Wave A since 1-10-07 has probably peaked. It looked like it had peaked yesterday because, there was a very short term Elliott Wave 12345 up down up down up pattern from early Tuesday until early yesterday, indicating that the very short term Wave 5/therefore the short term upcycle since 1-10 had peaked, BUT, the intraday upcycle early yesterday had an Elliott Wave 12345 up down up down up pattern which indicated that it was ONE CYCLE, not Waves 345 of a very short term Wave 5, which indicated that that cycle was a very short term Wave 3 and the weakness the remainder of the session was a very short term Wave 4 down, AND, today's early HUI strength is a very short term Wave 5, in which the Short Term Upcycle/Wave B Of Wave A Since 1-10-07 (major downcycle since 12-5-06 for HUI/XAU, see charts 2 and 3 at http://www.joefrocks.com/GoldStockCharts.html) has probably peaked.
One can see in HUI's 5 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==) that the cycle highs have flattened out/rolled over dramatically, which is another sign of peaking action.
The XAU's short term upcycle/Wave B of Wave A also did an Elliott Wave 12345 up down up down up pattern with Wave 1 peaking on Thursday 1-11, Wave 3 peaking on Friday 1-12, and, Wave 5 probably peaked early today, see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==.
As I write this HUI appears to have entered Wave C of Wave A of it's major downcycle since 12-5-06, charts 2 and 3 at http://www.joefrocks.com/GoldStockCharts.html show how Elliott Wave nailed and cycle trendlines confirmed (cycle trendline broke down one day after HUI's minor intermediate term cycle high on 12-5-06 and a 2% sell signal occurred two days after HUI's minor intermediate term cycle high on 12-5-06) HUI's minor intermediate term cycle high on 12-5-06. Chart one at the link above shows NEM's minor intermediate term downcycle since 12-8-06 with the Elliott Wave count.
The strategy now is to wait for HUI to do a very short term Wave B up today and/or tomorrow, then I'm looking to sell short and also buy XAU puts during late Wave B or early Wave C. The NEM and WMT (Walmart) Lead Indicators should both be bearish. The NEM Lead Indicator was a bearish -2.31% versus the XAU last week and was slightly bearish on Tuesday and Wednesday.
The Fed took their foot off the pedal yesterday and today (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), with only $1.75 Billion yesterday versus an average of $5-6 Billion/day, and, today's $11 Billion in Repos, while large, is below the typical $13-14 Billion on punch spiking Thursday (much more on recent Thursdays).
HUI/NEM/XAU should soon experience a nasty short term Wave C decline (a few days, so one must be nimble) in which Wave A of HUI/XAU's major downcycle (Wave C of Wave C of the Cyclical Bear Market since 5-11-06) since 12-5-06 (see charts 2 and 3 at http://www.joefrocks.com/GoldStockCharts.html), and, Wave C of NEM's minor intermediate term downcycle since 12-8-06 (see chart 1 at http://www.joefrocks.com/GoldStockCharts.html), should bottom.
NEM's cycle low from 10-4-06 at 39.84 should hold, because NEM hit it's primary Secular Bull Market trendline since October 2000, and, hit a major 5% follow through buy signal, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. Reliable lead indicator NEM should be in a 5+ year Wave 3 Cyclical Bull Market since 10-4-06's cycle low at 39.84. HUI/XAU are in a Wave 2 Cyclical Bear Market since 5-11-06 (have yet to reach their primary trendlines as discussed in subsequent paragraphs).
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 7 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 7, 8, and 9 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 7 and 9 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 two and three 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 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
One can see in HUI's 5 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==) that the cycle highs have flattened out/rolled over dramatically, which is another sign of peaking action.
The XAU's short term upcycle/Wave B of Wave A also did an Elliott Wave 12345 up down up down up pattern with Wave 1 peaking on Thursday 1-11, Wave 3 peaking on Friday 1-12, and, Wave 5 probably peaked early today, see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==.
As I write this HUI appears to have entered Wave C of Wave A of it's major downcycle since 12-5-06, charts 2 and 3 at http://www.joefrocks.com/GoldStockCharts.html show how Elliott Wave nailed and cycle trendlines confirmed (cycle trendline broke down one day after HUI's minor intermediate term cycle high on 12-5-06 and a 2% sell signal occurred two days after HUI's minor intermediate term cycle high on 12-5-06) HUI's minor intermediate term cycle high on 12-5-06. Chart one at the link above shows NEM's minor intermediate term downcycle since 12-8-06 with the Elliott Wave count.
The strategy now is to wait for HUI to do a very short term Wave B up today and/or tomorrow, then I'm looking to sell short and also buy XAU puts during late Wave B or early Wave C. The NEM and WMT (Walmart) Lead Indicators should both be bearish. The NEM Lead Indicator was a bearish -2.31% versus the XAU last week and was slightly bearish on Tuesday and Wednesday.
The Fed took their foot off the pedal yesterday and today (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), with only $1.75 Billion yesterday versus an average of $5-6 Billion/day, and, today's $11 Billion in Repos, while large, is below the typical $13-14 Billion on punch spiking Thursday (much more on recent Thursdays).
HUI/NEM/XAU should soon experience a nasty short term Wave C decline (a few days, so one must be nimble) in which Wave A of HUI/XAU's major downcycle (Wave C of Wave C of the Cyclical Bear Market since 5-11-06) since 12-5-06 (see charts 2 and 3 at http://www.joefrocks.com/GoldStockCharts.html), and, Wave C of NEM's minor intermediate term downcycle since 12-8-06 (see chart 1 at http://www.joefrocks.com/GoldStockCharts.html), should bottom.
NEM's cycle low from 10-4-06 at 39.84 should hold, because NEM hit it's primary Secular Bull Market trendline since October 2000, and, hit a major 5% follow through buy signal, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. Reliable lead indicator NEM should be in a 5+ year Wave 3 Cyclical Bull Market since 10-4-06's cycle low at 39.84. HUI/XAU are in a Wave 2 Cyclical Bear Market since 5-11-06 (have yet to reach their primary trendlines as discussed in subsequent paragraphs).
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 7 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 7, 8, and 9 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 7 and 9 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 two and three 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 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
6:59 AM
