............HUI/XAU Are In Wave B Of Wave A
In the previous post (http://tradethecycles.blogspot.com/2007/01/new-nem-chart-with-elliott-wave-count.html) I discussed HUI/NEM/XAU's Elliott Wave count since they turned down in early December. The new NEM chart (chart one at http://www.joefrocks.com/GoldStockCharts.html) indicates that NEM is in Wave B (since early last Wednesday) of the minor intermediate term downcycle since 12-8-06, but, HUI/XAU should be in Wave B of Wave A of the major downcycle since 12-5-06 (see chart two at http://www.joefrocks.com/GoldStockCharts.html), not Wave B of the entire major downcycle, because NEM should bottom at 40.50ish, not too far above NEM's current level and expected Wave B peak of 44.20ish (see chart one at http://www.joefrocks.com/GoldStockCharts.html), but, HUI/XAU still have a long way to fall to reach their primary Secular Bull Market/very long term upcycle trendlines in effect since late 2000 (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.
What appears likely (I've discussed this possibility a few times before) is that NEM's minor intermediate term downcycle since 12-8-06 will bottom at about the same time as Wave A of HUI/XAU's major downcycle since 12-5-06, then NEM's Wave 1 of a new minor intermediate term upcycle (might be Waves 1, 2, and 3 of a shorter monthly upcycle) will coincide closely with Wave B of HUI/XAU's major downcycle since 12-5-06, then, Wave 2 down of NEM's new minor intermediate term upcycle will probably coincide closely with the final Wave C of HUI/XAU's major downcycle since 12-5-06. Obviously, at some point in this process reliable lead indicator NEM should start to dramatically outperform HUI/XAU (will decline much less than HUI/XAU because NEM reached it's primary trendline on 10-4-06, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html).
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
What appears likely (I've discussed this possibility a few times before) is that NEM's minor intermediate term downcycle since 12-8-06 will bottom at about the same time as Wave A of HUI/XAU's major downcycle since 12-5-06, then NEM's Wave 1 of a new minor intermediate term upcycle (might be Waves 1, 2, and 3 of a shorter monthly upcycle) will coincide closely with Wave B of HUI/XAU's major downcycle since 12-5-06, then, Wave 2 down of NEM's new minor intermediate term upcycle will probably coincide closely with the final Wave C of HUI/XAU's major downcycle since 12-5-06. Obviously, at some point in this process reliable lead indicator NEM should start to dramatically outperform HUI/XAU (will decline much less than HUI/XAU because NEM reached it's primary trendline on 10-4-06, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html).
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
9:54 PM
