.....I Covered My NEM Short Position Early Today
I wrote this (first three paragraphs in quotes followed by two new ones) early today, but Blogger was down for maintenance, so I'm posting it now:
"A few things caused me to cover my NEM short position early today. The WMT (Walmart) Lead Indicator is a very bullish at +1.20% versus the S & P 500 (SPX) right now, which correctly pointed to some SPX strength that's "propping up" HUI/NEM/XAU due to index fund program buying. The NEM Lead Indicator is bullish at +0.70% versus the XAU right now. NEM's technical indicators (RSI, Stochastics, Williams %R) are very oversold.
Also 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.
Right now it makes sense to see if NEM will begin to fill it's cluster of downside gaps at 42.21, 41.83, 41.09, and 40.83. WMT has a downside gap at 46.18 from 1-3-07's open. "
The latest COT (Commitments Of Traders) data released yesterday was clearly bearish (see next paragraph), which indicates that Wave A of HUI/XAU's major downcycle since 12-5-06 may not have bottomed, and, the Fed didn't spike the punch today, they only added a $3.25 Billion one day repo, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm, so, significant SPX (S & P 500) weakness may occur that would lead to index fund program selling affecting HUI/NEM/XAU.
It almost always makes sense to trade with the COT data when it's clearly bearish or bullish, which means that trading short probably makes sense for much of this week, but, since Wave B may have begun, and, since reliable lead indicator NEM closely approached it's cluster of downside gaps at 42.21, 41.83, 41.09, and 40.83 early today, with session cycle low at 42.40, then dramatically reversed course, it makes sense to wait for reliable lead indicator NEM to either start filling that cluster of downside gaps or to clearly start Wave B up. It makes sense to wait and see what reliable lead indicator NEM does. If NEM fills it's upside gap at 43.65, that'll be a sign that Wave B has begun, and, if NEM fills it's downside gap at 42.21 then Wave A is still in effect.
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.
The Fed has been going nuts spiking the punch since December 14, which points to strength once Wave B begins, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE. Thursday's credit was a massive $23.75 Billion in repos.
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
"A few things caused me to cover my NEM short position early today. The WMT (Walmart) Lead Indicator is a very bullish at +1.20% versus the S & P 500 (SPX) right now, which correctly pointed to some SPX strength that's "propping up" HUI/NEM/XAU due to index fund program buying. The NEM Lead Indicator is bullish at +0.70% versus the XAU right now. NEM's technical indicators (RSI, Stochastics, Williams %R) are very oversold.
Also 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.
Right now it makes sense to see if NEM will begin to fill it's cluster of downside gaps at 42.21, 41.83, 41.09, and 40.83. WMT has a downside gap at 46.18 from 1-3-07's open. "
The latest COT (Commitments Of Traders) data released yesterday was clearly bearish (see next paragraph), which indicates that Wave A of HUI/XAU's major downcycle since 12-5-06 may not have bottomed, and, the Fed didn't spike the punch today, they only added a $3.25 Billion one day repo, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm, so, significant SPX (S & P 500) weakness may occur that would lead to index fund program selling affecting HUI/NEM/XAU.
It almost always makes sense to trade with the COT data when it's clearly bearish or bullish, which means that trading short probably makes sense for much of this week, but, since Wave B may have begun, and, since reliable lead indicator NEM closely approached it's cluster of downside gaps at 42.21, 41.83, 41.09, and 40.83 early today, with session cycle low at 42.40, then dramatically reversed course, it makes sense to wait for reliable lead indicator NEM to either start filling that cluster of downside gaps or to clearly start Wave B up. It makes sense to wait and see what reliable lead indicator NEM does. If NEM fills it's upside gap at 43.65, that'll be a sign that Wave B has begun, and, if NEM fills it's downside gap at 42.21 then Wave A is still in effect.
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.
The Fed has been going nuts spiking the punch since December 14, which points to strength once Wave B begins, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE. Thursday's credit was a massive $23.75 Billion in repos.
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
11:13 AM
