...........New NEM Chart With Elliott Wave Count
I did a new annotated 3 month chart for reliable lead indicator NEM with the Elliott Wave count, that's sorely needed to have confidence in the Elliott Wave count I've been discussing, see chart one at http://www.joefrocks.com/GoldStockCharts.html. How do I know that the current short term upcycle since early Wednesday is Wave B for HUI/NEM/XAU? One can never say with 100% certainty of course, but, the upcycle labeled Wave B of Wave A lasted about one session, so, it's very unlikely that's Wave B, and, indicates that the current short term upcycle since early Wednesday (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==) is very likely to be Wave B for HUI/NEM/XAU.
Also, NEM has unfilled downside gaps at 41.83, 41.09, and 40.83 that are likely to get filled, since most gaps get filled, which indicates that Wave C probably hasn't occurred yet. Another sign that NEM hasn't bottomed yet is that HUI/XAU haven't reached 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.
Wave B of NEM's minor intermediate term downcycle since 12-8-06 and HUI/XAU's major downcycle since 12-5-06 (see charts one and two at http://www.joefrocks.com/GoldStockCharts.html) is in Wave 4 down since mid session on Friday for NEM and the NEM dominated XAU (see NEM's 5 day chart at 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==), and, HUI appears to have entered Wave 4 down shortly before Friday's close.
Therefore, early weakness/the culmination of the very short term Wave 4 down is likely on Tuesday, followed by Wave 5 in which NEM/XAU's upside gap filling action should be completed (NEM should fill 43.65 and 44, and, the XAU should fill 136.95).
The NEM Lead Indicator was a bearish -2.31% versus the XAU this week and was a very bearish -0.87% on Friday 1-12, which points to some weakness on Tuesday (complete the very short term Wave 4 down early on Tuesday), and, indicates that those looking to short/buy puts should look to do so in the very short term Wave 5 that should begin on Tuesday and end on Tuesday or Wednesday.
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 net long to an unusually large (>10% decrease in net short position) degree, while the clueless/contrarian gold Speculators traded net short to an unusually large (>10% decrease in net long position) degree. Even though the savvy non contrarian gold Commercial Traders nailed this week's gold strength and the clueless/contrarian gold Speculators blundered big time, the unusually large changes point to gold weakness next week, that's just the way it usually works.
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
Also, NEM has unfilled downside gaps at 41.83, 41.09, and 40.83 that are likely to get filled, since most gaps get filled, which indicates that Wave C probably hasn't occurred yet. Another sign that NEM hasn't bottomed yet is that HUI/XAU haven't reached 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.
Wave B of NEM's minor intermediate term downcycle since 12-8-06 and HUI/XAU's major downcycle since 12-5-06 (see charts one and two at http://www.joefrocks.com/GoldStockCharts.html) is in Wave 4 down since mid session on Friday for NEM and the NEM dominated XAU (see NEM's 5 day chart at 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==), and, HUI appears to have entered Wave 4 down shortly before Friday's close.
Therefore, early weakness/the culmination of the very short term Wave 4 down is likely on Tuesday, followed by Wave 5 in which NEM/XAU's upside gap filling action should be completed (NEM should fill 43.65 and 44, and, the XAU should fill 136.95).
The NEM Lead Indicator was a bearish -2.31% versus the XAU this week and was a very bearish -0.87% on Friday 1-12, which points to some weakness on Tuesday (complete the very short term Wave 4 down early on Tuesday), and, indicates that those looking to short/buy puts should look to do so in the very short term Wave 5 that should begin on Tuesday and end on Tuesday or Wednesday.
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 net long to an unusually large (>10% decrease in net short position) degree, while the clueless/contrarian gold Speculators traded net short to an unusually large (>10% decrease in net long position) degree. Even though the savvy non contrarian gold Commercial Traders nailed this week's gold strength and the clueless/contrarian gold Speculators blundered big time, the unusually large changes point to gold weakness next week, that's just the way it usually works.
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
12:20 AM
