Notice How HUI Is Following The S & P 500 (SPX)
Notice how SPX weakness yesterday resulted in HUI weakness yesterday, and, how SPX strength today has led to HUI strength in the first half of the session, 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. Due to program trading, where SPX is the lead index, one has to time SPX as well as HUI/NEM/XAU (probably true for most sectors), and, is the reason I had to add the reliable WMT (Walmart) Lead Indicator.
Program trading accounts for about 45% of the trading volume on the NYSE and probably 70% or more of the dollar volume/actual money involved. HUI/NEM/XAU/gold/silver are affected dramatically short term by SPX (intermediate term when substantial SPX up/downcycles occur), even though their primary cycles are vastly different (SPX is in a Secular Bear Market versus a Secular Bull Market for HUI/NEM/XAU/gold/silver (Wave 2 Cyclical Bear Market for HUI/XAU/gold/silver since 5-11-06). It's virtually impossible to manipulate HUI/NEM/XAU/gold/silver due to program trading. Gold and silver are securitized as GLD, IAU, SLV ETFs now, which subjects them to the enormous Tsunami effect of program trading.
See the previous post at http://tradethecycles.blogspot.com/2007/01/nem-filled-its-upside-gap-at-44-and-fed.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
Program trading accounts for about 45% of the trading volume on the NYSE and probably 70% or more of the dollar volume/actual money involved. HUI/NEM/XAU/gold/silver are affected dramatically short term by SPX (intermediate term when substantial SPX up/downcycles occur), even though their primary cycles are vastly different (SPX is in a Secular Bear Market versus a Secular Bull Market for HUI/NEM/XAU/gold/silver (Wave 2 Cyclical Bear Market for HUI/XAU/gold/silver since 5-11-06). It's virtually impossible to manipulate HUI/NEM/XAU/gold/silver due to program trading. Gold and silver are securitized as GLD, IAU, SLV ETFs now, which subjects them to the enormous Tsunami effect of program trading.
See the previous post at http://tradethecycles.blogspot.com/2007/01/nem-filled-its-upside-gap-at-44-and-fed.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
9:28 AM
