..................A Gold Article Worth Reading
Take a look at the chart (toward the bottom of the article) in the article at the first link and note that gold has been following it's 1970s pattern closely, and, is due for a major decline that could last another year or so (gold tends to lag gold stocks), see http://www.321gold.com/editorials/saxena/saxena021507.html.
The fact that gold/silver and HUI/NEM/XAU had huge spike moves that peaked in May 2006 (Wave 1 Cyclical Bull Market cycle highs of the Secular Bull Market since late 2000 for HUI/NEM/XAU, since April 2001 for gold, and, since late 2001 for silver) was an obvious sign that they were due for a major sustained downturn anyway, and, the Elliott Wave count was pretty clear, and, pointed to a Wave 1 Cyclical Bull Market cycle high, as shown in the XAU chart done in February 2006, see chart 11 at http://www.joefrocks.com/GoldStockCharts.html.
Assuming NEM and the XAU fill downside gaps at 45.34 and at 140.07 early next week (see previous post at http://tradethecycles.blogspot.com/2007/02/huixau-are-in-very-short-term-wave-down.html), I’m going to look to close out my NEM short/XAU puts positions, and, should be able to get back in with double or triple the number of March 130 XAU puts (XAVOF).
I think they're (NEM and the XAU, and HUI also of course) going to bounce after filling those gaps, because, there's distance between those gaps and the next ones at 43.88 and 136.10, and, the indicators and data clearly point to some strength next week.
The NEM (-0.08% versus the XAU W/E 2-16-07, +0.50% on 2-16) and WMT (-0.14% versus SPX W/E 2-16-07, +0.34% on 2-16, +0.92% on 2-15) Lead Indicators were nearly neutral last week and were both bullish on Friday. The savvy gold Commercial Traders made a significant long trade (see last data at http://www.cftc.gov/dea/options/deacmxsof.htm), the Fed has been spiking the punch (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), and, NEM's I Watch data was bullish on Thursday and Friday, see http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?t=NEM&range=7&mgp=0&i=3&hdate=&x=13&y=3.
The XAU has downside gaps at 140.07, 136.10, and 132.09, and, an upside gap at 144.64, and, NEM has downside gaps at 45.34, 43.88, 43.06, 41.83, 41.09, and 40.83, and, an upside gap at 46.51.
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
The fact that gold/silver and HUI/NEM/XAU had huge spike moves that peaked in May 2006 (Wave 1 Cyclical Bull Market cycle highs of the Secular Bull Market since late 2000 for HUI/NEM/XAU, since April 2001 for gold, and, since late 2001 for silver) was an obvious sign that they were due for a major sustained downturn anyway, and, the Elliott Wave count was pretty clear, and, pointed to a Wave 1 Cyclical Bull Market cycle high, as shown in the XAU chart done in February 2006, see chart 11 at http://www.joefrocks.com/GoldStockCharts.html.
Assuming NEM and the XAU fill downside gaps at 45.34 and at 140.07 early next week (see previous post at http://tradethecycles.blogspot.com/2007/02/huixau-are-in-very-short-term-wave-down.html), I’m going to look to close out my NEM short/XAU puts positions, and, should be able to get back in with double or triple the number of March 130 XAU puts (XAVOF).
I think they're (NEM and the XAU, and HUI also of course) going to bounce after filling those gaps, because, there's distance between those gaps and the next ones at 43.88 and 136.10, and, the indicators and data clearly point to some strength next week.
The NEM (-0.08% versus the XAU W/E 2-16-07, +0.50% on 2-16) and WMT (-0.14% versus SPX W/E 2-16-07, +0.34% on 2-16, +0.92% on 2-15) Lead Indicators were nearly neutral last week and were both bullish on Friday. The savvy gold Commercial Traders made a significant long trade (see last data at http://www.cftc.gov/dea/options/deacmxsof.htm), the Fed has been spiking the punch (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), and, NEM's I Watch data was bullish on Thursday and Friday, see http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?t=NEM&range=7&mgp=0&i=3&hdate=&x=13&y=3.
The XAU has downside gaps at 140.07, 136.10, and 132.09, and, an upside gap at 144.64, and, NEM has downside gaps at 45.34, 43.88, 43.06, 41.83, 41.09, and 40.83, and, an upside gap at 46.51.
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
8:14 PM
