HUI Has Probably Put In A Nearly Perfect Bearish Double Top
HUI probably put in a nearly perfect bearish double top today at 362.58 versus the minor intermediate term cycle high at 362.53 on 12-5-06. The NEM Lead Indicator was a very bearish -1.64% versus the XAU today, and, the WMT Lead Indicator was a slightly bullish +0.12% versus the S & P 500 today.
Reliable lead indicator NEM filled it's downside gap at 46.98 (from yesterday's big gap up at the open to 47.90) as expected, which is a strong indication that NEM and probably also HUI/XAU have put in cycle highs for the upcycle since 1-10-07.
From NEM's anemic uptrend today after the early sharp decline (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 very bearish underperformance, and, from looking at HUI/XAU's downtrend today (http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=), it looks like there will be potentially severe weakness early on Monday. Watch NEM's downside gap at 45.34 and the XAU's downside gap at 136.10 early next week.
Lycos Thomson I Watch revealed bearish/strong sell interest today for NEM (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=nem), GFI (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=gfi), and, for WMT (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=wmt).
Was it the savvy gold Commercial Traders that were "on the ropes" as Clive Maund said in a recent article, or, was it the clueless gold Speculators, including some "well known" (this means that the average person has probably never heard of them) KoolAid drinking gold writers who got their butts kicked? See for yourself in the last data at http://www.cftc.gov/dea/options/deacmxsof.htm.
The savvy gold Commercial Traders traded net short, adding to their short position, though not nearly as much as in previous weeks (been going massively short), and, they also traded a respectable long position for the third straight week, benefitting from this week's gold strength.
It was the clueless gold Speculators who lost their nerve and got squeezed. They engaged in an unusually large (>10% decrease in short position) degree of short covering, and, their long trade was LESS THAN one fifth the size of the gold Commercial Traders long trade.
By the way, despite shorting NEM a bit below 46, I held on to that position despite NEM spiking above 48 (48.33 was the cycle high I think), thanks to my great system, and, it looks like it'll be a good trade.
HUI put in a near perfect slightly higher bearish double top (assuming HUI has peaked) today with the 12-5-06 minor intermediate term cycle high, so, HUI's Elliott Wave count gets reset to Wave A along with NEM's.
In the next few months HUI/XAU should decline 40-45%+ to their primary multi year Secular Bull Market trendlines in effect since November/October 2000, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. HUI's target range is 200-220 (220 if the primary trendline turns up) and the XAU's is 85-90.
HUI and the XAU probably peaked today. The 1 day lag between when NEM and HUI/XAU peaked is a sign that an important cycle high occurred. In the new HUI chart I did the Elliott Wave count indicated that an important peak was imminent, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html.
Fed Credit was an average $5.50 Billion today (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE) after a very massive $23.75 Billion yesterday, and, the weekly Fed Credit data has revealed sharp increases in 3 of the past 4 weeks, see http://www.federalreserve.gov/releases/h41/. The Rollover Barometer is at "likely," which means one probably shouldn't sell short/buy puts right now.
However, since the NEM Lead Indicator was very bearish today, I doubled up on March 130 XAU puts (XAVOF) at only 20 cents versus the original 65 cents, so, my basis is now 42.50 cents or $42.50 per 100 share contract. Next week I'll be looking to roll over to the April expiration.
Annotated chart 1 at http://www.joefrocks.com/GoldStockCharts.html shows HUI as of 2-9-07 with Elliott Wave count.
Massive index fund program trader buying (fueled by Fed Credit) has led to much of the strength in recent weeks (upcycle began 1-10-07), propping up SPX/HUI/NEM/XAU (has led to a great deal of deceptive rollover action).
The XAU has downside gaps at 136.10, and 132.09, and, NEM has downside gaps at 45.34, 43.88, 43.06, 41.83, 41.09, and 40.83. Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps is the basis/crux of "Trade the Cycles."
HUI/XAU are in Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06. In the next few months 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 Friday 2-23 for HUI (12-5-06 for the XAU), when minor intermediate term cycle highs occurred, see charts three and four 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 5-6 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
Reliable lead indicator NEM filled it's downside gap at 46.98 (from yesterday's big gap up at the open to 47.90) as expected, which is a strong indication that NEM and probably also HUI/XAU have put in cycle highs for the upcycle since 1-10-07.
From NEM's anemic uptrend today after the early sharp decline (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 very bearish underperformance, and, from looking at HUI/XAU's downtrend today (http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=), it looks like there will be potentially severe weakness early on Monday. Watch NEM's downside gap at 45.34 and the XAU's downside gap at 136.10 early next week.
Lycos Thomson I Watch revealed bearish/strong sell interest today for NEM (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=nem), GFI (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=gfi), and, for WMT (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=wmt).
Was it the savvy gold Commercial Traders that were "on the ropes" as Clive Maund said in a recent article, or, was it the clueless gold Speculators, including some "well known" (this means that the average person has probably never heard of them) KoolAid drinking gold writers who got their butts kicked? See for yourself in the last data at http://www.cftc.gov/dea/options/deacmxsof.htm.
The savvy gold Commercial Traders traded net short, adding to their short position, though not nearly as much as in previous weeks (been going massively short), and, they also traded a respectable long position for the third straight week, benefitting from this week's gold strength.
It was the clueless gold Speculators who lost their nerve and got squeezed. They engaged in an unusually large (>10% decrease in short position) degree of short covering, and, their long trade was LESS THAN one fifth the size of the gold Commercial Traders long trade.
By the way, despite shorting NEM a bit below 46, I held on to that position despite NEM spiking above 48 (48.33 was the cycle high I think), thanks to my great system, and, it looks like it'll be a good trade.
HUI put in a near perfect slightly higher bearish double top (assuming HUI has peaked) today with the 12-5-06 minor intermediate term cycle high, so, HUI's Elliott Wave count gets reset to Wave A along with NEM's.
In the next few months HUI/XAU should decline 40-45%+ to their primary multi year Secular Bull Market trendlines in effect since November/October 2000, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. HUI's target range is 200-220 (220 if the primary trendline turns up) and the XAU's is 85-90.
HUI and the XAU probably peaked today. The 1 day lag between when NEM and HUI/XAU peaked is a sign that an important cycle high occurred. In the new HUI chart I did the Elliott Wave count indicated that an important peak was imminent, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html.
Fed Credit was an average $5.50 Billion today (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE) after a very massive $23.75 Billion yesterday, and, the weekly Fed Credit data has revealed sharp increases in 3 of the past 4 weeks, see http://www.federalreserve.gov/releases/h41/. The Rollover Barometer is at "likely," which means one probably shouldn't sell short/buy puts right now.
However, since the NEM Lead Indicator was very bearish today, I doubled up on March 130 XAU puts (XAVOF) at only 20 cents versus the original 65 cents, so, my basis is now 42.50 cents or $42.50 per 100 share contract. Next week I'll be looking to roll over to the April expiration.
Annotated chart 1 at http://www.joefrocks.com/GoldStockCharts.html shows HUI as of 2-9-07 with Elliott Wave count.
Massive index fund program trader buying (fueled by Fed Credit) has led to much of the strength in recent weeks (upcycle began 1-10-07), propping up SPX/HUI/NEM/XAU (has led to a great deal of deceptive rollover action).
The XAU has downside gaps at 136.10, and 132.09, and, NEM has downside gaps at 45.34, 43.88, 43.06, 41.83, 41.09, and 40.83. Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps is the basis/crux of "Trade the Cycles."
HUI/XAU are in Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06. In the next few months 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 Friday 2-23 for HUI (12-5-06 for the XAU), when minor intermediate term cycle highs occurred, see charts three and four 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 5-6 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
1:13 PM
