An HUI/NEM/XAU Wave B Blowoff Spike/Sucker's Rally
Today was an HUI/NEM/XAU Wave B (began 1-10-07) blowoff spike/sucker's rally resulting partly from massive Fed Credit, and, the lead indicators were very bullish yesterday, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==. The NEM Lead Indicator was a very bearish -1.37% versus the XAU today, the WMT Lead Indicator was a bearish -0.44% versus the S & P 500 today, and, both became more bearish toward session's end, which points to early weakness tomorrow, see
http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,nem,%5Exau,%5EGSPC.
The fact that both lead indicators were bearish and became more bearish toward session's end indicates that there should be little if any additional upside tomorrow, BUT, tomorrow is Fed punch spiking Thursday (they've been going nuts in recent months on Thursday), so keep that in mind.
HUI was in a very short term Wave A down at session's end, which points to early weakness tomorrow, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==.
Lycos Thomson I Watch revealed 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 WMT (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=wmt).
HUI, NEM, and the XAU all took out their recent Wave B (began on 1-10-07) cycle highs thanks to massive Fed punch spiking today and in recent weeks, but, today's large spike move is the hallmark of important cycle highs (looks like a blowoff spike/sucker's rally), so, the countertrend Wave B that began on 1-10-07 MAY have finally peaked today, or may do so tomorrow.
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 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
http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,nem,%5Exau,%5EGSPC.
The fact that both lead indicators were bearish and became more bearish toward session's end indicates that there should be little if any additional upside tomorrow, BUT, tomorrow is Fed punch spiking Thursday (they've been going nuts in recent months on Thursday), so keep that in mind.
HUI was in a very short term Wave A down at session's end, which points to early weakness tomorrow, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==.
Lycos Thomson I Watch revealed 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 WMT (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=wmt).
HUI, NEM, and the XAU all took out their recent Wave B (began on 1-10-07) cycle highs thanks to massive Fed punch spiking today and in recent weeks, but, today's large spike move is the hallmark of important cycle highs (looks like a blowoff spike/sucker's rally), so, the countertrend Wave B that began on 1-10-07 MAY have finally peaked today, or may do so tomorrow.
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 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
1:36 PM
