HUI/XAU's Countertrend Wave B Since 1-10-07 Might Have Peaked Today
HUI/XAU's countertrend Wave B since 1-10-07 might have peaked today shortly after the open, 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==. HUI/XAU did an intraday Wave A down followed by a Wave B up, and, were in Wave C down at session's end, which points to weakness early tomorrow and potential downside gap filling action, in order to fill the downside gaps created at today's open.
The XAU filled it's downside gap at 145.81 today, which obviously means that it wasn't a breakaway gap, but, reliable lead indicator NEM has a downside gap at 46.98 from today's open. If NEM fills today's downside gap at 46.98 (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==) that will confirm that NEM and HUI/XAU have probably peaked.
However, reliable lead indicator NEM made a large gap up at today's open that may be a bullish breakaway gap, and, the NEM Lead Indicator was a very bullish +1.39% versus the XAU today, BUT, since NEM opened at 47.90 and closed at 47.71, NEM actually declined -0.40% from where it opened, whereas, the XAU fell -1.09% from it's open at 147.67 to the close at 146.06, so, from the open to the close the NEM Lead Indicator was actually a bullish +0.69% versus the XAU today, which is considerably less bullish than +1.39% obviously. The Walmart Lead Indicator was a bearish -0.47% versus the S & P 500 today.
Lycos Thomson I Watch was relatively bearish for NEM (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=nem) and WMT today (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=wmt), but, was relatively bullish for GFI (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=gfi) today.
The Fed's weekly credit data released today again (http://www.federalreserve.gov/releases/h41/Current/) revealed a sharp rise, +$4.502 Billion, after a sharp +$5.69 Billion rise the week before. Combined with today's massive $23.75 Billion in credit (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE) and bullish NEM Lead indicator, the Rollover Barometer is at "likely," which means don't sell short/buy puts tomorrow.
Annotated chart 1 at http://www.joefrocks.com/GoldStockCharts.html shows HUI as of 2-9-07 with Elliott Wave count. HUI/XAU should soon enter (may have today) the final major Wave C decline of their Wave 2 Cyclical Bear Market (since 5-11-06).
Massive index fund program trader buying (fueled by Fed Credit) has led to much of the Wave B (began 1-10-07) strength in recent weeks, propping up SPX/HUI/NEM/XAU (has led to a great deal of deceptive rollover action).
The monster spike move that began early on Tuesday, 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==, is probably the final blowoff phase of the countertrend Wave B that began on 1-10-07 for HUI/XAU, IF NEM didn't break out today. Since NEM took out the 12-8-06 minor intermediate term cycle high, NEM's count gets reset to Wave A once it peaks (may have early today).
I've realized that I need a "Rollover Barometer" that will gauge the likelihood of rollover action. Fed Credit (fuels program traders), the lead indicators (NEM, WMT), COT data, etc. will be used to determine whether rollover action is likely, mildly likely, or unlikely. Last week's weekly Fed Credit data (http://www.federalreserve.gov/releases/h41/20070215/, released 4:30 on Thursday) revealed a sharp +$5.69 Billion rise in credit, combined with punch spiking since then and somewhat bullish NEM/WMT Lead Indicators, meant that rollover action was likely.
The XAU has downside gaps at 136.10, and 132.09, and, NEM has downside gaps at 46.98, 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
The XAU filled it's downside gap at 145.81 today, which obviously means that it wasn't a breakaway gap, but, reliable lead indicator NEM has a downside gap at 46.98 from today's open. If NEM fills today's downside gap at 46.98 (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==) that will confirm that NEM and HUI/XAU have probably peaked.
However, reliable lead indicator NEM made a large gap up at today's open that may be a bullish breakaway gap, and, the NEM Lead Indicator was a very bullish +1.39% versus the XAU today, BUT, since NEM opened at 47.90 and closed at 47.71, NEM actually declined -0.40% from where it opened, whereas, the XAU fell -1.09% from it's open at 147.67 to the close at 146.06, so, from the open to the close the NEM Lead Indicator was actually a bullish +0.69% versus the XAU today, which is considerably less bullish than +1.39% obviously. The Walmart Lead Indicator was a bearish -0.47% versus the S & P 500 today.
Lycos Thomson I Watch was relatively bearish for NEM (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=nem) and WMT today (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=wmt), but, was relatively bullish for GFI (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=gfi) today.
The Fed's weekly credit data released today again (http://www.federalreserve.gov/releases/h41/Current/) revealed a sharp rise, +$4.502 Billion, after a sharp +$5.69 Billion rise the week before. Combined with today's massive $23.75 Billion in credit (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE) and bullish NEM Lead indicator, the Rollover Barometer is at "likely," which means don't sell short/buy puts tomorrow.
Annotated chart 1 at http://www.joefrocks.com/GoldStockCharts.html shows HUI as of 2-9-07 with Elliott Wave count. HUI/XAU should soon enter (may have today) the final major Wave C decline of their Wave 2 Cyclical Bear Market (since 5-11-06).
Massive index fund program trader buying (fueled by Fed Credit) has led to much of the Wave B (began 1-10-07) strength in recent weeks, propping up SPX/HUI/NEM/XAU (has led to a great deal of deceptive rollover action).
The monster spike move that began early on Tuesday, 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==, is probably the final blowoff phase of the countertrend Wave B that began on 1-10-07 for HUI/XAU, IF NEM didn't break out today. Since NEM took out the 12-8-06 minor intermediate term cycle high, NEM's count gets reset to Wave A once it peaks (may have early today).
I've realized that I need a "Rollover Barometer" that will gauge the likelihood of rollover action. Fed Credit (fuels program traders), the lead indicators (NEM, WMT), COT data, etc. will be used to determine whether rollover action is likely, mildly likely, or unlikely. Last week's weekly Fed Credit data (http://www.federalreserve.gov/releases/h41/20070215/, released 4:30 on Thursday) revealed a sharp +$5.69 Billion rise in credit, combined with punch spiking since then and somewhat bullish NEM/WMT Lead Indicators, meant that rollover action was likely.
The XAU has downside gaps at 136.10, and 132.09, and, NEM has downside gaps at 46.98, 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
1:34 PM
