...........HUI/XAU's Final Major Wave C Decline
HUI/XAU's final major Wave C decline of the Wave 2 Cyclical Bear market (since 5-11-06) began on Wednesday 2-14-07 for the XAU and on Thursday 2-15-07 for HUI, see 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==. See chart 1 for HUI's Elliott Wave count as of 2-9-07, see http://www.joefrocks.com/GoldStockCharts.html. Reliable lead indicator NEM entered Wave C of it's minor intermediate term downcycle since 12-8-06 on 2-9-07.
NEM and the XAU appear to have made bearish breakaway gaps to the downside again today (now upside gaps at 46.26 and at 143.12), as they did on Friday, see 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==. The XAU has downside gaps at 140.07, 136.10, and 132.09, and, upside gaps at 144.64 and 143.12, and, NEM has downside gaps at 45.34, 43.88, 43.06, 41.83, 41.09, and 40.83, and, upside gaps at 46.51 and 46.26.
Assuming NEM and the XAU fill downside gaps at 45.34 and at 140.07 early this 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 (may not) 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 this week. However, getting out risks missing a 10%+ move down, that would probably result from program selling due to SPX (S & P 500) weakness. Notice that today's weakness is largely the result of computerized program trading, 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.
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.
Ask one of the "legendary" (probably for their cluelessness) gold writers how a declining peaks chart pattern for HUI/XAU since May 11, 2006 is bullish.
A picture sometimes is worth much more than any number of words can convey. In the latest annotated HUI chart, see chart one at http://www.joefrocks.com/GoldStockCharts.html, one should make the following highly important observations:
1. HUI has a succession of lower cycle highs since putting in a Wave 1 Cyclical Bull Market cycle high on 5-11-06 a bit above 401. They are Wave B of the Wave 2 Cyclical Bear Market, Wave B of Wave C of the Wave 2 Cyclical Bear Market, and, Wave B of Wave C of Wave C (Wave C of Wave C began on 12-5-06) of the Wave 2 Cyclical Bear Market, that occurred on 2-15-07. So, the final Wave C decline of HUI/XAU's Wave 2 Cyclical Bear Market since 5-11-06 has begun.
2. Also note that HUI remains way above it's primary Secular Bull Market trendline in effect since November 2000, currently at 200ish. HUI closed at 340.06 on 2-9-07. So, HUI is 140/340 = 41% above it's primary trendline at 2-9's close. Combine that with a succession of lower cycle highs since 5-11-06's Wave 1 Cyclical Bull Market cycle high and an Elliott Wave count that indicates the final Wave C decline of HUI/XAU's Wave 2 Cyclical Bear Market has begun, and one has to be very cautious/bearish now.
Amazingly (???, actually they tend to be terrible) most gold writers are bullish now, according to Mark Hulbert, and, from skimming some of the gold writers work.
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
NEM and the XAU appear to have made bearish breakaway gaps to the downside again today (now upside gaps at 46.26 and at 143.12), as they did on Friday, see 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==. The XAU has downside gaps at 140.07, 136.10, and 132.09, and, upside gaps at 144.64 and 143.12, and, NEM has downside gaps at 45.34, 43.88, 43.06, 41.83, 41.09, and 40.83, and, upside gaps at 46.51 and 46.26.
Assuming NEM and the XAU fill downside gaps at 45.34 and at 140.07 early this 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 (may not) 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 this week. However, getting out risks missing a 10%+ move down, that would probably result from program selling due to SPX (S & P 500) weakness. Notice that today's weakness is largely the result of computerized program trading, 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.
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.
Ask one of the "legendary" (probably for their cluelessness) gold writers how a declining peaks chart pattern for HUI/XAU since May 11, 2006 is bullish.
A picture sometimes is worth much more than any number of words can convey. In the latest annotated HUI chart, see chart one at http://www.joefrocks.com/GoldStockCharts.html, one should make the following highly important observations:
1. HUI has a succession of lower cycle highs since putting in a Wave 1 Cyclical Bull Market cycle high on 5-11-06 a bit above 401. They are Wave B of the Wave 2 Cyclical Bear Market, Wave B of Wave C of the Wave 2 Cyclical Bear Market, and, Wave B of Wave C of Wave C (Wave C of Wave C began on 12-5-06) of the Wave 2 Cyclical Bear Market, that occurred on 2-15-07. So, the final Wave C decline of HUI/XAU's Wave 2 Cyclical Bear Market since 5-11-06 has begun.
2. Also note that HUI remains way above it's primary Secular Bull Market trendline in effect since November 2000, currently at 200ish. HUI closed at 340.06 on 2-9-07. So, HUI is 140/340 = 41% above it's primary trendline at 2-9's close. Combine that with a succession of lower cycle highs since 5-11-06's Wave 1 Cyclical Bull Market cycle high and an Elliott Wave count that indicates the final Wave C decline of HUI/XAU's Wave 2 Cyclical Bear Market has begun, and one has to be very cautious/bearish now.
Amazingly (???, actually they tend to be terrible) most gold writers are bullish now, according to Mark Hulbert, and, from skimming some of the gold writers work.
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
7:19 AM
