New HUI Chart With Countertrend Wave B Channel And Elliott Wave Count
I did a new chart that shows HUI's countertrend Wave B channel and Elliott Wave count that indicates Thursday 2-22-07 might be the Wave B cycle high, see the second chart at http://www.joefrocks.com/GoldStockCharts.html.
A good solution to avoid getting whipsawed by unexpected strength/rollover action after short selling is to short only after the Fed's weekly credit data reveals a sharp (> $4 Billion) or at least significant (> $2 Billion) drop, as opposed to the sharp increases that occurred in 3 of the past 4 weeks (http://www.federalreserve.gov/releases/h41/), and, the NEM/WMT Lead Indicators should be clearly bearish (in concert with Elliott Wave patterns of course). The NEM Lead Indicator is clearly bearish at -0.50% or more versus the XAU, and, the less volatile WMT Lead Indicator is clearly bearish at -0.25% or more versus the S & P 500.
Also, until the channel clearly breaks down (see the second chart at http://www.joefrocks.com/GoldStockCharts.html), say HUI falling below 335, keep the trading timeframes very short (a day or two, unless (maybe) both lead indicators are very bearish) and use the very short term Elliott Wave patterns plus lead indicators, Lycos Thomson I Watch, etc.
Another great thing about channels is, if they're well defined, one can/might sell/short near the top and cover/go long near the bottom. Channels provide buy/sell zones near the bottom and top of the channel, using Elliott Wave, lead indicators, COT data, Lycos Thomson I Watch, etc (use "Trade the Cycles").
See the previous post at http://tradethecycles.blogspot.com/2007/02/huixaus-countertrend-wave-b-since-1-10.html.
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
A good solution to avoid getting whipsawed by unexpected strength/rollover action after short selling is to short only after the Fed's weekly credit data reveals a sharp (> $4 Billion) or at least significant (> $2 Billion) drop, as opposed to the sharp increases that occurred in 3 of the past 4 weeks (http://www.federalreserve.gov/releases/h41/), and, the NEM/WMT Lead Indicators should be clearly bearish (in concert with Elliott Wave patterns of course). The NEM Lead Indicator is clearly bearish at -0.50% or more versus the XAU, and, the less volatile WMT Lead Indicator is clearly bearish at -0.25% or more versus the S & P 500.
Also, until the channel clearly breaks down (see the second chart at http://www.joefrocks.com/GoldStockCharts.html), say HUI falling below 335, keep the trading timeframes very short (a day or two, unless (maybe) both lead indicators are very bearish) and use the very short term Elliott Wave patterns plus lead indicators, Lycos Thomson I Watch, etc.
Another great thing about channels is, if they're well defined, one can/might sell/short near the top and cover/go long near the bottom. Channels provide buy/sell zones near the bottom and top of the channel, using Elliott Wave, lead indicators, COT data, Lycos Thomson I Watch, etc (use "Trade the Cycles").
See the previous post at http://tradethecycles.blogspot.com/2007/02/huixaus-countertrend-wave-b-since-1-10.html.
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
8:39 PM
