An HUI/NEM/XAU Countertrend 1-2 Day Wave B Has Probably Begun
An HUI/NEM/XAU countertrend 1-2 day Wave B has probably begun, because they trended up the last 3 hours or so of the session, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=on&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==. Also, NEM/XAU finished their gap filling action, with NEM filling it's downside gap at 43.06 and the XAU filling it's downside gap at 132.09 today, versus session cycle lows at 42.80 and 131.86, which often indicates that a downcycle (or upcycle) has bottomed (or peaked).
NEM has downside gaps at 41.83, 41.09, and 40.83 that probably won't get filled until after a very short term countertrend Wave B occurs.
I exited my NEM short at 43 and sold the XAU puts when the XAU was very close to 132.09, very close to the session cycle lows and likely very short term Wave C cycle lows. It doesn't get much better than that. Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps is the basis/crux of "Trade the Cycles."
Also, the lead indicators point to strength, with the NEM Lead Indicator at -0.01% versus the XAU today/on 3-2, but was +0.65% in the second half of the session (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=on&z=l&q=l&p=&a=&c=%5Ehui,nem), at -0.89% on 3-1, at +0.22% on 2-28, and at +1.07% on 2-27.
The WMT Lead Indicator was a very bullish +0.97% versus the S & P 500 today/on 3-2, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=on&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC, and the gap widened near session's end, which points to strength early on Monday.
The COT data (see last data at http://www.cftc.gov/dea/options/deacmxsof.htm) points to a rebound (may have begun today) next week, since the savvy non contrarian gold Commercial Traders made a surprisingly aggressive long trade of 9857 futures and options contracts, which points to some significant gold strength next week, while continuing to go massively net short gold, adding a very large 24,204 futures and options contracts, which is obviously very bearish on an intermediate term (weeks/months) basis.
Lycos Thomson I Watch showed some strong/bullish buy 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).
Early on Monday, if it looks like a 1-2 day countertrend Wave B has begun, I'll be looking to day trade or maybe hold overnight some XAU Calls, maybe XAVCI, which is the March 145 XAU call option.
Today's second half of the session strength was probably Wave 1 (or part of Wave 1) of a 1-2 day countertrend Wave B, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=on&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==. Watch NEM's upside gaps at 44.53 and 45.10, and, the XAU's upside gaps at 136.66 and 139.66, that may get filled in the 1-2 day countertrend Wave B. There are also upside gaps at 47.06 for NEM and at 147.75 for the XAU, that should be breakaway gaps, and shouldn't get filled until much later on.
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
NEM has downside gaps at 41.83, 41.09, and 40.83 that probably won't get filled until after a very short term countertrend Wave B occurs.
I exited my NEM short at 43 and sold the XAU puts when the XAU was very close to 132.09, very close to the session cycle lows and likely very short term Wave C cycle lows. It doesn't get much better than that. Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps is the basis/crux of "Trade the Cycles."
Also, the lead indicators point to strength, with the NEM Lead Indicator at -0.01% versus the XAU today/on 3-2, but was +0.65% in the second half of the session (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=on&z=l&q=l&p=&a=&c=%5Ehui,nem), at -0.89% on 3-1, at +0.22% on 2-28, and at +1.07% on 2-27.
The WMT Lead Indicator was a very bullish +0.97% versus the S & P 500 today/on 3-2, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=on&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC, and the gap widened near session's end, which points to strength early on Monday.
The COT data (see last data at http://www.cftc.gov/dea/options/deacmxsof.htm) points to a rebound (may have begun today) next week, since the savvy non contrarian gold Commercial Traders made a surprisingly aggressive long trade of 9857 futures and options contracts, which points to some significant gold strength next week, while continuing to go massively net short gold, adding a very large 24,204 futures and options contracts, which is obviously very bearish on an intermediate term (weeks/months) basis.
The savvy non contrarian gold Commercial Traders have been going massively net short the past 7-8 weeks, while also trading significant long positions, taking advantage of generally modest gold strength much of that time.
The Fed's weekly data released yesterday (http://www.federalreserve.gov/releases/h41/Current/) indicates that credit rose +$1.795 Billion in the week ending 2-28-07, which points to some significant strength next week due to likely program buying.
Williams %R became extremely oversold at -100 today for HUI/NEM/XAU, which reliably points to a bounce, especially when confirmed by a number of other important factors.Lycos Thomson I Watch showed some strong/bullish buy 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).
Early on Monday, if it looks like a 1-2 day countertrend Wave B has begun, I'll be looking to day trade or maybe hold overnight some XAU Calls, maybe XAVCI, which is the March 145 XAU call option.
Today's second half of the session strength was probably Wave 1 (or part of Wave 1) of a 1-2 day countertrend Wave B, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=on&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==. Watch NEM's upside gaps at 44.53 and 45.10, and, the XAU's upside gaps at 136.66 and 139.66, that may get filled in the 1-2 day countertrend Wave B. There are also upside gaps at 47.06 for NEM and at 147.75 for the XAU, that should be breakaway gaps, and shouldn't get filled until much later on.
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
3:07 PM
