HUI/NEM/XAU's Very Short Term Countertrend Wave B Is Probably Peaking Today
HUI/NEM/XAU's very short term countertrend Wave B (began early on Monday) is probably peaking today, 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==. Reliable lead indicator NEM has a bearish triple top the past two days, with yesterday's double top cycle high at 43.52 and today's cycle high at 43.53.
The NEM Lead Indicator is a bearish -0.58% versus the XAU right now, and, was a very bearish -1.26% versus the XAU yesterday, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=on&z=l&q=l&p=&a=&c=%5Ehui,nem. The WMT Lead Indicator is a bearish -0.36% versus the S & P 500 (SPX) right now, was a bearish -0.35% versus the S & P 500 (SPX) yesterday, see http://finance.yahoo.com/q/ta?t=5d&s=WMT&l=off&z=l&q=l&a=m26-12-9&a=p12&a=fs&a=w14&c=&c=%5EGSPC.
The very short term HUI/NEM/XAU countertrend Wave B that began early on Monday is in a final/third Wave 5 up, and, appears to be peaking, 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 very large 4-5%+ spike move by HUI/XAU in recent days point to important peaking action, which, combined with the very short term and big picture Elliott Wave count, see chart 1 at http://www.joefrocks.com/GoldStockCharts.html, and bearish NEM/WMT Lead Indicators, means that it's time to look to sell short/buy puts, if that's what you're looking to do.
It looks like today/tomorrow will be a good time to short some stock and buy some puts. If the very short term HUI/NEM/XAU countertrend Wave B (began early on Monday) peaks today, then there should soon be an intraday Wave A down (probably today), in which the very short term HUI/NEM/XAU countertrend Wave B should clearly break down. Then, I'll be looking to short some stock and buy XAU puts in an intraday Wave B rebound.
The XAU has a downside gap at 129.28. NEM has downside gaps at 42.48, 41.83, 41.09, and 40.83.
It looks like NEM will/may fill all of it's downside gaps in the next few days, and, NEM's minor intermediate term downcycle since 2-22-07 (cycle high at 48.33) should bottom shortly after filling the last downside gap at 40.83 (at 40.50ish). 10-4-06's cycle low at 39.84 should hold, because NEM bounced right at it's primary Secular Bull Market trendline in effect since October 2000, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html, and, hit a 5% follow through major buy signal, indicating that reliable lead indicator NEM probably entered a Wave 3 Cyclical Bull Market on 10-4-06.
A scenario I've discussed many times (but not recently) before is that HUI/XAU's Wave A down of their major downcycle since 2-23-07 should closely coincide with NEM's minor intermediate term cycle low at 40.50ish. Then the Wave B should closely coincide with Wave 1 of a new NEM minor intermediate term upcycle, followed by the final Wave C of HUI/XAU's major downcycle since 2-23-07 probably closely coinciding with Wave 2 down of a new NEM minor intermediate term upcycle.
NEM/XAU have upside gaps at 44.53, 45.10, and at 47.06 for NEM, and, at 136.66, 139.66, and at 147.75 for the XAU.
Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps is the basis/crux of "Trade the Cycles."
XAU Implied Volatility revealed one of the largest one day spikes in fear I've ever seen, rising +48.28% to 41.280 on 3-5 from 27.840 on 3-2, which points to substantial weakness in the near future, because it's an unusually large (> 6%) rise in fear that portends weakness in the near future.
Note how the gold ETF GLD (and HUI/NEM/XAU) tracks SPX due to program trading, see http://finance.yahoo.com/q/ta?t=5d&s=GLD&l=off&z=l&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=&c=%5EGSPC. This shows how clueless the manipulation theory gold writers are. There simply aren't any traders who can overcome the huge program trading money, 70% of the dollar volume on the NYSE. Gold did 30-35%/year on average in it's Wave 1 Cyclical Bull Market from April 2001 until May 2006, yet many gold writers harp on gold price suppression by some "cartel."
Tuesday 2-27's Wave A crash was probably an important technical breakdown for HUI/XAU as well as for SPX (S & P 500), and, to a lesser extent for NEM, which should be in a Wave 3 Cyclical Bull Market since 10-4-06, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. Tuesday 2-27's Wave A crash was probably an important technical breakdown for the stock market in general, meaning the major averages and nearly all sectors except a few defensive ones (despite what most gold "gurus" say gold isn't a safe haven/defensive sector).
The Fed added an average $5.25 Billion in credit today, an above average $7.75 Billion in credit yesterday, an above average $7.50 Billion in credit on Monday, an average sized $5 Billion in credit on Friday, a massive $17.75 Billion in credit on Thursday (punch spiking Thursday) after Wednesday 2-28's unusually large (for any day but Thursday) $17.25 Billion, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE.
The Fed's weekly data released Thursday (http://www.federalreserve.gov/releases/h41/Current/) indicates that credit rose +$1.75 Billion in the week ending 2-28-07, much less than I thought it would. They show $36.286 in Repos for the week ending 2-28-07, which doesn't jive with $17.25 Billion + $8 Billion + $9.50 Billion + $5.50 Billion + $23.75 Billion = $64 Billion for the five days (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE). I obviously need to find out why there is such a huge difference between the two totals.
Fed Credit is extremely important because it fuels index fund program traders, that account for about 70% of the dollar volume on the NYSE. Just look at what happened on Tuesday 2-27. THREE out of five hundred SPX components rose. Unreal.
Annotated new chart 1 at http://www.joefrocks.com/GoldStockCharts.html shows HUI as of 3-2-07 with Elliott Wave count. HUI/XAU are in a major Wave C decline of their Wave 2 Cyclical Bear Market since 5-11-06 (Secular Bull Market since late 2000). It's Wave C of Wave C for HUI, and Wave C of Wave C of Wave C for the XAU.
In the next few months HUI/XAU should decline 40-45%+ (from 2-23-07's minor intermediate term cycle highs) to their primary multi year Secular Bull Market trendlines in effect since November/October 2000, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. HUI's target range is 200-220 (220 if the primary trendline turns up) and the XAU's is 85-90.
HUI and the XAU peaked Friday 2-23. The 1 day lag between when NEM and HUI/XAU peaked is a sign that an important cycle high occurred. In the new HUI chart I did the Elliott Wave count indicated that an important peak was imminent, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html.
Massive index fund program trader buying (fueled by Fed Credit) led to much of the strength in the upcycle that began 1-10-07 and peaked on 2-23-07, propping up SPX/HUI/NEM/XAU (led to a great deal of deceptive rollover action).
HUI is in Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06 (The XAU is in Wave C of Wave C of Wave C). In the next few months 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 Friday 2-23 for HUI (12-5-06 for the XAU), when minor intermediate term cycle highs occurred, see charts three and four 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.
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
The NEM Lead Indicator is a bearish -0.58% versus the XAU right now, and, was a very bearish -1.26% versus the XAU yesterday, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=on&z=l&q=l&p=&a=&c=%5Ehui,nem. The WMT Lead Indicator is a bearish -0.36% versus the S & P 500 (SPX) right now, was a bearish -0.35% versus the S & P 500 (SPX) yesterday, see http://finance.yahoo.com/q/ta?t=5d&s=WMT&l=off&z=l&q=l&a=m26-12-9&a=p12&a=fs&a=w14&c=&c=%5EGSPC.
The very short term HUI/NEM/XAU countertrend Wave B that began early on Monday is in a final/third Wave 5 up, and, appears to be peaking, 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 very large 4-5%+ spike move by HUI/XAU in recent days point to important peaking action, which, combined with the very short term and big picture Elliott Wave count, see chart 1 at http://www.joefrocks.com/GoldStockCharts.html, and bearish NEM/WMT Lead Indicators, means that it's time to look to sell short/buy puts, if that's what you're looking to do.
It looks like today/tomorrow will be a good time to short some stock and buy some puts. If the very short term HUI/NEM/XAU countertrend Wave B (began early on Monday) peaks today, then there should soon be an intraday Wave A down (probably today), in which the very short term HUI/NEM/XAU countertrend Wave B should clearly break down. Then, I'll be looking to short some stock and buy XAU puts in an intraday Wave B rebound.
The XAU has a downside gap at 129.28. NEM has downside gaps at 42.48, 41.83, 41.09, and 40.83.
It looks like NEM will/may fill all of it's downside gaps in the next few days, and, NEM's minor intermediate term downcycle since 2-22-07 (cycle high at 48.33) should bottom shortly after filling the last downside gap at 40.83 (at 40.50ish). 10-4-06's cycle low at 39.84 should hold, because NEM bounced right at it's primary Secular Bull Market trendline in effect since October 2000, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html, and, hit a 5% follow through major buy signal, indicating that reliable lead indicator NEM probably entered a Wave 3 Cyclical Bull Market on 10-4-06.
A scenario I've discussed many times (but not recently) before is that HUI/XAU's Wave A down of their major downcycle since 2-23-07 should closely coincide with NEM's minor intermediate term cycle low at 40.50ish. Then the Wave B should closely coincide with Wave 1 of a new NEM minor intermediate term upcycle, followed by the final Wave C of HUI/XAU's major downcycle since 2-23-07 probably closely coinciding with Wave 2 down of a new NEM minor intermediate term upcycle.
NEM/XAU have upside gaps at 44.53, 45.10, and at 47.06 for NEM, and, at 136.66, 139.66, and at 147.75 for the XAU.
Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps is the basis/crux of "Trade the Cycles."
XAU Implied Volatility revealed one of the largest one day spikes in fear I've ever seen, rising +48.28% to 41.280 on 3-5 from 27.840 on 3-2, which points to substantial weakness in the near future, because it's an unusually large (> 6%) rise in fear that portends weakness in the near future.
Note how the gold ETF GLD (and HUI/NEM/XAU) tracks SPX due to program trading, see http://finance.yahoo.com/q/ta?t=5d&s=GLD&l=off&z=l&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=&c=%5EGSPC. This shows how clueless the manipulation theory gold writers are. There simply aren't any traders who can overcome the huge program trading money, 70% of the dollar volume on the NYSE. Gold did 30-35%/year on average in it's Wave 1 Cyclical Bull Market from April 2001 until May 2006, yet many gold writers harp on gold price suppression by some "cartel."
Tuesday 2-27's Wave A crash was probably an important technical breakdown for HUI/XAU as well as for SPX (S & P 500), and, to a lesser extent for NEM, which should be in a Wave 3 Cyclical Bull Market since 10-4-06, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. Tuesday 2-27's Wave A crash was probably an important technical breakdown for the stock market in general, meaning the major averages and nearly all sectors except a few defensive ones (despite what most gold "gurus" say gold isn't a safe haven/defensive sector).
The Fed added an average $5.25 Billion in credit today, an above average $7.75 Billion in credit yesterday, an above average $7.50 Billion in credit on Monday, an average sized $5 Billion in credit on Friday, a massive $17.75 Billion in credit on Thursday (punch spiking Thursday) after Wednesday 2-28's unusually large (for any day but Thursday) $17.25 Billion, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE.
The Fed's weekly data released Thursday (http://www.federalreserve.gov/releases/h41/Current/) indicates that credit rose +$1.75 Billion in the week ending 2-28-07, much less than I thought it would. They show $36.286 in Repos for the week ending 2-28-07, which doesn't jive with $17.25 Billion + $8 Billion + $9.50 Billion + $5.50 Billion + $23.75 Billion = $64 Billion for the five days (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE). I obviously need to find out why there is such a huge difference between the two totals.
Fed Credit is extremely important because it fuels index fund program traders, that account for about 70% of the dollar volume on the NYSE. Just look at what happened on Tuesday 2-27. THREE out of five hundred SPX components rose. Unreal.
Annotated new chart 1 at http://www.joefrocks.com/GoldStockCharts.html shows HUI as of 3-2-07 with Elliott Wave count. HUI/XAU are in a major Wave C decline of their Wave 2 Cyclical Bear Market since 5-11-06 (Secular Bull Market since late 2000). It's Wave C of Wave C for HUI, and Wave C of Wave C of Wave C for the XAU.
In the next few months HUI/XAU should decline 40-45%+ (from 2-23-07's minor intermediate term cycle highs) to their primary multi year Secular Bull Market trendlines in effect since November/October 2000, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. HUI's target range is 200-220 (220 if the primary trendline turns up) and the XAU's is 85-90.
HUI and the XAU peaked Friday 2-23. The 1 day lag between when NEM and HUI/XAU peaked is a sign that an important cycle high occurred. In the new HUI chart I did the Elliott Wave count indicated that an important peak was imminent, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html.
Massive index fund program trader buying (fueled by Fed Credit) led to much of the strength in the upcycle that began 1-10-07 and peaked on 2-23-07, propping up SPX/HUI/NEM/XAU (led to a great deal of deceptive rollover action).
HUI is in Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06 (The XAU is in Wave C of Wave C of Wave C). In the next few months 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 Friday 2-23 for HUI (12-5-06 for the XAU), when minor intermediate term cycle highs occurred, see charts three and four 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.
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
8:19 AM
