HUI/XAU Are In Wave 5 Of The Countertrend Wave B
HUI/XAU are in Wave 5 of the countertrend Wave B (began 3-14), 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==. Wave 2 down occurred last Friday. Wave 4 down occurred yesterday for HUI and from mid session yesterday until mid session today for the XAU (based on a quick glance).
Reliable lead indicator NEM is in Wave 5 of the Wave 1 short term upcycle that began 3-14, see 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==. Wave 2 down occurred last Friday and Wave 4 down occurred from early yesterday at 43.94 to late today at 43.02.
HUI/NEM/XAU did an Elliott Wave 12345 up down up down up spike move late in the day thanks to a Fed statement relief rally, so, some weakness early tomorrow is likely, which jives with the bearish lead indicators, at -0.56% versus the XAU for the NEM Lead Indicator, and, at a very bearish -0.72% versus the S & P 500 for the WMT Lead Indicator.
It looks like NEM will fill it's upside gap at 44.53 and possibly also 45.10 tomorrow, and, the XAU will probably fill it's upside gap at 139.66 tomorrow. Once NEM fills 45.10 I'll be looking to exit my long NEM/long NEM April 45 calls (NEMDI) positions.
One usually will exit trading positions shortly after gap filling action is completed, unless there are very good reasons for remaining in the position(s). Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps are the basis/crux of "Trade the Cycles."
If it looks like the upside gap at 45.10 might not get filled until later I might exit before 45.10 gets filled. A trader should always be assessing the situation and should never be 100% sold on any scenario. If the NEM/WMT lead indicators were bullish instead of bearish today, then it would be safe to assume that 45.10 would get filled tomorrow or Friday.
Thomson I Watch was very bearish again today for NEM (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=nem) and for GFI (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=gfi), and, was bearish for WMT (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=wmt).
I bought NEM on 3-16 at 42.56, and, I bought NEM April 45 Calls (NEMDI) at a basis/average cost of 0.78, very close to 3-16's cycle lows at 42.51 and 0.75 (bought 40% of the contracts at 0.75 and 60% at 0.80), see 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==.
In the countertrend Wave B since 3-14 NEM will probably fill upside gaps at 44.53, 45.10, and possibly also at 47.06, and, the XAU will probably fill upside gaps at 136.66 (filled yesterday/3-20) and 139.66, but not the one at 147.75, because it's a likely bearish breakaway gap to the downside, and, the XAU would exceed 2-23-07's minor intermediate term cycle high if it filled 147.75. 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= for the XAU's five day chart. So, watch NEM's upside gaps at 44.53, 45.10 (possibly also at 47.06), and, watch the XAU's upside gap at 139.66.
NEM/XAU have upside gaps at 44.53, 45.10, and at 47.06 for NEM, and, at 139.66, and at 147.75 for the XAU. NEM has downside gaps at 41.44 and 42.14, and, the XAU has downside gaps at 133.31 and 129.65. WMT has an upside gap at 49.98 and a downside gap at 46.21. I need to check WMT's historical data further to see if there are more gaps.
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.
Annotated 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.
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
Reliable lead indicator NEM is in Wave 5 of the Wave 1 short term upcycle that began 3-14, see 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==. Wave 2 down occurred last Friday and Wave 4 down occurred from early yesterday at 43.94 to late today at 43.02.
HUI/NEM/XAU did an Elliott Wave 12345 up down up down up spike move late in the day thanks to a Fed statement relief rally, so, some weakness early tomorrow is likely, which jives with the bearish lead indicators, at -0.56% versus the XAU for the NEM Lead Indicator, and, at a very bearish -0.72% versus the S & P 500 for the WMT Lead Indicator.
It looks like NEM will fill it's upside gap at 44.53 and possibly also 45.10 tomorrow, and, the XAU will probably fill it's upside gap at 139.66 tomorrow. Once NEM fills 45.10 I'll be looking to exit my long NEM/long NEM April 45 calls (NEMDI) positions.
One usually will exit trading positions shortly after gap filling action is completed, unless there are very good reasons for remaining in the position(s). Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps are the basis/crux of "Trade the Cycles."
If it looks like the upside gap at 45.10 might not get filled until later I might exit before 45.10 gets filled. A trader should always be assessing the situation and should never be 100% sold on any scenario. If the NEM/WMT lead indicators were bullish instead of bearish today, then it would be safe to assume that 45.10 would get filled tomorrow or Friday.
Thomson I Watch was very bearish again today for NEM (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=nem) and for GFI (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=gfi), and, was bearish for WMT (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=wmt).
I bought NEM on 3-16 at 42.56, and, I bought NEM April 45 Calls (NEMDI) at a basis/average cost of 0.78, very close to 3-16's cycle lows at 42.51 and 0.75 (bought 40% of the contracts at 0.75 and 60% at 0.80), see 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==.
In the countertrend Wave B since 3-14 NEM will probably fill upside gaps at 44.53, 45.10, and possibly also at 47.06, and, the XAU will probably fill upside gaps at 136.66 (filled yesterday/3-20) and 139.66, but not the one at 147.75, because it's a likely bearish breakaway gap to the downside, and, the XAU would exceed 2-23-07's minor intermediate term cycle high if it filled 147.75. 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= for the XAU's five day chart. So, watch NEM's upside gaps at 44.53, 45.10 (possibly also at 47.06), and, watch the XAU's upside gap at 139.66.
NEM/XAU have upside gaps at 44.53, 45.10, and at 47.06 for NEM, and, at 139.66, and at 147.75 for the XAU. NEM has downside gaps at 41.44 and 42.14, and, the XAU has downside gaps at 133.31 and 129.65. WMT has an upside gap at 49.98 and a downside gap at 46.21. I need to check WMT's historical data further to see if there are more gaps.
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.
Annotated 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.
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, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
1:55 PM
