I Bought NEM At 42.56 And NEM April 45 Calls At A Basis Of 0.78
I bought NEM today at 42.56, and, I bought NEM April 45 Calls (NEMDI) at a basis/average cost of 0.78, very close to the session 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==.
It was a slam dunk trade due to NEM's large likely bullish breakaway gap at today's open, to 43.35 versus yesterday's close at 42.14, and, the very bullish lead indicators, with the NEM Lead Indicator at a very bullish +1.30% versus the XAU today/on 3-16 (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem), and, the WMT Lead Indicator at a very bullish +0.84% versus the S & P 500 (SPX) today/on 3-16 (http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC).
I also looked at NEM's intraday Elliott Wave patterns. NEM did a Wave A down early in the session, followed by a Wave B up during mid session, and, completed Wave C toward session's end.
Also giving me confidence is the fact that NEM probably hit a minor intermediate term cycle low at 40.53 on 3-14, and, a Wave 2 Cyclical Bear Market cycle low at 39.84 on 10-4-06, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. The fact that reliable lead indicator NEM is probably in a 5-6 year Wave 3 Cyclical Bull Market since 10-4-06 was obviously another major positive.
Today's sharp intraday decline was Wave 2 down of the short term HUI/XAU countertrend Wave B since Wednesday 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==. So, HUI/XAU entered Wave 3 up near session's end.
Today's sharp intraday decline was Wave 2 down of NEM's monthly upcycle since Wednesday 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==. So, NEM entered Wave 3 up near session's end.
The beauty of "Trade the Cycles" is that it tells us what's likely to happen in Wave B, and, when to exit long positions/look to go short, which is shortly after the last of the upside gaps gets filled. That's why I don't use Fibonacci (or other) price targets.
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 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, and, you can click on longer timeframe options of course. So, watch NEM's upside gaps at 44.53, 45.10 (possibly also at 47.06), and, watch the XAU's upside gaps at 136.66 and 139.66. A likely scenario is that HUI/XAU's Wave B since 3-14 will probably peak shortly after the last of those upside gaps gets filled.
NEM's minor intermediate term downcycle and HUI/XAU's Wave A bottomed shortly after the last of the downside gaps (NEM's at 40.83) got filled (about an hour or less later HUI/XAU bottomed), which is why cycle trendlines/channels used in concert with Elliott Wave patterns and gaps are the basis/crux of "Trade the Cycles."
I exited my GDX short position (at 36.70)/long XAU put position within about an hour of the HUI/XAU Wave A cycle low on Wednesday. If you're looking to short and/or go long some puts, wait for HUI/XAU's spike move/Wave B since 3-14 to clearly break down/do a Wave A type decline (probably shortly after the XAU's upside gap at 139.66 gets filled or whichever one is the last to get filled), then get your shorts on in a countertrend Wave B.
The COT data (http://www.cftc.gov/dea/options/deacmxsof.htm) points to strength accompanied by some weakness next week, because the savvy non contrarian gold Commercial Traders traded net long, while the clueless gold Speculators traded net short. The significant short trade by the savvy gold Commercial Traders points to some weakness.
See today's important first post at http://tradethecycles.blogspot.com/2007/03/nem-experienced-likely-bullish.html.
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
It was a slam dunk trade due to NEM's large likely bullish breakaway gap at today's open, to 43.35 versus yesterday's close at 42.14, and, the very bullish lead indicators, with the NEM Lead Indicator at a very bullish +1.30% versus the XAU today/on 3-16 (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem), and, the WMT Lead Indicator at a very bullish +0.84% versus the S & P 500 (SPX) today/on 3-16 (http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC).
I also looked at NEM's intraday Elliott Wave patterns. NEM did a Wave A down early in the session, followed by a Wave B up during mid session, and, completed Wave C toward session's end.
Also giving me confidence is the fact that NEM probably hit a minor intermediate term cycle low at 40.53 on 3-14, and, a Wave 2 Cyclical Bear Market cycle low at 39.84 on 10-4-06, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. The fact that reliable lead indicator NEM is probably in a 5-6 year Wave 3 Cyclical Bull Market since 10-4-06 was obviously another major positive.
Today's sharp intraday decline was Wave 2 down of the short term HUI/XAU countertrend Wave B since Wednesday 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==. So, HUI/XAU entered Wave 3 up near session's end.
Today's sharp intraday decline was Wave 2 down of NEM's monthly upcycle since Wednesday 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==. So, NEM entered Wave 3 up near session's end.
The beauty of "Trade the Cycles" is that it tells us what's likely to happen in Wave B, and, when to exit long positions/look to go short, which is shortly after the last of the upside gaps gets filled. That's why I don't use Fibonacci (or other) price targets.
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 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, and, you can click on longer timeframe options of course. So, watch NEM's upside gaps at 44.53, 45.10 (possibly also at 47.06), and, watch the XAU's upside gaps at 136.66 and 139.66. A likely scenario is that HUI/XAU's Wave B since 3-14 will probably peak shortly after the last of those upside gaps gets filled.
NEM's minor intermediate term downcycle and HUI/XAU's Wave A bottomed shortly after the last of the downside gaps (NEM's at 40.83) got filled (about an hour or less later HUI/XAU bottomed), which is why cycle trendlines/channels used in concert with Elliott Wave patterns and gaps are the basis/crux of "Trade the Cycles."
I exited my GDX short position (at 36.70)/long XAU put position within about an hour of the HUI/XAU Wave A cycle low on Wednesday. If you're looking to short and/or go long some puts, wait for HUI/XAU's spike move/Wave B since 3-14 to clearly break down/do a Wave A type decline (probably shortly after the XAU's upside gap at 139.66 gets filled or whichever one is the last to get filled), then get your shorts on in a countertrend Wave B.
The COT data (http://www.cftc.gov/dea/options/deacmxsof.htm) points to strength accompanied by some weakness next week, because the savvy non contrarian gold Commercial Traders traded net long, while the clueless gold Speculators traded net short. The significant short trade by the savvy gold Commercial Traders points to some weakness.
See today's important first post at http://tradethecycles.blogspot.com/2007/03/nem-experienced-likely-bullish.html.
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
1:17 PM
