Should You "Get WITM?" (Wits Basin Precious Minerals Inc.)
Wits Basin Precious Minerals Inc., WITM.OB, see six month chart at http://finance.yahoo.com/q/ta?s=WITM.OB&t=6m&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==, is a good example for how to use "Trade the Cycles." WITM recently completed an Elliott Wave 12345 up down up down up Wave 3 Major Intermediate Term Upcycle, after recently experiencing a nearly two year Cyclical Bear Market (ended October 2005), that did an Elliott Wave ABC down up down pattern, see http://finance.yahoo.com/q/ta?s=WITM.OB&t=5y&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==. So, WITM is relatively early in a likely 3-6 year Cyclical Bull Market.
The final/third Wave 5 cycle high of WITM's Wave 3 Major Intermediate Term Upcycle occurred at 1.25, then Wave A bottomed at 0.74, and, Wave B is in effect, or, may have peaked last week at 1.05. Wave C should bottom below Wave A's cycle at 0.74, and, should bottom shortly after filling a downside gap at 0.64. WITM should be a great buy in the 0.60-0.63 range, based on "Trade the Cycles." This is just a "Trade the Cycles" example, NOT a recommendation, one should do one's own due diligence concerning the quality of any investment or trading vehicle. I've never traded or owned WITM (at least not recently), but, it's on my list of trading stocks.
There's also a downside gap at 0.43, that's probably a bullish breakaway gap, because WITM had a large gap up (%wise) to 0.46 after closing the prior day at 0.43. There's a small chance that 0.64 is also a bullish breakaway gap, because WITM had a large gap up (%wise) to 0.66 after closing the prior day at 0.64, but, it looks like 0.64 will probably get filled, because Wave A bottomed at 0.74, so, Wave C should fill 0.64.
The CBOT tightened it's margin requirement for gold beginning Tuesday, see http://www.cbot.com/cbot/pub/page/0,3181,136,00.html, which is yet another negative for next week. See the previous post at http://tradethecycles.blogspot.com/2007/03/nemwmt-lead-indicators-are-bearish.html. Severe weakness is likely next week.
I'm not certain of this, but it looks like Lycos Thomson I Watch, a great tool, is kaput. What I learned unofficially is that they don't think they'll be able to continue to get timely quality data. The timing of this coincided closely with the stock market starting to "fall apart." I used it for looking at NEM/GFI/WMT data for market timing purposes, as well as to see what potential trading stocks data looked like. I'll miss it, but, it's not a major part of "Trade the Cycles."
The recent addition of the Walmart (WMT) Lead Indicator and the Rollover/Upside Surprise Barometer (using the Fed's weekly credit data) are bigger positives than the negative caused by the loss of Lycos Thomson I Watch. Ways to compensate for the loss of Lycos Thomson I Watch is to watch insider trading activity, recent mutual fund activity, money flow data/indicators, etc. That being said I hope I Watch comes back.
XAU has a bearish declining peaks chart pattern going back to 5-11-06 (HUI's is only slightly better), HUI/XAU are 35%ish above their primary Secular Bull Market trendlines, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. Basic technical analysis alone indicates a clearly bearish picture. Would you buy a stock with a declining peaks chart pattern going back 10 months??? Yet, most gold writers are (or were until recently) bullish??? Truth really is stranger than fiction.
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 final/third Wave 5 cycle high of WITM's Wave 3 Major Intermediate Term Upcycle occurred at 1.25, then Wave A bottomed at 0.74, and, Wave B is in effect, or, may have peaked last week at 1.05. Wave C should bottom below Wave A's cycle at 0.74, and, should bottom shortly after filling a downside gap at 0.64. WITM should be a great buy in the 0.60-0.63 range, based on "Trade the Cycles." This is just a "Trade the Cycles" example, NOT a recommendation, one should do one's own due diligence concerning the quality of any investment or trading vehicle. I've never traded or owned WITM (at least not recently), but, it's on my list of trading stocks.
There's also a downside gap at 0.43, that's probably a bullish breakaway gap, because WITM had a large gap up (%wise) to 0.46 after closing the prior day at 0.43. There's a small chance that 0.64 is also a bullish breakaway gap, because WITM had a large gap up (%wise) to 0.66 after closing the prior day at 0.64, but, it looks like 0.64 will probably get filled, because Wave A bottomed at 0.74, so, Wave C should fill 0.64.
The CBOT tightened it's margin requirement for gold beginning Tuesday, see http://www.cbot.com/cbot/pub/page/0,3181,136,00.html, which is yet another negative for next week. See the previous post at http://tradethecycles.blogspot.com/2007/03/nemwmt-lead-indicators-are-bearish.html. Severe weakness is likely next week.
I'm not certain of this, but it looks like Lycos Thomson I Watch, a great tool, is kaput. What I learned unofficially is that they don't think they'll be able to continue to get timely quality data. The timing of this coincided closely with the stock market starting to "fall apart." I used it for looking at NEM/GFI/WMT data for market timing purposes, as well as to see what potential trading stocks data looked like. I'll miss it, but, it's not a major part of "Trade the Cycles."
The recent addition of the Walmart (WMT) Lead Indicator and the Rollover/Upside Surprise Barometer (using the Fed's weekly credit data) are bigger positives than the negative caused by the loss of Lycos Thomson I Watch. Ways to compensate for the loss of Lycos Thomson I Watch is to watch insider trading activity, recent mutual fund activity, money flow data/indicators, etc. That being said I hope I Watch comes back.
XAU has a bearish declining peaks chart pattern going back to 5-11-06 (HUI's is only slightly better), HUI/XAU are 35%ish above their primary Secular Bull Market trendlines, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. Basic technical analysis alone indicates a clearly bearish picture. Would you buy a stock with a declining peaks chart pattern going back 10 months??? Yet, most gold writers are (or were until recently) bullish??? Truth really is stranger than fiction.
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
1:18 PM
