Today's HUI/NEM/XAU Strength Was A Very Short Term Countertrend Wave B
Today's HUI/NEM/XAU strength was a very short term countertrend Wave B (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=), in which most of the gains occurred during a very brief early spike. The XAU Put/Call Ratio portended some strength today, rising to 0.96905 from 0.96363 on 3-9 (March expiration).
Wave C of Wave A of HUI/XAU's major downcycle since 2-23-07 (see chart 1 at http://www.joefrocks.com/GoldStockCharts.html) began last Thursday (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==), and, should soon enter the more parabolic/sharply declining part of the downcycle.
The lead indicators in recent days have been mostly bearish, with the NEM Lead Indicator at a neutral +0.02% versus the XAU today/on 3-12, a bearish -0.60% versus the XAU on 3-9,+0.03% versus the XAU on 3-8, a bearish -0.74% on 3-7, and, a very bearish -1.25% on 3-6, and, with the WMT Lead Indicator at a bearish -0.61% versus the S & P 500 today/on 3-12, a very bearish -1.03% versus the S & P 500 on 3-9, a very bearish -0.81% versus the S & P 500 on 3-8, +0.02% on 3-7, and, a bearish -0.35% on 3-6.
Thomson I-Watch was bearish today for NEM (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=nem), GFI (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=gfi), and WMT (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=wmt).
NEM should soon fill it's downside gap at 41.83, also watch 41.09 and 40.83, and, the XAU should soon fill it's downside gap at 129.28.
The Elliott Wave count is Wave C of Wave A of HUI/XAU's major downcycle since 2-23-07, and, Wave C of reliable lead indicator NEM's minor intermediate term downcycle since 2-22-07. In HUI's 3 month chart one can see that the countertrend Wave B peaked Thursday (XAU also, NEM on Wednesday, leading as usual), see http://finance.yahoo.com/q/ta?s=%5EHUI&t=3m&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==.
I bought some April 120 XAU puts (XAVPD) on Wednesday at 1.50 and I doubled up today at 1 (so my average cost/basis is now 1.25), and, I shorted some GDX (Gold Miners ETF) at 38.70 on Thursday.
Fed Credit (fuels program trading) for the five day period ending 3-7-07 declined -$1.710 Billion, which points to weakness the next five sessions ending 3-14-07, see http://www.federalreserve.gov/releases/h41/Current/. The Rollover/Upside Surprise Barometer is at "unlikely."
The XAU has a downside gap at 129.28. NEM has downside gaps at 41.83, 41.09, and 40.83. 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."
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.
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
Wave C of Wave A of HUI/XAU's major downcycle since 2-23-07 (see chart 1 at http://www.joefrocks.com/GoldStockCharts.html) began last Thursday (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==), and, should soon enter the more parabolic/sharply declining part of the downcycle.
The lead indicators in recent days have been mostly bearish, with the NEM Lead Indicator at a neutral +0.02% versus the XAU today/on 3-12, a bearish -0.60% versus the XAU on 3-9,+0.03% versus the XAU on 3-8, a bearish -0.74% on 3-7, and, a very bearish -1.25% on 3-6, and, with the WMT Lead Indicator at a bearish -0.61% versus the S & P 500 today/on 3-12, a very bearish -1.03% versus the S & P 500 on 3-9, a very bearish -0.81% versus the S & P 500 on 3-8, +0.02% on 3-7, and, a bearish -0.35% on 3-6.
Thomson I-Watch was bearish today for NEM (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=nem), GFI (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=gfi), and WMT (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=wmt).
NEM should soon fill it's downside gap at 41.83, also watch 41.09 and 40.83, and, the XAU should soon fill it's downside gap at 129.28.
The Elliott Wave count is Wave C of Wave A of HUI/XAU's major downcycle since 2-23-07, and, Wave C of reliable lead indicator NEM's minor intermediate term downcycle since 2-22-07. In HUI's 3 month chart one can see that the countertrend Wave B peaked Thursday (XAU also, NEM on Wednesday, leading as usual), see http://finance.yahoo.com/q/ta?s=%5EHUI&t=3m&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==.
I bought some April 120 XAU puts (XAVPD) on Wednesday at 1.50 and I doubled up today at 1 (so my average cost/basis is now 1.25), and, I shorted some GDX (Gold Miners ETF) at 38.70 on Thursday.
Fed Credit (fuels program trading) for the five day period ending 3-7-07 declined -$1.710 Billion, which points to weakness the next five sessions ending 3-14-07, see http://www.federalreserve.gov/releases/h41/Current/. The Rollover/Upside Surprise Barometer is at "unlikely."
The XAU has a downside gap at 129.28. NEM has downside gaps at 41.83, 41.09, and 40.83. 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."
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.
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
1:13 PM
