The Very Short Term Countertrend Wave B Should Clearly Break Down Tomorrow
Based on sell interest for NEM (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=NEM) and GFI (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=gfi) at Thomson I Watch the very short term countertrend Wave B since mid session yesterday will probably clearly break down early tomorrow. Also, the relatively flat downtrend for HUI that was in effect for most of the session was probably the flat part of a Wave A type decline, 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 NEM Lead Indicator at a bearish -0.54% versus the XAU today/on 3-15 and at a bearish -0.81% on 3-14 obviously points to weakness tomorow, and, the WMT Lead Indicator at a modestly bullish +0.22% versus the S & P 500 today/on 3-15 after being an extremely bearish -1.17% on 3-14, also points to weakness tomorrow.
NEM created a downside gap at today's open at 41.44, and, the XAU did so at 129.65, that will probably get filled tomorrow or Monday.
Fed Credit (fuels program trading) for the five day period ending 3-14-07 declined -$0.164 Billion, which points to some weakness in the five sessions ending 3-21-07, see http://www.federalreserve.gov/releases/h41/Current/. The Rollover/Upside Surprise Barometer is at "unlikely."
Yesterday's cycle low for HUI/XAU was probably Wave A of Wave C of Wave A (of the major downcycle since 2-23-07, see chart 1 at http://www.joefrocks.com/GoldStockCharts.html) bottoming, 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==. A glaring clue that yesterday wasn't an important short term Wave A cycle low is the vertical nature (a "spike move") of this rally that began mid session yesterday and may have peaked today. There's almost always relatively flat action for a few hours after an important cycle low or cycle high occurs, and, that didn't happen yesterday. Also, the fact that HUI's cycle low at 311.78 yesterday was only modestly lower than the Wave A of Wave A cycle low at 313+ that occurred in early March, indicates that a significantly lower cycle low may occur soon.
With help from massive program trader punch spiking ($20.25 Billion today on top of $10.75 Billion yesterday) by the Fed (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), HUI did/is doing an impressive very short term countertrend Wave B Elliott Wave 12345 up down up down up spike move since mid session yesterday, and, the third/final Wave 5 may have peaked early today, or, a rollover cycle high might occur early tomorrow, 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==.
If you're looking to short and/or go long some puts, wait for HUI/NEM/XAU's spike move to clearly break down/do a Wave A type decline, then get your shorts on in a countertrend Wave B, probably tomorrow.
NEM's 10-4-06 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 5-6 year Wave 3 Cyclical Bull Market on 10-4-06.
HUI's Wave A of Wave A of it's major downcycle since 2-23-07 (see chart 1 at http://www.joefrocks.com/GoldStockCharts.html) bottomed at 313+ in early March, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=6m&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==, so, this current Wave C of Wave A should bottom well below 313+ at 300ish (295-305), which implies that HUI/XAU still have a sharp decline ahead of them.
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 are the basis/crux of "Trade the Cycles."
A scenario I've discussed many times 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.
The lead indicators in recent days have been mostly bearish, with the NEM Lead Indicator at a bearish -0.54% versus the XAU today/on 3-15, at a bearish -0.81% versus the XAU on 3-14, a bullish +0.56% versus the XAU on 3-13, a neutral +0.02% versus the XAU 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 modestly bullish +0.22% versus the S & P 500 today/on 3-15, at a very bearish -1.17% versus the S & P 500 on 3-14, a bearish -0.25% versus the S & P 500 on 3-13, a very bearish -0.61% versus the S & P 500 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.
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, assuming they haven't bottomed (NEM is more likely to have bottomed). In HUI's 3 month chart one can see that the countertrend Wave B of Wave A peaked Thursday 3-8 (XAU also, NEM on Wednesday 3-7, 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==.
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.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.
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 at a bearish -0.54% versus the XAU today/on 3-15 and at a bearish -0.81% on 3-14 obviously points to weakness tomorow, and, the WMT Lead Indicator at a modestly bullish +0.22% versus the S & P 500 today/on 3-15 after being an extremely bearish -1.17% on 3-14, also points to weakness tomorrow.
NEM created a downside gap at today's open at 41.44, and, the XAU did so at 129.65, that will probably get filled tomorrow or Monday.
Fed Credit (fuels program trading) for the five day period ending 3-14-07 declined -$0.164 Billion, which points to some weakness in the five sessions ending 3-21-07, see http://www.federalreserve.gov/releases/h41/Current/. The Rollover/Upside Surprise Barometer is at "unlikely."
Yesterday's cycle low for HUI/XAU was probably Wave A of Wave C of Wave A (of the major downcycle since 2-23-07, see chart 1 at http://www.joefrocks.com/GoldStockCharts.html) bottoming, 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==. A glaring clue that yesterday wasn't an important short term Wave A cycle low is the vertical nature (a "spike move") of this rally that began mid session yesterday and may have peaked today. There's almost always relatively flat action for a few hours after an important cycle low or cycle high occurs, and, that didn't happen yesterday. Also, the fact that HUI's cycle low at 311.78 yesterday was only modestly lower than the Wave A of Wave A cycle low at 313+ that occurred in early March, indicates that a significantly lower cycle low may occur soon.
With help from massive program trader punch spiking ($20.25 Billion today on top of $10.75 Billion yesterday) by the Fed (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), HUI did/is doing an impressive very short term countertrend Wave B Elliott Wave 12345 up down up down up spike move since mid session yesterday, and, the third/final Wave 5 may have peaked early today, or, a rollover cycle high might occur early tomorrow, 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==.
If you're looking to short and/or go long some puts, wait for HUI/NEM/XAU's spike move to clearly break down/do a Wave A type decline, then get your shorts on in a countertrend Wave B, probably tomorrow.
NEM's 10-4-06 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 5-6 year Wave 3 Cyclical Bull Market on 10-4-06.
HUI's Wave A of Wave A of it's major downcycle since 2-23-07 (see chart 1 at http://www.joefrocks.com/GoldStockCharts.html) bottomed at 313+ in early March, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=6m&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==, so, this current Wave C of Wave A should bottom well below 313+ at 300ish (295-305), which implies that HUI/XAU still have a sharp decline ahead of them.
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 are the basis/crux of "Trade the Cycles."
A scenario I've discussed many times 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.
The lead indicators in recent days have been mostly bearish, with the NEM Lead Indicator at a bearish -0.54% versus the XAU today/on 3-15, at a bearish -0.81% versus the XAU on 3-14, a bullish +0.56% versus the XAU on 3-13, a neutral +0.02% versus the XAU 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 modestly bullish +0.22% versus the S & P 500 today/on 3-15, at a very bearish -1.17% versus the S & P 500 on 3-14, a bearish -0.25% versus the S & P 500 on 3-13, a very bearish -0.61% versus the S & P 500 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.
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, assuming they haven't bottomed (NEM is more likely to have bottomed). In HUI's 3 month chart one can see that the countertrend Wave B of Wave A peaked Thursday 3-8 (XAU also, NEM on Wednesday 3-7, 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==.
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.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.
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
1:09 PM
