.......HUI/NEM/XAU Appear To Have Peaked
NEM and HUI/XAU's very short term upcycle since early Monday rolled over dramatically yesterday and appear to have peaked early today, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=on&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==. If so then HUI/XAU's Wave B upcycle (began 3-14-07) of the major downcycle since 2-23-07 (when HUI put in a nearly perfect bearish double top, see chart 1 at http://www.joefrocks.com/GoldStockCharts.html) probably peaked early today.
HUI/NEM/XAU didn't make enough progress on the downside today after hitting very early session cycle highs to provide much conclusive insight into whether the very short term upcycle since early Monday has peaked, but, a few conclusions can be drawn. NEM's very flat action after peaking at 43.90 early today (see http://finance.yahoo.com/q/ta?s=nem&t=5d&l=on&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==) is typical of what happens after an important cycle high has occurred. Also, the fact that HUI/XAU didn't rally after the very early session cycle highs, despite the fact that both the NEM and WMT Lead Indicators were in positive territory for basically the entire session, probably means that they've turned down, see (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=on&z=l&q=c&p=&a=&c=%5Ehui,nem) for today's NEM Lead Indicator, that closed at +0.67% versus the XAU, and, see (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) today's WMT Lead Indicator, that closed at +0.15% versus the S & P 500. Note that the NEM Lead Indicator turned more bullish in the last few hours of trading while the WMT Lead Indicator turned bearish.
Also, since HUI put in a nearly perfect bearish double top at 362.53 on 12-5-06 and at 362.58 on 2-23-07 (see chart 1 at http://www.joefrocks.com/GoldStockCharts.html), then today's high at 358.44 should be the countertrend Wave B (began 3-14-07) cycle high or very nearly so, because, it's within less than 2% (closer to 1%) of the bearish double top cycle highs.
NEM's Thomson I Watch turned bearish near the session cycle high today (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=NEM), and, turned bearish in the second half of the session for WMT (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=wmt).
The NEM Lead Indicator is very bearish short term, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=&c=%5Ehui,nem. The WMT Lead Indicator has been very bullish in recent days (http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=on&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC), but should turn bearish, since WMT filled it's upside gap at 47.49 on Monday.
In the next week or so the XAU should fill downside gaps at 133.31 and possibly also at 129.65, and, NEM should fill it's downside gaps at 43.45, 42.89, and 41.44. The XAU should bottom at 133ish or 129ish and NEM should bottom at 41ish, above the monthly cycle low at 40.53 that occurred on 3-14-07.
Fed Credit for the 5 day period ending 4-4-07 rose a modest $128 Million (http://www.federalreserve.gov/releases/h41/Current/), so, the Rollover/Upside Surprise Barometer is at "Mildly Likely."
I bought XAU April 130 puts (XAVPF) on 3-28 at 1.20, and, I doubled up on Tuesday at 0.55 for an average cost/basis of 0.875, and, will look to exit shortly after the gap filling action is completed in the next few days. I shorted GLD, the gold ETF, at 65.61 on 3-29, which will probably bottom at 63.50ish in the next few days, shortly after filling a downside gap at 63.98 (there are also downside gaps at 62.26 and 60.63). Since NEM probably hit an important monthly cycle low at 40.53 on 3-14-07 and an extremely important Wave 2 Cyclical Bear Market cycle low at 39.84 on 10-4-06 (see chart 8 at http://www.joefrocks.com/GoldStockCharts.html), my NEM April 45 calls (NEMDI) position should do well.
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."
NEM/XAU have upside gaps at 44.53, 45.10, and at 47.06 for NEM, and, at 147.75 for the XAU. NEM has downside gaps at 43.45, 42.89 and 41.44, 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.
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.
Note how the gold ETF GLD (and HUI/NEM/XAU) tracks SPX due to program trading, see http://finance.yahoo.com/q/ta?t=5d&s=GLD&l=off&z=l&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=&c=%5EGSPC. This shows how clueless the manipulation theory gold writers are. There simply aren't any traders who can overcome the huge program trading money, 70% of the dollar volume on the NYSE. Gold did 30-35%/year on average in it's Wave 1 Cyclical Bull Market from April 2001 until May 2006, yet many gold writers harp on gold price suppression by some "cartel."
Tuesday 2-27's Wave A crash was probably an important technical breakdown for HUI/XAU as well as for SPX (S & P 500), and, to a lesser extent for NEM, which should be in a Wave 3 Cyclical Bull Market since 10-4-06, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. Tuesday 2-27's Wave A crash was probably an important technical breakdown for the stock market in general, meaning the major averages and nearly all sectors except a few defensive ones (despite what most gold "gurus" say gold isn't a safe haven/defensive sector, T Bills and T Bonds are, which run COUNTER to the precious metals sector, which does well in an inflationary rising interest rate environment).
Fed Credit is extremely important because it fuels index fund program traders, that account for about 70% of the dollar volume on the NYSE. Just look at what happened on Tuesday 2-27. THREE out of five hundred SPX components rose. Unreal.
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
HUI/NEM/XAU didn't make enough progress on the downside today after hitting very early session cycle highs to provide much conclusive insight into whether the very short term upcycle since early Monday has peaked, but, a few conclusions can be drawn. NEM's very flat action after peaking at 43.90 early today (see http://finance.yahoo.com/q/ta?s=nem&t=5d&l=on&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==) is typical of what happens after an important cycle high has occurred. Also, the fact that HUI/XAU didn't rally after the very early session cycle highs, despite the fact that both the NEM and WMT Lead Indicators were in positive territory for basically the entire session, probably means that they've turned down, see (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=on&z=l&q=c&p=&a=&c=%5Ehui,nem) for today's NEM Lead Indicator, that closed at +0.67% versus the XAU, and, see (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) today's WMT Lead Indicator, that closed at +0.15% versus the S & P 500. Note that the NEM Lead Indicator turned more bullish in the last few hours of trading while the WMT Lead Indicator turned bearish.
Also, since HUI put in a nearly perfect bearish double top at 362.53 on 12-5-06 and at 362.58 on 2-23-07 (see chart 1 at http://www.joefrocks.com/GoldStockCharts.html), then today's high at 358.44 should be the countertrend Wave B (began 3-14-07) cycle high or very nearly so, because, it's within less than 2% (closer to 1%) of the bearish double top cycle highs.
NEM's Thomson I Watch turned bearish near the session cycle high today (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=NEM), and, turned bearish in the second half of the session for WMT (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=wmt).
The NEM Lead Indicator is very bearish short term, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=&c=%5Ehui,nem. The WMT Lead Indicator has been very bullish in recent days (http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=on&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC), but should turn bearish, since WMT filled it's upside gap at 47.49 on Monday.
In the next week or so the XAU should fill downside gaps at 133.31 and possibly also at 129.65, and, NEM should fill it's downside gaps at 43.45, 42.89, and 41.44. The XAU should bottom at 133ish or 129ish and NEM should bottom at 41ish, above the monthly cycle low at 40.53 that occurred on 3-14-07.
Fed Credit for the 5 day period ending 4-4-07 rose a modest $128 Million (http://www.federalreserve.gov/releases/h41/Current/), so, the Rollover/Upside Surprise Barometer is at "Mildly Likely."
I bought XAU April 130 puts (XAVPF) on 3-28 at 1.20, and, I doubled up on Tuesday at 0.55 for an average cost/basis of 0.875, and, will look to exit shortly after the gap filling action is completed in the next few days. I shorted GLD, the gold ETF, at 65.61 on 3-29, which will probably bottom at 63.50ish in the next few days, shortly after filling a downside gap at 63.98 (there are also downside gaps at 62.26 and 60.63). Since NEM probably hit an important monthly cycle low at 40.53 on 3-14-07 and an extremely important Wave 2 Cyclical Bear Market cycle low at 39.84 on 10-4-06 (see chart 8 at http://www.joefrocks.com/GoldStockCharts.html), my NEM April 45 calls (NEMDI) position should do well.
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."
NEM/XAU have upside gaps at 44.53, 45.10, and at 47.06 for NEM, and, at 147.75 for the XAU. NEM has downside gaps at 43.45, 42.89 and 41.44, 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.
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.
Note how the gold ETF GLD (and HUI/NEM/XAU) tracks SPX due to program trading, see http://finance.yahoo.com/q/ta?t=5d&s=GLD&l=off&z=l&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=&c=%5EGSPC. This shows how clueless the manipulation theory gold writers are. There simply aren't any traders who can overcome the huge program trading money, 70% of the dollar volume on the NYSE. Gold did 30-35%/year on average in it's Wave 1 Cyclical Bull Market from April 2001 until May 2006, yet many gold writers harp on gold price suppression by some "cartel."
Tuesday 2-27's Wave A crash was probably an important technical breakdown for HUI/XAU as well as for SPX (S & P 500), and, to a lesser extent for NEM, which should be in a Wave 3 Cyclical Bull Market since 10-4-06, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. Tuesday 2-27's Wave A crash was probably an important technical breakdown for the stock market in general, meaning the major averages and nearly all sectors except a few defensive ones (despite what most gold "gurus" say gold isn't a safe haven/defensive sector, T Bills and T Bonds are, which run COUNTER to the precious metals sector, which does well in an inflationary rising interest rate environment).
Fed Credit is extremely important because it fuels index fund program traders, that account for about 70% of the dollar volume on the NYSE. Just look at what happened on Tuesday 2-27. THREE out of five hundred SPX components rose. Unreal.
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
1:38 PM
