HUI/XAU Short Term Wave A Downcycle Is Still In Effect
An HUI/XAU short term Wave A downcycle is still in effect since Monday 4-16-07's intermediate term cycle highs for HUI (cycle began 10-4-06)/XAU (cycle that began 10-4-06 peaked on 12-5-06), 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 2% intermediate term cycle sell signal occurred on Thursday 4-19-07.
The XAU's cycle that began on 3-14-07 and peaked on 4-16-07 was a minor intermediate term upcycle. NEM's upcycle since 3-14-07 is really a minor intermediate term upcycle at this point. There isn't a big difference between a minor intermediate term upcycle and a monthly upcycle. A minor intermediate term upcycle is usually a one weekish Wave 5 short term upcycle "on top of" a complete monthly cycle (Elliott Wave 12345 upcycle plus ABC downcycle), in which a longer Elliott Wave 12345 up down up down up upcycle is created (obviously) than the one that occurred in the monthly upcycle.
All HUI/XAU managed today was to very briefly spike at the open and rise to the very short term Wave A downtrend lines, then resumed their downtrend since late Monday 4-16-07, when intermediate term cycle highs occurred, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.
Reliable lead indicator WMT has an upside gap at 49.98 that it probably won't fill, because, it's cycle high today at 49.95 missed filling that upside gap by only 3 cents, and, WMT fell sharply after that, closing at 48.93 today.
The NEM Lead Indicator was a slightly bearish -0.11% versus the XAU today/on 4-23, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem. The WMT Lead Indicator, was an extremely bearish -1.44% versus the S & P 500 today, and, became more bearish toward session's end, 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.
Thomson I Watch that was somewhat bearish today for NEM (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=nem) and for GFI (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=gfi), but, was bullish for WMT (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=wmt).
The COT (Commitments Of Traders) data is very bearish again in the 5 day period ending 4-17-07, especially on an intermediate term cycle (weeks/months) basis, see http://www.cftc.gov/dea/options/deacmxsof.htm. The savvy non contrarian gold Commercial Traders traded aggressively net short, mostly by short selling, while the clueless (from a big picture standpoint especially) gold Speculators did the opposite, mostly by aggressively adding to their long position, as gold approaches a very important Wave B cycle high (might have occurred Friday) of the Wave 2 Cyclical Bear Market that began at $730ish last May 2006.
Fed Credit for the 5 day period ending 4-18-07 rose a significant +$1.778 Billion, which points to a sharp rebound (very short term countertrend Wave B) in the 5 day period ending 4-25-07, http://www.federalreserve.gov/releases/h41/Current/. The Rollover/Upside Surprise Barometer is at "Mildly Likely," because, a 2% intermediate term cycle sell signal occurred yesterday/4-19, which indicates that the cycle peaked on Monday. The sharp -$2.823 Billion decline in the 5 day period ending 4-11-07 correctly pointed to some sustained significant weakness (late Monday through Wednesday 4-21) in the 5 day period ending 4-18-07.
Cycles indicate that a big decline is coming. HUI/XAU are 40-45% above their primary multi year trendlines (Secular Bull Market since late 2000), see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. There's no way in hell that HUI's extremely anemic uptrend of recent months is bullish, it's actually extremely flat lengthy rollover action since 12-5-06's cycle high. There's no way in hell that the XAU's downtrend since 5-11-06 (Wave 2 Cyclical Bear Market for HUI/XAU, Wave 2 down of the Secular Bull Market since late 2000) is bullish. Actually, the XAU managed to put in a slightly higher bearish double top cycle high at 148.50 on Monday 4-16 versus the cycle high at 148.11 on 2-23-07. Big deal.
In the next week or two the XAU should fill downside gaps at 143.58 (filled), 133.31 and possibly also at 129.65, and, NEM should fill it's downside gaps at 43.57 (filled), 43.45 (filled), 43.34 (filled), 42.89, and at 41.44. The XAU should bottom at 133ish or 129ish and NEM should bottom at 42.50ish or 41ish, shortly after filling 42.89 and (big) maybe 41.44 (monthly cycle low at 40.53 occurred on 3-14-07).
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 has an upside gap at 47.06. NEM has downside gaps at 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 45%+ (from 4-16-07's 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.
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."
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
The XAU's cycle that began on 3-14-07 and peaked on 4-16-07 was a minor intermediate term upcycle. NEM's upcycle since 3-14-07 is really a minor intermediate term upcycle at this point. There isn't a big difference between a minor intermediate term upcycle and a monthly upcycle. A minor intermediate term upcycle is usually a one weekish Wave 5 short term upcycle "on top of" a complete monthly cycle (Elliott Wave 12345 upcycle plus ABC downcycle), in which a longer Elliott Wave 12345 up down up down up upcycle is created (obviously) than the one that occurred in the monthly upcycle.
All HUI/XAU managed today was to very briefly spike at the open and rise to the very short term Wave A downtrend lines, then resumed their downtrend since late Monday 4-16-07, when intermediate term cycle highs occurred, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.
Reliable lead indicator WMT has an upside gap at 49.98 that it probably won't fill, because, it's cycle high today at 49.95 missed filling that upside gap by only 3 cents, and, WMT fell sharply after that, closing at 48.93 today.
The NEM Lead Indicator was a slightly bearish -0.11% versus the XAU today/on 4-23, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem. The WMT Lead Indicator, was an extremely bearish -1.44% versus the S & P 500 today, and, became more bearish toward session's end, 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.
Thomson I Watch that was somewhat bearish today for NEM (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=nem) and for GFI (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=gfi), but, was bullish for WMT (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=wmt).
The COT (Commitments Of Traders) data is very bearish again in the 5 day period ending 4-17-07, especially on an intermediate term cycle (weeks/months) basis, see http://www.cftc.gov/dea/options/deacmxsof.htm. The savvy non contrarian gold Commercial Traders traded aggressively net short, mostly by short selling, while the clueless (from a big picture standpoint especially) gold Speculators did the opposite, mostly by aggressively adding to their long position, as gold approaches a very important Wave B cycle high (might have occurred Friday) of the Wave 2 Cyclical Bear Market that began at $730ish last May 2006.
Fed Credit for the 5 day period ending 4-18-07 rose a significant +$1.778 Billion, which points to a sharp rebound (very short term countertrend Wave B) in the 5 day period ending 4-25-07, http://www.federalreserve.gov/releases/h41/Current/. The Rollover/Upside Surprise Barometer is at "Mildly Likely," because, a 2% intermediate term cycle sell signal occurred yesterday/4-19, which indicates that the cycle peaked on Monday. The sharp -$2.823 Billion decline in the 5 day period ending 4-11-07 correctly pointed to some sustained significant weakness (late Monday through Wednesday 4-21) in the 5 day period ending 4-18-07.
Cycles indicate that a big decline is coming. HUI/XAU are 40-45% above their primary multi year trendlines (Secular Bull Market since late 2000), see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. There's no way in hell that HUI's extremely anemic uptrend of recent months is bullish, it's actually extremely flat lengthy rollover action since 12-5-06's cycle high. There's no way in hell that the XAU's downtrend since 5-11-06 (Wave 2 Cyclical Bear Market for HUI/XAU, Wave 2 down of the Secular Bull Market since late 2000) is bullish. Actually, the XAU managed to put in a slightly higher bearish double top cycle high at 148.50 on Monday 4-16 versus the cycle high at 148.11 on 2-23-07. Big deal.
In the next week or two the XAU should fill downside gaps at 143.58 (filled), 133.31 and possibly also at 129.65, and, NEM should fill it's downside gaps at 43.57 (filled), 43.45 (filled), 43.34 (filled), 42.89, and at 41.44. The XAU should bottom at 133ish or 129ish and NEM should bottom at 42.50ish or 41ish, shortly after filling 42.89 and (big) maybe 41.44 (monthly cycle low at 40.53 occurred on 3-14-07).
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 has an upside gap at 47.06. NEM has downside gaps at 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 45%+ (from 4-16-07's 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.
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."
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
1:51 PM
