Monthly Employment Data Stronger Than Expected, Sending The US Dollar Up Significantly
The monthly employment data released today was stronger than expected (http://biz.yahoo.com/ap/070406/economy.html?.v=19), which sent the US Dollar up significantly early today (+0.31 to 82.76, a move of 0.25 or greater is significant for the US Dollar, a move of 0.50 or greater is a sharp rise/decline). This is another reason why HUI/XAU's Wave B upcycle (began 3-14-07, 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==) 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 yesterday, 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==.
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 yesterday's cycle 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.
Another sign that HUI/XAU peaked very early yesterday is that the XAU Put/Call Ratio (April expiration) rose sharply (> 2%) to 1.32423 yesterday/on 4-5 from 1.29246 on 4-4, yet HUI/XAU only managed a very brief spike upcycle, then declined the rest of the session. The minimal follow through in terms of time and price, despite the sharp rise in the XAU Put/Call Ratio, is another sign that HUI/XAU probably turned down and entered Wave C (early yesterday) 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).
The fact that HUI/XAU didn't rally after the very early session cycle highs yesterday, 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 yesterday'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) for yesterday'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.
"The report was stronger than economists were expecting. They were calling for the economy to add around 135,000 new jobs in March, and for the unemployment rate to actually edge up to 4.6 percent.
The 4.4 percent unemployment rate, which dropped down a notch from 4.5 percent in February, matched the rate in October, which was the lowest in five years.
Jobs gains in March were fairly widespread, except for the struggling manufacturing sector, which continued to shed jobs for the ninth month in a row; factories cut 16,000 in March alone. Some business services also trimmed jobs, by 7,000 last month.
Construction companies, after suffering heavy job losses in February in part due to lousy winter weather, bulked up in March. They added 56,000 positions last month, the most in just over a year. Retailers added nearly 36,000 jobs last month. Education and health care services expanded employment by 54,000. Leisure and hospitality picked up 21,000 new jobs, while the government added 23,000.
Adding to the positive showing, job gains in January and February turned out to be stronger than previously reported. The economy added 113,000 positions in February, up from a prior estimate of just 97,000, which had marked the slowest job growth in two years. In January 162,000 new jobs were created, better than the 146,000 previously reported.
Workers' wages grew modestly.
Average hourly earnings rose to $17.22 in March, a 0.3 percent increase from February. That matched economists' expectations. Over the last 12 months, wages grew by 4 percent."
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.
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
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 yesterday's cycle 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.
Another sign that HUI/XAU peaked very early yesterday is that the XAU Put/Call Ratio (April expiration) rose sharply (> 2%) to 1.32423 yesterday/on 4-5 from 1.29246 on 4-4, yet HUI/XAU only managed a very brief spike upcycle, then declined the rest of the session. The minimal follow through in terms of time and price, despite the sharp rise in the XAU Put/Call Ratio, is another sign that HUI/XAU probably turned down and entered Wave C (early yesterday) 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).
The fact that HUI/XAU didn't rally after the very early session cycle highs yesterday, 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 yesterday'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) for yesterday'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.
"The report was stronger than economists were expecting. They were calling for the economy to add around 135,000 new jobs in March, and for the unemployment rate to actually edge up to 4.6 percent.
The 4.4 percent unemployment rate, which dropped down a notch from 4.5 percent in February, matched the rate in October, which was the lowest in five years.
Jobs gains in March were fairly widespread, except for the struggling manufacturing sector, which continued to shed jobs for the ninth month in a row; factories cut 16,000 in March alone. Some business services also trimmed jobs, by 7,000 last month.
Construction companies, after suffering heavy job losses in February in part due to lousy winter weather, bulked up in March. They added 56,000 positions last month, the most in just over a year. Retailers added nearly 36,000 jobs last month. Education and health care services expanded employment by 54,000. Leisure and hospitality picked up 21,000 new jobs, while the government added 23,000.
Adding to the positive showing, job gains in January and February turned out to be stronger than previously reported. The economy added 113,000 positions in February, up from a prior estimate of just 97,000, which had marked the slowest job growth in two years. In January 162,000 new jobs were created, better than the 146,000 previously reported.
Workers' wages grew modestly.
Average hourly earnings rose to $17.22 in March, a 0.3 percent increase from February. That matched economists' expectations. Over the last 12 months, wages grew by 4 percent."
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.
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
11:30 AM
