Walmart (WMT) Is Trying To Fill It's Upside Gap At 47.49
Reliable S & P 500 (SPX) lead indicator Walmart (WMT) is trying to fill it's upside gap at 47.49 (http://finance.yahoo.com/q/ta?s=WMT&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==), which is causing the WMT Lead Indicator to be positive and is holding the S & P 500 (SPX) and therefore HUI/NEM/XAU together due to modest program selling/some program buying today.
The NEM Lead Indicator is very bearish the past two weeks at -2.96% versus the XAU last week and at -1.90% the week before, but, the big declines usually happen when both the NEM and WMT Lead Indicators (was +0.61% on Friday and is bullish so far today) are very bearish. Severe HUI/XAU weakness this week probably won't occur until WMT either fills 47.49, or, clearly fails to do so and starts to plunge, causing the WMT Lead Indicator to probably turn bearish again.
Another reason why HUI/NEM/XAU bounced today is that Williams %R for NEM closely approached an extremely oversold -100. My feeling right now is once NEM fills it's downside gap at 41.44 and the XAU probably fills it's downside gap at 133.31 I'll probably exit my short GLD/long April 130 XAU puts (XAVPF) positions, and, I'm probably going to double or triple up on the long April 45 NEM calls (NEMDI) position.
Thomson I Watch is bearish so far today 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), but, is bullish so far today for WMT (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=wmt), suggesting the likelihood that it'll fill it's upside gap at 47.49. Right now WMT is probably the key stock to watch for HUI/NEM/XAU, as weird as that may seem, because it's a reliable lead indicator for SPX (S & P 500).
See the previous post at http://tradethecycles.blogspot.com/2007/03/reliable-lead-indicator-nem-filled-its.html.
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 43.73, 44.53, 45.10, and at 47.06 for NEM, and, at 139.18, 139.66, and at 147.75 for the XAU. NEM has a downside gap at 41.44, and, the XAU has downside gaps at 133.31 and 129.65. WMT has upside gaps at 47.49 and 49.98, and, a downside gap at 46.21. WMT made a bearish breakaway gap to the downside on 3-28 from 47.49.
The XAU hit a Wave B (began 3-14) cycle high on Thursday 3-22 (http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==) for the major downcycle since 2-23-07 (see chart 1 at http://www.joefrocks.com/GoldStockCharts.html), and, HUI did so on Monday 3-26 (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 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 is very bearish the past two weeks at -2.96% versus the XAU last week and at -1.90% the week before, but, the big declines usually happen when both the NEM and WMT Lead Indicators (was +0.61% on Friday and is bullish so far today) are very bearish. Severe HUI/XAU weakness this week probably won't occur until WMT either fills 47.49, or, clearly fails to do so and starts to plunge, causing the WMT Lead Indicator to probably turn bearish again.
Another reason why HUI/NEM/XAU bounced today is that Williams %R for NEM closely approached an extremely oversold -100. My feeling right now is once NEM fills it's downside gap at 41.44 and the XAU probably fills it's downside gap at 133.31 I'll probably exit my short GLD/long April 130 XAU puts (XAVPF) positions, and, I'm probably going to double or triple up on the long April 45 NEM calls (NEMDI) position.
Thomson I Watch is bearish so far today 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), but, is bullish so far today for WMT (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=wmt), suggesting the likelihood that it'll fill it's upside gap at 47.49. Right now WMT is probably the key stock to watch for HUI/NEM/XAU, as weird as that may seem, because it's a reliable lead indicator for SPX (S & P 500).
See the previous post at http://tradethecycles.blogspot.com/2007/03/reliable-lead-indicator-nem-filled-its.html.
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 43.73, 44.53, 45.10, and at 47.06 for NEM, and, at 139.18, 139.66, and at 147.75 for the XAU. NEM has a downside gap at 41.44, and, the XAU has downside gaps at 133.31 and 129.65. WMT has upside gaps at 47.49 and 49.98, and, a downside gap at 46.21. WMT made a bearish breakaway gap to the downside on 3-28 from 47.49.
The XAU hit a Wave B (began 3-14) cycle high on Thursday 3-22 (http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==) for the major downcycle since 2-23-07 (see chart 1 at http://www.joefrocks.com/GoldStockCharts.html), and, HUI did so on Monday 3-26 (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 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
7:52 AM
