AVNR's Bearish Screwed Up Elliott Wave 12345 Monthly Upcycle
AVNR's monthly cycle began in mid March, see http://finance.yahoo.com/q/ta?s=AVNR&t=3m&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==. However, I realize now that my Elliott Wave count is wrong for AVNR. AVNR did a screwed up/bearish 12345 monthly upcycle, with Wave 4 bottoming in late March below Wave 2, so, the huge two day spike to 6.75, a rise of 500%ish, was Wave 5 not Wave 3, which means that the current long downcycle since peaking at 6.75 is a monthly downcycle, not a short term Wave 4 down. The good news is that the monthly downcycle is probably near a cycle low, and, one might have occurred at 2.58 on Friday 5-11.
The screwed up/bearish 12345 up down up down up monthly upcycle, similar to NEM's recent screwed up/bearish 12345 monthly upcycle (see http://tradethecycles.blogspot.com/2007/05/bearish-action-points-to-possibility-of.html), plus the additional bearish action/huge decline from 6.75 to 3.85 in the same session that the monthly upcycle peaked at 6.75, pointed to the possibility of an unusual inverse Elliott Wave 12345 down up down up down pattern, just as occurred with NEM last week, when it took out it's cycle low at 40.90 from early May.
For AVNR Wave A of the monthly downcycle was the decline in the same session from the 6.75 monthly cycle high to the Wave A cycle low at 3.85. Wave B was the two day upcycle that peaked a bit above 5, then Wave A of Wave C bottomed at 3.17 on 4-26, and, Wave C of Wave C has been in effect the past nine sessions, see http://finance.yahoo.com/q/ta?s=AVNR&t=3m&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==.
So, the good news is that bearish action, such as a screwed up/bearish 12345 monthly upcycle, like AVNR and NEM had recently, in which the normal higher cycle highs (Waves 1, 3, 5) and/or higher cycle lows (Waves 2 and 4) doesn't occur, or, if an unusually large decline occurs, such as when AVNR fell to 3.85 from the monthly cycle high at 6.75 in the same session, points to the possibility of an unusual inverse Elliott Wave 12345 down up down up down pattern as opposed to the normal ABC down up down on the daily charts.
Not only did AVNR experience an unusually large decline to 3.85 from the monthly cycle high at 6.75 in the same session, it also had a screwed up/bearish 12345 up down up down up monthly upcycle. So, twice in the current monthly cycle AVNR exhibited bearish action that correctly pointed to the possibility of an unusual inverse Elliott Wave 12345 down up down up down pattern, as opposed to the normal ABC down up down pattern visible on the daily charts.
AVNR DID do an ABC pattern so far, but, on the daily chart it looks like an unusual inverse Elliott Wave 12345 down up down up down pattern, because, Wave A's ABC down up down pattern occurred in one session, so, it wasn't visible on the daily chart.
The due diligence that I do (as a minimum) on trading stocks is to look at insider trading activity, the balance sheet, mutual fund/institutional ownership, scan the news/maybe read some, check I Watch, make sure that they're probably in a Cyclical Bull Market (should have completed a 9-18+ month Cyclical Bear Market in the past year or two), etc.
There are times when one should wait for strength after hitting a price target (hit a buy signal), such as if there's a well established downtrend line one should wait for it to clearly be broken (might wait for a Wave 1 short term upcycle and buy late in a Wave 2 down or early in a Wave 3 up, in the flat early part of the cycle), and, there are times to consider trying to catch the bottom (when I Watch and the WMT Lead Indicator are clearly bullish and/or a stock bounces at a well established uptrend line, then look to buy a pullback).
If one decides to trade rockets obviously paper trade for a while or trade very modest positions at first.
I'll be using cycle trendlines/channels, Elliott Wave patterns, gaps, the WMT Lead Indicator, I Watch, etc. to time the rockets. If it works the way I think it will it should be a lot of fun. We'll see.
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. The primary Secular Bull Market trendlines since late 2000 are at 200-220 for HUI and at 85-90 for the XAU. Those are the targets for where the Cyclical Bear Market will bottom. 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 screwed up/bearish 12345 up down up down up monthly upcycle, similar to NEM's recent screwed up/bearish 12345 monthly upcycle (see http://tradethecycles.blogspot.com/2007/05/bearish-action-points-to-possibility-of.html), plus the additional bearish action/huge decline from 6.75 to 3.85 in the same session that the monthly upcycle peaked at 6.75, pointed to the possibility of an unusual inverse Elliott Wave 12345 down up down up down pattern, just as occurred with NEM last week, when it took out it's cycle low at 40.90 from early May.
For AVNR Wave A of the monthly downcycle was the decline in the same session from the 6.75 monthly cycle high to the Wave A cycle low at 3.85. Wave B was the two day upcycle that peaked a bit above 5, then Wave A of Wave C bottomed at 3.17 on 4-26, and, Wave C of Wave C has been in effect the past nine sessions, see http://finance.yahoo.com/q/ta?s=AVNR&t=3m&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==.
So, the good news is that bearish action, such as a screwed up/bearish 12345 monthly upcycle, like AVNR and NEM had recently, in which the normal higher cycle highs (Waves 1, 3, 5) and/or higher cycle lows (Waves 2 and 4) doesn't occur, or, if an unusually large decline occurs, such as when AVNR fell to 3.85 from the monthly cycle high at 6.75 in the same session, points to the possibility of an unusual inverse Elliott Wave 12345 down up down up down pattern as opposed to the normal ABC down up down on the daily charts.
Not only did AVNR experience an unusually large decline to 3.85 from the monthly cycle high at 6.75 in the same session, it also had a screwed up/bearish 12345 up down up down up monthly upcycle. So, twice in the current monthly cycle AVNR exhibited bearish action that correctly pointed to the possibility of an unusual inverse Elliott Wave 12345 down up down up down pattern, as opposed to the normal ABC down up down pattern visible on the daily charts.
AVNR DID do an ABC pattern so far, but, on the daily chart it looks like an unusual inverse Elliott Wave 12345 down up down up down pattern, because, Wave A's ABC down up down pattern occurred in one session, so, it wasn't visible on the daily chart.
The due diligence that I do (as a minimum) on trading stocks is to look at insider trading activity, the balance sheet, mutual fund/institutional ownership, scan the news/maybe read some, check I Watch, make sure that they're probably in a Cyclical Bull Market (should have completed a 9-18+ month Cyclical Bear Market in the past year or two), etc.
There are times when one should wait for strength after hitting a price target (hit a buy signal), such as if there's a well established downtrend line one should wait for it to clearly be broken (might wait for a Wave 1 short term upcycle and buy late in a Wave 2 down or early in a Wave 3 up, in the flat early part of the cycle), and, there are times to consider trying to catch the bottom (when I Watch and the WMT Lead Indicator are clearly bullish and/or a stock bounces at a well established uptrend line, then look to buy a pullback).
If one decides to trade rockets obviously paper trade for a while or trade very modest positions at first.
I'll be using cycle trendlines/channels, Elliott Wave patterns, gaps, the WMT Lead Indicator, I Watch, etc. to time the rockets. If it works the way I think it will it should be a lot of fun. We'll see.
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. The primary Secular Bull Market trendlines since late 2000 are at 200-220 for HUI and at 85-90 for the XAU. Those are the targets for where the Cyclical Bear Market will bottom. 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
