HUI/NEM/XAU/SPX Should Rebound Tomorrow,Possibly After Early Weakness
HUI/NEM/XAU/SPX should rebound tomorrow, possibly after early weakness, see http://finance.yahoo.com/q/ta?t=5d&s=%5EGSPC&l=off&z=l&q=c&a=m26-12-9&a=m26-12-9&a=p12&a=m26-12-9&a=p12&a=fs&a=m26-12-9&a=p12&a=fs&a=w14&c=gld%2C+%5Ehui. SPX is in a very short term Wave A down move that began yesterday, and, should bottom early tomorrow if it didn't bottom late today, because, the WMT Lead Indicator was a very bullish +1.66% versus the S & P 500 today/on 5-24, and, Fed Credit rose +$2.252 Billion in the 5 day period ending 5-23-07, see http://www.federalreserve.gov/releases/h41/Current/, and, the Fed added a massive +$18.25 Billion in credit today, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE.
Notice in the chart at the link above that GLD, the gold ETF, and HUI both track the S & P 500 closely due to index fund program trading, which accounts for a massive 70% or so of the dollar volume on the NYSE, which is why major manipulation (even minor) of gold is basically impossible. Program trading, with SPX being the key lead index, is such a huge factor that one must time SPX as well as whatever sector you're timing. Today was a great example of that.
The WMT Lead Indicator was a very bullish +1.66% versus the S & P 500 today/on 5-24. So, a sharp rally is likely to begin tomorrow (possibly after early weakness) for HUI/NEM/XAU/SPX.
The NEM Lead Indicator was a very bullish +2.70% versus the XAU today/on 5-24.
I'm looking to short the gold ETF GLD in an intraday countertrend Wave B. I'm also looking to trade a short term Wave 5 up long for the oil ETF USO, see http://stockcharts.com/charts/gallery.html?uso. It looks like Wave 5 might have begun today at 48.59, but, I'm not convinced yet. Usually it's best to wait for strength (very short term/intraday Wave 1) and buy a pullback (very short term/intraday Wave 2).
Because of the low volume and flat action today I didn't go long DNDN and/or AGEN, because the action was flat/dead in the water. DNDN probably entered Wave 5 of a short term Wave 3 (monthly cycle low at 4.95) today after hitting a cycle low at 6.49, see http://stockcharts.com/charts/gallery.html?dndn.
AGEN entered a short term Wave 5 yesterday after a Wave 4 cycle low at 2.76 (monthly cycle low at 2.25), see http://stockcharts.com/charts/gallery.html?agen.
AVNR probably entered a short term Wave 5 today after a Wave 4 cycle low at 3.22 (monthly cycle low at 2.36) , see http://stockcharts.com/charts/gallery.html?avnr. AVNR surprised modestly to the downside from yesterday's cycle low at 3.25, that probably would have been the Wave 4 cycle low were it not for today's severe market weakness. Given how volatile AVNR is, combined with the severe market weakness, and today's downside surprise was very modest, which suggests that a Wave 4 cycle low did occur at 3.22.
HUI/XAU's Wave 2 Cyclical Bear Market (since 5-11-06) should bottom at 200-220 and 85-90 this year, near the primary multi year trendlines (basic TA) since late 2000, shown in charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html.
Chart 8 is old now since NEM broke down and took out the cycle low at 39.84 from 10-4-06. Since HUI/XAU are more volatile/parabolic than NEM their relatively flat multi year trendlines should hold, BUT, note that I drew HUI's optimistically, at the top of the 200-220 target range.
Most of the gold writers don't even understand basic TA. Gold's primary multi year trendline is at $475ish. Most of the "well known" gold writers have been exposed for the bumbling fools most of them are when it comes to market timing/technical analysis.
Fundamentally, the deflationary real estate/mortgage bust is a major negative for gold, which is a hedge against inflation. Note that HUI/XAU's Wave 1 Cyclical Bull Market from late 2000 until 5-11-06 coincided closely with the inflationary real estate/mortgage boom from 2002 through 2005.
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. 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 began on 1-31-06. ....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Notice in the chart at the link above that GLD, the gold ETF, and HUI both track the S & P 500 closely due to index fund program trading, which accounts for a massive 70% or so of the dollar volume on the NYSE, which is why major manipulation (even minor) of gold is basically impossible. Program trading, with SPX being the key lead index, is such a huge factor that one must time SPX as well as whatever sector you're timing. Today was a great example of that.
The WMT Lead Indicator was a very bullish +1.66% versus the S & P 500 today/on 5-24. So, a sharp rally is likely to begin tomorrow (possibly after early weakness) for HUI/NEM/XAU/SPX.
The NEM Lead Indicator was a very bullish +2.70% versus the XAU today/on 5-24.
I'm looking to short the gold ETF GLD in an intraday countertrend Wave B. I'm also looking to trade a short term Wave 5 up long for the oil ETF USO, see http://stockcharts.com/charts/gallery.html?uso. It looks like Wave 5 might have begun today at 48.59, but, I'm not convinced yet. Usually it's best to wait for strength (very short term/intraday Wave 1) and buy a pullback (very short term/intraday Wave 2).
Because of the low volume and flat action today I didn't go long DNDN and/or AGEN, because the action was flat/dead in the water. DNDN probably entered Wave 5 of a short term Wave 3 (monthly cycle low at 4.95) today after hitting a cycle low at 6.49, see http://stockcharts.com/charts/gallery.html?dndn.
AGEN entered a short term Wave 5 yesterday after a Wave 4 cycle low at 2.76 (monthly cycle low at 2.25), see http://stockcharts.com/charts/gallery.html?agen.
AVNR probably entered a short term Wave 5 today after a Wave 4 cycle low at 3.22 (monthly cycle low at 2.36) , see http://stockcharts.com/charts/gallery.html?avnr. AVNR surprised modestly to the downside from yesterday's cycle low at 3.25, that probably would have been the Wave 4 cycle low were it not for today's severe market weakness. Given how volatile AVNR is, combined with the severe market weakness, and today's downside surprise was very modest, which suggests that a Wave 4 cycle low did occur at 3.22.
HUI/XAU's Wave 2 Cyclical Bear Market (since 5-11-06) should bottom at 200-220 and 85-90 this year, near the primary multi year trendlines (basic TA) since late 2000, shown in charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html.
Chart 8 is old now since NEM broke down and took out the cycle low at 39.84 from 10-4-06. Since HUI/XAU are more volatile/parabolic than NEM their relatively flat multi year trendlines should hold, BUT, note that I drew HUI's optimistically, at the top of the 200-220 target range.
Most of the gold writers don't even understand basic TA. Gold's primary multi year trendline is at $475ish. Most of the "well known" gold writers have been exposed for the bumbling fools most of them are when it comes to market timing/technical analysis.
Fundamentally, the deflationary real estate/mortgage bust is a major negative for gold, which is a hedge against inflation. Note that HUI/XAU's Wave 1 Cyclical Bull Market from late 2000 until 5-11-06 coincided closely with the inflationary real estate/mortgage boom from 2002 through 2005.
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. 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 began on 1-31-06. ....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
1:15 PM
