.............Light Holiday Weekend Volume
Many traders have started the holiday weekend early, which has led to light volume today. I may do my first audio Blog/Podcast this weekend. I don't see any surprises today. Gold has broken below it's channel of the previous four days, see http://stockcharts.com/charts/gallery.html?$gold.
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 yesterday, 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 may not go long DNDN and/or AGEN, because the action is 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 6.50, 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 entered a short term Wave 5 yesterday after a Wave 4 cycle low at 3.25 (monthly cycle low at 2.36) , see http://stockcharts.com/charts/gallery.html?avnr.
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
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 yesterday, 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 may not go long DNDN and/or AGEN, because the action is 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 6.50, 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 entered a short term Wave 5 yesterday after a Wave 4 cycle low at 3.25 (monthly cycle low at 2.36) , see http://stockcharts.com/charts/gallery.html?avnr.
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
7:22 AM
