Modest HUI/NEM/XAU/SPX Strength Occurred, Given Yesterday's Very Bullish NEM/WMT Lead Indicators
Modest short lived HUI/NEM/XAU/SPX strength occurred today, especially given yesterday's very bullish NEM/WMT Lead Indicators (+2.70% versus the XAU for NEM and +1.66% versus the S & P 500 for WMT), see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==, which is a bearish sign.
Early in the session HUI/XAU/SPX completed brief Elliott Wave 12345 up down up down up spikes, then they did an intraday Wave A down and spent most of the remainder of the session in an intraday Wave B up, possibly (XAU probably did) entering Wave C down near session's end.
The NEM Lead Indicator was a very bearish -1.58% versus the XAU today/on 5-25, so, severe weakness is likely on Tuesday for HUI/NEM/XAU. I'll be looking to reshort the gold ETF GLD early on Monday. I probably should have shorted it late today, but, it was in an intraday Wave 5, which is why I was waiting. I also have the June XAU 125 puts (XAVRE) at 0.75.
Now for HUI's Elliott Wave count, see HUI's chart at http://stockcharts.com/charts/gallery.html?%24hui. HUI's major intermediate term upcycle that began on 10-4-06 peaked on 4-16-07 at 369.69 (The XAU peaked way back on 12-5-06). Wave A down bottomed at 333.37 on 5-1-07. Wave B peaked at 351.85 on 5-4-07. Wave A of Wave C bottomed at 319.56 on 5-17. Wave B of Wave C peaked at 334.43 on 5-21, so, Wave C of Wave C is in effect for HUI, in which it should bottom well below 319.56.
The WMT Lead Indicator was a neutral +0.01% versus the S & P 500 today/on 5-25. But, WMT's anemic very short term Elliott Wave 12345 up down up down up upcycle since late Wednesday (http://finance.yahoo.com/q/ta?s=wmt&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=) has peaked, or, will peak in rollover mode early on Tuesday. The upcycle has been so anemic that most of it occurred in rollover mode. So, weakness is likely to set in for SPX/WMT early on Tuesday.
I'm looking to trade a short term Wave 5 up long for the oil ETF USO, see http://stockcharts.com/charts/gallery.html?uso. Wave 5 began yesterday at 48.59, but, I'm waiting for the well established (1 week) Wave 4 downtrend line to be broken.
AVNR needs to clearly break it's short term Wave 4 downtrend line (bullish perfect double bottom monthly cycle low at 2.36 on 5-14/5-15) , see http://stockcharts.com/charts/gallery.html?avnr and http://finance.yahoo.com/q/ta?s=avnr&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, before it'll be safe to assume that Wave 4 has bottomed.
I didn't go long DNDN and/or AGEN yet. DNDN probably entered Wave 5 of a short term Wave 3 (monthly cycle low at 4.95) yesterday after hitting a cycle low at 6.49, see http://stockcharts.com/charts/gallery.html?dndn.
AGEN's Wave 4 may still be in effect, since it took out the cycle low at 2.76 from Wednesday, with a cycle low today at 2.65 (monthly cycle low at 2.25), see http://stockcharts.com/charts/gallery.html?agen. In the future I'm going to wait for a cycle's downtrend line (see http://finance.yahoo.com/q/ta?s=agen&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==) to be clearly broken before I say that a cycle low has probably occurred.
I might do my first audio Blog/Podcast this weekend.
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
Early in the session HUI/XAU/SPX completed brief Elliott Wave 12345 up down up down up spikes, then they did an intraday Wave A down and spent most of the remainder of the session in an intraday Wave B up, possibly (XAU probably did) entering Wave C down near session's end.
The NEM Lead Indicator was a very bearish -1.58% versus the XAU today/on 5-25, so, severe weakness is likely on Tuesday for HUI/NEM/XAU. I'll be looking to reshort the gold ETF GLD early on Monday. I probably should have shorted it late today, but, it was in an intraday Wave 5, which is why I was waiting. I also have the June XAU 125 puts (XAVRE) at 0.75.
Now for HUI's Elliott Wave count, see HUI's chart at http://stockcharts.com/charts/gallery.html?%24hui. HUI's major intermediate term upcycle that began on 10-4-06 peaked on 4-16-07 at 369.69 (The XAU peaked way back on 12-5-06). Wave A down bottomed at 333.37 on 5-1-07. Wave B peaked at 351.85 on 5-4-07. Wave A of Wave C bottomed at 319.56 on 5-17. Wave B of Wave C peaked at 334.43 on 5-21, so, Wave C of Wave C is in effect for HUI, in which it should bottom well below 319.56.
The WMT Lead Indicator was a neutral +0.01% versus the S & P 500 today/on 5-25. But, WMT's anemic very short term Elliott Wave 12345 up down up down up upcycle since late Wednesday (http://finance.yahoo.com/q/ta?s=wmt&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=) has peaked, or, will peak in rollover mode early on Tuesday. The upcycle has been so anemic that most of it occurred in rollover mode. So, weakness is likely to set in for SPX/WMT early on Tuesday.
I'm looking to trade a short term Wave 5 up long for the oil ETF USO, see http://stockcharts.com/charts/gallery.html?uso. Wave 5 began yesterday at 48.59, but, I'm waiting for the well established (1 week) Wave 4 downtrend line to be broken.
AVNR needs to clearly break it's short term Wave 4 downtrend line (bullish perfect double bottom monthly cycle low at 2.36 on 5-14/5-15) , see http://stockcharts.com/charts/gallery.html?avnr and http://finance.yahoo.com/q/ta?s=avnr&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, before it'll be safe to assume that Wave 4 has bottomed.
I didn't go long DNDN and/or AGEN yet. DNDN probably entered Wave 5 of a short term Wave 3 (monthly cycle low at 4.95) yesterday after hitting a cycle low at 6.49, see http://stockcharts.com/charts/gallery.html?dndn.
AGEN's Wave 4 may still be in effect, since it took out the cycle low at 2.76 from Wednesday, with a cycle low today at 2.65 (monthly cycle low at 2.25), see http://stockcharts.com/charts/gallery.html?agen. In the future I'm going to wait for a cycle's downtrend line (see http://finance.yahoo.com/q/ta?s=agen&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==) to be clearly broken before I say that a cycle low has probably occurred.
I might do my first audio Blog/Podcast this weekend.
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
1:18 PM
