The NEM/WMT Lead Indicators Remain Bearish
The WMT Lead Indicator was a very bearish -1.53% versus the S & P 500 today/on 5-21, and, was a bearish -1.72% last week, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC. So, severe weakness is likely tomorrow for HUI/NEM/XAU/SPX.
The NEM Lead Indicator was a bearish -2.56% versus the XAU last W/E 5-18-07, and, was a bearish -0.52% today/on 5-21, see the 5 day NEM Lead Indicator at http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=on&z=l&q=l&p=&a=&c=%5Ehui,nem.
DNDN confirmed the bullish case today by convincingly taking out it's short term Wave 1 cycle high (at 6.65) today, with a cycle high at 7.24, see http://stockcharts.com/charts/gallery.html?dndn. The cycle high at 6.57 from last Thursday should be Wave 1 of the short term Wave 3, today's/tomorrow's cycle high should be Wave 3 of the short term Wave 3, see http://finance.yahoo.com/q/ta?s=dndn&t=5d&l=off&z=l&q=c&p=v&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==. It looks like Wave 5 of Wave 3 of the short term Wave 3 will occur early tomorrow, because, DNDN's Wave 3 of Wave 3 has done an up down up down since beginning just before Friday's close.
So, the third Wave 5 upcycle of the short term Wave 3 (plus Wave 5 of Wave 3 of Wave 3 will probably occur early tomorrow), as well as the Wave 5 short term upcycle (monthly upcycle since bottoming at 4.95 on 5-11), still probably lie ahead for DNDN. Despite the bullish breakaway gap today and the fact that Wave 3 probably hasn't peaked yet, I decided not to go long today due to the very bearish WMT Lead Indicator and the fact that Wave 3 of Wave 3's cycle high might be a brief spike early tomorrow followed by a very sharp decline. There's likely to be a good entry point tomorrow for DNDN anyway. DNDN made a bullish large gap up today to 6.55 from Friday's close at 6.07.
The 3 rockets that look great right now are AGEN, AVNR, and DNDN. AVNR's short term Wave 3 peaked at 3.73 early today versus a Wave 1 cycle high at 3.03 on 5-15 and a perfect double bottom monthly cycle low at 2.36 on Monday 5-14/Tuesday 5-15, and, it's short term Wave 4 might have completed a shallow Elliott Wave ABC down up down pattern, or, it's just Wave A of Wave 4 down, see http://finance.yahoo.com/q/ta?s=avnr&t=5d&l=off&z=l&q=c&p=v&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==. CEGE might have hit a monthly cycle low at 3.79 on Friday 5-18.
Also, I didn't reshort GLD, the gold ETF, because I'm waiting for it to clearly break down/do an intraday Wave A, then I'll look to short a countertrend Wave B. It's usually better to wait for the expected action and then short a countertrend Wave B (or buy a Wave 2 down if you're looking to go long). I covered GLD at 65.23 early today versus a short at 65.50 on Friday.
AGEN exploded today on big volume due to positive news, see http://finance.yahoo.com/q/ta?s=AGEN&t=5d&l=off&z=l&q=c&p=v&a=m26-12-9,p12,fs,w14&c==. AGEN probably began a short term Wave 4 downcycle (monthly cycle low at 2.25 on 5-15) late today after hitting a session cycle high at 3.69. Wave 3 did an Elliott Wave 12345 up down up down up pattern, which is why it's probably peaked. Also, it had a huge spike move today obviously. However, it made a huge bullish breakaway gap to the upside today, so, it might surprise to the upside early tomorrow, but, it looks like Wave 3 peaked.
I might do my first audio Blog today or tomorrow.
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
The NEM Lead Indicator was a bearish -2.56% versus the XAU last W/E 5-18-07, and, was a bearish -0.52% today/on 5-21, see the 5 day NEM Lead Indicator at http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=on&z=l&q=l&p=&a=&c=%5Ehui,nem.
DNDN confirmed the bullish case today by convincingly taking out it's short term Wave 1 cycle high (at 6.65) today, with a cycle high at 7.24, see http://stockcharts.com/charts/gallery.html?dndn. The cycle high at 6.57 from last Thursday should be Wave 1 of the short term Wave 3, today's/tomorrow's cycle high should be Wave 3 of the short term Wave 3, see http://finance.yahoo.com/q/ta?s=dndn&t=5d&l=off&z=l&q=c&p=v&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==. It looks like Wave 5 of Wave 3 of the short term Wave 3 will occur early tomorrow, because, DNDN's Wave 3 of Wave 3 has done an up down up down since beginning just before Friday's close.
So, the third Wave 5 upcycle of the short term Wave 3 (plus Wave 5 of Wave 3 of Wave 3 will probably occur early tomorrow), as well as the Wave 5 short term upcycle (monthly upcycle since bottoming at 4.95 on 5-11), still probably lie ahead for DNDN. Despite the bullish breakaway gap today and the fact that Wave 3 probably hasn't peaked yet, I decided not to go long today due to the very bearish WMT Lead Indicator and the fact that Wave 3 of Wave 3's cycle high might be a brief spike early tomorrow followed by a very sharp decline. There's likely to be a good entry point tomorrow for DNDN anyway. DNDN made a bullish large gap up today to 6.55 from Friday's close at 6.07.
The 3 rockets that look great right now are AGEN, AVNR, and DNDN. AVNR's short term Wave 3 peaked at 3.73 early today versus a Wave 1 cycle high at 3.03 on 5-15 and a perfect double bottom monthly cycle low at 2.36 on Monday 5-14/Tuesday 5-15, and, it's short term Wave 4 might have completed a shallow Elliott Wave ABC down up down pattern, or, it's just Wave A of Wave 4 down, see http://finance.yahoo.com/q/ta?s=avnr&t=5d&l=off&z=l&q=c&p=v&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==. CEGE might have hit a monthly cycle low at 3.79 on Friday 5-18.
Also, I didn't reshort GLD, the gold ETF, because I'm waiting for it to clearly break down/do an intraday Wave A, then I'll look to short a countertrend Wave B. It's usually better to wait for the expected action and then short a countertrend Wave B (or buy a Wave 2 down if you're looking to go long). I covered GLD at 65.23 early today versus a short at 65.50 on Friday.
AGEN exploded today on big volume due to positive news, see http://finance.yahoo.com/q/ta?s=AGEN&t=5d&l=off&z=l&q=c&p=v&a=m26-12-9,p12,fs,w14&c==. AGEN probably began a short term Wave 4 downcycle (monthly cycle low at 2.25 on 5-15) late today after hitting a session cycle high at 3.69. Wave 3 did an Elliott Wave 12345 up down up down up pattern, which is why it's probably peaked. Also, it had a huge spike move today obviously. However, it made a huge bullish breakaway gap to the upside today, so, it might surprise to the upside early tomorrow, but, it looks like Wave 3 peaked.
I might do my first audio Blog today or tomorrow.
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
1:36 PM
