Update To Rockets 6 Month TA Charts And Fed Credit - KDKN.OB And PUDC.OB Added
Update to this post: I had to add KDKN.OB And PUDC.OB to the rockets club, see http://finance.yahoo.com/q/ta?s=kdkn.ob%2C+pudc.ob&t=3m&l=off&z=l&q=c&p=v&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==. Both are in Wave B of monthly Elliott Wave ABC down up down patterns, and, here are my notes on them: PUDC.OB (1.25-1.50 monthly cycle low target, in Wave B, no downside gaps likely to get filled), KDKN.OB (monthly cycle low target 2.00-2.05, in Wave B, downside gaps at 2.12, 1.75 is a large likely breakaway gap).
See the rockets 6 month TA charts at http://finance.yahoo.com/q/ta?s=ANPI%2C+AVNR%2C+BQI%2C+CALVF.OB%2C+CEGE%2C+DNDN%2C+GNLM.OB%2C+LMC%2C+MDII%2C+NABI%2C+NGEN%2C+PPCO%2C+PPHM%2C+PTIE%2C+SLGLF.OB%2C+SMDI%2C+SUPG&t=6m&l=off&z=l&q=c&p=v&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==.
BQI's a potential rocket included in the list. It broke out late last week (the funk since late March), and, it's Cyclical Bear Market since May 2006 probably bottomed in March 2007. It rose from a monthly cycle low at 2.85 to 3.12, a likely Wave 1 short term cycle high, which was a very strong +9.47% gain/monthly cycle buy signal in Wave 1.
In a Wave 2 short term downcycle early next week I'm looking to buy CEGE at 4.25-4.50 (monthly cycle low at 4.18), LMC at 12.00-12.50 (monthly cycle low at 11.86), NGEN at 1.60-1.65 (monthly cycle low at 1.54), and, SUPG at 6.25-6.50 (monthly cycle low at 6.01). I also might trade non rocket NEM, looking to buy at 41.20ish (monthly cycle low at 40.90).
The targets may be adjusted based on possible upside or downside surprises, but, are useful. Any of the rockets might be traded. The ones discussed here are the most likely to be bought early next week. ANPI, CALVF.OB, NABI, KDKN.OB, PUDC.OB, SLGLF.OB, and SMDI are on the radar for early next week also.
Based on the bearish WMT/NEM Lead Indicators (and the Elliott Wave count) there should be a sharp decline in HUI/NEM/XAU/SPX early next week, but, the largest weekly increase in Fed Credit I've ever seen, at least in recent months, at +$16.947 Billion for the 5 day period ending 5-2-07, see http://www.federalreserve.gov/releases/h41/Current/, means that substantial strength should occur after the potentially severe weakness early next week. It will probably be a great buying opportunity, if one buys the right stocks.
The WMT/NEM Lead Indicators have become bearish recently, the WMT Lead Indicator was a bearish -0.41% versus the S & P 500 on 5-4, was -0.26% on 5-3, -0.75% on 5-2, +0.59% on 5-1, -0.09% on 4-30, -0.73% on 4-27, -0.15% on 4-26, -0.76% on 4-25, -0.46% on 4-24, and was -1.44% on 4-23. The NEM Lead Indicator was a slightly bearish -0.08% versus the XAU on 5-4, was -0.88% on 5-3, -1.59% on 5-2, -0.33% on 5-1, -0.10% on 4-30, and -1.86% on 4-27.
See the previous post at http://tradethecycles.blogspot.com/2007/05/bearish-wmtnem-lead-indicators-and.html.
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. I didn't see anything with any of the stocks listed in this post that scared me away.
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. 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
See the rockets 6 month TA charts at http://finance.yahoo.com/q/ta?s=ANPI%2C+AVNR%2C+BQI%2C+CALVF.OB%2C+CEGE%2C+DNDN%2C+GNLM.OB%2C+LMC%2C+MDII%2C+NABI%2C+NGEN%2C+PPCO%2C+PPHM%2C+PTIE%2C+SLGLF.OB%2C+SMDI%2C+SUPG&t=6m&l=off&z=l&q=c&p=v&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==.
BQI's a potential rocket included in the list. It broke out late last week (the funk since late March), and, it's Cyclical Bear Market since May 2006 probably bottomed in March 2007. It rose from a monthly cycle low at 2.85 to 3.12, a likely Wave 1 short term cycle high, which was a very strong +9.47% gain/monthly cycle buy signal in Wave 1.
In a Wave 2 short term downcycle early next week I'm looking to buy CEGE at 4.25-4.50 (monthly cycle low at 4.18), LMC at 12.00-12.50 (monthly cycle low at 11.86), NGEN at 1.60-1.65 (monthly cycle low at 1.54), and, SUPG at 6.25-6.50 (monthly cycle low at 6.01). I also might trade non rocket NEM, looking to buy at 41.20ish (monthly cycle low at 40.90).
The targets may be adjusted based on possible upside or downside surprises, but, are useful. Any of the rockets might be traded. The ones discussed here are the most likely to be bought early next week. ANPI, CALVF.OB, NABI, KDKN.OB, PUDC.OB, SLGLF.OB, and SMDI are on the radar for early next week also.
Based on the bearish WMT/NEM Lead Indicators (and the Elliott Wave count) there should be a sharp decline in HUI/NEM/XAU/SPX early next week, but, the largest weekly increase in Fed Credit I've ever seen, at least in recent months, at +$16.947 Billion for the 5 day period ending 5-2-07, see http://www.federalreserve.gov/releases/h41/Current/, means that substantial strength should occur after the potentially severe weakness early next week. It will probably be a great buying opportunity, if one buys the right stocks.
The WMT/NEM Lead Indicators have become bearish recently, the WMT Lead Indicator was a bearish -0.41% versus the S & P 500 on 5-4, was -0.26% on 5-3, -0.75% on 5-2, +0.59% on 5-1, -0.09% on 4-30, -0.73% on 4-27, -0.15% on 4-26, -0.76% on 4-25, -0.46% on 4-24, and was -1.44% on 4-23. The NEM Lead Indicator was a slightly bearish -0.08% versus the XAU on 5-4, was -0.88% on 5-3, -1.59% on 5-2, -0.33% on 5-1, -0.10% on 4-30, and -1.86% on 4-27.
See the previous post at http://tradethecycles.blogspot.com/2007/05/bearish-wmtnem-lead-indicators-and.html.
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. I didn't see anything with any of the stocks listed in this post that scared me away.
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. 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
12:41 PM
