...................Slow Post Holiday Action
Let's look at the extremely important Elliott Wave patterns for SPX/WMT/HUI/NEM/XAU:
Key lead index SPX (S & P 500) experienced a sharp Wave A type decline from last Wednesday until late Thursday, that did an Elliott Wave ABC down up down pattern, 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==. Since then SPX is doing an anemic countertrend type Wave B Elliott Wave 12345 up down up down up pattern, with Wave 5 up in effect at session's end today, so, some brief early strength is likely for SPX tomorrow.
Looking at the 5 day charts for WMT/HUI/NEM/XAU, they all look pretty sick, see 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==. It looks like HUI/XAU will fail to do Wave 5 of a countertrend type Wave B Elliott Wave 12345 up down up down up pattern. They should put in higher cycle highs early tomorrow than those that occurred early today in order to complete their Elliott Wave patterns, and, that appears unlikely.
Reliable lead indicators WMT and NEM couldn't stage a meaningful rally today after the early (probably program buying induced) spike moves at the open. So, caution is in order now.
The WMT Lead Indicator was a slightly bearish -0.10% versus SPX today (see http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC), but, will probably turn more bearish tomorrow.
The NEM Lead Indicator was a slightly bullish +0.21% versus the XAU today (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=on&z=l&q=l&p=&a=&c=%5Ehui,nem), but, will probably turn bearish tomorrow. Today's tone was weakness as expected, following the program buying spike at the open, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==.
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.
Now, for some of the rockets action:
AGEN entered a short term Wave 3 on Friday after putting in a cycle low at 2.65 (monthly cycle low at 2.25), see http://stockcharts.com/charts/gallery.html?agen. I might buy some tomorrow.
AVNR's short term Wave 4 may have finally bottomed at 2.99 today (monthly cycle low at 2.36), see http://stockcharts.com/charts/gallery.html?avnr.
DNDN is in Wave 5 of a short term Wave 3, in which is should peak well above Wave 3 of Wave 3's cycle high at 7.30 (monthly cycle low at 4.95), see http://stockcharts.com/charts/gallery.html?dndn.
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
Key lead index SPX (S & P 500) experienced a sharp Wave A type decline from last Wednesday until late Thursday, that did an Elliott Wave ABC down up down pattern, 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==. Since then SPX is doing an anemic countertrend type Wave B Elliott Wave 12345 up down up down up pattern, with Wave 5 up in effect at session's end today, so, some brief early strength is likely for SPX tomorrow.
Looking at the 5 day charts for WMT/HUI/NEM/XAU, they all look pretty sick, see 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==. It looks like HUI/XAU will fail to do Wave 5 of a countertrend type Wave B Elliott Wave 12345 up down up down up pattern. They should put in higher cycle highs early tomorrow than those that occurred early today in order to complete their Elliott Wave patterns, and, that appears unlikely.
Reliable lead indicators WMT and NEM couldn't stage a meaningful rally today after the early (probably program buying induced) spike moves at the open. So, caution is in order now.
The WMT Lead Indicator was a slightly bearish -0.10% versus SPX today (see http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC), but, will probably turn more bearish tomorrow.
The NEM Lead Indicator was a slightly bullish +0.21% versus the XAU today (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=on&z=l&q=l&p=&a=&c=%5Ehui,nem), but, will probably turn bearish tomorrow. Today's tone was weakness as expected, following the program buying spike at the open, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==.
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.
Now, for some of the rockets action:
AGEN entered a short term Wave 3 on Friday after putting in a cycle low at 2.65 (monthly cycle low at 2.25), see http://stockcharts.com/charts/gallery.html?agen. I might buy some tomorrow.
AVNR's short term Wave 4 may have finally bottomed at 2.99 today (monthly cycle low at 2.36), see http://stockcharts.com/charts/gallery.html?avnr.
DNDN is in Wave 5 of a short term Wave 3, in which is should peak well above Wave 3 of Wave 3's cycle high at 7.30 (monthly cycle low at 4.95), see http://stockcharts.com/charts/gallery.html?dndn.
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
1:34 PM
