.......Tomorrow Might Bring Trading Opportunities
I didn't buy anything today, even though the WMT Lead Indicator was very bullish, and, closed at a very bullish +1.02% versus the S & P 500 today/on 5-10. The very bearish WMT Lead Indicator the prior two days at -0.67% versus the S & P 500 on 5-9 and -0.93% on 5-8 correctly pointed to today's severe weakness, though weak retail sales data was a catalyst today.
The NEM Lead Indicator was a bullish +0.74% versus the XAU today/on 5-10 after being a bearish -0.50% yesterday/on 5-9.
Given NEM's downside surprise today (see previous post at http://tradethecycles.blogspot.com/2007/05/bearish-action-points-to-possibility-of.html) I wasn't about to buy any mining stocks like LMC or NEM, and, given the DNDN debacle that began yesterday, buying SUPG and/or NGEN today didn't look too enticing, especially given the severe SPX weakness. However, DNDN probably hit a monthly cycle low today at 5.17 after filling it's downside gap at 5.22, and, I'll be looking to buy SUPG and/or NGEN (possibly DNDN) tomorrow.
Thomson I Watch has been bullish for SUPG (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=supg), NGEN (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=ngen), DNDN (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=dndn), and AVNR (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=avnr) recently.
BQI looks like it may fall into the 3.01-3.10 range tomorrow, so, I held off on BQI today. Wave 2 bottomed at 3.00, so, this short term Wave 4 down should bottom above 3.00.
Early tomorrow some good buying opportunities may arise for BQI (3.01-3.10 ), NGEN (1.55-1.70), SUPG (6.10-6.40), DNDN, LMC (12.00-12.50), NEM, etc. I Watch was very bullish again for NEM (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=nem) and for WMT (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=wmt).
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. 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 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
The NEM Lead Indicator was a bullish +0.74% versus the XAU today/on 5-10 after being a bearish -0.50% yesterday/on 5-9.
Given NEM's downside surprise today (see previous post at http://tradethecycles.blogspot.com/2007/05/bearish-action-points-to-possibility-of.html) I wasn't about to buy any mining stocks like LMC or NEM, and, given the DNDN debacle that began yesterday, buying SUPG and/or NGEN today didn't look too enticing, especially given the severe SPX weakness. However, DNDN probably hit a monthly cycle low today at 5.17 after filling it's downside gap at 5.22, and, I'll be looking to buy SUPG and/or NGEN (possibly DNDN) tomorrow.
Thomson I Watch has been bullish for SUPG (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=supg), NGEN (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=ngen), DNDN (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=dndn), and AVNR (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=avnr) recently.
BQI looks like it may fall into the 3.01-3.10 range tomorrow, so, I held off on BQI today. Wave 2 bottomed at 3.00, so, this short term Wave 4 down should bottom above 3.00.
Early tomorrow some good buying opportunities may arise for BQI (3.01-3.10 ), NGEN (1.55-1.70), SUPG (6.10-6.40), DNDN, LMC (12.00-12.50), NEM, etc. I Watch was very bullish again for NEM (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=nem) and for WMT (http://iwp.thomsonfn.com/tfspro/iwatch/cgi-bin/iw_ticker?ticker=wmt).
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. 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 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
1:11 PM
