............Weak Q1 GDP Data Led To Strength
Weak Q1 GDP data (+0.60% growth estimate) led to strength in HUI/NEM/XAU/SPX/WMT today, because, it makes Fed rate cutting much more likely.
The current deflationary real estate/mortgage bust declining interest rate environment is bearish for gold/silver and gold/silver stocks. Gold is a hedge against inflation, which is why gold did well/was in a Wave 1 Cyclical Bull Market from April 2001 until May 11, 2006, coinciding closely with the inflationary real estate/mortgage boom from 2002 through 2005.
A lot of goofy gold writers harp on the weak US economy, real estate bust, subprime lending fiasco, etc. as if that's good for gold. It's pretty basic that gold is a hedge against inflation. It's also basic technical analysis that HUI's primary multi year Secular Bull market trendline is at 200-220ish, see chart 7 at http://www.joefrocks.com/GoldStockCharts.html.
Though the WMT and NEM Lead Indicators were bullish at +0.99% versus SPX for WMT, and, at +0.52% versus the XAU today for NEM, they turned bearish late in the session, 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 and http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=on&z=l&q=l&p=&a=&c=%5Ehui,nem.
Both WMT (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=) and NEM (http://finance.yahoo.com/q/ta?s=nem&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==) were in very short term Wave 5 type moves today, that might have peaked late in the session.
AGEN entered a short term Wave 5 (correction from 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 finally bottomed at 2.94 yesterday (monthly cycle low at 2.36), see http://stockcharts.com/charts/gallery.html?avnr. AVNR gapped up dramatically today to 3.88 from yesterday's close at 3.22 due to good news (http://finance.yahoo.com/q?s=avnr) on strong volume and closed at 3.46. AVNR's early cycle high today at 4.00 is probably the Wave 1 cycle high of a short term Wave 5. AVNR was in Wave C of a very short term Wave 2 near session's end (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=), and, might have bottomed near session's end.
CEGE's action today (http://stockcharts.com/charts/gallery.html?cege), in which it made a huge bullish breakaway gap at the open from 4.08 to 4.59, indicates that a monthly cycle low occurred at 3.79, and, CEGE is in a short term Wave 3 (will probably do Wave 5 of Wave 3 in the next session or two).
DNDN's Wave 5 of a short term Wave 3 peaked well above Wave 3 of Wave 3's cycle high (at 7.30, monthly cycle low at 4.95) at 13.00 early today, see http://stockcharts.com/charts/gallery.html?dndn. So, DNDN is in a short term Wave 4 down that may have bottomed near sesion's end, because a huge
bullish breakaway gap occurred at today's open, see http://finance.yahoo.com/q/ta?s=dndn&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==. I may go long DNDN tomorrow.
FCEL put in a short term Wave 4 cycle low at 6.65 yesterday, versus a Wave 3 cycle high at 7.25 and monthly cycle low at 6.30, see http://stockcharts.com/charts/gallery.html?fcel.
QTWW put in a monthly cycle low at 1.17, and, is in Wave 4 of a short term Wave 3, see http://stockcharts.com/charts/gallery.html?qtww.
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 current deflationary real estate/mortgage bust declining interest rate environment is bearish for gold/silver and gold/silver stocks. Gold is a hedge against inflation, which is why gold did well/was in a Wave 1 Cyclical Bull Market from April 2001 until May 11, 2006, coinciding closely with the inflationary real estate/mortgage boom from 2002 through 2005.
A lot of goofy gold writers harp on the weak US economy, real estate bust, subprime lending fiasco, etc. as if that's good for gold. It's pretty basic that gold is a hedge against inflation. It's also basic technical analysis that HUI's primary multi year Secular Bull market trendline is at 200-220ish, see chart 7 at http://www.joefrocks.com/GoldStockCharts.html.
Though the WMT and NEM Lead Indicators were bullish at +0.99% versus SPX for WMT, and, at +0.52% versus the XAU today for NEM, they turned bearish late in the session, 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 and http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=on&z=l&q=l&p=&a=&c=%5Ehui,nem.
Both WMT (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=) and NEM (http://finance.yahoo.com/q/ta?s=nem&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==) were in very short term Wave 5 type moves today, that might have peaked late in the session.
AGEN entered a short term Wave 5 (correction from 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 finally bottomed at 2.94 yesterday (monthly cycle low at 2.36), see http://stockcharts.com/charts/gallery.html?avnr. AVNR gapped up dramatically today to 3.88 from yesterday's close at 3.22 due to good news (http://finance.yahoo.com/q?s=avnr) on strong volume and closed at 3.46. AVNR's early cycle high today at 4.00 is probably the Wave 1 cycle high of a short term Wave 5. AVNR was in Wave C of a very short term Wave 2 near session's end (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=), and, might have bottomed near session's end.
CEGE's action today (http://stockcharts.com/charts/gallery.html?cege), in which it made a huge bullish breakaway gap at the open from 4.08 to 4.59, indicates that a monthly cycle low occurred at 3.79, and, CEGE is in a short term Wave 3 (will probably do Wave 5 of Wave 3 in the next session or two).
DNDN's Wave 5 of a short term Wave 3 peaked well above Wave 3 of Wave 3's cycle high (at 7.30, monthly cycle low at 4.95) at 13.00 early today, see http://stockcharts.com/charts/gallery.html?dndn. So, DNDN is in a short term Wave 4 down that may have bottomed near sesion's end, because a huge
bullish breakaway gap occurred at today's open, see http://finance.yahoo.com/q/ta?s=dndn&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==. I may go long DNDN tomorrow.
FCEL put in a short term Wave 4 cycle low at 6.65 yesterday, versus a Wave 3 cycle high at 7.25 and monthly cycle low at 6.30, see http://stockcharts.com/charts/gallery.html?fcel.
QTWW put in a monthly cycle low at 1.17, and, is in Wave 4 of a short term Wave 3, see http://stockcharts.com/charts/gallery.html?qtww.
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
1:12 PM
