The Expected Precious Metals Massacre Might Have Begun
We'll see what tomorrow brings, but, it looks like the expected precious metals massacre might have begun tonight, since both gold and silver are weak right now, see http://www.321gold.com/.
Despite an anemic/weak US Dollar from 5-11-06 until 10-1-07 all gold was able to do since it's Wave 1 Cyclical Bull Market cycle high at $730.40 on 5-11-06 was to rise a measly +3.46% to $755.70 today/10-1-07, see chart 2 at http://stockcharts.com/charts/gallery.html?%24gold. Only +3.46% in a little under 17 months time.
If gold really was in a Cyclical Bull Market from 5-11-06 until today/10-1-07 it would obviously have risen a lot more than a measly +3.46%. It nearly doubled (doubling is 100% of course) from May 2004 until 5-11-06. Very simple analysis, yet, have you seen a single gold writer mention/realize this?
Also, just basic technical analysis, let alone the high powered "Trade the Cycles" market timing system, indicates that gold not only isn't timely, but is very untimely, because, it's Secular Bull Market very long term (probably 15-20+ years) upcycle trendline since April 2001 is at $475ish right now. HUI's Secular Bull Market very long term (probably 15-20+ years) upcycle trendline is at 200ish right now, see chart 7 at http://www.joefrocks.com/GoldStockCharts.html. The XAU's is at 85ish, see chart 9 at http://www.joefrocks.com/GoldStockCharts.html.
HUI and the XAU probably put in bearish countertrend Wave B double top cycle highs on 9-21-07 at 402.27/173.17 (of the Wave 2 Cyclical Bear Market since 5-11-06, see chart 2 at http://stockcharts.com/charts/gallery.html?%24hui) versus Wave 1 Cyclical Bull Market cycle highs on 5-11-06 at 401.69/171.71, however, today's (10-1-07) cycle highs at 401.50 and 173.09 obviously cast some doubt on that, with huge Fed credit being a major factor. This jives with the extremely bearish NEM Lead Indicator and the extremely bearish COT (Commitments Of Traders) data (see next two paragraphs). A major gold massacre is probably brewing.
The NEM Lead Indicator is BIG TIME SCARY. The NEM Lead Indicator = +0.33% versus the XAU today/on 10-1, -0.41% on 9-28, -2.21% on 9-27, -4.13% on 9-26, +0.40% on 9-25, +2.03% on 9-24, +0.07% on 9-21, -1.46% on 9-20, +0.69% on 9-19, -2.33% on 9-18, -0.53% on 9-17, +0.12% on 9-14, -1.34% on 9-13,+0.02% on 9-12, +0.25% on 9-11, -0.69% on 9-10, +0.42% on 9-7, -1.39% on 9-6, +0.06% on 9-5, -1.81% on 9-4, -0.98% on 8-31, -0.03% on 8-30, -1.86% on 8-29 = an extremely bearish -14.78% versus the XAU the past 23 sessions, see six month NEM Lead Indicator at http://finance.yahoo.com/q/ta?s=%5EXAU&t=6m&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem.
The latest gold COT (Commitments Of Traders) Data (5 day period ending 9-25) is very bearish, see the last/third data at http://www.cftc.gov/dea/options/deacmxsof.htm. The savvy non contrarian gold Commercial Traders continue to go massively short, adding a large 27,946 short gold futures and options contracts (over 17,000 the prior week and a massive 53,207 the week before that), while liquidating 2977 long gold futures and options contracts.See Tuesday 9-25's first post at http://tradethecycles.blogspot.com/2007/09/bearish-huge-transitory-huixau-spike.html for additional important precious metals sector analysis.
Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps are the basis/crux of "Trade the Cycles." "Gaps action" is very important.
If one decides to trade volatile stocks/ETFs obviously paper trade for a while or trade very modest positions at first.
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 $475ish right now, so, gold would be a great buy in the $475-500 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
Despite an anemic/weak US Dollar from 5-11-06 until 10-1-07 all gold was able to do since it's Wave 1 Cyclical Bull Market cycle high at $730.40 on 5-11-06 was to rise a measly +3.46% to $755.70 today/10-1-07, see chart 2 at http://stockcharts.com/charts/gallery.html?%24gold. Only +3.46% in a little under 17 months time.
If gold really was in a Cyclical Bull Market from 5-11-06 until today/10-1-07 it would obviously have risen a lot more than a measly +3.46%. It nearly doubled (doubling is 100% of course) from May 2004 until 5-11-06. Very simple analysis, yet, have you seen a single gold writer mention/realize this?
Also, just basic technical analysis, let alone the high powered "Trade the Cycles" market timing system, indicates that gold not only isn't timely, but is very untimely, because, it's Secular Bull Market very long term (probably 15-20+ years) upcycle trendline since April 2001 is at $475ish right now. HUI's Secular Bull Market very long term (probably 15-20+ years) upcycle trendline is at 200ish right now, see chart 7 at http://www.joefrocks.com/GoldStockCharts.html. The XAU's is at 85ish, see chart 9 at http://www.joefrocks.com/GoldStockCharts.html.
HUI and the XAU probably put in bearish countertrend Wave B double top cycle highs on 9-21-07 at 402.27/173.17 (of the Wave 2 Cyclical Bear Market since 5-11-06, see chart 2 at http://stockcharts.com/charts/gallery.html?%24hui) versus Wave 1 Cyclical Bull Market cycle highs on 5-11-06 at 401.69/171.71, however, today's (10-1-07) cycle highs at 401.50 and 173.09 obviously cast some doubt on that, with huge Fed credit being a major factor. This jives with the extremely bearish NEM Lead Indicator and the extremely bearish COT (Commitments Of Traders) data (see next two paragraphs). A major gold massacre is probably brewing.
The NEM Lead Indicator is BIG TIME SCARY. The NEM Lead Indicator = +0.33% versus the XAU today/on 10-1, -0.41% on 9-28, -2.21% on 9-27, -4.13% on 9-26, +0.40% on 9-25, +2.03% on 9-24, +0.07% on 9-21, -1.46% on 9-20, +0.69% on 9-19, -2.33% on 9-18, -0.53% on 9-17, +0.12% on 9-14, -1.34% on 9-13,+0.02% on 9-12, +0.25% on 9-11, -0.69% on 9-10, +0.42% on 9-7, -1.39% on 9-6, +0.06% on 9-5, -1.81% on 9-4, -0.98% on 8-31, -0.03% on 8-30, -1.86% on 8-29 = an extremely bearish -14.78% versus the XAU the past 23 sessions, see six month NEM Lead Indicator at http://finance.yahoo.com/q/ta?s=%5EXAU&t=6m&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem.
The latest gold COT (Commitments Of Traders) Data (5 day period ending 9-25) is very bearish, see the last/third data at http://www.cftc.gov/dea/options/deacmxsof.htm. The savvy non contrarian gold Commercial Traders continue to go massively short, adding a large 27,946 short gold futures and options contracts (over 17,000 the prior week and a massive 53,207 the week before that), while liquidating 2977 long gold futures and options contracts.See Tuesday 9-25's first post at http://tradethecycles.blogspot.com/2007/09/bearish-huge-transitory-huixau-spike.html for additional important precious metals sector analysis.
Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps are the basis/crux of "Trade the Cycles." "Gaps action" is very important.
If one decides to trade volatile stocks/ETFs obviously paper trade for a while or trade very modest positions at first.
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 $475ish right now, so, gold would be a great buy in the $475-500 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
9:27 PM
