HUI/XAU Extended Very Flat Action Since 9-21-07 Points To A Major Decline
HUI/XAU's extended very flat action since 9-21-07 points to a major decline soon, see http://stockcharts.com/charts/gallery.html?%24xau, because, it's probably the flat segment of a very large downcycle, which is probably the beginning (HUI since 9-21-07, the XAU might have peaked at today's close) of the Wave C downcycle of the Cyclical Bear Market since 5-11-06.
HUI took out Friday's cycle high (at 397.29) today as did the XAU, and, the XAU barely exceeded it's 9-21-07 cycle high (at 173.17) today, with a session cycle high at the close of 173.44. Massive Fed credit ($12.50 Billion today and $28 Billion last Thursday) continues to feed program buying in a big way, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE.
A very bearish WMT Lead Indicator today, at -0.94% versus SPX (S & P 500) today/on 10-9, and, a modestly bearish NEM Lead Indicator today, at
-0.25% versus the XAU today/on 10-9, plus the fact that HUI/XAU's very short term upcycle that began yesterday rolled over dramatically after the early spike move today, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c, points to weakness tomorrow.
Right now the Trade the Cycles picture for HUI, XAU, and gold is very clear, and, I'm looking to short the gold miners ETF GDX, http://stockcharts.com/charts/gallery.html?gdx. 10-2-07's mini crash was a 2%+ sell signal that confirms that the huge spike move that began on 8-16-07 (Wave 5 of Wave B of the Cyclical Bear Market since 5-11-06) probably peaked on 9-21-07 (cycle highs at 402.27 and 173.17, XAU hit 173.44 today/10-9-07), and, more importantly, that risk was too high to trade long.
The NEM Lead Indicator is BIG TIME SCARY. The NEM Lead Indicator = -0.25% versus the XAU on 10-9, -0.06% on 10-8, -0.57% on 10-5, -1.17% on 10-4, +0.37% on 10-3, +1.35% on 10-2, +0.33% 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 -15.11% versus the XAU the past 29 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 recent gold COT (Commitments Of Traders) Data 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 relatively modest 1751 (27,946 two weeks ago) short gold futures and options contracts (added over 17,000 three weeks ago and a massive 53,207 four weeks ago), while liquidating 5492 (2977 the prior week) long gold futures and options contracts.
SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) exceeded the July cycle high again today. A Cyclical Bull Market cycle high, for the cycle that began in October 2002, is likely in the near future, see SPX's (S & P 500) 5% major sell signal, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html.
The point of sell signals is much more to indicate that risk has increased dramatically than it is to be a psychic nailing every cycle high. Double and even triple tops are fairly common, as is rollover action with modestly, and, much less frequently (especially for major 5% sell signals), sometimes substantially higher cycle highs occurring. SPX's (S & P 500) 5% major sell signal, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html, indicated that July's cycle high at 1555.90 was a likely Cyclical Bull Market cycle high and that trading SPX long was risky because a very important cycle trendline had broken down.
A great sanity check of the Elliott Wave count is the reliable WMT Lead Indicator, which nearly/seemingly always turns bearish ahead of downcycles and bullish ahead of upcycles. For example, the extremely bearish six month WMT Lead Indicator (see http://finance.yahoo.com/q/ta?s=%5EHUI&t=6m&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC) jives with SPX soon experiencing a substantial decline/Elliott Wave ABC down up down monthly downcycle, see http://stockcharts.com/charts/gallery.html?%24spx, and, a much larger downcycle is likely also.
I'm looking to do some very modest (at first) rockets trading:
Spicy Pickle® fast casual restaurants (SPKL.OB, http://finance.yahoo.com/q?s=spkl.ob) appears to be a good penny stock to trade, see http://stockcharts.com/charts/gallery.html?spkl. Today's rally was probably part of Wave B of an Elliott Wave ABC down up down monthly downcycle, with Wave A bottoming at 0.92. I'm looking for Wave C to bottom at roughly 0.75ish. I'll probably bottom pick SPKL.OB at 0.75ish if a bullish large inverse spike occurs and volume is high.
Vonage, VG (http://stockcharts.com/charts/gallery.html?vg), settled the patent lawsuit with Sprint, which is why the stock exploded on huge volume yesterday, hitting a major 5% follow through buy signal, which indicates that the recent cycle low at 0.89 is very likely a Cyclical Bear Market cycle low.
VG gapped up to 1.56 at the open yesterday from 1.15 at Friday's close. The downside gap at 1.15 is a likely bullish breakaway gap. VG's short term Wave 3 upcycle peaked late yesterday, see http://finance.yahoo.com/q/ta?s=vg&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c.
VG is in a short term Wave 4 downcycle for a few days, that will probably have an Elliott Wave ABC down up down pattern visible on the daily chart (http://stockcharts.com/charts/gallery.html?vg). Especially if the downside gap at 1.15 created at 10-8's open doesn't get filled (is a bullish breakaway gap), I'll look to trade a tiny VG position for a few days to catch the short term Wave 5 upcycle.
I'm looking to trade a tiny ICO (http://stockcharts.com/charts/gallery.html?ico) position once it does Elliott Wave ABC down up down monthly downcycle.
I'm going to try to trade a tiny ONT (http://stockcharts.com/charts/gallery.html?ont) position and catch a short term Wave 5 upcycle. It probably entered a short term Wave 4 downcycle today, that should form an Elliott Wave ABC down up down pattern on the daily chart.
As discussed previously I'm looking to/might buy/trade a tiny position in GXPI.OB, a gold penny stock that appears to have put in a major cycle low at 0.06 on 10-1-07, in a short term Wave 2 type pullback, see http://stockcharts.com/charts/gallery.html?gxpi. Also, MGH looks good after it's corrects, see http://tradethecycles.blogspot.com/2007/10/mgh-china-goldsilverbase-metals-play.html.
I might wait for even more follow through before looking to buy GXPI.OB in a short term Wave 2 pullback, especially since the gold sector is likely to be very weak. Another strong rally on Wednesday will definitely be enough to convince me to trade a tiny position. Note GXPI.OB's bullish large inverse spike at 0.06, and, the (borderline) buy signal/very strong rally in recent sessions on strong volume. I'm going to limit my rockets trading to tiny positions for now. I'll gradually increase the position size if successful.
And you gold manipulation theorists, I'm still waiting to hear from you! See http://tradethecycles.blogspot.com/2007/10/to-gold-manipulation-theorists.html.
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
HUI took out Friday's cycle high (at 397.29) today as did the XAU, and, the XAU barely exceeded it's 9-21-07 cycle high (at 173.17) today, with a session cycle high at the close of 173.44. Massive Fed credit ($12.50 Billion today and $28 Billion last Thursday) continues to feed program buying in a big way, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE.
A very bearish WMT Lead Indicator today, at -0.94% versus SPX (S & P 500) today/on 10-9, and, a modestly bearish NEM Lead Indicator today, at
-0.25% versus the XAU today/on 10-9, plus the fact that HUI/XAU's very short term upcycle that began yesterday rolled over dramatically after the early spike move today, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c, points to weakness tomorrow.
Right now the Trade the Cycles picture for HUI, XAU, and gold is very clear, and, I'm looking to short the gold miners ETF GDX, http://stockcharts.com/charts/gallery.html?gdx. 10-2-07's mini crash was a 2%+ sell signal that confirms that the huge spike move that began on 8-16-07 (Wave 5 of Wave B of the Cyclical Bear Market since 5-11-06) probably peaked on 9-21-07 (cycle highs at 402.27 and 173.17, XAU hit 173.44 today/10-9-07), and, more importantly, that risk was too high to trade long.
The NEM Lead Indicator is BIG TIME SCARY. The NEM Lead Indicator = -0.25% versus the XAU on 10-9, -0.06% on 10-8, -0.57% on 10-5, -1.17% on 10-4, +0.37% on 10-3, +1.35% on 10-2, +0.33% 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 -15.11% versus the XAU the past 29 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 recent gold COT (Commitments Of Traders) Data 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 relatively modest 1751 (27,946 two weeks ago) short gold futures and options contracts (added over 17,000 three weeks ago and a massive 53,207 four weeks ago), while liquidating 5492 (2977 the prior week) long gold futures and options contracts.
SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) exceeded the July cycle high again today. A Cyclical Bull Market cycle high, for the cycle that began in October 2002, is likely in the near future, see SPX's (S & P 500) 5% major sell signal, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html.
The point of sell signals is much more to indicate that risk has increased dramatically than it is to be a psychic nailing every cycle high. Double and even triple tops are fairly common, as is rollover action with modestly, and, much less frequently (especially for major 5% sell signals), sometimes substantially higher cycle highs occurring. SPX's (S & P 500) 5% major sell signal, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html, indicated that July's cycle high at 1555.90 was a likely Cyclical Bull Market cycle high and that trading SPX long was risky because a very important cycle trendline had broken down.
A great sanity check of the Elliott Wave count is the reliable WMT Lead Indicator, which nearly/seemingly always turns bearish ahead of downcycles and bullish ahead of upcycles. For example, the extremely bearish six month WMT Lead Indicator (see http://finance.yahoo.com/q/ta?s=%5EHUI&t=6m&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC) jives with SPX soon experiencing a substantial decline/Elliott Wave ABC down up down monthly downcycle, see http://stockcharts.com/charts/gallery.html?%24spx, and, a much larger downcycle is likely also.
I'm looking to do some very modest (at first) rockets trading:
Spicy Pickle® fast casual restaurants (SPKL.OB, http://finance.yahoo.com/q?s=spkl.ob) appears to be a good penny stock to trade, see http://stockcharts.com/charts/gallery.html?spkl. Today's rally was probably part of Wave B of an Elliott Wave ABC down up down monthly downcycle, with Wave A bottoming at 0.92. I'm looking for Wave C to bottom at roughly 0.75ish. I'll probably bottom pick SPKL.OB at 0.75ish if a bullish large inverse spike occurs and volume is high.
Vonage, VG (http://stockcharts.com/charts/gallery.html?vg), settled the patent lawsuit with Sprint, which is why the stock exploded on huge volume yesterday, hitting a major 5% follow through buy signal, which indicates that the recent cycle low at 0.89 is very likely a Cyclical Bear Market cycle low.
VG gapped up to 1.56 at the open yesterday from 1.15 at Friday's close. The downside gap at 1.15 is a likely bullish breakaway gap. VG's short term Wave 3 upcycle peaked late yesterday, see http://finance.yahoo.com/q/ta?s=vg&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c.
VG is in a short term Wave 4 downcycle for a few days, that will probably have an Elliott Wave ABC down up down pattern visible on the daily chart (http://stockcharts.com/charts/gallery.html?vg). Especially if the downside gap at 1.15 created at 10-8's open doesn't get filled (is a bullish breakaway gap), I'll look to trade a tiny VG position for a few days to catch the short term Wave 5 upcycle.
I'm looking to trade a tiny ICO (http://stockcharts.com/charts/gallery.html?ico) position once it does Elliott Wave ABC down up down monthly downcycle.
I'm going to try to trade a tiny ONT (http://stockcharts.com/charts/gallery.html?ont) position and catch a short term Wave 5 upcycle. It probably entered a short term Wave 4 downcycle today, that should form an Elliott Wave ABC down up down pattern on the daily chart.
As discussed previously I'm looking to/might buy/trade a tiny position in GXPI.OB, a gold penny stock that appears to have put in a major cycle low at 0.06 on 10-1-07, in a short term Wave 2 type pullback, see http://stockcharts.com/charts/gallery.html?gxpi. Also, MGH looks good after it's corrects, see http://tradethecycles.blogspot.com/2007/10/mgh-china-goldsilverbase-metals-play.html.
I might wait for even more follow through before looking to buy GXPI.OB in a short term Wave 2 pullback, especially since the gold sector is likely to be very weak. Another strong rally on Wednesday will definitely be enough to convince me to trade a tiny position. Note GXPI.OB's bullish large inverse spike at 0.06, and, the (borderline) buy signal/very strong rally in recent sessions on strong volume. I'm going to limit my rockets trading to tiny positions for now. I'll gradually increase the position size if successful.
And you gold manipulation theorists, I'm still waiting to hear from you! See http://tradethecycles.blogspot.com/2007/10/to-gold-manipulation-theorists.html.
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
1:17 PM
2 Comments:
If there is continuous massive fed credit being pumped into the market, what would stop the market from just extending and extending. Surely any massive correction pending would be a muted affair? ie a shortened wave C.
By
Anonymous, at 9:38 PM
Let's assume for the moment that Alf Field is correct in his analysis that we are in a wave 1 of wave 3 for gold and that we are currently in a wave 4 correction of wave 1. At what point would you say, "There is something wrong with my analysis" ie would it be a 5% spike in the gold price from $747? What would be your defining signal to say that wave 3 is underway.
By
Anonymous, at 4:59 AM
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