The NEM And WMT Lead Indicators Were Slightly Bearish Today
The NEM and WMT Lead Indicators were slightly bearish today, at -0.19% versus the XAU for NEM and at -0.14% versus SPX (S & P 500) for WMT.
Looking at the last/third data at http://www.cftc.gov/dea/options/deacmxsof.htm, the savvy non contrarian gold Commercial Traders continued to go massively short in the five day period ending 10-9-07, adding a large 16,788 short gold futures and options contracts.
I'm going to look to day trade the Gold Miners ETF GDX (short sale) on Monday, which closely tracks HUI. I might even hold a short position overnight.
The large intraday Wave A type plunges that occurred yesterday have the look of a major turning point/sell signal. HUI had a -4.90% mini crash from session cycle high to cycle low, 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=, which has the look of a major sell signal/technical breakdown. There's a good chance that yesterday's cycle highs for HUI, XAU, and gold are Cyclical Bull Market cycle highs for the cycle since late 2000 for HUI/XAU and since April 2001 for gold, and, SPX's Cyclical Bull Market cycle high for the cycle since October 2002 might have occurred yesterday.
The S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) is up all of 1.30% since July, thanks to massive Fed credit due to the mortgage/credit crisis. Once the market/SPX breaks down nearly sectors will get whacked. SPX actually broke down a few months ago, hitting a 5% major sell signal, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html, and, the recent strength was rollover action, which was the upcycle/Cyclical Bull Market since October 2002 running out of gas. What was going on in the market was very important peaking action.
Technically HUI/XAU's Wave 1 Cyclical Bull Market is peaking in dramatic rollover mode (probably did yesterday 10-11-07) versus 5-11-06's cycle highs at 401.69/171.71 (http://stockcharts.com/charts/gallery.html?%24hui). The 5% major sell signal, see annotated charts 15 and 18 at http://www.joefrocks.com/GoldStockCharts.html, that occurred in May 2006, correctly indicated that it was time to turn bearish on HUI/XAU.
The NEM Lead Indicator is BIG TIME SCARY. The NEM Lead Indicator = -0.19% versus the XAU today/on 10-12, +1.62% on 10-11, -1.28% on 10-10, -0.25% 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 -14.96% versus the XAU the past 32 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 large 16,788 short gold futures and options contracts (added 1751 two weeks ago, 27,946 three weeks ago, over 17,000 four weeks ago, and, a massive 53,207 five weeks ago), while liquidating 192 (5492 the prior week, 2977 three weeks ago) long gold futures and options contracts.
The reliable WMT Lead Indicator is extremely bearish, see the six month chart (shows WMT, SPX, HUI relative performance) at 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.
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/potential Cyclical Bull Market cycle high, and, more importantly, that trading SPX long was risky, because, a very important cycle trendline had broken down.
A brief rockets summary:
I'm "imminently" (might Monday) looking to buy VG (Vonage) and ONT for short term Wave 5 upcycle 1 to 3 day trades (trade a Wave 5 short term upcycle of a monthly upcycle).
Spicy Pickle (SPKL.OB, http://stockcharts.com/charts/gallery.html?spkl) might have hit a monthly cycle high yesterday.
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.
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
Looking at the last/third data at http://www.cftc.gov/dea/options/deacmxsof.htm, the savvy non contrarian gold Commercial Traders continued to go massively short in the five day period ending 10-9-07, adding a large 16,788 short gold futures and options contracts.
I'm going to look to day trade the Gold Miners ETF GDX (short sale) on Monday, which closely tracks HUI. I might even hold a short position overnight.
The large intraday Wave A type plunges that occurred yesterday have the look of a major turning point/sell signal. HUI had a -4.90% mini crash from session cycle high to cycle low, 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=, which has the look of a major sell signal/technical breakdown. There's a good chance that yesterday's cycle highs for HUI, XAU, and gold are Cyclical Bull Market cycle highs for the cycle since late 2000 for HUI/XAU and since April 2001 for gold, and, SPX's Cyclical Bull Market cycle high for the cycle since October 2002 might have occurred yesterday.
The S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) is up all of 1.30% since July, thanks to massive Fed credit due to the mortgage/credit crisis. Once the market/SPX breaks down nearly sectors will get whacked. SPX actually broke down a few months ago, hitting a 5% major sell signal, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html, and, the recent strength was rollover action, which was the upcycle/Cyclical Bull Market since October 2002 running out of gas. What was going on in the market was very important peaking action.
Technically HUI/XAU's Wave 1 Cyclical Bull Market is peaking in dramatic rollover mode (probably did yesterday 10-11-07) versus 5-11-06's cycle highs at 401.69/171.71 (http://stockcharts.com/charts/gallery.html?%24hui). The 5% major sell signal, see annotated charts 15 and 18 at http://www.joefrocks.com/GoldStockCharts.html, that occurred in May 2006, correctly indicated that it was time to turn bearish on HUI/XAU.
The NEM Lead Indicator is BIG TIME SCARY. The NEM Lead Indicator = -0.19% versus the XAU today/on 10-12, +1.62% on 10-11, -1.28% on 10-10, -0.25% 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 -14.96% versus the XAU the past 32 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 large 16,788 short gold futures and options contracts (added 1751 two weeks ago, 27,946 three weeks ago, over 17,000 four weeks ago, and, a massive 53,207 five weeks ago), while liquidating 192 (5492 the prior week, 2977 three weeks ago) long gold futures and options contracts.
The reliable WMT Lead Indicator is extremely bearish, see the six month chart (shows WMT, SPX, HUI relative performance) at 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.
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/potential Cyclical Bull Market cycle high, and, more importantly, that trading SPX long was risky, because, a very important cycle trendline had broken down.
A brief rockets summary:
I'm "imminently" (might Monday) looking to buy VG (Vonage) and ONT for short term Wave 5 upcycle 1 to 3 day trades (trade a Wave 5 short term upcycle of a monthly upcycle).
Spicy Pickle (SPKL.OB, http://stockcharts.com/charts/gallery.html?spkl) might have hit a monthly cycle high yesterday.
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.
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
1:18 PM
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