SPX (S & P 500), HUI, XAU, Gold, etc Are Doing A Countertrend Wave B Rebound Since Late Yesterday
SPX (S & P 500), HUI, XAU, Gold, etc are doing a countertrend Wave B type rebound since late yesterday, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.
I'm probably going to day trade the Gold Miners ETF GDX (short sale) today, which closely tracks HUI. The NEM Lead Indicator is bearish right now as it should be, see http://finance.yahoo.com/q/ta?s=^XAU&t=1d&l=on&z=m&q=l&p=&a=&c=^hui,nem. HUI has a bearish very large spike on yesterday's candle, see http://stockcharts.com/charts/gallery.html?%24hui.
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.
Reliable HUI/XAU lead indicator NEM appears to have failed (which rarely happens) to do an Elliott Wave 12345 up down up down up pattern in it's countertrend Wave B type rebound since late yesterday, see 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=, which is obviously another bearish sign. Also, NEM appears to have put in a bearish slightly lower double top cycle high early today with yesterday's cycle high.
The precious metals sector does well in an inflationary rising interest rate environment/economic upcycle, such as existed during the real estate/mortgage/credit (remember all those credit card offers that used to come in the mail?) boom from 2002-2006. Gold averaged 30-35%/year from April 2001 ($254ish) until 5-11-06 ($730.40), during the healthy part of the Wave 1 Cyclical Bull Market. From 5-11-06 until yesterday gold rose about +3.50%. The time to sell gold was obviously in May 2006, which is when a major 5% sell signal occurred. The recent strength is the Wave 1 Cyclical Bull Market peaking in dramatic rollover mode.
The Fed's recent 0.50% Fed Funds rate cut was a short term positive for gold, because, it led to US Dollar weakness, but, big picturewise it's a major negative that a deflationary declining interest rate economic downcycle is in effect, because, gold does well in inflationary economic upcycles.
A lot of the clueless goofy gold writers (who are almost always bullish, and, when they are cautious or god forbid outright bearish, it always seems to be short term, there's always a big rally on the horizon, despite the fact that the sector has done basically nothing since May 2006) have been harping about the subprime mortgage crisis as if it's good for gold, and, have been harping about geopolitical events that they think will help gold, as if gold was a safe haven, it isn't. Try US Treasuries.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
I'm probably going to day trade the Gold Miners ETF GDX (short sale) today, which closely tracks HUI. The NEM Lead Indicator is bearish right now as it should be, see http://finance.yahoo.com/q/ta?s=^XAU&t=1d&l=on&z=m&q=l&p=&a=&c=^hui,nem. HUI has a bearish very large spike on yesterday's candle, see http://stockcharts.com/charts/gallery.html?%24hui.
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.
Reliable HUI/XAU lead indicator NEM appears to have failed (which rarely happens) to do an Elliott Wave 12345 up down up down up pattern in it's countertrend Wave B type rebound since late yesterday, see 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=, which is obviously another bearish sign. Also, NEM appears to have put in a bearish slightly lower double top cycle high early today with yesterday's cycle high.
The precious metals sector does well in an inflationary rising interest rate environment/economic upcycle, such as existed during the real estate/mortgage/credit (remember all those credit card offers that used to come in the mail?) boom from 2002-2006. Gold averaged 30-35%/year from April 2001 ($254ish) until 5-11-06 ($730.40), during the healthy part of the Wave 1 Cyclical Bull Market. From 5-11-06 until yesterday gold rose about +3.50%. The time to sell gold was obviously in May 2006, which is when a major 5% sell signal occurred. The recent strength is the Wave 1 Cyclical Bull Market peaking in dramatic rollover mode.
The Fed's recent 0.50% Fed Funds rate cut was a short term positive for gold, because, it led to US Dollar weakness, but, big picturewise it's a major negative that a deflationary declining interest rate economic downcycle is in effect, because, gold does well in inflationary economic upcycles.
A lot of the clueless goofy gold writers (who are almost always bullish, and, when they are cautious or god forbid outright bearish, it always seems to be short term, there's always a big rally on the horizon, despite the fact that the sector has done basically nothing since May 2006) have been harping about the subprime mortgage crisis as if it's good for gold, and, have been harping about geopolitical events that they think will help gold, as if gold was a safe haven, it isn't. Try US Treasuries.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
7:41 AM
1 Comments:
Hi Frocks,
Long time. I've been waiting patiently ... Many times I figured you were way over the top in your ASSessment of the gold gurus, but hey that's your opinion. Also figure you're very selective in your criteria for bull and bear markets. It is quite obvious that the PMS suctor is still in a bull market. Your choice of saying it's only up x% in y months doesn't cut the mustard. Every major peak (in the HUI say) was followed by an increasingly lengthly period of consolidation. And while you've been calling correction the price of gold has steamed up to $770/oz and also gained against a world basket of currencies. Anybody who shorted gold at $640 is probably starting to get a little squirmy in here.
That being said, I did sell off my PMS position (too early) which I bought into in August with a nice profit and went short early Friday morning. I figured what better day to get short than ops expiry in October with early buying and reactive selling predominating. I went after a few heavy weights but they held up remarkably well considering the complete drubbing the Dow received.
Still I'm not looking for the end of the world as we know it but I'd say a goodly correction is due.
Keep up the good work and stay real.
ThorAss
By
Anonymous, at 9:57 PM
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