SPX (S & P 500, "The Market"), HUI, XAU, Gold Thoughts
SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) is up all of +0.60% since July 2007, 1555.90 to 1565.26. HUI is up a little over 1% since 5-11-06 (peak to peak), the XAU is up about +2.50% (peak to peak), gold is up +3.46% (peak to peak).
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, more importantly, that trading SPX long was risky because a very important cycle trendline had broken down.
SPX's (S & P 500) Cyclical Bull Market since October 2002 might have peaked yesterday or should soon do so. Once the important trend line broke down and the 5% major sell signal occurred, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html, that meant that SPX had either peaked or that it's rate of ascent would slow dramatically/roll over/flatten out. It's only risen +0.60% since July 2007 as I said before, 1555.90 to 1565.26.
Once SPX (S & P 500) collapses it'll take nearly all sectors with it due to program selling, because, nearly all sectors are represented in SPX. FCX and NEM are in SPX for example.
Concerning HUI (http://stockcharts.com/charts/gallery.html?%24hui), XAU, and Gold, why are so many bullish?, which is obviously a very bearish sign, because, most people tend to be contrarian indicators and become most bullish near important cycle highs. Since May 11, 2006 the money market has outperformed HUI, XAU, and gold.
The only time an index, stock, commodity is timely, from a long term investor's point of view, is near it's primary multi year uptrend line, if it's in a Bull Market. HUI's primary multi year Secular Bull Market (since October 2000) uptrend line is at 200-220 right now, see chart 7 at http://www.joefrocks.com/GoldStockCharts.html. The gold Commercial Traders have gone massively short the past month and the NEM Lead Indicator is extremely bearish.
HUI, XAU, and Gold recently exceeding their 5-11-06 cycle highs is technically the Wave 1 Cyclical Bull Market peaking in dramatic rollover mode, which means that technically THE BEAR MARKET HASN'T EVEN STARTED YET.
Gold does well in inflationary economic cycles, such as the real estate/mortgage/credit (I used to get credit card offers every week on average) boom from 2002-2006. The current deflationary real estate/mortgage/credit bust is very bearish for gold, which is a hedge against inflationary economic cycles.
I might not do a post market close update today. HUI/XAU need to clearly break down before I short GDX (Gold Miners ETF) in a countertrend Wave B type rebound. Basically nothing has changed, and, massive Fed credit ($16 Billion today) has led to more (but very little) upside surprise. Earnings season has begun, which is likely to cause the market to break down. Ciao.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
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, more importantly, that trading SPX long was risky because a very important cycle trendline had broken down.
SPX's (S & P 500) Cyclical Bull Market since October 2002 might have peaked yesterday or should soon do so. Once the important trend line broke down and the 5% major sell signal occurred, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html, that meant that SPX had either peaked or that it's rate of ascent would slow dramatically/roll over/flatten out. It's only risen +0.60% since July 2007 as I said before, 1555.90 to 1565.26.
Once SPX (S & P 500) collapses it'll take nearly all sectors with it due to program selling, because, nearly all sectors are represented in SPX. FCX and NEM are in SPX for example.
Concerning HUI (http://stockcharts.com/charts/gallery.html?%24hui), XAU, and Gold, why are so many bullish?, which is obviously a very bearish sign, because, most people tend to be contrarian indicators and become most bullish near important cycle highs. Since May 11, 2006 the money market has outperformed HUI, XAU, and gold.
The only time an index, stock, commodity is timely, from a long term investor's point of view, is near it's primary multi year uptrend line, if it's in a Bull Market. HUI's primary multi year Secular Bull Market (since October 2000) uptrend line is at 200-220 right now, see chart 7 at http://www.joefrocks.com/GoldStockCharts.html. The gold Commercial Traders have gone massively short the past month and the NEM Lead Indicator is extremely bearish.
HUI, XAU, and Gold recently exceeding their 5-11-06 cycle highs is technically the Wave 1 Cyclical Bull Market peaking in dramatic rollover mode, which means that technically THE BEAR MARKET HASN'T EVEN STARTED YET.
Gold does well in inflationary economic cycles, such as the real estate/mortgage/credit (I used to get credit card offers every week on average) boom from 2002-2006. The current deflationary real estate/mortgage/credit bust is very bearish for gold, which is a hedge against inflationary economic cycles.
I might not do a post market close update today. HUI/XAU need to clearly break down before I short GDX (Gold Miners ETF) in a countertrend Wave B type rebound. Basically nothing has changed, and, massive Fed credit ($16 Billion today) has led to more (but very little) upside surprise. Earnings season has begun, which is likely to cause the market to break down. Ciao.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
8:04 AM
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