HUI/XAU Are Approaching A Wave A Intermediate Term Cycle Low
HUI/XAU are approaching a Wave A intermediate term cycle low, since putting in a likely Wave 1 Cyclical Bull Market cycle high on 11-7-07, see http://stockcharts.com/charts/gallery.html?%24hui.
The important downside gap I was watching today was the one for reliable lead indicator NEM at 46.44, which got filled today, and, NEM bottomed at 46.28. Once NEM filled 46.44 that was a sign to look to cover GDX, the Gold Miners ETF that closely tracks HUI. Gaps are very important, because, important cycle highs/lows tend to/reliably occur shortly after gaps get filled. They provide targets (in this case timing, since I didn't have a downside gap for GDX) for when to exit a trade.
My downside target for NEM is 46. There were no downside gaps to use for GDX, HUI, or the XAU today. NEM has a large bearish spike on today's candle, see http://stockcharts.com/charts/gallery.html?nem.
There's likely to be a bit more downside tomorrow, but, I wouldn't chase it given today's very bullish lead indicators, at +1.47% versus the XAU today/on 12-17 for the NEM Lead Indicator, and, at +1.92% versus SPX (S & P 500) today/on 12-17 for the WMT Lead Indicator.
However, gold appears to be lagging HUI/XAU, having done what appears to be a Wave A type downcycle late in the session/near session's end, see http://finance.yahoo.com/q/ta?s=gld&t=1d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
Early tomorrow, if I'm convinced that gold is doing a countertrend Wave B type rebound/upcycle, I'll look to short GLD, the gold ETF. Since gold tends to lag HUI/XAU, sometimes one can short GLD shortly after having shorted and (maybe) exited GDX, the Gold Miners ETF.
Also, tomorrow or Wednesday I may go long NEM, which is in the process of putting in a Wave 4 intermediate term cycle low (target 46, which was based on the downside gap at 46.44 that got filled today). NEM put in a likely Cyclical Bear Market cycle low at 37.91 in June 2007, see http://stockcharts.com/charts/gallery.html?nem.
NDX (NASDAQ 100, http://stockcharts.com/charts/gallery.html?%24ndx) is in the process of putting in a Wave A of Wave C cycle low, for the intermediate term downcycle since late October. Wave A bottomed in early November. The countertrend Wave B peaked in early/mid December, at the time of last Tuesday 12-11's Fed rate decision (note the Elliott Wave 12345 up down up down up pattern), so, Wave C of the intermediate term downcycle (since late October) has been in effect since last Tuesday 12-11's Fed rate decision. Some time in the next week or so there should be a good opportunity to short NDX/catch Wave C of Wave C via the Ultra Short ETF QID, as NDX's Wave B of Wave C peaks.
SPX (S & P 500) put in a likely Cyclical Bull Market cycle high at 1576.09 on 10-11-07, that occurred +1.30% above July's cycle high at 1555.90.
HUI/XAU put in likely Wave 1 Cyclical Bull Market and intermediate term (cycle began 8-16-07) cycle highs on 11-7-07, see http://stockcharts.com/charts/gallery.html?%24hui.
The monetary inflation due to the real estate/mortgage/credit boom from 2002 until early/mid 2006 (and the stock market Cyclical Bull Market from October 2002 until 10-11-07 for SPX (S & P 500) was another major factor) was the primary factor that drove gold's Wave 1 Cyclical Bull Market from April 2001 until November 7, 2007.
Gold began to flounder after the 5-11-06 cycle high at $730, and, didn't exceed that cycle high until October 2007, due to the monetary inflation created by the Fed in order to fight the mortgage/credit crisis.
The current monetary deflation due to the real estate/mortgage/credit bust and SPX's (S & P 500) Cyclical Bear Market should result in a gold Bear market.
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.
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 $490ish right now, so, gold would be a great buy in the $490-520 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 basically 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 210-230 for HUI and at 90-95 for the XAU. Those are the targets for where the Wave 2 Cyclical Bear Market will bottom. ....... http://www.JoeFRocks.com/ .
HUI NEM XAU
The important downside gap I was watching today was the one for reliable lead indicator NEM at 46.44, which got filled today, and, NEM bottomed at 46.28. Once NEM filled 46.44 that was a sign to look to cover GDX, the Gold Miners ETF that closely tracks HUI. Gaps are very important, because, important cycle highs/lows tend to/reliably occur shortly after gaps get filled. They provide targets (in this case timing, since I didn't have a downside gap for GDX) for when to exit a trade.
My downside target for NEM is 46. There were no downside gaps to use for GDX, HUI, or the XAU today. NEM has a large bearish spike on today's candle, see http://stockcharts.com/charts/gallery.html?nem.
There's likely to be a bit more downside tomorrow, but, I wouldn't chase it given today's very bullish lead indicators, at +1.47% versus the XAU today/on 12-17 for the NEM Lead Indicator, and, at +1.92% versus SPX (S & P 500) today/on 12-17 for the WMT Lead Indicator.
However, gold appears to be lagging HUI/XAU, having done what appears to be a Wave A type downcycle late in the session/near session's end, see http://finance.yahoo.com/q/ta?s=gld&t=1d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
Early tomorrow, if I'm convinced that gold is doing a countertrend Wave B type rebound/upcycle, I'll look to short GLD, the gold ETF. Since gold tends to lag HUI/XAU, sometimes one can short GLD shortly after having shorted and (maybe) exited GDX, the Gold Miners ETF.
Also, tomorrow or Wednesday I may go long NEM, which is in the process of putting in a Wave 4 intermediate term cycle low (target 46, which was based on the downside gap at 46.44 that got filled today). NEM put in a likely Cyclical Bear Market cycle low at 37.91 in June 2007, see http://stockcharts.com/charts/gallery.html?nem.
NDX (NASDAQ 100, http://stockcharts.com/charts/gallery.html?%24ndx) is in the process of putting in a Wave A of Wave C cycle low, for the intermediate term downcycle since late October. Wave A bottomed in early November. The countertrend Wave B peaked in early/mid December, at the time of last Tuesday 12-11's Fed rate decision (note the Elliott Wave 12345 up down up down up pattern), so, Wave C of the intermediate term downcycle (since late October) has been in effect since last Tuesday 12-11's Fed rate decision. Some time in the next week or so there should be a good opportunity to short NDX/catch Wave C of Wave C via the Ultra Short ETF QID, as NDX's Wave B of Wave C peaks.
SPX (S & P 500) put in a likely Cyclical Bull Market cycle high at 1576.09 on 10-11-07, that occurred +1.30% above July's cycle high at 1555.90.
HUI/XAU put in likely Wave 1 Cyclical Bull Market and intermediate term (cycle began 8-16-07) cycle highs on 11-7-07, see http://stockcharts.com/charts/gallery.html?%24hui.
The monetary inflation due to the real estate/mortgage/credit boom from 2002 until early/mid 2006 (and the stock market Cyclical Bull Market from October 2002 until 10-11-07 for SPX (S & P 500) was another major factor) was the primary factor that drove gold's Wave 1 Cyclical Bull Market from April 2001 until November 7, 2007.
Gold began to flounder after the 5-11-06 cycle high at $730, and, didn't exceed that cycle high until October 2007, due to the monetary inflation created by the Fed in order to fight the mortgage/credit crisis.
The current monetary deflation due to the real estate/mortgage/credit bust and SPX's (S & P 500) Cyclical Bear Market should result in a gold Bear market.
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.
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 $490ish right now, so, gold would be a great buy in the $490-520 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 basically 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 210-230 for HUI and at 90-95 for the XAU. Those are the targets for where the Wave 2 Cyclical Bear Market will bottom. ....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
1:19 PM
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