NDX's (NASDAQ 100) Very Short Term Downcycle Since Late Wednesday Probably Bottomed
NDX's (NASDAQ 100, http://stockcharts.com/charts/gallery.html?%24ndx) very short term downcycle since late Wednesday (entered Wave C of Wave C of the Wave A intermediate term downcycle since late October) probably bottomed at mid session today, see http://finance.yahoo.com/q/ta?s=%5ENDX&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=. So, it looks like I'll be shorting NDX (via the Ultra Short NDX ETF QID) during a very short term countertrend Wave B rebound/upcycle in the next session or two.
The XAU's (http://stockcharts.com/charts/gallery.html?%24xau) Wave B of Wave C (HUI is Wave B of Wave C of Wave C) is still rising, but, is rolling over/flattening out, and, should soon break down, see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.
Once HUI/XAU do a very sharp -3%+ very short term 1-2 day Wave A type downcycle I'l look to short GDX, the Gold Miners ETF, in a countertrend Wave B rebound/very short term 1-2 day upcycle, that obviously must peak below the previous cycle high, otherwise it wouldn't be a countertrend Wave B upcycle. I'll also look for the NEM/WMT Lead Indicators to be bearish or at least near neutral/not overly bullish.
The NEM Lead Indicator is very bearish recently, at a bearish -0.90% versus the XAU today/on 12-28, was a very bearish -1.15% versus the XAU on 12-27, was a very bearish -1.12% on 12-26, was a very bearish -1.10% on 12-24, was a very bearish -1.08% on 12-21, -0.18% on 12-20, -0.26% on 12-19.
The WMT Lead Indicator was +0.50% versus SPX (S & P 500) today/on 12-28 (jives with an NDX countertrend rebound the next session or two, it became more bullish toward session's end, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC), was +0.17% versus SPX (S & P 500) on 12-27, was a bearish -0.82% on 12-26, +0.29% on 12-24, -0.92% on 12-21, -0.97% on 12-20, -0.19% on 12-19.
The beauty of gaps is that, usually/reliably, important cycle highs/lows occur shortly after gap filling action is completed.
NDX's (NASDAQ 100, http://stockcharts.com/charts/gallery.html?%24ndx) Wave A intermediate term cycle low target range of 1820-1840 was very straightforward/easy to derive. NDX's (NASDAQ 100) short term Wave C of Wave C/final intermediate term cycle (Wave A intermediate term downcycle since late October) low target range is 1820-1840 (1980.18 was the Wave A cycle low on 11-12-07, see http://stockcharts.com/charts/gallery.html?%24ndx), shortly after filling the final downside gap at 1846.09.
NDX’s Wave A of Wave C of Wave C should/might bottom at 1940-2020. NDX (NASDAQ 100) has downside gaps at 2111.77 (filled 12-27), 2069.68, 2031.00, 1989.36, 1982.16, 1960.20, 1899.24, 1846.09.
I have more work to do for HUI/XAU/NEM/GDX. I'll try to post that in the next day or two. NEM has downside gaps at 48.45 (filled 12-27/today), 47.39, 42.29, 41.52. So, NEM may fill all of those gaps, but I need to look at all (HUI/XAU/NEM/GDX) and derive good target(s). A few weeks ago, with the big day trade I did, I had to use NEM, because, that was the only available downside gap.
Given the Euro gold's long term bearish double top (May 2006/November 2007, see chart 3 at http://www.the-privateer.com/chart/g-multi.html), and, the fact that the US Dollar probably entered a Cyclical Bull Market in November 2007 after being in a Bear Market since late 2005 (think any of the gold writers will point that fact out?), see http://stockcharts.com/charts/gallery.html?%24usd, plus the very bearish NEM/WMT Lead Indicators recently (see NEM Lead Indicator 5 day chart http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=on&z=m&q=l&p=&a=&c=%5Ehui,nem), and it's far too risky to trade gold aggressively or even modestly long now.
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 (the long term upcycle from June 2006 to 11-7-07 was an anemic rollover upcycle, in which HUI/XAU were underwater until October 2007 versus the 5-11-06 cycle highs), 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 XAU's (http://stockcharts.com/charts/gallery.html?%24xau) Wave B of Wave C (HUI is Wave B of Wave C of Wave C) is still rising, but, is rolling over/flattening out, and, should soon break down, see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.
Once HUI/XAU do a very sharp -3%+ very short term 1-2 day Wave A type downcycle I'l look to short GDX, the Gold Miners ETF, in a countertrend Wave B rebound/very short term 1-2 day upcycle, that obviously must peak below the previous cycle high, otherwise it wouldn't be a countertrend Wave B upcycle. I'll also look for the NEM/WMT Lead Indicators to be bearish or at least near neutral/not overly bullish.
The NEM Lead Indicator is very bearish recently, at a bearish -0.90% versus the XAU today/on 12-28, was a very bearish -1.15% versus the XAU on 12-27, was a very bearish -1.12% on 12-26, was a very bearish -1.10% on 12-24, was a very bearish -1.08% on 12-21, -0.18% on 12-20, -0.26% on 12-19.
The WMT Lead Indicator was +0.50% versus SPX (S & P 500) today/on 12-28 (jives with an NDX countertrend rebound the next session or two, it became more bullish toward session's end, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC), was +0.17% versus SPX (S & P 500) on 12-27, was a bearish -0.82% on 12-26, +0.29% on 12-24, -0.92% on 12-21, -0.97% on 12-20, -0.19% on 12-19.
The beauty of gaps is that, usually/reliably, important cycle highs/lows occur shortly after gap filling action is completed.
NDX's (NASDAQ 100, http://stockcharts.com/charts/gallery.html?%24ndx) Wave A intermediate term cycle low target range of 1820-1840 was very straightforward/easy to derive. NDX's (NASDAQ 100) short term Wave C of Wave C/final intermediate term cycle (Wave A intermediate term downcycle since late October) low target range is 1820-1840 (1980.18 was the Wave A cycle low on 11-12-07, see http://stockcharts.com/charts/gallery.html?%24ndx), shortly after filling the final downside gap at 1846.09.
NDX’s Wave A of Wave C of Wave C should/might bottom at 1940-2020. NDX (NASDAQ 100) has downside gaps at 2111.77 (filled 12-27), 2069.68, 2031.00, 1989.36, 1982.16, 1960.20, 1899.24, 1846.09.
I have more work to do for HUI/XAU/NEM/GDX. I'll try to post that in the next day or two. NEM has downside gaps at 48.45 (filled 12-27/today), 47.39, 42.29, 41.52. So, NEM may fill all of those gaps, but I need to look at all (HUI/XAU/NEM/GDX) and derive good target(s). A few weeks ago, with the big day trade I did, I had to use NEM, because, that was the only available downside gap.
Given the Euro gold's long term bearish double top (May 2006/November 2007, see chart 3 at http://www.the-privateer.com/chart/g-multi.html), and, the fact that the US Dollar probably entered a Cyclical Bull Market in November 2007 after being in a Bear Market since late 2005 (think any of the gold writers will point that fact out?), see http://stockcharts.com/charts/gallery.html?%24usd, plus the very bearish NEM/WMT Lead Indicators recently (see NEM Lead Indicator 5 day chart http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=on&z=m&q=l&p=&a=&c=%5Ehui,nem), and it's far too risky to trade gold aggressively or even modestly long now.
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 (the long term upcycle from June 2006 to 11-7-07 was an anemic rollover upcycle, in which HUI/XAU were underwater until October 2007 versus the 5-11-06 cycle highs), 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
12:57 PM
4 Comments:
I would watch the dollar. I am not sure that the recent move is anything other than a technical bounce. The dollar failing to break 80 and the previous bounce high of 78.89 do not make me bullish on the dollar right now.
Options are pointing to an extremly volatile January so reduced position size might be in order.
Good Luck
J
By
Anonymous, at 8:55 PM
Hey Joe,
Am I crazy or is just about every gold article floating out there super bullish on the sector? I looked very hard and could only find one guy who thought spot gold was possibly doing an X here near $840, with a Y to bottom near $740 to end wave 4. I don't know about you, but back when I was learning about contrarian psychology, that meant that optimism was far too high for a bull to continue up. All I keep reading about is the measuring objective of this triangle that the metal "broke out of" this past week and how $950 is firmly in the bag. Yet none of them act as if it meant anything that the well-known, contrarian-signaling publication "The Economist" came out with its BEARISH DOLLAR cover only a few weeks ago. I would love to be long gold but Lord have mercy ... Every one of these turkeys thinks its going to the moon with no problems.
I'll tell you what, Joe. I never made a dime on gold that I didn't have to pay for with worry and a little sweat. Its never this easy. That's why I'd sooner team up with you for this round. These other guys think gold is a cakewalk. Since when?
I remember one time I saw you posting a warning over on Mineweb. I think it was maybe 2004. And nobody there wanted to listen to you. Consequently, things got a little rough that spring due to overoptimism. I have to wonder if things are not shaping up like this again?
It looks like we might be the only two guys with any powder dry here. I am also very uncomfortable being long dollars and that is what makes me think we have a greater than normal chance of being right.-- Almost forgot, I think I saw Jim Rogers on Cavuto the other week and he said he was going long dollars also. Haven't seen that gentleman wrong too many times in my life.
So have a great New Year, Joe. Wish I could send you a shot and a beer. Appreciate all your work here. Thanks, M
By
Anonymous, at 4:58 AM
Hi J,
The US Dollar has a bullish large inverse spike at November's 74.48 cycle low, and, with the strong follow through it probably entered a Cyclical Bull Market after being in a Bear Market for about two years.
Gold could put in a double top with the 11-7-07 cycle high or even put in a modestly higher cycle high, since gold tends to lag HUI/XAU at important cycle highs/lows, but, HUI/XAU probably/very likely entered a Wave 2 Cyclical Bear Market on 11-7-07.
Really, HUI/XAU basically entered a Bear Market on 5-11-06, since the long term upcycle from June 2006 to 11-7-07 was a deceptive rollover upcycle, in which HUI/XAU were underwater versus the 5-11-06 cycle highs until October 2007. Good luck.
By
Joe Ferrazzano, at 2:23 PM
Thanks for the kind words M and have a great New Year.
Gold's breakout this week is a very minor short term one, that's to be shorted not bought.
The gold sector has far too many goofballs, con artists, salesmen, etc masquerading as gold gurus, technical analysts, etc.
As volatile as the sector is, especially gold/silver stocks, the bullish agendas of far too many gold writers are really proof that many are rank amateurs and/or con artists.
Professionals focus on risk, amateurs focus on reward. Buffett's first rule is to not lose money. Good luck.
By
Joe Ferrazzano, at 2:36 PM
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