.......Got More HUI/XAU And SPX/NDX/RUT Strength Than Expected
Thanks partly to the Fed's large $10.25 Billion 1 day Repo (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), that fueled program buying and is probably what caused the intraday rollover action, there was more HUI/XAU (http://stockcharts.com/charts/gallery.html?%24hui) and SPX/NDX/RUT (http://stockcharts.com/charts/gallery.html?%24spx) strength than expected today, see HUI at http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=, and, see SPX at 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 shorted GDX, the Gold Miners ETF, at 50.83 today, but, due to the fact that the NEM Lead Indicator became/remained very bullish toward session's end (closed at +2.10% versus the XAU), I covered my short position at 50.74.
I'll be looking to short GDX, the Gold Miners ETF, again tomorrow, and, I'll be looking to go "ultra" long RUT (Russell 2000) via the Ultra Long RUT ETF UWM tomorrow (possibly early if RUT appears to have entered a short term Wave 3 upcycle, since RUT appeared to do an intraday countertrend Wave B just before session's end, see http://finance.yahoo.com/q/ta?s=%5Erut&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c) or Wednesday.
HUI/XAU's brief but substantial short term countertrend Wave B upcycle (since 1-22 for HUI and since 1-23 for the XAU) probably peaked Friday, right after the open, see the 5 day intraday candlestick chart at http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c, and, see the daily candlestick chart at http://stockcharts.com/charts/gallery.html?%24hui. Note the large bearish spike on Friday's daily candle, and, the bearish black candle indicates a close below the open.
Friday's HUI/XAU decline was probably a Wave A type decline and today's was probably a countertrend Wave B type rebound, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c.
The NEM Lead Indicator was a very bullish +2.10% versus the XAU today/1-28, was a bullish +0.74% versus the XAU on 1-25, was a very bearish -0.94% versus the XAU on 1-24, was a very bearish -1.92% on 1-23, -1.69% on 1-22, -1.11% on 1-18.
A 12-18 month Wave 2 Cyclical Bear Market probably/very likely began on Monday 1-14-08 for HUI/XAU, which is Wave 2 down of the Secular 20 yearish Bull Market that began in late 2000 for HUI/XAU, began in April 2001 for gold, and, began in late 2001 for silver. Gold lags HUI/XAU and silver lags gold.
HUI/XAU peaked in rollover mode versus the 11-7-07 cycle highs, and, peaked in dramatic rollover mode versus the 5-11-06 cycle highs, see http://stockcharts.com/charts/gallery.html?%24hui.
Likely Wave A intermediate term (Cyclical Bear Market began 10-11-07 for SPX, late October 2007 for NDX, late July 2007 for RUT) cycle lows occurred on 1-23 for SPX/NDX and on 1-22 for RUT (Russell 2000).
SPX (S & P 500)/NDX (NASDAQ 100)/RUT (Russell 2000) are probably still in a short term Wave 2 downcycle, as opposed to early in a short term Wave 3 upcycle, as discussed in the next paragraph. One obviously can't rule out that a short term Wave 3 upcycle began early today. Tomorrow's action should shed some light on that.
Since SPX/NDX/RUT probably put in Wave A intermediate term cycle lows last week (http://stockcharts.com/charts/gallery.html?%24spx), it's likely that they will put in modestly higher cycle lows than the intermediate term cycle lows that occurred last week, since cycle uptrends usually begin relatively flat, which is another factor pointing to likely additional weakness/downside on Tuesday and/or Wednesday for SPX/NDX/RUT. Always keep in mind the nature of cycles.
The WMT Lead Indicator was a bearish -0.47% versus SPX (S & P 500) today/on 1-28, was a slightly bearish -0.09% versus SPX (S & P 500) on 1-25, and, was an extremely bearish -3.50% on 1-24.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
I shorted GDX, the Gold Miners ETF, at 50.83 today, but, due to the fact that the NEM Lead Indicator became/remained very bullish toward session's end (closed at +2.10% versus the XAU), I covered my short position at 50.74.
I'll be looking to short GDX, the Gold Miners ETF, again tomorrow, and, I'll be looking to go "ultra" long RUT (Russell 2000) via the Ultra Long RUT ETF UWM tomorrow (possibly early if RUT appears to have entered a short term Wave 3 upcycle, since RUT appeared to do an intraday countertrend Wave B just before session's end, see http://finance.yahoo.com/q/ta?s=%5Erut&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c) or Wednesday.
HUI/XAU's brief but substantial short term countertrend Wave B upcycle (since 1-22 for HUI and since 1-23 for the XAU) probably peaked Friday, right after the open, see the 5 day intraday candlestick chart at http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c, and, see the daily candlestick chart at http://stockcharts.com/charts/gallery.html?%24hui. Note the large bearish spike on Friday's daily candle, and, the bearish black candle indicates a close below the open.
Friday's HUI/XAU decline was probably a Wave A type decline and today's was probably a countertrend Wave B type rebound, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c.
The NEM Lead Indicator was a very bullish +2.10% versus the XAU today/1-28, was a bullish +0.74% versus the XAU on 1-25, was a very bearish -0.94% versus the XAU on 1-24, was a very bearish -1.92% on 1-23, -1.69% on 1-22, -1.11% on 1-18.
A 12-18 month Wave 2 Cyclical Bear Market probably/very likely began on Monday 1-14-08 for HUI/XAU, which is Wave 2 down of the Secular 20 yearish Bull Market that began in late 2000 for HUI/XAU, began in April 2001 for gold, and, began in late 2001 for silver. Gold lags HUI/XAU and silver lags gold.
HUI/XAU peaked in rollover mode versus the 11-7-07 cycle highs, and, peaked in dramatic rollover mode versus the 5-11-06 cycle highs, see http://stockcharts.com/charts/gallery.html?%24hui.
Likely Wave A intermediate term (Cyclical Bear Market began 10-11-07 for SPX, late October 2007 for NDX, late July 2007 for RUT) cycle lows occurred on 1-23 for SPX/NDX and on 1-22 for RUT (Russell 2000).
SPX (S & P 500)/NDX (NASDAQ 100)/RUT (Russell 2000) are probably still in a short term Wave 2 downcycle, as opposed to early in a short term Wave 3 upcycle, as discussed in the next paragraph. One obviously can't rule out that a short term Wave 3 upcycle began early today. Tomorrow's action should shed some light on that.
Since SPX/NDX/RUT probably put in Wave A intermediate term cycle lows last week (http://stockcharts.com/charts/gallery.html?%24spx), it's likely that they will put in modestly higher cycle lows than the intermediate term cycle lows that occurred last week, since cycle uptrends usually begin relatively flat, which is another factor pointing to likely additional weakness/downside on Tuesday and/or Wednesday for SPX/NDX/RUT. Always keep in mind the nature of cycles.
The WMT Lead Indicator was a bearish -0.47% versus SPX (S & P 500) today/on 1-28, was a slightly bearish -0.09% versus SPX (S & P 500) on 1-25, and, was an extremely bearish -3.50% on 1-24.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
2:01 PM
3 Comments:
You can't fight the FED... 50 BP rate cut coming. 1000 seems almost guaranteed. It might even happen this week. With the ecb holding the line on interest rates the dollar has a long way to go and stong headwinds from the Euro and Yen. I think the carry trade reversal will continue to strengthen. Be nimble with that RUT trade as I think a lot of people may try and sell a post fed rally. If it rallies before the meeting they might decide to sell that too.
The hui priced in gold is at a two year low. There should be a major move comming from one of them.
Good Luck
J
By
Anonymous, at 4:49 PM
Hi J,
The US Dollar probably bottomed in November 2007, or, at least appears to have little downside, see US Dollar Chart.
The major move from HUI/gold is very likely to be DOWN. Sentiment is extremely bullish now for the most part also, which is a very bad sign.
The major averages very likely entered a Wave B minor intermediate term upcycle, but, they are probably in a Cyclical Bear Market now, so, from that point of view one CAN fight the Fed. The Fed won't prevent a Bear Market or a recession (very unlikely). Good luck.
By
Joe Ferrazzano, at 7:09 PM
Also,
Concerning the RUT trade, I agree that one must be careful due to Wednesday's Fed rate decision, one must keep in mind that there might be a sell the news effect, and, a quarter point rate cut would obviously probably bring a sharp selloff.
However, I'll look to trade long if I think RUT is in a short term Wave 3 upcycle, regardless of concerns about the Fed decision.
By
Joe Ferrazzano, at 7:49 PM
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