I Escaped UWM With A Significant Profit And HUI/XAU Countertrend Wave B Probably Peaked Today
I escaped UWM, the Ultra Long Russell 2000 ETF (RUT, http://stockcharts.com/charts/gallery.html?%24rut), with a significant profit, selling it at 53.915 versus a puchase yesterday at 53.64ish (a bit less), and, HUI/XAU's countertrend Wave B upcycle since 12-18-07 probably peaked today, in dramatic rollover mode versus the 1-3-08 cycle high, 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.
HUI (http://stockcharts.com/charts/gallery.html?%24hui) put in a nearly perfect bearish double top cycle high today at 463.19 versus the 11-7-07 cycle high at 463.06, while the XAU (http://stockcharts.com/charts/gallery.html?%24xau) put in a modestly lower countertrend Wave B cycle (began 12-18-07) high today at 193.78 versus the 11-7-07 likely Wave 1 Cyclical Bull Market cycle high at 195.50. Both HUI/XAU have bearish large spikes on today/1-8's candle.
Today was probably just a last gasp for the gold bulls. 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 con artist gold writers (too many are con artists) will point that fact out?), see http://stockcharts.com/charts/gallery.html?%24usd, gold stocks have been underperforming gold since 11-7-07, the very bearish gold COT data, etc.
The NEM Lead Indicator is very bearish recently, it was a bearish -0.81% versus the XAU today/on 1-8, was -0.05% on 1-7, -0.42% on 1-4, -0.56% on 1-3, +0.94% on 1-2, +1.38% on 12-31, -0.90% on 12-28, -1.15% on 12-27, -1.12% on 12-26, -1.10% on 12-24, -1.08% on 12-21, -0.18% on 12-20, -0.26% on 12-19.
The WMT Lead Indicator was a bullish +0.57% versus SPX (S & P 500) on 1-8, was a very bullish +1.21% on 1-7, was a very bullish +1.04% on 1-4.
The major averages should soon start to rally, once they put in intermediate term cycle lows. The fact that they remain in an intermediate term downcycle explains the lag time between the bullish WMT Lead Indicator and the major averages. Cycles, Elliott Wave patterns, and gaps (the basis/crux of "Trade the Cycles") are the primary consideration when timing any index/stock/commodity/fund.
The gold COT (Commitments Of Traders) data remains bearish, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm. The savvy non contrarian gold Commercial Traders traded significantly net short in the five day period ending 12-31-07 (traded net short 16,658 gold futures and options contracts versus trading net short 12,456 the previous week), trading a significant long position (added 5608 long gold futures and options contracts versus 8002 added the previous week), correctly anticipating some short term strength, but, continuing to go massively short (added 22,266 short gold futures and options contracts versus 20,458 added the previous week), as they've done in recent months.
So, the gold COT (Commitments Of Traders) data is short term and long term bearish. Some significant gold strength this week won't be surprising, but, it's very likely to be a great shorting opportunity.
I had to bail out of UWM (Ultra Long Russell 2000 (RUT, http://stockcharts.com/charts/gallery.html?%24rut) ETF) during the intraday Wave B rebound today, since the early plunge/decline turned out to be a Wave A type plunge and not a Wave 4 down type move (I expected it to bottom above late yesterday's cycle low, in other words, I expected an uptrend/Elliott Wave 12345 up down up down up upcycle to be in effect since yesterday's cycle low/potential major intermediate term cycle low when I was still long early today), 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.
Since putting in a likely Cyclical Bull Market cycle high at 856.48 in July 2007, RUT is doing an Elliott Wave ABC down up down pattern, see the second weekly view RUT chart at http://stockcharts.com/charts/gallery.html?%24rut.
I'm looking to trade the US Natural Gas ETF UNG (http://stockcharts.com/charts/gallery.html?ung), that sports a 6%ish yield. Note that UNG recently put in a slightly higher bullish double bottom cycle low at 33.58 versus 33.23 a little over 4 months ago. UNG appears to be in a short term Wave 3 upcycle, see http://finance.yahoo.com/q/ta?s=ung&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.
I bought a tiny position in LTXX at 2.9999 on 1-2, whose short term Wave 4 downcycle appears to be bottoming, see http://stockcharts.com/charts/gallery.html?ltxx. LTXX appears to have put in a Cyclical Bear Market cycle low at 2.25 recently.
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
HUI (http://stockcharts.com/charts/gallery.html?%24hui) put in a nearly perfect bearish double top cycle high today at 463.19 versus the 11-7-07 cycle high at 463.06, while the XAU (http://stockcharts.com/charts/gallery.html?%24xau) put in a modestly lower countertrend Wave B cycle (began 12-18-07) high today at 193.78 versus the 11-7-07 likely Wave 1 Cyclical Bull Market cycle high at 195.50. Both HUI/XAU have bearish large spikes on today/1-8's candle.
Today was probably just a last gasp for the gold bulls. 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 con artist gold writers (too many are con artists) will point that fact out?), see http://stockcharts.com/charts/gallery.html?%24usd, gold stocks have been underperforming gold since 11-7-07, the very bearish gold COT data, etc.
The NEM Lead Indicator is very bearish recently, it was a bearish -0.81% versus the XAU today/on 1-8, was -0.05% on 1-7, -0.42% on 1-4, -0.56% on 1-3, +0.94% on 1-2, +1.38% on 12-31, -0.90% on 12-28, -1.15% on 12-27, -1.12% on 12-26, -1.10% on 12-24, -1.08% on 12-21, -0.18% on 12-20, -0.26% on 12-19.
The WMT Lead Indicator was a bullish +0.57% versus SPX (S & P 500) on 1-8, was a very bullish +1.21% on 1-7, was a very bullish +1.04% on 1-4.
The major averages should soon start to rally, once they put in intermediate term cycle lows. The fact that they remain in an intermediate term downcycle explains the lag time between the bullish WMT Lead Indicator and the major averages. Cycles, Elliott Wave patterns, and gaps (the basis/crux of "Trade the Cycles") are the primary consideration when timing any index/stock/commodity/fund.
The gold COT (Commitments Of Traders) data remains bearish, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm. The savvy non contrarian gold Commercial Traders traded significantly net short in the five day period ending 12-31-07 (traded net short 16,658 gold futures and options contracts versus trading net short 12,456 the previous week), trading a significant long position (added 5608 long gold futures and options contracts versus 8002 added the previous week), correctly anticipating some short term strength, but, continuing to go massively short (added 22,266 short gold futures and options contracts versus 20,458 added the previous week), as they've done in recent months.
So, the gold COT (Commitments Of Traders) data is short term and long term bearish. Some significant gold strength this week won't be surprising, but, it's very likely to be a great shorting opportunity.
I had to bail out of UWM (Ultra Long Russell 2000 (RUT, http://stockcharts.com/charts/gallery.html?%24rut) ETF) during the intraday Wave B rebound today, since the early plunge/decline turned out to be a Wave A type plunge and not a Wave 4 down type move (I expected it to bottom above late yesterday's cycle low, in other words, I expected an uptrend/Elliott Wave 12345 up down up down up upcycle to be in effect since yesterday's cycle low/potential major intermediate term cycle low when I was still long early today), 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.
Since putting in a likely Cyclical Bull Market cycle high at 856.48 in July 2007, RUT is doing an Elliott Wave ABC down up down pattern, see the second weekly view RUT chart at http://stockcharts.com/charts/gallery.html?%24rut.
I'm looking to trade the US Natural Gas ETF UNG (http://stockcharts.com/charts/gallery.html?ung), that sports a 6%ish yield. Note that UNG recently put in a slightly higher bullish double bottom cycle low at 33.58 versus 33.23 a little over 4 months ago. UNG appears to be in a short term Wave 3 upcycle, see http://finance.yahoo.com/q/ta?s=ung&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.
I bought a tiny position in LTXX at 2.9999 on 1-2, whose short term Wave 4 downcycle appears to be bottoming, see http://stockcharts.com/charts/gallery.html?ltxx. LTXX appears to have put in a Cyclical Bear Market cycle low at 2.25 recently.
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
1:19 PM
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