Some Brief HUI/XAU Strength And I Went Long The Russell 2000 (RUT)
As discussed Friday (http://tradethecycles.blogspot.com/2008/01/some-huixau-strength-is-likely-early-on.html) there was some brief HUI (http://stockcharts.com/charts/gallery.html?%24hui)/XAU strength today as expected (see 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, I went long the Russell 2000 (RUT) via the Ultra Long RUT ETF UWM at 53.64 late today (http://finance.yahoo.com/q/ta?s=uwm&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=), attempting to nail a major intermediate term cycle low.
I'll talk about the Russell 2000 (RUT) first, because of the potentially important cycle low, and, the fact that I was a "daredevil" and bought UWM (Ultra Long RUT ETF) today, see http://stockcharts.com/charts/gallery.html?%24rut.
Since putting in a likely Cyclical Bull Market cycle high at 856.48 in July 2007, RUT has done (is doing if it hasn't bottomed obviously) an Elliott Wave ABC down up down pattern, see the second weekly view RUT chart at http://stockcharts.com/charts/gallery.html?%24rut. Note the bullish large inverse spike on today's candle.
What gave me confidence to be a "daredevil" and buy UWM (Ultra Long RUT ETF) today? The many factors include the cycles/Elliott Wave count pointing to an important cycle low, the bullish large inverse spike on today's candle (http://stockcharts.com/charts/gallery.html?%24rut), the bullish RUT COTs (Commitments Of Traders, there's a regular COT and one for the mini contract, see toward the bottom of http://www.cftc.gov/dea/futures/deacmelf.htm and note that the Commercial Traders are overall net long, and, their latest weekly changes are net long, with the mini contract being very bullish), and, the very bullish WMT Lead Indicator the past two sessions, at +1.21% versus SPX (S & P 500) on 1-7 and at +1.04% on 1-4.
We'll see if "Trade the Cycles" enabled me to nail a Russell 2000 (RUT) major intermediate term cycle low to the day.
For HUI (http://stockcharts.com/charts/gallery.html?%24hui)/XAU, since putting in a likely countertrend Wave B cycle high on 1-3-08 of the Wave A intermediate term downcycle since 11-7-07 (likely start of the Wave 2 Cyclical Bear Market), they've done a two and a half session Elliott Wave ABC down up down downcycle, see 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=.
So, I'll look to short HUI/XAU, via shorting the Gold Miners ETF GDX during a very short term 1-2 day countertrend Wave B upcycle, that probably will start tomorrow/might have late today. I'll look for the NEM/WMT Lead Indicators to be bearish or at least near neutral/not overly bullish on an intraday basis (intraday chart, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=on&z=l&q=l&p=&a=&c=%5Ehui,nem).
The NEM Lead Indicator was slightly bearish today (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem), at -0.05% versus the XAU today/on 1-7, at -0.42% on 1-4, was -0.56% on 1-3, was +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 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'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.
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 con artist 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
I'll talk about the Russell 2000 (RUT) first, because of the potentially important cycle low, and, the fact that I was a "daredevil" and bought UWM (Ultra Long RUT ETF) today, see http://stockcharts.com/charts/gallery.html?%24rut.
Since putting in a likely Cyclical Bull Market cycle high at 856.48 in July 2007, RUT has done (is doing if it hasn't bottomed obviously) an Elliott Wave ABC down up down pattern, see the second weekly view RUT chart at http://stockcharts.com/charts/gallery.html?%24rut. Note the bullish large inverse spike on today's candle.
What gave me confidence to be a "daredevil" and buy UWM (Ultra Long RUT ETF) today? The many factors include the cycles/Elliott Wave count pointing to an important cycle low, the bullish large inverse spike on today's candle (http://stockcharts.com/charts/gallery.html?%24rut), the bullish RUT COTs (Commitments Of Traders, there's a regular COT and one for the mini contract, see toward the bottom of http://www.cftc.gov/dea/futures/deacmelf.htm and note that the Commercial Traders are overall net long, and, their latest weekly changes are net long, with the mini contract being very bullish), and, the very bullish WMT Lead Indicator the past two sessions, at +1.21% versus SPX (S & P 500) on 1-7 and at +1.04% on 1-4.
We'll see if "Trade the Cycles" enabled me to nail a Russell 2000 (RUT) major intermediate term cycle low to the day.
For HUI (http://stockcharts.com/charts/gallery.html?%24hui)/XAU, since putting in a likely countertrend Wave B cycle high on 1-3-08 of the Wave A intermediate term downcycle since 11-7-07 (likely start of the Wave 2 Cyclical Bear Market), they've done a two and a half session Elliott Wave ABC down up down downcycle, see 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=.
So, I'll look to short HUI/XAU, via shorting the Gold Miners ETF GDX during a very short term 1-2 day countertrend Wave B upcycle, that probably will start tomorrow/might have late today. I'll look for the NEM/WMT Lead Indicators to be bearish or at least near neutral/not overly bullish on an intraday basis (intraday chart, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=on&z=l&q=l&p=&a=&c=%5Ehui,nem).
The NEM Lead Indicator was slightly bearish today (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem), at -0.05% versus the XAU today/on 1-7, at -0.42% on 1-4, was -0.56% on 1-3, was +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 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'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.
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 con artist 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
1:33 PM
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