Some HUI/XAU Strength Is Likely Early On Monday
Some HUI/XAU strength is likely early on Monday (http://stockcharts.com/charts/gallery.html?%24hui), 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=. After bottoming early in the session HUI did an up down up down pattern, and, was in an intraday Wave 5 at session's end (the 1 day intraday chart helps a lot, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=), so, some strength is likely early on Monday.
It looks like I'll probably be shorting HUI/XAU via shorting the Gold Miners ETF GDX early on Monday. 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 bearish again today (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem), at -0.42% versus the XAU today/on 1-4, was -0.56% versus the XAU 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 WMT (Walmart) Lead Indicator was a very bullish +1.04% versus the S & P 500 (SPX) today/on 1-4 (see http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=off&z=m&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC), was a very bearish -1.11% on 1-3, was +0.11% on 1-2, -0.45% on 12-31, +0.50% on 12-28, +0.17% on 12-27, -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 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 next week won't be surprising, but, it's very likely to be a great shorting opportunity.
The countertrend Wave B Upcycle (since 12-18-07) of HUI/XAU's first (Wave A) intermediate term downcycle (of the Wave 2 Cyclical Bear Market since 11-7-07) appears to have peaked yesterday/1-3-08, see the 5 day intraday HUI chart at http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=on&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c= and the daily HUI chart at http://stockcharts.com/charts/gallery.html?%24hui.
HUI/XAU approaching the 11-7-07 likely Wave 1 Cyclical Bull Market cycle highs made perfect sense. It's probably the Wave 2 Cyclical Bear Market's (since 11-7-07) downtrend line beginning relatively flat, as cycle trendlines usually do. The huge spike move the prior two sessions points to likely severe weakness (got some late yesterday/early today), because, the larger the spike move the more severe the ensuing decline tends to be.
Reliable lead indicator NEM's very large spike on yesterday 1-3-08's candle is another bearish sign, see http://stockcharts.com/charts/gallery.html?nem.
NEM's extreme volume the prior two days, at 14.33 million shares and 11.50ish million shares, is another bearish sign, because, extreme volume (and volatility) tends to occur at important cycle highs/lows. The smart money was probably selling to the dumb money the prior two days.
Yesterday was a golden opportunity to exit the gold/silver sector. If you didn't realize that the huge spike move the prior two days was important peaking action take a good long hard look in the mirror. This is going to be a very tough year for nearly all gold/silver bugs. Most of last year was difficult. HUI/XAU/gold were underwater versus the 5-11-06 cycle highs until early October 2007.
Big spike moves tend to mark important cycle highs, and, the two day monster spike move was obviously huge. Gold's peaking in rollover mode (yesterday's cycle high was $869ish), lagging HUI/XAU as it tends to do at important cycle highs/lows, versus the 11-7-07 cycle high at $848. The big lag time between gold and HUI/XAU, with gold peaking about two months later, is a clear sign that important peaking action is/was occurring.
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.
NDX (NASDAQ 100) is doing a short term Wave A downcycle since 12-26-07, that's Wave A of the final Wave C of Wave C of the intermediate term downcycle since late October (http://stockcharts.com/charts/gallery.html?%24ndx), see http://finance.yahoo.com/q/ta?s=%5Endx&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c. So, I may short NDX (via the Ultra Short NDX ETF QID) during a short term countertrend Wave B rebound/upcycle in the next few sessions.
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), 2069.68 (filled), 2031.00 (filled), 1989.36 (filled), 1982.16 (filled), 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 48.83, 48.45 (filled 12-27), 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
It looks like I'll probably be shorting HUI/XAU via shorting the Gold Miners ETF GDX early on Monday. 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 bearish again today (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem), at -0.42% versus the XAU today/on 1-4, was -0.56% versus the XAU 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 WMT (Walmart) Lead Indicator was a very bullish +1.04% versus the S & P 500 (SPX) today/on 1-4 (see http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=off&z=m&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC), was a very bearish -1.11% on 1-3, was +0.11% on 1-2, -0.45% on 12-31, +0.50% on 12-28, +0.17% on 12-27, -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 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 next week won't be surprising, but, it's very likely to be a great shorting opportunity.
The countertrend Wave B Upcycle (since 12-18-07) of HUI/XAU's first (Wave A) intermediate term downcycle (of the Wave 2 Cyclical Bear Market since 11-7-07) appears to have peaked yesterday/1-3-08, see the 5 day intraday HUI chart at http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=on&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c= and the daily HUI chart at http://stockcharts.com/charts/gallery.html?%24hui.
HUI/XAU approaching the 11-7-07 likely Wave 1 Cyclical Bull Market cycle highs made perfect sense. It's probably the Wave 2 Cyclical Bear Market's (since 11-7-07) downtrend line beginning relatively flat, as cycle trendlines usually do. The huge spike move the prior two sessions points to likely severe weakness (got some late yesterday/early today), because, the larger the spike move the more severe the ensuing decline tends to be.
Reliable lead indicator NEM's very large spike on yesterday 1-3-08's candle is another bearish sign, see http://stockcharts.com/charts/gallery.html?nem.
NEM's extreme volume the prior two days, at 14.33 million shares and 11.50ish million shares, is another bearish sign, because, extreme volume (and volatility) tends to occur at important cycle highs/lows. The smart money was probably selling to the dumb money the prior two days.
Yesterday was a golden opportunity to exit the gold/silver sector. If you didn't realize that the huge spike move the prior two days was important peaking action take a good long hard look in the mirror. This is going to be a very tough year for nearly all gold/silver bugs. Most of last year was difficult. HUI/XAU/gold were underwater versus the 5-11-06 cycle highs until early October 2007.
Big spike moves tend to mark important cycle highs, and, the two day monster spike move was obviously huge. Gold's peaking in rollover mode (yesterday's cycle high was $869ish), lagging HUI/XAU as it tends to do at important cycle highs/lows, versus the 11-7-07 cycle high at $848. The big lag time between gold and HUI/XAU, with gold peaking about two months later, is a clear sign that important peaking action is/was occurring.
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.
NDX (NASDAQ 100) is doing a short term Wave A downcycle since 12-26-07, that's Wave A of the final Wave C of Wave C of the intermediate term downcycle since late October (http://stockcharts.com/charts/gallery.html?%24ndx), see http://finance.yahoo.com/q/ta?s=%5Endx&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c. So, I may short NDX (via the Ultra Short NDX ETF QID) during a short term countertrend Wave B rebound/upcycle in the next few sessions.
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), 2069.68 (filled), 2031.00 (filled), 1989.36 (filled), 1982.16 (filled), 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 48.83, 48.45 (filled 12-27), 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
12:53 PM
5 Comments:
Hi Joe,
You said, "NDX's (NASDAQ 100, Wave A intermediate term cycle low target range of 1820-1840 was very straightforward/easy to derive."
Then, what would you say is the rough equivalent goal price range for QID, if the NDX were to slump down into that 1820-1840 territory ---- $50 to $52, or what do you think is realistic?
Take care, M
By
Anonymous, at 9:14 AM
Hi M,
QID has unfilled upside gaps at 42.90, 43.97, 44.46, 47.55, 50.10, 53.86, 55.92.
Since NDX should bottom at 1820-1840, shortly after filling the last downside gap at 1846.09, one could then look at which gap QID is near when that happens, and, either exit or wait for it to get filled.
If QID is at 48 when NDX hits 1820-1840 I'd sell it. If QID is very close to 50 I might wait for the upside gap at 50.10 to get filled. There's probably a lag of maybe a few minutes between NDX and QID. It looks that way in the 1day Yahoo comparison chart, see NDX Versus QID 1 Day Comparison.
By
Joe Ferrazzano, at 11:22 AM
After taking a better look at the 1 day NDX vs QID comparison chart I don't see a noticeable lag time. It probably makes sense to sell QID based on NDX's gaps and don't use QID's gaps. Good luck.
By
Joe Ferrazzano, at 11:30 AM
Okay Joe,
Awesome analysis. Very straightforward with no bull.
By the way, I was just reading about that #1 gold analyst for 2007 from HSBC. He is espousing the viewpoint that gold is fundamentally overvalued by at least $150 from up here. Sounds like a good trade. Looks like some of the smarties are catching on to these things you have been pointing out lately.
But, I notice that some of the 'usual suspects' like Clive Maund are starting to call this last leg since the triangle, a 'Breakout.' In maybe 80% of the cases, that has been a sign of big trouble when he says it (according to my recollection). Let's see if those gold commercials can get some losses rolling when the margin calls starting hitting Wall Street equities next week. Treasury isThis should be interesting.
Thanks for the heads up on all this.
M
By
Anonymous, at 7:31 AM
Thanks for the kind words M and you're welcome. It's about having the right system. Markets trade in cycles that reliably follow Elliott Wave patterns. That's why I'm usually able, especially on an intermediate or long term basis, to time the market.
Gold did break out, but, it's a short term breakout. Gold is lagging HUI/XAU, which peaked on 11-7-07. Good luck. Joe
By
Joe Ferrazzano, at 11:17 AM
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