...............HUI/XAU/NEM Gap Filling Action
HUI/XAU/NEM (http://stockcharts.com/charts/gallery.html?%24hui) are doing gap filling action today, 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, have entered a very short term (might only last a few hours/less than one session) countertrend Wave B upcycle, of the short term Wave C downcycle that began on 1-30-08.
I expect the major averages (likely) countertrend rally (Wave B of a short term Wave 2 downcycle) to soon fizzle today. SPX (S & P 500) should fail to fill it's upside gap at 1380.82 from yesterday 2-5's open. The decline in SPX/"the market" will drag HUI/XAU/NEM and most sectors/countries (like China, Japan, Germany, no big deal) down with it.
The cycles, while they might be vastly different from a very long term point of view (Secular 10 to 20+ year perspective), are surprisingly highly correlated on a very short term (hours/days), short term (days/weeks), and intermediate term (weeks/months) basis due to program trading, and, the fact that so many foreign stocks/ETFs are listed on US exchanges now.
The mission of this very short term countertrend Wave B upcycle (might be a one day wonder) is basically gap filling. Once it's clear that the gap filling action has ended, it'll be time to look to go short GDX (Gold Miners ETF, my choice) or the stock/ETF of your choice. All of yesterday's upside gaps for HUI/XAU/GDX/NEM might get filled, see next paragraph. Whether any of 2-4's gaps get filled is very doubtful.
NEM's upside gap at 50.91 got filled today/2-6, the XAU's upside gap at 180.24 remains unfilled, GDX's upside gap at 48.15 remains unfilled, HUI's upside gap at 438.93 got filled (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), all were created yesterday/2-5. HUI has an upside gap at 451.56, GDX has an upside gap at 49.15, NEM has an upside gap at 53.23, all created 2-4.
NEM has a downside gap at 49.48, HUI at 425.04, XAU at 173.22, GDX at 46.75, GLD at 87.68, all from today/2-6's open. There are downside gaps for NEM at 47.39, GDX at 44.33, 42.87, XAU at 161.75.
Once SPX (probably, today is probably Wave B of a short term Wave 2 downcycle, see http://stockcharts.com/charts/gallery.html?%24spx) clearly fails to fill it's upside gap at 1380.82 from yesterday 2-5's open, that will be a sign to look to go short the major average of your choice via a short or ultra short ETF (such as SDS, QID, TWM), and, to short GDX or GLD etc, though obviously closely watch their gaps and Elliott Wave patterns, the NEM and WMT Lead Indicators, etc.
You want to see some complacency? I'll show you some complacency!
The PowerShares DB Gold Fund (DGL) Put/Call Ratio was 21/239 = 0.087866 on 2/1/08, was 78/18 = 4.33333 on 2-4-08, and, was 17/84 = 0.20238 on 2-5-08! See http://www.cboe.com/data/mktstat5.aspx#DGL.
The PowerShares DB Gold Fund (DGL) Put/Call Ratio revealed "super extreme" complacency on 2-1, "super extreme" fear on 2-4 that correctly pointed to a sharp decline yesterday, and, yesterday's extremely complacent level at 0.20238 on 2-5-08 points to weakness very soon, maybe today or tomorrow.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
I expect the major averages (likely) countertrend rally (Wave B of a short term Wave 2 downcycle) to soon fizzle today. SPX (S & P 500) should fail to fill it's upside gap at 1380.82 from yesterday 2-5's open. The decline in SPX/"the market" will drag HUI/XAU/NEM and most sectors/countries (like China, Japan, Germany, no big deal) down with it.
The cycles, while they might be vastly different from a very long term point of view (Secular 10 to 20+ year perspective), are surprisingly highly correlated on a very short term (hours/days), short term (days/weeks), and intermediate term (weeks/months) basis due to program trading, and, the fact that so many foreign stocks/ETFs are listed on US exchanges now.
The mission of this very short term countertrend Wave B upcycle (might be a one day wonder) is basically gap filling. Once it's clear that the gap filling action has ended, it'll be time to look to go short GDX (Gold Miners ETF, my choice) or the stock/ETF of your choice. All of yesterday's upside gaps for HUI/XAU/GDX/NEM might get filled, see next paragraph. Whether any of 2-4's gaps get filled is very doubtful.
NEM's upside gap at 50.91 got filled today/2-6, the XAU's upside gap at 180.24 remains unfilled, GDX's upside gap at 48.15 remains unfilled, HUI's upside gap at 438.93 got filled (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), all were created yesterday/2-5. HUI has an upside gap at 451.56, GDX has an upside gap at 49.15, NEM has an upside gap at 53.23, all created 2-4.
NEM has a downside gap at 49.48, HUI at 425.04, XAU at 173.22, GDX at 46.75, GLD at 87.68, all from today/2-6's open. There are downside gaps for NEM at 47.39, GDX at 44.33, 42.87, XAU at 161.75.
Once SPX (probably, today is probably Wave B of a short term Wave 2 downcycle, see http://stockcharts.com/charts/gallery.html?%24spx) clearly fails to fill it's upside gap at 1380.82 from yesterday 2-5's open, that will be a sign to look to go short the major average of your choice via a short or ultra short ETF (such as SDS, QID, TWM), and, to short GDX or GLD etc, though obviously closely watch their gaps and Elliott Wave patterns, the NEM and WMT Lead Indicators, etc.
You want to see some complacency? I'll show you some complacency!
The PowerShares DB Gold Fund (DGL) Put/Call Ratio was 21/239 = 0.087866 on 2/1/08, was 78/18 = 4.33333 on 2-4-08, and, was 17/84 = 0.20238 on 2-5-08! See http://www.cboe.com/data/mktstat5.aspx#DGL.
The PowerShares DB Gold Fund (DGL) Put/Call Ratio revealed "super extreme" complacency on 2-1, "super extreme" fear on 2-4 that correctly pointed to a sharp decline yesterday, and, yesterday's extremely complacent level at 0.20238 on 2-5-08 points to weakness very soon, maybe today or tomorrow.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
7:57 AM
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