......I Shorted GDX At 48.05 Near Session's End
I shorted GDX at 48.05 near session's end, because, GDX didn't fill today's upside gap at 49.15, see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=on&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, NEM appears to be heading down to fill it's downside gap at 50.50 early tomorrow (the XAU will probably fill 175.65), see http://finance.yahoo.com/q/ta?s=nem&t=5d&l=on&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, and, both the NEM Lead Indicator (-1.99% versus the XAU today/on 2-4, -0.97% on 2-1, -0.87% on 1-31) and the WMT Lead Indicator (-1.12% versus SPX (S & P 500) today/on 2-4, -0.35% on 2-1, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC) were very bearish today.
The NEM Lead Indicator tended to get more bearish as the session progressed, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem.
When both the NEM and WMT Lead Indicators strongly agree that usually points to a strong move the next day or two for HUI/XAU/gold. The major averages and HUI/XAU/gold (most sectors really) will probably experience severe weakness tomorrow. I'll also be looking to day trade the major averages ultra short (short term Wave 2 downcycle) tomorrow via SDS, QID, or TWM.
GDX (Gold Miners ETF) filled it's downside gap at 48.19 early today, and, has more downside gaps at 44.33 and 42.87 that will probably get filled in the short term Wave C downcycle (cycle low target 42.50), possibly tomorrow or Wednesday given the very bearish NEM/WMT Lead Indicators today, see http://stockcharts.com/charts/gallery.html?gdx. Also, watch the XAU's downside gaps at 175.65 and 161.75, and, watch NEM's downside gaps at 50.50 and 47.39.
The short term Wave C cycle low target for HUI/XAU/GDX/NEM based on gaps is 161 for the XAU (shortly after filling the downside gap at 161.75), 380-400 for HUI (I need to check the less straightforward HUI historical data to finetune the target), 42.50 for GDX (shortly after filling the downside gap at 42.87), and 47 for NEM (shortly after filling the downside gap at 47.39).
One can look at the daily charts for HUI/XAU/GDX/NEM (http://stockcharts.com/charts/gallery.html?%24xau) and see that the Wave C cycle low targets are reasonable, based on where the short term Wave A cycle lows occurred.
Since 11-7-07 the XAU has had only one session (1-14-08) where it made any upside progress (HUI had three), see http://stockcharts.com/charts/gallery.html?%24xau. The XAU obviously dramatically rolled over, probably put in a Wave 1 Cyclical Bull Market cycle high on 1-14-08 at 199.25, then put in a short term countertrend Wave B cycle high on 1-30-08, see the new annotated XAU candlestick chart dated 1-30-08, see chart one at http://www.joefrocks.com/GoldStockCharts.html.
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), so, SPX/NDX/RUT are in a countertrend Wave B minor intermediate term upcycle.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
The NEM Lead Indicator tended to get more bearish as the session progressed, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem.
When both the NEM and WMT Lead Indicators strongly agree that usually points to a strong move the next day or two for HUI/XAU/gold. The major averages and HUI/XAU/gold (most sectors really) will probably experience severe weakness tomorrow. I'll also be looking to day trade the major averages ultra short (short term Wave 2 downcycle) tomorrow via SDS, QID, or TWM.
GDX (Gold Miners ETF) filled it's downside gap at 48.19 early today, and, has more downside gaps at 44.33 and 42.87 that will probably get filled in the short term Wave C downcycle (cycle low target 42.50), possibly tomorrow or Wednesday given the very bearish NEM/WMT Lead Indicators today, see http://stockcharts.com/charts/gallery.html?gdx. Also, watch the XAU's downside gaps at 175.65 and 161.75, and, watch NEM's downside gaps at 50.50 and 47.39.
The short term Wave C cycle low target for HUI/XAU/GDX/NEM based on gaps is 161 for the XAU (shortly after filling the downside gap at 161.75), 380-400 for HUI (I need to check the less straightforward HUI historical data to finetune the target), 42.50 for GDX (shortly after filling the downside gap at 42.87), and 47 for NEM (shortly after filling the downside gap at 47.39).
One can look at the daily charts for HUI/XAU/GDX/NEM (http://stockcharts.com/charts/gallery.html?%24xau) and see that the Wave C cycle low targets are reasonable, based on where the short term Wave A cycle lows occurred.
Since 11-7-07 the XAU has had only one session (1-14-08) where it made any upside progress (HUI had three), see http://stockcharts.com/charts/gallery.html?%24xau. The XAU obviously dramatically rolled over, probably put in a Wave 1 Cyclical Bull Market cycle high on 1-14-08 at 199.25, then put in a short term countertrend Wave B cycle high on 1-30-08, see the new annotated XAU candlestick chart dated 1-30-08, see chart one at http://www.joefrocks.com/GoldStockCharts.html.
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), so, SPX/NDX/RUT are in a countertrend Wave B minor intermediate term upcycle.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
1:42 PM
3 Comments:
Why did you wait until TODAY to short this thing? Its been a great short since you pointed out the top near $54. The gap got filled and GDX will probably rebound to knock out your stop before it continues down.
That's a minor C wave up from here to complete B or 2, then GDX should start gapping down violently. Gold held 900 and that's not a good sign for what you are trying to do. Rebound, then short it.
Rebound should not make a new high. Its possible to exceed the high of Jan 30 slightly but that is unlikely. The brokers will probably sell into any rebound but not before some shorts kiss the trade goodbye.
If things work out this way don't abandon your view. You're going to be right about this. But what do you say to buying UUP when GDX violates $52 for one last time before the collapse? This might make up for getting stopped out.
That is my take. ~ Cycleman Pete
By
Anonymous, at 1:47 AM
Hi Cycleman Pete,
Yesterday was the fourth time I've shorted GDX recently. I did a good day trade on Friday as I discussed Friday.
NEM will probably fill it's downside gap at 50.50 early today, and, the XAU might fill 175.65 as well early today.
I don't see getting stopped out of my position today, since gold is down over -$15 right now, and, the NEM and WMT Lead Indicators were very bearish yesterday as I discussed yesterday.
At this point it's very very unlikely that the January 30 countertrend Wave B cycle high will be exceeded.
UUP might be interesting to trade at some point. Good luck. Joe
By
Joe Ferrazzano, at 5:38 AM
I spoke too quick Joe. Soon as I wrote that last night I checked the gold price and it was scraping lower support at $888. Serves me right for not looking before pulling the trigger on that comment. This morning weakness changes everything just as you are saying. I agree you probably won't be losing any money today. All you need is a protective stop and your profits are locked in here. Nice work.
I think I've blown it waiting to pull the trigger on that UUP though. The Euro is tanking this morning and $USD is doing some covering. Hate missing a good move but the who knows what the Treasury/FED will do with stocks in free fall this morning? If there is a PPT they better stop eating those donuts and get to work. The gold channel can tolerate a move back to $920. Will they do it today? Who knows ~ but those jokers are never around when you really need them to help you put on a trade. Man ~ I knew I should have bought that UUP yesterday. Be cool. ~ Cycleman Pete
By
Anonymous, at 6:59 AM
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