The 1987 Crash Took The XAU With It Due To Program Trading

The 1987 crash took the XAU with it due to index related program trading (which caused the severity and speed with which the crash occurred), see http://www.sharelynx.com/chartsfixed/XAUDJI87Crash.gif. NEM and FCX are in the S & P 500 (SPX) and both HUI/XAU I think, so, once SPX gets whacked HUI/XAU will get whacked at about the same time/very shortly thereafter.

Please save the alternate Trade the Cycles Blog at http://journals.aol.com/joefrocks/trade-the-cycles---market-timing/ to your favorite places. Also, please "Delicious it" and "Digg it." The links to do that are at the alternate AOL Blog. Thank you.

Gold/silver stocks and the metals aren't a safe haven from stock market turmoil as I've said before (only on a Secular 20 yearish basis do they clearly run counter to the major averages). Try T Bills and T Bonds.

Today the major averages are weak early and HUI/XAU are very weak early, see http://stockcharts.com/charts/gallery.html?%24hui. HUI/XAU tend to move in the same direction as the major averages on a short term basis due to index related program trading, which accounts for a massive 70% of the dollar volume on the NYSE.

HUI/XAU appear to have put in a very short term cycle low today. Their candles have large bullish inverse spikes today/right now at least, see http://stockcharts.com/charts/gallery.html?%24hui.

About 70% of the money involved in trading on the NYSE is program trading related. When the gold nitwits think they're going to influence the market by having a bullish agenda, it shows what dinosaur nitwits they are. It's also illegal to try to manipulate a market.

Not only are HUI/XAU NOT a safe haven from stock market turmoil, they AMPLIFY it most of the time, because, they're more volatile than SPX (S & P 500) and they are probably also more volatile than NDX (NASDAQ 100) and RUT (Russell 2000).

The gold nitwits are full of crap as usual. They don't even understand that program trading rules HUI/XAU/gold also (nearly all sectors), so they think, in their simple minds, that having a bullish agenda (screwing investors much of the time) will boost gold. Most gold writers are clueless dips when it comes to market timing/technical analysis. The ones I have a problem with are the nitwits who don't care about the lives they ruin (are purposely bullish but know better).

....... http://www.JoeFRocks.com/ .