HUI/XAU/Gold Hit A 5% Follow Through Major Sell Signal
HUI/XAU/gold hit a 5% follow through major sell signal, see http://stockcharts.com/charts/gallery.html?%24xau. The multi month uptrend lines broke down and 5%+ follow through occurred to the downside. HUI/XAU/gold are in the midst of a major intermediate term downcycle, that's probably the start of an 18 monthish Wave 2 Cyclical Bear Market. HUI/XAU/gold will probably fall -50%+ in this bear market. Got cycles?
Gold and silver had two Cyclical Bear Markets in the previous Secular Bull Market that peaked in 1980, corresponding to Elliott Wave 2 and 4 downcycles, see http://tradethecycles.blogspot.com/2008/03/gold-and-silvers-two-cyclical-bear.html.
HUI/XAU very likely put in an intermediate term and a Wave 1 Cyclical Bull Market cycle high on 3-17 for HUI and on 3-14 for the XAU, see http://stockcharts.com/charts/gallery.html?%5Ehui. The XAU has a large bearish spike on 3-14's candle.
The -18.29% HUI Wave A type decline in a little under three sessions time so far (might not have bottomed yet), see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, is very likely an (probably extremely) important turning point/very strong sell signal. The more severe the weakness the stronger the sell signal tends to be, and, this weakness has been about as severe as it gets.
This severe weakness/action in recent days tells us something, just as the severe weakness/5% sell signal that occurred in May 2006 was a good one, since HUI/XAU/gold (http://stockcharts.com/charts/gallery.html?%24xau) were underwater versus the May 2006 cycle high for about 17 months.
A rollover long term upcycle was in effect from June 2006 (from October 2006 for the XAU, http://stockcharts.com/charts/gallery.html?%24xau) until the recent cycle highs, that was probably the Wave 1 Cyclical Bull Market (began in late 2000 for HUI/XAU and in April 2001 for gold, which was a slightly higher bullish double bottom with the 1999 cycle low) peaking in dramatic rollover mode versus the May 2006 cycle high. One can only discuss likely scenarios, not certainties.
The same excessive greed, blind bullishness, and criminal activity (very serious attempts to manipulate gold, silver, and some gold/silver stocks) seen in the 1999-2000 timeframe for growth stocks has been seen in recent months/years in the precious metals sector. Money (the allure of get rich quick) and ego (or lack thereof, I contend that someone who constantly needs to have his ego stroked has a very fragile ego) make many people do stupid things.
The gold nitwits and scam artists are no better (just as greedy and irresponsible) than the mortgage lenders making loans (adjustable rate mortgages) that they should have known would "blow up" in the near future and not be affordable. Gold will probably drop -40% to -50%+ in the next 18 months. Gold's primary Secular Bull Market uptrend line is at $500ish right now, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html.
The work of many gold writers reads like a scam. Gold will skyrocket (it already did obviously), gold won't go down this time (BS), the US is falling apart, etc etc. If it sounds too good to be true, it probably is. Gold and silver are great investments timed properly.
Gold and gold mining scams are commonplace, see http://tradethecycles.blogspot.com/2008/03/gold-and-gold-mining-scams-are.html.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Gold and silver had two Cyclical Bear Markets in the previous Secular Bull Market that peaked in 1980, corresponding to Elliott Wave 2 and 4 downcycles, see http://tradethecycles.blogspot.com/2008/03/gold-and-silvers-two-cyclical-bear.html.
HUI/XAU very likely put in an intermediate term and a Wave 1 Cyclical Bull Market cycle high on 3-17 for HUI and on 3-14 for the XAU, see http://stockcharts.com/charts/gallery.html?%5Ehui. The XAU has a large bearish spike on 3-14's candle.
The -18.29% HUI Wave A type decline in a little under three sessions time so far (might not have bottomed yet), see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, is very likely an (probably extremely) important turning point/very strong sell signal. The more severe the weakness the stronger the sell signal tends to be, and, this weakness has been about as severe as it gets.
This severe weakness/action in recent days tells us something, just as the severe weakness/5% sell signal that occurred in May 2006 was a good one, since HUI/XAU/gold (http://stockcharts.com/charts/gallery.html?%24xau) were underwater versus the May 2006 cycle high for about 17 months.
A rollover long term upcycle was in effect from June 2006 (from October 2006 for the XAU, http://stockcharts.com/charts/gallery.html?%24xau) until the recent cycle highs, that was probably the Wave 1 Cyclical Bull Market (began in late 2000 for HUI/XAU and in April 2001 for gold, which was a slightly higher bullish double bottom with the 1999 cycle low) peaking in dramatic rollover mode versus the May 2006 cycle high. One can only discuss likely scenarios, not certainties.
The same excessive greed, blind bullishness, and criminal activity (very serious attempts to manipulate gold, silver, and some gold/silver stocks) seen in the 1999-2000 timeframe for growth stocks has been seen in recent months/years in the precious metals sector. Money (the allure of get rich quick) and ego (or lack thereof, I contend that someone who constantly needs to have his ego stroked has a very fragile ego) make many people do stupid things.
The gold nitwits and scam artists are no better (just as greedy and irresponsible) than the mortgage lenders making loans (adjustable rate mortgages) that they should have known would "blow up" in the near future and not be affordable. Gold will probably drop -40% to -50%+ in the next 18 months. Gold's primary Secular Bull Market uptrend line is at $500ish right now, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html.
The work of many gold writers reads like a scam. Gold will skyrocket (it already did obviously), gold won't go down this time (BS), the US is falling apart, etc etc. If it sounds too good to be true, it probably is. Gold and silver are great investments timed properly.
Gold and gold mining scams are commonplace, see http://tradethecycles.blogspot.com/2008/03/gold-and-gold-mining-scams-are.html.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, XAU
posted by Joe Ferrazzano at
7:15 AM
1 Comments:
Reliable lead indicator Newmont Mining (NEM) is still plummeting (down nearly -6% right now) and keeps plumbing fresh new session cycle lows. It doesn't look like this huge Wave A type decline for HUI/XAU/gold has bottomed yet.
By
Joe Ferrazzano, at 9:48 AM
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