The New Annotated XAU Chart Shows Why Wave A Down Of The GDX/HUI/XAU Wave 2 Cyclical Bear Market Since 3-17-08 Probably Bottomed On Friday 9-5-08
The new annotated XAU chart, with the detailed cycles and Elliott Wave count, see chart two at http://www.joefrocks.com/GoldStockCharts.html, shows why Wave A down of the GDX/HUI/XAU Wave 2 Cyclical Bear Market since 3-17-08 (3-14-08 for the XAU) probably bottomed yesterday, on Friday 9-5-08.
Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps are the basis/crux of "Trade the Cycles."
Without an understanding of what the cycles are, effectively using the Elliott Wave patterns is basically impossible. Most/nearly all gold bugs will probably assume that the Wave A Major Intermediate Term cycle low that probably occurred on 9-5-08 is a major correction within a Secular Bull Market, not Wave A down of a Wave 2 Cyclical Bear Market.
Very few gold bugs understand the concept of a Cyclical Bear Market occurring in a Secular Bull Market. Both gold and silver had two Cyclical Bear Markets in the prior Secular Bull Market that peaked in 1980, corresponding to Elliott Wave 2 and 4 downcycles (corrections from a generational point of view). Silver had one that lasted 42 months (3.5 years) I believe.
Here's a chart for gold's Wave 4 Cyclical Bear Market from December 1974 until August 1976, see
http://www.chartsrus.com/chart.php?image=http://www.sharelynx.com/chartsfixed/GC1976btm.gif, in which gold fell about -45%. A similar decline would see gold fall to about $569 in the current Wave 2 Cyclical Bear Market since 3-17-08. I have a target of $500 to $550.
At least waiting for a strong short term Wave 1 upcycle/buy signal, then looking to go long shortly after a short term Wave 2 downcycle bottoms makes sense.
One obviously wants to wait for a strong/major 5% follow through buy signal (Wave 1 monthly upcycle, or, maybe a 5% major buy signal will occur after a Wave 3 short term upcycle, or, maybe after a very strong short term Wave 1 upcycle), then look to go long after a Wave 2 monthly downcycle or maybe after a short term Wave 4 downcycle (of a monthly upcycle), or, even after short term Wave 2 downcycle, if a very strong short term Wave 1 upcycle occurred.
.......http://www.JoeFRocks.com/
NEM XAU HUI
Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps are the basis/crux of "Trade the Cycles."
Without an understanding of what the cycles are, effectively using the Elliott Wave patterns is basically impossible. Most/nearly all gold bugs will probably assume that the Wave A Major Intermediate Term cycle low that probably occurred on 9-5-08 is a major correction within a Secular Bull Market, not Wave A down of a Wave 2 Cyclical Bear Market.
Very few gold bugs understand the concept of a Cyclical Bear Market occurring in a Secular Bull Market. Both gold and silver had two Cyclical Bear Markets in the prior Secular Bull Market that peaked in 1980, corresponding to Elliott Wave 2 and 4 downcycles (corrections from a generational point of view). Silver had one that lasted 42 months (3.5 years) I believe.
Here's a chart for gold's Wave 4 Cyclical Bear Market from December 1974 until August 1976, see
http://www.chartsrus.com/chart.php?image=http://www.sharelynx.com/chartsfixed/GC1976btm.gif, in which gold fell about -45%. A similar decline would see gold fall to about $569 in the current Wave 2 Cyclical Bear Market since 3-17-08. I have a target of $500 to $550.
At least waiting for a strong short term Wave 1 upcycle/buy signal, then looking to go long shortly after a short term Wave 2 downcycle bottoms makes sense.
One obviously wants to wait for a strong/major 5% follow through buy signal (Wave 1 monthly upcycle, or, maybe a 5% major buy signal will occur after a Wave 3 short term upcycle, or, maybe after a very strong short term Wave 1 upcycle), then look to go long after a Wave 2 monthly downcycle or maybe after a short term Wave 4 downcycle (of a monthly upcycle), or, even after short term Wave 2 downcycle, if a very strong short term Wave 1 upcycle occurred.
.......http://www.JoeFRocks.com/
NEM XAU HUI
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, XAU
posted by Joe Ferrazzano at
12:51 AM
2 Comments:
How long do you think it will take to complte wave B? Also, does it not look like NEM is in a countertrend wave B up, where its c wave peaked towards the end? Thanks
By
Sean, at 2:12 AM
A countertrend Wave B Major Intermediate Term Upcycle will probably peak early next year.
HUI/XAU should approach the mid March 2008 Wave 1 Cyclical Bull Market cycle high, and, peak about 3% to 5% below the bull market cycle high. I'll let you do the math.
NEM probably put in a Wave 2 major intermediate term cycle low at 39 on Friday 9-5-08, so, NEM is probably in a Wave 3 major intermediate term upcycle now.
By
Joe Ferrazzano, at 1:16 PM
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