Monthly Digger - October 2006

[Charmin]

I suppose the eternal question this month will be concerning NEM. Will it react from it's old mid trading range and trendline and build cause to go higher? GG may be another concern at it's present position.

 

GG

http://www.StockSharePublishing.com/ChartL..._1159572264.png

 

 

NEM's trend

http://www.StockSharePublishing.com/ChartL..._1159572042.png

 

 

Anyway, the XAU could be stuck in a trading range for a long time above 119, but at least its closer to monthly and weekly support.

 

XAU monthly

http://www.StockSharePublishing.com/ChartL..._1159572351.png

 

XAU weekly

http://www.StockSharePublishing.com/ChartL..._1159572486.png

 

XAU Daily

http://www.StockSharePublishing.com/ChartL..._1159572657.png

[bearvest]

O.T.

 

My wife flew off to Scotland to be with our daughter and newborn grandson. And I'm left to mind the office and courtroom. Back to night-time and lunch-hour postings.

 

Of course, she spent the last 2 weeks shopping for sleepers, bibs, snowsuits, carriers, mobiles, and a whole host of sundry items.

 

She got into a dispute at the airport about the size of her Carry-on luggage. She snapped this photo just before the skycap loaded it onto the plane.

 

She's flying out of Canada, so things are a little less modern, eh?

[bearvest]

XAU:

 

I think 119 won't hold--but I'd be a buyer there, none the less.

 

I think linear support is between 110 and 116, as indicated on the P&F.

 

Channel or cyclical support could be lower as indicated on the candlestick chart if one ignores the tails on a monthly chart.

 

And remember that on XAU, the long term pattern could be a correction, not an impulse.

[Metamucil]

XAU:

 

I think 119 won't hold--but I'd be a buyer there, none the less.

 

I think linear support is between 110 and 116, as indicated on the P&F.

 

Channel or cyclical support could be lower as indicated on the candlestick chart if one ignores the tails on a monthly chart.

 

And remember that on XAU, the long term pattern could be a correction, not an impulse.

<{POST_SNAPBACK}>

 

 

NEM is resting on the 200wkEMA. Should it break below, this correction is going to last longer. This looks like capitulation on big volume.

It's actually a low risk trade, since the stop is pretty well defined and not far below at all.

 

 

[dharma]

if one looks @the xau charts posted by charmin above, the consolidation of the last 9 months is quite apparent. this is much like the consolidation from o4-may 05. whenever this correction ends,i expect the uptrend to resume dharma

[bearvest]

XAU, HUI, GDX all have similar patterns---rising wedges.

 

Wedges retrace at least 100% of the move.

 

So I'm thinking that we should retace to the June lows, as a minimum.

[bearvest]

NEM:

 

Right at an important support zone. It has retraced to the extent of prior wave 4.

 

But I think this is false support for the reasons set out in the annotations on the chart.

 

The entry or stop would be at $40. Former wave 1 resistance and A=B.

[bearvest]

Hecla:

 

Hadjin mentioned this stock a few days ago.

 

It probably has the most bullish chart of all 15 HUI components.

 

The buy zone, however, is about a dollar below current levels.

 

It could be a WXY as labelled (abc/abc/abc), or it could be a 4th wave triangle in progress (5 abc's), as the waves, so far, seem to subdivide into abc's, with tredlines compressing.

 

That peak in MACD in April says that once the decline is over, it will see new highs. New highs that are tops should produce negative MACD divergence.

[ThorAss]

All things considered ST I see things pretty flat but looking to make a move. Could get an up fakeout followed by that elusive last leg down. Silver stocks outperforming goldies in the very near term. Somebody worried about the so-called "Texas Hedge" by the people who brought us SLV.

I'm going to remain short term focused for the foreseeable so don't think I've been replaced by Stepford ThorAss if I say I'm short the PMS; it may or may not be actual so much as ThorHeretical. I've decided to concentrate my effort on a very small number of PMS stocks for now. I may broaden out if we get an upward trend going.

 

I basically don't want to make any long term forecasts cause as you know predicting is very difficult especially about the future. I'm just going to go with the flow. Unfortunately there isn't much flow at the moment as the PMS ended the week trending sideways, still in a modest uptrend but looking toppy. Could easily break either way and that first break could just as easily be a wrong 'un. Which is why I'm not overly committed just now. Monday could be a different story.

[dharma]

i like the bearishness in this sector. while the lows that were just made, may or may not hold. nothing has been violated to throw doubt into the bullishness of this sector. the june lows remain in tact. Since january this market has been in a high level consolidation. while this bounce has only retraced 23% and thus uninspring at this point, i still think the benefit of the doubt has to go to the bulls. dharma

[ThorAss]

i like the bearishness in this sector. while the lows that were just made, may or may not hold. nothing has been violated to throw doubt into the bullishness of this sector. the june lows remain in tact.? Since january this market has been in a high level consolidation.? while this bounce has only retraced 23% and thus uninspring at this point, i still think the benefit of the doubt has to go to the bulls.?  dharma

<{POST_SNAPBACK}>

 

I disagree, I think there are many good reasons to be bearish. Of course, this in itself is bullish. So if I'm bearish then that's bullish so ........

 

Anybody remember that stupid old Star Trek episode Mudd's Women with Harcourt Fenton Mudd and how they blow the robot's brain with with a logical contradiction.

 

Spock : He is a liar

Kirk: Everything this man says is a lie.

Mudd: Listen very carefully, I am lying.

 

Poof, the robot short-circuits. That's me by the way.

 

[bearvest]

XAU:

 

At the risk of flogging a dead horse, here's a weelky chart.

 

It starts with the May 2005 lows, as that was a major intermediate bottom.

 

Trend:

 

We topped in May. Merely connecting "5" and "X" shows the downtrend. The downtrend retraces a rally from the May 2005 lows. A Fib 61.8% retracement targets 113.94 precisely.

 

Pattern:

 

There are 2 very clear patterns forming.

 

The first is a possible head and shoulders top. "4" and "W" represent the necline. "3" and "X" represent the shoulders and "5" represents the head. The neckline id downward sloping and is currently around 115. If it fails to hold, the May 2005 lows would be re-visited and then some. If it holds, a sharp "pattern failure reversal rally" will follow.

 

The second pattern is the breadown out of the rising wedge. I've discussed this above. It targets a re-visit of the June lows.

 

Elliott:

 

After the impulse up, there is a clear 3 wave pattern down. There are only 4 options at that point:

 

1. The correction is complete. Hindsight now says otherwise.

2. The correction is a 3-3-5 flat. Hindsight also rules this out, as the rally back failed to approach the prior rally highs.

3. The correction is a 4th wave triangle. Possibly. If so, it should be a 3-3-3-3-3. With only 2 of 5 waves complete, the index would only go sideways. Considering the risks, I would not commit money now for 2 reasons. First, 4th waves are too tricky and whipsaw about--so it's better for your nerves to stand aside. Second, why commit to a setup for mere sideays action?

4. The correction is a 3-3-3, or a WXY pattern consisting of an ABC down, an abc up (usually smaller than the first ABC), and an ABC down. Of that last ABC, we still must likely complete B and must complete C.

 

I favour the 4th count.

 

Consolidation:

 

I can see no January/present consolidation. It was nothing but a terrible decline that shaved 30% off the value of the index. If the DOW fell from 11,700 to 8,200 there would be predictions of Armageddon.

 

The consolidation is occurring within the rising wedge breakdown ABC as part of the B countertrend move within that ABC.

[Charmin]

"The CRB Index is giving a clear technical indication of a recovery from a short term Dover Sole level. Look for the trend to continue. Crude oil, gold and grain prices are leading the recovery."

http://dvtechtalk.com/October/October2.htm

[bearvest]

"The CRB Index is giving a clear technical indication of a recovery from a short term Dover Sole level. Look for the trend to continue. Crude oil, gold and grain prices are leading the recovery."

http://dvtechtalk.com/October/October2.htm

<{POST_SNAPBACK}>

 

That chart is evidence of a recovery?

 

My surgery was on August 8th.

 

If my recovery from my surgery, plotted on a chart, looked like that, I'd be in a hospice right now.

[faramir]

Thank God our standards for recovery are higher in medicine than investing.

 

Looking forward to how the true recovery works itself out, in terms of Canadian majors, I am suspecting ABX leads, with KGC not far behind ? with GG lagging somewhat.