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

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?

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.

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.

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

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.

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.

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.

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.

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

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.

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.

"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

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.

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.

Do you think it was the lack of alcohol intake that helped?

HUI and XAU:

The blue lines represent the 61.8% retracement level of the rally off the May 2005 lows with some background on prior major resistance (now support?) levels.

If I didn't know any better, it looks like the dollar is ready to test S/T support.

Good morning all ...

Very ugly very quickly in da miners... BV, you're calling it.

ok, this is the last low i have been calling for. still think 542 holds. i am looking at the 5th or the 11 as possible dates for a low. from here the spigots of monetary printing will resume. dharma

You might be right but this is beginning to look a hell of a lot like 2004 to me. Open ABC down is still open in Gold at 490 and there is a cluster of support 510-520. Worst case appears to be 460. Miners look terrible. Downside breakaway gaps to the downside on extreme volume. Silver looks vulnerable to 7.50-8.50.

Hey, when PMPIX drops 10% in one day you know it's ugly

one day left for the fire sale.

One day left? Mohendra pay you a visit or something? Care to nail down a specific time and price target Charmin?

tfh, yes what you state is what most are looking for. divergences are set up on hourly charts. on daily charts @ this point divergences are set up on many issues and xau/hui/gold.
since january this set up in the indexes and gold looks like a high level consolidation. and until something changes that, thats the pattern that i am following. giving the bull the benefit of the doubt. dharma

I don't think what I stated is what most are looking for dharma. Most think we bottom 250-260 HUI. I think there is a good chance we go quite a bit lower. While I think your 540is Gold target is a bit optimistic I will be buying physical there and maybe a bit higher say 550.

Charmin:

Can you give me a hand?

Here's HUI's P&F chart.

I understand how the vertical target of $204 is arrived at. It's akin to the Elliott formula that C=A.

The horizontal count is far less bearish.

If I'm right, and this is where I need help, the horizontal count is 272---a far more plausible target.

My math says take the width of the chart where the column of 0's begins (3). Multiply arbitrarily by 3. Multiply by the box size (4). The result is 36.

Subtract this from the top of the column of X's (308)

Is 272 the horizontal target you'd arrive at? It's natural support right on the chart.

GOLD:

Tested its lower trendline.

If the triangle pattern is to hold, it can't fall further.

A violation of the triangle would herald much lower prices.

NEM:

And the answer to this month's question is:

Yup, an angel paid me a visit and whispered in my ear

"light at end of tunnel - you must decipher if it coming or going"

The train needs to stop right here anyway on XAU
http://www.StockSharePublishing.com/ChartL..._1159972603.png

here's sinclairs take on the weakness. http://www.jsmineset.com/ARhome.asp?VAfg=1...001&T_ARID=4071
interesting! dharma

Makes a hell of a lot of sense but we could still be scratching our heads wondering how the hell Gold traded down to 500.

No offense to Mr. Sinclair, but again he indicates no timeframe other than to mention the mid term elections. $1600 ? OK, but many many financial crises before that price point could cause readers to ride their positions down much further and longer than he cares to express.

Looks as if dharma called another bottom area. Well done.

not yet, i am still waiting. this is a drubbing, but the nature of the beast. waiting to buy physical and some more shares. will look @the charts tonight as hopefully the yankees drub the tigers. dharma
ps. still thinking 542 holds. the shares took out their june lows on xau only. so that is a divergence.

With the reversal this afternoon I believe we have seen the final lows of this correction. HUI has a higher low and XAU a lower one, which is wierd, but they are both basically a double bottom.

We should now be ready to resume the bull with 3 of 3, to the HUI 600-640 area, Gold 850.

I thought HUI 290-300 was the bottom too I'm too optimistic

Say hello to your angel. Hammers all over the place.

With you.

that just may have been it!
ander its a divergence xau took out june low, hui did not. dharma

Yes, I agree.

Also, MACD and RSI are showing higher lows than in the mid september bottom, another divergence.


Also, we MUST bottom here and rise, since a further decline breaks the neckling of the potential H&S top, which would project another 30% decline. It would take years to recover from that. If you believe the bull is not dead, you must believe this is the bottom. There is no more room for a decline without killing the bull (barring a false breakdown/bear trap).

That was from JS and I'm not sure what that means.
I wouldn't mind a drop in POG of 100 bucks as long as it was intraday and closed above the $540 area and stayed there. That would certainly clear some stops.

Bear, I'd be the last one to figure using 3 box reversals, which is why I just use 1 box reversals and count the boxes. It helps some times to break price down a bit further to see the swings in greater detail. One standard setup is to use a 10 minute PnF chart (stockcharts of course) of the SPX with 1 box and 1 reversal, while a bigger chart using a 5 box 1 reversal will provide bigger cause targets. In this case SPX has potential to 1355.

From what I gather your taking a count from 308 which is like a stepping stone count as price moved down away from the top of a bigger count which started up at the horizontal area of 350. So, your 272 figure has arrived and you accurately figured the potential target for the cause you have.

Now, can you do the same up near the 350 area and with a much bigger count also arrive at 272 or does it even matter?

The last time I looked at a PnF chart for the XAU I had a 36 count cause from the 150 area. There may be more cause left, but with it now at monthly support I think we may see a reaction.

Sept. 22 PnF

On the HUI chart using a 4 box 1 reversal in my own way would count 23 for cause and have two areas for a conservative count which arrives between 280 and 264

It may not be right, but it's the best I know

well fwiw, i bought coins today. after looking @the charts it looks like the bottom could have been put in. xau lower lows than june, hui not. there are daily divergences in xau/hui/gold/ silver. dharma

Thanks, Charmin.

I was tempted, around noon on Wednesday, to hit the "buy button" to deploy some of the cash I had sitting in my account.

I didn't, preferring to watch the metal price.

Gold has broken its rising downtrend line on the candlestick chart. It broke linear support on the P&F.

Wednesday's action confines it to a downtrending channel bounded by the May highs and a downtrending lower channel commencing at the July lows.

So far, all we've done is bounced off that red line.

Until the metal can recover into the triangle, the larger chart pattern is a triangle breakdown. It portends much lower metal prices.

Silver:

The chart looks more constructive than Gold.

Leavitt Brother's free anaysis on the metals:

http://www.leavittbrothers.com//chartspeak...peak_100406.pdf

Whew ! Is it REALLY safe to come out from hiding yet ?

NIce work guys ..

here is the latest from leavitt bros. http://www.leavittbrothers.com//chartspeak...peak_100406.pdf
finished my buying this am. i think that was the end of wave 2. dharma

HMY performing very well...

I notice it is Freeport McMoran and Agnico Eagle doing the heavy lifting today. FM is more of a base metals play, non?