Once again I'm looking at the PMPIX precious metals fund. If by chance gold retests back to 750 this month with the dollar doing a countertrend bounce then I'd be watching in the 49-47 area for a consolidation.

http://www.StockSharePublishing.com/ChartL..._1196474789.png

XAU:

I'm still standing aside waiting for the pattern to resolve itself.

I've given up looking at intra-day charts to seek the next mini-move.

As I trade the 13 week cycle, I intend to be governed by daily and weekly charts.

Right now, the daily for XAU is decidedly bearish.

After a 3 month impulse up, we have a small impulse down lasting a week and a half and a highly corrective pattern since. This is consistent with an abc correction under construction.

The corrective pattern is pennant-like. At 8 days, its duration is at its extreme to be a true pennant (in my opinion). Pennants are "flags" and flags "fly at half mast". Thus, they are precursors to abc corrections.

MACD histogram has been rising but the fast line is flat, consistent with a corrective pattern in trend.

Stochastics has broken below the 20 line and rallied above it. As you know, I prefer to buy the "double dip"--a decline below 20, a rise above, and a 2nd decline below 20.

I'm holding PMPIX in two accounts. The recent buy is holding up barely green and did well under today's pressure with only a slight loss (remember 1.5X its holdings)
Spot gold chart saying down after a double top, 60 day trend line violation and couple of moving indicators.

Have to wait until Monday's closing price if I want to get out.

HUI:

When I drew the XAU chart posted Friday night, I couldn't rule out a rally to 182 to complete the "b" wave.

I now think that there is little likelihood of that happening. I suspect that Monday will be a "downer".

I suspect that the "b" wave was in and that Monday will usher in wave 3 down in "c".

The MACD analysis is the same. There's no bearish divergence in the fast line, and the histogram indicated a slight increase in the bearish trend.

Of course, Stochastics has yet to do a double dip. It is much weaker than XAU and lacks the positive divergence of XAU.

Added is the Bollinger Band analysis. Before a bottom is in, we should see at least one or two "tags" of the lower BB's.

The upper BB should start to decline and, absent a rally, the lower BB will decline into the support/resistance zone.

The support/resistance zone is centered by a 50% retracement at 373.96.

Guess who? There's an elephant of danger here. But in Bull Market's these shorter term trend following systems seem to buy higher as often as not.Still odds favour some kind of smack-down from hereabouts.

[attachmentid=93215]

Wow, haven't seen Thorass in these parts in ages. I believe he has his own set of charts over at stockcharts too if I remember correctly.

Apparently everyone who started buying gold this evening have changed their mind all of a sudden.

i think that i am early, but i started a position in smxmf. dharma

NOVEMBER 19TH UPDATE - BOTTOMS IN - LET'S ROCK!

Welp . . . I sees here the usual . . . sun rises in the East . . . sets in the West . . .
those who get TA bearish on dips sell . . . remain TA bearish as we move off the lows . . .

and those that always accumulate the dips . . . profit.

. . . Forest for the Trees . . .

And yet another confirmation buy.

mfn . . .

Before I forget . . .

GRS: Congratulations Agent Smith for stepping up to the plate!

Nice 25% pop the past two days! Last week the company said that operations were improving.
Once the operation side turns the corner, GRS becomes a potential buy-out candidate.

Last Week's Comic Relief for the Gold Bulls follows:
__________________________________________

Short gold in '08, Goldman says

ANGELA BARNES

Globe and Mail Update

November 29, 2007 at 3:03 PM EST

Gold bugs have mostly had it all their own way this year, but that won't be the case next year, Goldman Sachs Group Inc. believes. In fact, the big brokerage firm recommends in its top 10 trades list for 2008 that investors short gold next year. . .


http://www.reportonbusiness.com/servlet/st...29.wgoldman1129


Hah Hah Hah Hee Hee Hee!!!

I know, there are a couple chere that take this GS stuff seriously . . . same ones, obviously, that believe in Paulson’s "Strong Dollar Policy.”

Here’s a site I visit to see if (GS) words match their actions.

http://www.tocom.or.jp/souba/gold/torikumi.html

Welp, Goobers, what do you know, as of today, GS is net short 11,487 contracts as compared to 54,000 plus back in May of ’06.

These guys have consistently reduced their net shorts by over 40,000 contracts during the past 18 months! Since this past July, GS reduced their net shorts from 27,000 to the current 11,000 as gold soared from $650 to $850!

Welcome back, Thor.

I can't agree with you more.

The continuing negativity in PPO and RSI do not warrant a trend change.

It is wiser to wait for bullish divergence on the trend or overbought indicators before entering.

GM:

I can't agree with your market call---and, frankly, I don't understand what the oscillators are measuring.

But MFN looks like a real counter-trend play.

Hecla:

This is another stock with a stong 3 wave pattern.

Unlike MFN, it looks ready to enter wave 4.

Note how it gapped right through former resistance. The gap runs from 9.91 to 10.04.

A 50% retracement of wave 3 would take it back to red wave iv of 3. A 61.8% retacement of 3 would fill the gap without overlapping wave 1.

I'm keeping an eye on this one.

Elliott Trendlines:

Gold:

An impulse up should rise in a channel bounded by lines connecting waves 1 and 3 and 2 and 4.

Looks too pat to me.

I'm looking for 760.

Am I catching a wiff of silver excitement from the MFN talk?

PAAS
SSRI
CDE
HL
MFN
CEF
SLW

Here's what I see in MFN.

Notable volume at the swing high of 14.11. In that case it will come back to that high at some point.

http://www.StockSharePublishing.com/ChartL..._1196740361.png

GOLD:

Targets for wave 4 (cont'd)

link:

http://www.elliott-wave-theory.com/elliott3.html#channeling


4. Channeling :: top ::

Channeling is an important tool not only to determine which sub waves belong together, but also to project targets for the next wave up.

Channels are parallel lines, which more or less contain the complete price movement of a wave.

Waves of the same degree can be recognized by drawing channels. Especially this is the case for Impulse (5) wave structures, Zigzags and Triangles. If these waves do not equate properly, you have a strong indication to search for an alternative count.

Next you will learn how to draw channels and how to project targets using channels.



Targets for wave 4

As soon as wave 3 is finished you can draw a channel by connecting the end of wave 1 and wave 3 with a trend line and drawing a parallel line from the end of wave 2. In this way you can project a target for wave 4. Keep in mind that normally the base line from wave 2 will be broken slightly by the price action of wave 4. The base line serves as a minimum target for wave 4. If wave 4 doesn’t come near the base line at all, this is a sign of a very strong trend. You are probably still in wave 3 or you should get ready for a blow off in wave 5.

Seinfeld:

What's this about silver?

Overlapped.

Looks like a nested set of 1/2's. Wave 3 of 3 could be in the offing.

But not yet.

since the initial down wave, the market is making 3 wave moves. i am starting to think it is forming a triangle, in which case the low of 773 may not be violated. if this is the case we could finish this correction late this week. in either case it doesnt really matter to me, as i am an investor in this sector and the next significant move is up. the sentiment has gotten very bearish, to the point where gs has given gold the axe in 08. you gotta love their timing.
if it turns out that the zig zag scenerio is the correct analysis than i am looking for 764. by the 11th we should start the next up move. time is running out here.
dharma

I am feeling more bullish with Gold decoupling from crude this week (so far).

I now figure 12 decembre may be the bottom with a lot of sideways see sawing since my monthly slow stochs are down

If one was a bear on gold stocks, then GDX going down to 40 would be sweet to see. It would hit the middle of a long trading range providing support and most likely an area where the shorts would begin to cover.

I speak in scenarios, loosing opinions every day.

Spot gold showing good support here it's the only thing keeping the miners from total collapse. Need the regular markets to drop and watch if any money gets parked in gold. That will happen if traders are scared of what's on the horizon.

By the way I'm still holding PMPIX.

dharma:

I doubt that a triangle can form in wave 2.

Here's a rather funky analysis for Silver.

The impulse waves, are opening and ending diagonals

AU:

Doc spotted this one in the WSE. He didn't recommend it as a long, but merely noted it.

It looks like a good scalp. A small bear flag in a 4th wave position filling a gap.

Keep this in mind with HL and MFN. The stocks that are showing maximum strength here will be the darlings once this correction ends. They'll be the leaders.

PnF buy signal. Looking ok.

There are still bargains....a CS special
That is a portentous volume pattern. Sometimes it really works.

AEM completing a cup-handle?

....and a HUI sled dog is completing a correction...always have stops:

XAU:

I'm not discounting a small "c" wave rally here. It all depends on how we break out of the triangle. And as triangles are continuation patterns, I suspect the breakout will be southbound.

Thus, this chart is my alternate count. I have little faith in it.

The rally in the metals on Tuesday was discounted by the miners as merely a technical commodity short squeeze. Very disappointing.

The fact that we impulsed down is the major feature of the chart. Impulses are always followed by further impulses after a correction. They always "travel with a friend".

They are best detected by a "double dip" in daily stochastics.

Silver stocks:

Charmin had noted the resistance to decline in many silver stocks.

Add Silvercorp ( SVMFF.PK ) to your watch lists.

It has an incredibly bullish pattern.

I think Jim Sinclair made a very good point a week or two ago when he spoke about breaking the thermometers. First, they stop publishing M3. Then they continue lying about inflation with ridiculously low CPIs and methods for calculating CPI that exclude anything that goes up in price. Then all countries decide to competitively debase their currencies, so it no longer looks like the dollar is falling against other currencies.

How hot is it when all the thermometers have been broken? Might feel pretty hot but now they can lie longer about it being really cool. For a while.

Orwell warned us. Makes things tough for us bugs. But their day is coming. Patience. Then onward to glory.

my last post was in june when I discussed the concept of broken trendlines with bearvest. I basically said "ignore in the PM market - they are made to be broken" and he said "beware nonetheless". (see arrows in chart).

Turns out both of us were right in hindsight.

I'm posting again because I don't like most of his latest posts. I shall call it "analysis-overkill", which is part of my basic disagreement with elliott: too many labels, no room for human action. Human action understood as governed by free will and not predetermined by fractal sequence.

Example: calling a triangle "continuation" is plain wrong in my view. Better description: "pause". people are waiting, turn can go either way. no predetermination.

Example: I am a big fan of a-b-c corrections, because one can explain the action behind it: sell, recovery and then lower low by taking out the stops. no need to talk about predetermination, because sometimes there not a lower low.

whatever, this is just my opinion, please do not see this as a personal attack, bearvest.

that said: I'm bullish and overweight the pm's.

notes on the margin: What keeps the angst at bay whenever the pm's underperform the general market: diversify into energy and base-metals. scared of economic downturn? diversify into agro-chemicals.

regards

natural gas stock. note the similarity of pattern with the strongest PM stocks.

also the short window of opportunity where stop is close by.

when would you buy this stock?

philosophical question, I suppose. But IMO the past weeks was the pullback following breakout, and at the slighest whiff of upside resolution - buy.

regards

looks to me like the bottom could have come early. finishing my buying! this is close enough. i am satisfied. dharma

I was going to say earlier today that now that the media traders had everyone bearish on the gold stocks it was probably time for an Dover Sole bounce.

I was looking at some noteable volume for ASA on 11/27 with very small range near trading range lows. Pigmen might have been absorbing any selling here.

http://www.StockSharePublishing.com/ChartL..._1196973189.png

I've been listening to a pattern recognition guy on currencies. He's been saying the Yen is ready to move along with the Euro going down.

Dollar might get taken down a tad with that I'd suspect.

Bearvest,

Appreciate your posts. You put a lot of hard work into them.

But, I must respond by saying that you've also expressed that you haven't agreed with my posts in the past. And yet, they've usually been accurate and timely. (And when my projections have been correct, it appears you've given them no recognition.)

BV, we'll just have to agree to disagree. But so far, Aug 16th continues to be a significant low. And the Nov 19th low is still in place. Both called by me (and a few other posters here) within a day. I could go on, the early March low, Oct '06 low (called it within a day), May '05 low and so on. IF you have disagreed with these calls, then you have been wrong so far.

And I'll also add my strong belief that TA without guidance from the market sector fundamentals can leave one unable to "see the forest for the trees."

In a long-term bull market sector, you want to buy the significant dips. It's not easy "backing up the truck" when everyone else is TA bearish and selling. But when the "fundamentals" are gold bullish (i.e., the many things discussed here by posters in the past), then the companies that produce the stuff will outperform over the longer-term.

Here's another chart I post occasionally relevant to gold stocks as they continue their relationship to the SPX and Volatility concerns.

GOLD STOCKS RELEVANT CHART

Here's an example of a stock that was a prime "back up the truck" candidate this past summer.
I went shopping on this one, twice, taking advantage of the initial Jump Out the Window Panic Sale and then the August 16th 2 for 1 Blow Out Extravaganza Sale!. There were TA Picketers outside the store carrying signs and screaming, "Wouldn't Be Prudent!

I bought this "no brainer" with the expectation there's an extremely high probability that within 6 months, there will be an announcement that the mine in Turkey comes back on stream.

GM,

Your work is outstanding and appreciated.

Today was simple. HUI 400 was major support...and it held very well. XAU 172 was reclaimed. It is very conceivable that this abc correction is ending.

Silver plays doing particularly well. I'm quite long this one....about 17 cents away from liftoff, with no overhead resistance.

Meta,

Goes without saying, we appreciate your work as well. You are a big step ahead of the rest of us with your ability to point out the chart setups likely to make the big bucks.

Thanks for your continued heads ups on the pm stock sector!!!

gooberout

Goobers, I've got a few minutes to ramble on concerning the overall outlook for the gold stocks. IMO, the technical picture is VERY strong. I’ll skip the charts for now and just post a few thoughts, but you are certainly advised to check out what I say for yourselves.

As posted earlier, we’ve most likely scene yet another minor bottom on Nov 19th, and are in the process of another recovery rally to former highs. The various relevant gold stock charts show the 9-Day RSI remains in the plus 40 range and has showed substantially reduced downside momentum. For the HUI, it’s breaking through the 415 level that is key, while for the XAU, 175. The various short-term / medium-term oscillators/ratios patterns I follow have all registered over-sold readings at historic “Buy-Me-Now” levels. Taking a quick look at the RYDEX Fund Assets, we see a very low “Buy-Me-Now” level of $175 mm, confirming investor apathy and that plenty of money is sitting on the sidelines. And anyone that follows this stuff, (apparently just a couple of us), knows that every time the combined funds assets are this low, the Gold stocks take off! The avowed PM bears on this thread are either clueless, “Forrest For The Trees,” or are assuming “This Time Is Different” which is a foolish strategy to follow.

We’ve also witnessed the bullish relative strength of the gold stocks, HUI, XAU, GDX, holding above their former lows as Gold bullion approached its Nov 18th low. Taking a look at the Dec Hourly Gold chart, we see a classic ABC correction from the early November high which is now in the process of a new leg up.

And finally, as for the “Paulson Strong Dollar” advocates, 3rd Qtr home prices fell more than in any other quarter since 1982. Think and relate about the effects this is having on the mortgage holders; Goldman Sachs, Merrill Lynch, Morgan Stanley, Lehman Brothers, etc., all downgraded. Does anyone with a brain think the dollar will experience a significant rally in light of yet another rate cut with more to follow? This requires continued massive amounts of new dollars to flood the markets. Check out a recent chart of M3b for confirmation.
Thanks.

gooberout

AU:

Thank you for your civil and courteous criticism. It never goes unheard---possibly merely unheeded.

I believe in trendlines for 2 reasons:

First, they are a proxy for cyclic action--albeit a "poor man's approach" to cycles.

Second, they tend to highlight, pictorally, human sentiment as it waxes and wanes.
This can be detected, in large measure, by the slope and direction of the line.

Trendlines help to identify patterns in human behavior which, I believe, can be plotted graphically. These patterns of human behaviour, I also believe, are identifiable as recurring stages of mass fear and greed.

Thus, I look for patterns. I use Elliott to help me to identify patterns.

Finally, I use MACD to assist me in confirming my longer term count and Stochastics to assist in my short term count.

Alexander Elder, in his treatise "Trading for a Living" referred to traders who constantly changed strategies as the market's certain losers.

My indicators tell me there is too much risk to be long or short.

The black upper trendline has not been broken on HUI. It is downtrending. Fast and Slow on MACD confirm this.

The short term red trendlines have diminished slopes. They are downtrending in a possible ending diagonal. My count and MACD do not yet confirm this. MACD histogram calls for a rally.

Finally, as I have said repeatedly, the best indicator of a completed abc correction is a "double dip" in daily Stochastics.

Finally, I'd like you and others to look at the August thread, if you can locate it.

I posted my August 16th trades in real time.

so, the conversations are constructive. and i read each and every post carefully. thank you all.
aristotle had a law that stated "a trend in motion will continue until it stops" this is the simple truth of a bull/bear market. and until i see signs that this trend has run its course, i will use weakness to accumulate shares. this market will end w/a parabolic blow off. w/gold posting limit up days. until then its just the ebb and flow of a normal market. the nature of this beast is to get beaten w/a stick. one has to be prepared for that. i havent changed my mo and will continue to ride the waves. i really dont know if this correction is over but i topped up my positions over the last few days and i am done for now. its the hardest thing to ride the trend. however, i have proven it to myself over years of watching markets that it will provide the biggest returns. this is far and away my favorite board. dharma

I'm playing a spx rally to potentially 1550 as a Christmas rally. Right here I think we may be overbought temporarily for the Dow stocks. I went long the spx on 11/27. As the market continues higher, I'd be looking to use the 1490 area as a base of support . I'd be selling into the rally and looking for it to fail up in the 1550 area.

If this is the pigmen scenario, then I'd be happy to have gold stocks for the ride up here and GDX doing a retest of the old high near 54.

So we are playing with a story in the market for rate cuts and mortgage bailout hoopla. Did anyone say anything about earnings?

All I know is you guys are so much smarter than me.

If the spx fails in the 1550 area. If the XLF goes to the 34 area and fails along with the semi's. If the GDX goes to retest the highs in the 54 area and even if gold retests the 840 area highs.

At that point I'd have to concur with Bearvest, that there is potential risk that the whole market became overbought.