AEM , Agnico Eagle Mines

aem 2011big aem 2011

It is not entirely clear if this is a clean five waves up, or if we have a  B-wave into the top, either way this is another one of the relatively large and well known gold stocks that is not going anywhere in a hurry (Goldcorp, Barrick and Kinross are some of the others). This in contrast to the “juniors” as personified in the ZJG, the BMO ETF for the junior gold companies. Here is the chart;

ZJG

The juniors have doubled over the last year, and the big boys went nowhere. There is no better signal that something is amiss than when junk drifts to the top! As an aside, I started my career buying this stock for a client at around $4. back in 1991. We sold it at around $9. In retrospect we should have held on.

NYA , NYSE index

nya NYA apr 2011

Both these charts are of the NYSE index, NYA. The one on the left is a few months old and the one on the right is up to date. There does not seem to be that much difference, unless of course you are waiting for something  to stop this best 9 quarter advance since W2. We did get a little dip but are right back at it but with each passing day the picture gets clearer and clearer. A little further and we will have a very clear A-B-C counter-trend rally from the lows of March 2009. This implies that , at the very least, we should go down for a while in a measurable way, perhaps even to new lows.

Reading the latest forecast from the Prechter fellows in Gainsville , I was reminded of the existence of the Dow Jones Utility Average index. There is nothing very special about this index except that, so far at least, it has followed the EW prescribed path much better than most others. It has retraced 50%, right into the 50/62% range that one would expect when working with a clean board. This is actually quite amazing as the utilities are normally viewed as a defensive segment of the market so, with the financial world collapsing one would expect the DJUA to outperform, not underperform. Here is the chart;

djua