.............Higher Highs As The Cycle Rolls Over

As strong as the monthly and short term upcycles have been an upside surprise, exceeding Friday's highs, isn't too surprising. I see this early strength largely as dumb money getting excited and chasing this rally. Also, Friday's very sharp plunge was a very respectable volatility spike that portended some strength today. But last week's short term and monthly cycle sell signals indicate that risk is very high right now from a monthly and short term cycle perspective. The indicators and COT data largely point to weakness, except right now NEM is outperforming the XAU by about +0.40% which portends strength for some of today's session and the COT data did point to some strength.

The XAU Put/Call Ratio continues to rise dramatically, which is another major warning sign, rising to 0.89875 today from 0.83370 on Friday, which is an unusually large (> 6%) rise in fear that portends weakness/a downtrend for part of today's session.

XAU Implied Volatility fell -1.14% to 29.835 on Friday 12-9 from 30.180 on 12-8 versus a -1.00% decline in the XAU on 12-9, which is a sharp (2-2.99%) 2.14% rise in complacency (-1.14% + -1.00% = -2.14%. The XAU wall of worry shrank by -2.14%, therefore complacency rose by +2.14%) that portends weakness/a downtrend during part of Monday 12-12's session.

Right now it's very risky trading either long or short, because the monthly and short term upcycles have flattened out/rolled over after an incredible spike move that saw NEM rise +9.18% in a little over one session from early last Tuesday until early Wednesday. If you're looking to make a trade today day trading short or trading puts probably makes the most sense if you're able to do that in your account. NEM is showing surprising strength, partly due to it's major breakout last week and dumb money getting excited. Ciao.