Early Weakness Followed By Oversold Bounce

More Wave A down appears likely before the major upcycle (since 5-16-05) Wave 4's Wave B up begins, because NEM is still leading to the downside early today. The major upcycle's (since 5-16-05) Wave 4 should do an Elliot Wave A, B, C correction is what I'm talking about. When the NEM Lead Indicator becomes > +0.50% vs the XAU then Wave B up will probably be imminent. The XAU has downside gaps at 137.64 from 1-19 and at 135.39 from 1-6 that may get filled in Wave A. The major upcycle's (since 5-16-05) Elliot Wave 4 minor int term downcycle began on 1-31-06 for HUI/NEM/XAU and a 20-30% 1-2 month correction is probably underway. A Wave 3 2% sell signal occurred yesterday. See http://www.joefrocks.com/GoldStockCharts.html for the latest HUI/NEM/XAUcharts showing the Elliot Wave count. NEM's 1 year chart dated 2-3-06 has the clearest count. The XAU Put/Call Ratio rose to 1.47331 today from 1.41244 on Tuesday which portends some strength today. XAU Implied Volatility rose to 36.740 yesterday from 35.385 on Monday 2-6 versus a -7.08% decline in the XAU on 2-7, which is a very sharp (3-6%) rise in complacency that portends weakness/a downtrend during part of today's session. The Fed lent a modest $3.5 Billion 1 day Repo to index fund traders so far today after a $5 Billion 1 day Repo yesterday and a respectable $7 Billion 1 day Repo on Monday, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm , so the Fed isn't spiking the index fund trader punch so far this week. HUI, NEM, and the XAU probably entered their major upcycle's (since 5-16-05) Elliot Wave 4 correction on 1-31-06 and are likely to decline -20-30% in the next 4-10 weeks, similar to what occurred in 2003's Wave 4 when HUI fell -26.59% and the XAU fell -25.11% in 7 weeks. NEM has downside gaps to fill at 53.40 from 1-3, at 51.59 from 12-28, at 50.45 from 12-22, and at 48.75 from 12-7, and, the XAU has downside gaps at 137.64 from 1-19, at 135.39 from 1-6, at 128.03 from 1-3, at 124.36 from 12-28, and at 122.49 from 12-22. Often cycle highs or lows will occur shortly after gaps get filled, so one needs to track gaps closely. If gaps don't get filled that can be a bearish or bullish sign, as occurred recently when NEM twice closely approached (daily cycle lows at 48.88 and 48.89) but didn't fill it's downside gap at 48.75, then the recent explosive rally occurred. See http://www.joefrocks.com/TradetheCycles.html for the weekly update. Scroll down a few pages past the major averages work to see the gold/silver stock work. See http://www.joefrocks.com/GoldStockCharts.html for all the charts. My home page is http://www.JoeFRocks.com/ I hope you'll take the time to e mail your friends re this Blog and my site/work/system. This will help to keep my work free, because the more visitors I get the more advertising $ I make. I have a long way to go but have made significant progress in recent months. Thank you.