................NEM Tested Tuesday's Cycle High

Which is probably the major upcycle's (since 5-16-05) Elliot Wave 4 beginning relatively flat, but the Fed spiked the punch today with $13.5 Billion in Repos ($6 Billion was a 14 day Repo though), so a higher high is a definite possibility. The strength in Wave 3 was largely due to strong cycles (long term upcycle, major upcycle, Wave 3 minor int term upcycle) which are the primary market timing consideration, but, because the cycles were very strong, gold/silver stocks reacted very well to the Fed's punch spiking. The S & P 500 (SPX) weakness early on today should lead to gold/silver stock weakness soon due to index funds selling their gold/silver stocks. SPX drives index fund trading. SPX is probably the reason why NEM is such a reliable lead indicator, because it's a component of SPX. In Elliot Wave 4 20-30% declines in HUI, NEM, and the XAU are likely, based on what happened in the previous long term upcycle's parabolic major upcycle in 2003, in which the XAU fell -25.11% and HUI fell -26.59% from late January 2003 to March 13, 2003, a 7 week decline. Since the long term cycles are getting larger and longer this Wave 4 correction could and probably will exceed the previous one in time and depth. My enter key isn't working in Blogger for some weird reason, sorry about that. That's why I'm not able to make spaces between paragraphs. See the latest 1 year charts dated 1-27-06 that show the likely Elliot Wave points for the major upcycle since 5-16-05, and, very important, see NEM's 1 year chart dated 1-20-06 that shows how I arrived at 9-30-05 being the Wave 1 cycle high, which is how I arrived at the Elliot Wave Points for the major upcycle since 5-16-05, and indicates that Tuesday's cycle highs probably aren't long term cycle highs, they're important Elliot Wave 3 cycle highs, but not the major/final Elliot Wave 5 cycle highs for the major upcycle since 5-16-05 that will also be long term cycle highs for the long term upcycle since 5-10-04. See http://www.joefrocks.com/GoldStockCharts.html for all the charts. My home page is http://www.JoeFRocks.com/ and the Trade the Cycles web page is 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. XAU Implied Volatility portends some weakness today because it fell to 35.64 yesterday from 36.13 on 1-31 vs the XAU falling -0.19% yesterday, which is a significant (0.50-1.99%) rise in complacency that portends some weakness today. The XAU Put/Call rose to 1.29351 today from 1.23383 yesterday which portends some strength today. The NEM Lead Indicator at +0.43% yesterday, at -1.55% on Tuesday and neutral so far today vs the XAU portends probably strength followed by weakness today. Fed credit so far today ( http://www.newyorkfed.org/markets/omo/dmm/temp.cfm ) is a 1 day $7.5 Billion Repo and a 14 day $6 Billion Repo after a relatively modest $5 Billion 1 day repo yesterday, and a small $2.75 Billion 1 day Repo on Tuesday. They've been spiking the punch every Thursday the past 4-5 weeks at least. NEM has downside gaps to fill at 59.20 from 1-30, at 56.97 from 1-25, 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 153.90 from 2-2, at 149.68 from 1-31, at 146.79 from 1-30, at 141.29 from 1-25, 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. Ciao!