S & P 500 (SPX) Weakness Resulting In Gold/Silver Stock Weakness

HUI made a slightly higher cycle high yesterday than it's cycle high on 2-22 (that appeared to be it's Wave B short term cycle high), so HUI may have put in a Wave B short term cycle high late yesterday or could even still be in Wave B. But, NEM began Wave C on 2-24 and the NEM dominated XAU did so on 2-22. Since NEM is a reliable lead indicator it's Elliot Wave count is obviously the most important. I assumed prior to yesterday that the XAU's upside gap at 140.51 wouldn't get filled and it might not, but yesterday's cycle high at 140.19 taught me to be more careful about assuming that gaps won't get filled. I am pretty careful but will try to be more so. The major upcycle's (since 5-16-05) Wave 4 minor intermediate term downcycle since 1-31-06 is due to bottom in mid March in similar fashion to what occurred in the prior parabolic major upcycle in early 2003, which peaked a few days earlier and bottomed on 3-13-2003. ......................The major cycles are vastly different for SPX vs HUI/NEM/XAU with SPX being in a secular Bear since March 2000 while HUI/NEM/XAU have been in a secular Bull since late 2000. But, near term SPX has a major impact on gold/silver stocks because it drives index fund trading. The NEM Lead Indicator turned very bearish on Monday at -2.26% vs the XAU, remained so on Tuesday at -1.69%, was also very bearish at -1.50% vs the XAU on Wednesday, and was a bearish -0.44% yesterday, so a substantial 10-15%+ decline is likely in the next few days. ...............Right now NEM is outperforming the XAU by a bullish +0.40%, so major weakness won't set in until NEM starts to plunge. An ABC Wave 4 minor intermediate term downcycle is occurring since 1-31-06. The cycle lows two weeks ago were Wave A short term cycle lows. They occurred too far above the major upcycle trendlines to be likely Wave 4 cycle lows. Both NEM and the XAU took out their cycle lows from two weeks ago on Tuesday. NEM has downside gaps to fill 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 to fill at 133.35 from 3-1, at 128.03 from 1-3, at 124.36 from 12-28, and at 122.49 from 12-22. Both have upside gaps from today's open at 54.15 and 139.09 that may get filled. Shortly after NEM fills it's downside gap at 48.75 from 12-7 and the XAU fills it's downside gap at 122.49 from 12-22 Wave 4 should bottom. Based on that and the latest major upcycle trendlines (see latest 1 year charts, http://www.joefrocks.com/GoldStockCharts.html ) my Wave 4 cycle low target ranges are 255-265 for HUI (was 240-250), 47-49 for NEM (was 45-47), and 117-122 for the XAU (was 112-117). XAU Implied Volatility rose yesterday despite the (to 35.020 on 3-2 from 34.580 on 3-1) XAU rising yesterday (+2.67%) which was a very sharp rise in fear that portends some strength today. The XAU Put/Call Ratio (March Expiration) fell an unusually large (> 6%) 7.18% today to 0.78629 from 0.84715 yesterday, which is an unusually large rise in complacency that portends some strength today, but the recent collapse in the XAU Put/Call ratio from above 1.30000 on 2-17 (final February value) suggests that a substantial decline is likely soon. The Fed didn't spike the index fund trader punch this week until yesterday's usual Thursday punch spiking = $18.25 Billion in Repos (happened every Thursday the past two months), with a $2.75 Billion 3 day Repo so far today, $6.75 Billion in Repos on Wednesday, only $2 Billion in Repos on Monday, and $3.5 Billion on Tuesday: http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE ...................... http://www.JoeFRocks.com/