The XAU Fills It's Last Downside Gap At 122.49 From 12-22

So the major upcycle's (since 5-16-05) Wave 4 may bottom today or Monday since important cycle lows/highs tend to occur shortly after gaps get filled. The NEM Lead Indicator is a bullish +0.75% vs the XAU right now which suggests that today could be the low, but it's not bullish enough right now to be convincing. But, the way NEM has bounced off 46.60, quickly rising to 48.28 on very high volume, is another sign that NEM's Wave 4 may have bottomed at 46.60 today. NEM tends to lead so keep that in mind. Trade the cycles uses trendline buy/sell signals anyway, so please distinguish between that and me trying to make a "call." I don't really make calls anyway, I do give opinions based on cycle trendlines, the nature of cycles, and some great indicators. NEM's very high volume so far today at over 3 million shares less than an hour into the session points to a potential bottom today or Monday. NEM fell below my Wave 4 cycle low target range of 47-49 (was 45-47) with a low at 46.60, which isn't a big deal if 46.60 turns out to be the cycle low or nearly so. Individual stocks have more uncertainty than indexes do because component upside surprises tend to cancel out/average out downside surprises in an index. Also, when choosing a target range I usually pick round numbers, and, my trendlines tend to be drawn fairly tight. With Elliot Wave suggesting that a 12-18+ month Cyclical Bear Market is due later this year after long term cycle highs occur, reliable lead indicator NEM surprising to the downside makes perfect sense.

NEM and the XAU filled their upside gaps from today's open (HUI usually doesn't have gaps or they're tiny ones). A good approach to use, even for daredevil bottom pickers like myself, is to wait for a successful test of today's cycle lows in the next few days before buying, waiting for higher cycle lows to occur for HUI/NEM/XAU. You have to use that same approach for whatever stocks/indexes you're trading. Many stocks lag. Waiting for a Trade the Cycles 2% Wave 5 buy signal is a more conservative approach that makes sense also. You can wait for the Wave 5 buy signal then buy on weakness in a short term or very short term downcycle. You have to use that same approach for whatever stocks/indexes you're trading. If the NEM Lead Indicator remains clearly bullish today I may pick up some XAU Call Options, I did well this week with XAU Puts.

The major upcycle (since 5-16-05) trendlines correctly suggested that further downside was likely. NEM's cycle low today at 46.60 was less than 1% below my Wave 4 cycle low target range of 47-49, while HUI's cycle low today at 278.47 was well above my Wave 4 cycle low target range of 255-265, but the XAU's cycle low today at 121.76 was near the top of my Wave 4 cycle low target range of 117-122. Based on the latest major upcycle trendlines (see latest 1 year charts, http://www.joefrocks.com/GoldStockCharts.html ) my Wave 4 cycle low target ranges of 255-265 for HUI, 47-49 for NEM, and 117-122 for the XAU were derived. XAU Implied Volatility rose +0.27% to 36.550 on Thursday 3-9 from 36.450 on Wednesday 3-8 versus a -1.86% decline in the XAU on 3-9, which is a significant (0.50-1.99%) +1.59% rise in complacency (+0.27% + -1.86% = -1.59%. The XAU wall of worry shrank by -1.59%, therefore complacency rose by +1.59%) that portends weakness/a downtrend during part of Thursday 3-9's session. The XAU Put/Call Ratio (March Expiration) fell a significant (0.50-1.99%) -0.50% today to 0.73200 from 0.73567 on Thursday, which is a significant rise in complacency that portends some weakness today, and the recent collapse in the XAU Put/Call ratio from above 1.30000 on 2-17 (final February value) correctly suggested that a substantial decline would soon occur. The Fed spiked the index fund trader punch massively yesterday as they always (past two months) do on Thursday, which is a major factor behind today's sharp rebound after early weakness: http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE ...................... http://www.JoeFRocks.com/