.......................What's Happenin Baby

Why the early strength? Reliable lead indicator NEM is putting in a third/Wave 5 short term cycle high (probably today) in rollover mode. It looked like it had occurred on Friday at 45.40ish (versus today's cycle high so far at 45.50), but, rollover choppy/sideways peaking action makes it difficult to nail a cycle high to a particular day. When a cycle starts to roll over dramatically one should seriously consider selling if one's trading that cycle timeframe.

Even if NEM had hit a third/Wave 5 short term cycle high on Friday a rebound was likely today, since NEM fell sharply from Friday's session high at 45.40ish to it's close at 44.32. An oversold bounce was very likely today and downcycles usually start out relatively flat (if NEM had peaked Friday), so, some strength today was very likely.

See HUI's 5 day chart for recent action: http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==.

The flat rollover action in recent sessions is probably the monthly upcycle since 10-4-06 rolling over/peaking as well as the third/Wave 5 short term upcycle rolling over/peaking. One can't rule out a modestly higher monthly cycle high this week as the monthly upcycle rolls over dramatically, but, when the Wave A short term downcycle occurs, it should do so with enough of a vengence (5-8%+ decline) that it'll be obvious that the monthly cycle since 10-4-06 has turned down. A little patience is required right now. If you're the type who trades put options and/or sells short, wait for Wave A down to occur then look to short and/or buy puts during late Wave B/early Wave C.

The XAU Put/Call Ratio did portend some strength today, rising to 1.14603
from 1.13974 on Friday (November expiration). Watch NEM's downside gap from today's open at 44.32 and the XAU's downside gap from today's open at 133.02, both will probably get filled today or tomorrow.

The monthly cycle since 10-4-06 is probably the start of the 3-6 monthish Wave B up of HUI/XAU's Wave 2 Cyclical Bear Market since 5-11-06, see the first chart at http://www.joefrocks.com/GoldStockCharts.html. NEM's Wave 2 Cyclical Bear Market that began on 1-31-06 ended on 10-4-06 at 39.84, so, reliable lead indicator NEM is probably in a 5 yearish Wave 3 Cyclical Bull Market since 10-4-06, see chart 4 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/

HUI NEM XAU