Trade the Cycles

Thursday, November 30, 2006

The NEM Lead Indicator Was A Very Bearish -1.02% Versus The XAU Today

The short term NEM Lead Indicator is very bearish, it was a very bearish -1.02% versus the XAU today/11-30, it was a bearish -0.57% versus the XAU on 11-29, was -0.42% versus the XAU on 11-28, was -0.26% on 11-27, and, was -2.42% for the week ending 11-24.

The one year NEM Lead Indicator is extremely bearish, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem.

I think what's happening is that reliable lead indicator NEM DID hit a monthly cycle high at 46.89 on 11-1-06 and HUI/XAU DID hit monthly cycle highs on 11-9-06, and, the cycle high that may have occurred today for HUI/NEM/XAU (should be imminent if it didn't occur today) is a Minor Intermediate Term cycle high (began 10-4-06), which obviously is the next longer cycle than a monthly cycle.

HUI/XAU are likely to experience Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06 during the next 3-6 weeks and experience vicious 30-45% declines, see the first chart at http://www.joefrocks.com/GoldStockCharts.html. Today's likely Minor Intermediate Term cycle high for HUI/XAU (Minor Intermediate Term upcycle began 10-4-06) was the Wave B of Wave C cycle high of the Wave 2 Cyclical Bear Market since 5-11-06.

NEM/XAU downside gaps to watch are 45.73, 44.88, 44.03, 42.21, 41.83, 41.09, 40.83 for NEM, and, at 144.09, 141.59, 138.37, 132.67 for the XAU. HUI tends to have fewer gaps, so I don't usually track HUI's gaps.

NEM's Minor Intermediate Term downcycle should bottom shortly after NEM fills it's downside gap at 40.83, so, 40.50ish is a reasonable target for reliable lead indicator NEM's Minor Intermediate Term cycle low. NEM's Minor Intermediate Term downcycle should coincide with HUI/XAU's Wave A of the likely vicious 3-6 week 30-40%+ decline, then, NEM's Wave 1 short term upcycle of a new monthly upcycle should coincide closely with Wave B up of HUI/XAU's likely vicious 3-6 week 30-40%+ decline. Then, NEM's Wave 2 short term downcycle of a new monthly upcycle should coincide closely with Wave C down of HUI/XAU's likely vicious 3-6 week 30-40%+ decline, that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06).

Wave A of the likely vicious 3-6 week 30-45%+ decline may have started today for HUI and the XAU. Please see this previous post for many details regarding the likely vicious 3-6 week 30-40%+ HUI/XAU decline: http://tradethecycles.blogspot.com/2006/11/what-will-cause-dramatic-huixau-decline.html.

HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be Wave A down of the likely 3-6 weekish vicious decline for HUI/XAU. Since 10-4-06 HUI/XAU have rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, and, may have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), in which HUI/XAU may experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 3 and 5 at http://www.joefrocks.com/GoldStockCharts.html.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 3 and 5 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/ .



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Fed Credit Today Was Index Fund/Program Trading Punch Spiking, A Major Factor Today

Even for a Thursday Fed Credit was very large today at $20.75 Billion in Repos versus the usual $13ish Billion on Thursday, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm. This led to more computerized buy programs/index fund trading than normally would occur.

HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be Wave A down of the likely 3-6 weekish vicious decline for HUI/XAU. Since 10-4-06 HUI/XAU have rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, and, may have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), in which HUI/XAU may experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 3 and 5 at http://www.joefrocks.com/GoldStockCharts.html.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 3 and 5 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/ .

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Thoughts About HUI/XAU and Reliable Lead Indicator NEM

The fact that both HUI/XAU appear to have broken their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, but haven't followed through by 5%+ (would be a major buy signal), isn't surprising. Since reliable lead indicator NEM's Wave 2 Cyclical Bear Market (1-31-06 until 10-4-06) ended at 39.84 on 10-4-06 (see chart 4 at http://www.joefrocks.com/GoldStockCharts.html), the largest component of HUI and the XAU is now probably going counter to HUI/XAU cyclewise, since HUI/XAU are still in a Wave 2 Cyclical Bear Market (began 5-11-06). This made the likelihood of HUI/XAU significantly breaking their Wave 2 Cyclical Bear Market downtrend lines/doing a fakeout much greater, so, the fact that nearly all gold/silver bugs are bullish now is understandable, but probably tragic, because of the likely impending 3-6 weekish vicious 30-40%+ decline.

Also, HUI/XAU don't correlate 100% with the gold/silver stock market, but they're good representatives. Thanks to reliable lead indicator NEM they tend to lead most gold/silver stocks.

HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be Wave A down of the likely 3-6 weekish vicious decline for HUI/XAU. Since 10-4-06 HUI/XAU have rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, and, may have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), in which HUI/XAU may experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 3 and 5 at http://www.joefrocks.com/GoldStockCharts.html.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 3 and 5 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/ .

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HUI Rallied To It's Wave 2 Cyclical Bear Market Downtrend Line!

HUI has rallied to it's Wave 2 Cyclical Bear Market downtrend line in it's monthly upcycle since 10-4-06, which is Wave B of Wave C of the Wave 2 Cyclical Bear Market, see the first chart at http://www.joefrocks.com/GoldStockCharts.html. The XAU appears to have broken it's Wave 2 Cyclical Bear Market downtrend line, but, it would have to follow through by 5%+ to flash a major buy signal, and, remember that NEM dominates the XAU at about 22%+ weighting, so HUI is a more accurate picture of the gold/silver stock market right now, since reliable lead indicator NEM probably bottomed (Wave 2 Cyclical Bear Market ended) on 10-4-06 at 39.84.

HUI and the XAU may finally be putting in monthly cycle highs today. Reliable lead indicator NEM tested it's monthly cycle high (that occurred at 46.89 way back on 11-1-06) today, probably putting in a very bearish quadruple top at 46.89! early today. A weak SPX (S & P 500) will probably be a major factor behind severe weakness in gold/silver stocks and many other sectors during the next 3-6 weeks due to index fund selling.

The short term NEM Lead Indicator is very bearish, it was a bearish -0.57% versus the XAU on 11-29, was -0.42% versus the XAU on 11-28, was -0.26% on 11-27, and, was -2.42% for the week ending 11-24.

The one year NEM Lead Indicator is extremely bearish, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem.

HUI/XAU are likely to experience Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06 during the next 3-6 weeks and experience vicious 30-40%+ declines, see the first chart at http://www.joefrocks.com/GoldStockCharts.html. Today's likely monthly cycle high for HUI/XAU (monthly upcycle began 10-4-06) was the Wave B of Wave C cycle high of the Wave 2 Cyclical Bear Market since 5-11-06.

Reliable lead indicator NEM hit a monthly cycle high at 46.89 way back on 11-1-06 and matched that cycle high today. NEM/XAU downside gaps to watch are 45.73, 44.88, 44.03, 42.21, 41.83, 41.09, 40.83 for NEM, and, at 144.09, 141.59, 138.37, 132.67 for the XAU. HUI tends to have fewer gaps, so I don't usually track HUI's gaps.

NEM's monthly downcycle should bottom shortly after NEM fills it's downside gap at 40.83, so, 40.50ish is a reasonable target for reliable lead indicator NEM's monthly cycle low.

NEM's monthly downcycle should coincide with HUI/XAU's Wave A of the likely vicious 3-6 week 30-40%+ decline, then, NEM's Wave 1 short term upcycle of a new monthly upcycle should coincide closely with Wave B up of HUI/XAU's likely vicious 3-6 week 30-40%+ decline. Then, NEM's Wave 2 short term downcycle of a new monthly upcycle should coincide closely with Wave C down of HUI/XAU's likely vicious 3-6 week 30-40%+ decline, that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06).

Wave A of the likely vicious 3-6 week 30-40%+ decline may have started today for HUI and the XAU. Please see this previous post for many details regarding the likely vicious 3-6 week 30-40%+ HUI/XAU decline: http://tradethecycles.blogspot.com/2006/11/what-will-cause-dramatic-huixau-decline.html.

HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be Wave A down of the likely 3-6 weekish vicious decline for HUI/XAU. Since 10-4-06 HUI/XAU have rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, and, may have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), in which HUI/XAU may experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 3 and 5 at http://www.joefrocks.com/GoldStockCharts.html.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 3 and 5 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/ .

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Wednesday, November 29, 2006

The NEM Lead Indicator Was A Bearish -0.57% Versus The XAU Today

The short term NEM Lead Indicator is very bearish, it was a bearish -0.57% versus the XAU today/on 11-29, was -0.42% versus the XAU on 11-28, was -0.26% on 11-27, and, was -2.42% for the week ending 11-24.

The one year NEM Lead Indicator is extremely bearish, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem.

HUI/XAU are likely to experience Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06 during the next 3-6 weeks and experience vicious 30-40%+ declines, see the first chart at http://www.joefrocks.com/GoldStockCharts.html. Monday's likely monthly cycle high for HUI (monthly upcycle began 10-4-06, XAU might have peaked today) was the Wave B of Wave C cycle high of the Wave 2 Cyclical Bear Market since 5-11-06.

Reliable lead indicator NEM hit a monthly cycle high at 46.89 way back on 11-1-06. NEM/XAU downside gaps to watch are 44.88, 44.03, 42.21, 41.83, 41.09, 40.83 for NEM, and, at 141.59, 138.37, 132.67 for the XAU. HUI tends to have fewer gaps, so I don't usually track HUI's gaps.

NEM's monthly downcycle should bottom shortly after NEM fills it's downside gap at 40.83, so, 40.50ish is a reasonable target for reliable lead indicator NEM's monthly cycle low.

NEM's monthly downcycle should coincide with HUI/XAU's Wave A of the likely vicious 3-6 week 30-40%+ decline, then, NEM's Wave 1 short term upcycle of a new monthly upcycle should coincide closely with Wave B up of HUI/XAU's likely vicious 3-6 week 30-40%+ decline. Then, NEM's Wave 2 short term downcycle of a new monthly upcycle should coincide closely with Wave C down of HUI/XAU's likely vicious 3-6 week 30-40%+ decline, that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06).

Wave A of the likely vicious 3-6 week 30-40%+ decline may have started on Monday for HUI and may start tomorrow for the XAU. Please see this previous post for many details regarding the likely vicious 3-6 week 30-40%+ HUI/XAU decline: http://tradethecycles.blogspot.com/2006/11/what-will-cause-dramatic-huixau-decline.html.

HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be Wave A down of the likely 3-6 weekish vicious decline for HUI/XAU. Since 10-4-06 HUI/XAU have rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, and, may have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), in which HUI/XAU may experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 3 and 5 at http://www.joefrocks.com/GoldStockCharts.html.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 3 and 5 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/ .

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An Extremely Bearish One Year NEM Lead Indicator

The one year NEM Lead Indicator is extremely bearish, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem. The short term NEM Lead Indicator is very bearish, it was -0.42% versus the XAU on 11-28, was -0.26% on 11-27, and, was -2.42% for the week ending 11-24.

HUI/XAU are likely to experience Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06 during the next 3-6 weeks and experience vicious 30-40%+ declines, see the first chart at http://www.joefrocks.com/GoldStockCharts.html. Monday's likely monthly cycle high for HUI (monthly upcycle began 10-4-06, XAU might have peaked today) was the Wave B of Wave C cycle high of the Wave 2 Cyclical Bear Market since 5-11-06.

Reliable lead indicator NEM hit a monthly cycle high at 46.89 way back on 11-1-06. NEM/XAU downside gaps to watch are 44.88, 44.03, 42.21, 41.83, 41.09, 40.83 for NEM, and, at 141.59, 138.37, 132.67 for the XAU. HUI tends to have fewer gaps, so I don't usually track HUI's gaps.

NEM's monthly downcycle should bottom shortly after NEM fills it's downside gap at 40.83, so, 40.50ish is a reasonable target for reliable lead indicator NEM's monthly cycle low.

NEM's monthly downcycle should coincide with HUI/XAU's Wave A of the likely vicious 3-6 week 30-40%+ decline, then, NEM's Wave 1 short term upcycle of a new monthly upcycle should coincide closely with Wave B up of HUI/XAU's likely vicious 3-6 week 30-40%+ decline. Then, NEM's Wave 2 short term downcycle of a new monthly upcycle should coincide closely with Wave C down of HUI/XAU's likely vicious 3-6 week 30-40%+ decline, that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06).

Wave A of the likely vicious 3-6 week 30-40%+ decline may have started on Monday for HUI and may have started today for the XAU. Please see this previous post for many details regarding the likely vicious 3-6 week 30-40%+ HUI/XAU decline: http://tradethecycles.blogspot.com/2006/11/what-will-cause-dramatic-huixau-decline.html.

HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be Wave A down of the likely 3-6 weekish vicious decline for HUI/XAU. Since 10-4-06 HUI/XAU have rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, and, may have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), in which HUI/XAU may experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 3 and 5 at http://www.joefrocks.com/GoldStockCharts.html.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 3 and 5 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/ .

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Tuesday, November 28, 2006

Reliable Lead Indicator NEM Rallied To It's Monthly/Short Term Downcycle Trendline

Reliable lead indicator NEM rallied to it's monthly/short term downcycle trendline at session's end today. The XAU put in a slightly higher bearish double top cycle high today than yesterday's, while HUI's monthly upcycle since 10-4-06 may have peaked yesterday. Reliable lead indicator NEM hit a monthly cycle high at 46.89 way back on 11-1-06. NEM/XAU downside gaps to watch are 44.88, 44.03, 42.21, 41.83, 41.09, 40.83 for NEM, and, at 141.59, 138.37, 132.67 for the XAU. HUI tends to have fewer gaps, so I don't usually track HUI's gaps.

NEM's monthly downcycle should bottom shortly after NEM fills it's downside gap at 40.83, so, 40.50ish is a reasonable target for reliable lead indicator NEM's monthly cycle low. HUI/XAU are likely to experience Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06, see the first chart at http://www.joefrocks.com/GoldStockCharts.html. Yesterday's likely monthly cycle high for HUI (XAU might have peaked today) was the Wave B of Wave C cycle high of the Wave 2 Cyclical Bear Market since 5-11-06.

NEM's monthly downcycle should coincide with HUI/XAU's Wave A of the likely vicious 3-6 week 30-40%+ decline, then, NEM's Wave 1 short term upcycle of a new monthly upcycle should coincide closely with Wave B up of HUI/XAU's likely vicious 3-6 week 30-40%+ decline. Then, NEM's Wave 2 short term downcycle of a new monthly upcycle should coincide closely with Wave C down of HUI/XAU's likely vicious 3-6 week 30-40%+ decline, that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06).

The NEM Lead Indicator was a modestly bearish -0.42% versus the XAU today, a modestly bearish -0.26% versus the XAU yesterday after being a very bearish -2.42% versus the XAU last week. Wave A of the likely vicious 3-6 week 30-40%+ decline may have started yesterday for HUI and may start tomorrow for the XAU. Please see this previous post for many details regarding the likely vicious 3-6 week 30-40%+ HUI/XAU decline: http://tradethecycles.blogspot.com/2006/11/what-will-cause-dramatic-huixau-decline.html.

HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be Wave A down of the likely 3-6 weekish vicious decline for HUI/XAU. Since 10-4-06 HUI/XAU have rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, and, may have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), in which HUI/XAU may experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 3 and 5 at http://www.joefrocks.com/GoldStockCharts.html.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 3 and 5 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/ .

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..............NEM/XAU Downside Gaps To Watch

The monthly upcycle since 10-4-06 for HUI/XAU probably peaked yesterday in dramatic rollover mode, while reliable lead indicator NEM hit a monthly cycle high at 46.89 way back on 11-1-06. NEM/XAU downside gaps to watch are
44.88, 44.03, 42.21, 41.83, 41.09, 40.83 for NEM, and, at 141.59, 138.37, 132.67 for the XAU. HUI tends to have fewer gaps, so I don't usually track HUI's gaps.


NEM's monthly downcycle should bottom shortly after NEM fills it's downside gap at 40.83, so, 40.50ish is a reasonable target for reliable lead indicator NEM's monthly cycle low. HUI/XAU are likely to experience Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06, see the first chart at http://www.joefrocks.com/GoldStockCharts.html. Yesterday's likely monthly cycle high for HUI/XAU was the Wave B of Wave C cycle high of the Wave 2 Cyclical Bear Market since 5-11-06.

NEM's monthly downcycle should coincide with HUI/XAU's Wave A of the likely vicious 3-6 week 30-40%+ decline, then, NEM's Wave 1 short term upcycle of a new monthly upcycle should coincide closely with Wave B up of HUI/XAU's likely vicious 3-6 week 30-40%+ decline. Then, NEM's Wave 2 short term downcycle of a new monthly upcycle should coincide closely with Wave C down of HUI/XAU's likely vicious 3-6 week 30-40%+ decline, that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06).

The NEM Lead Indicator was a modestly bearish -0.26% versus the XAU yesterday after being a very bearish -2.42% versus the XAU last week. Wave A of the likely vicious 3-6 week 30-40%+ decline may have started yesterday for HUI/XAU. Please see this previous post for many details regarding the likely vicious 3-6 week 30-40%+ HUI/XAU decline: http://tradethecycles.blogspot.com/2006/11/what-will-cause-dramatic-huixau-decline.html.

HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be the start of Wave A down of the likely 3-6 weekish vicious decline for HUI/XAU. Since 10-4-06 HUI/XAU have rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, and, may have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), in which HUI/XAU may experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 3 and 5 at http://www.joefrocks.com/GoldStockCharts.html.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 3 and 5 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/ .

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Monday, November 27, 2006

The NEM Lead Indicator Was -0.26% Versus The XAU Today

The NEM Lead Indicator was a modestly bearish -0.26% versus the XAU today after being a very bearish -2.42% versus the XAU last week. The monthly upcycle since 10-4-06 for HUI/XAU may have peaked today in dramatic rollover mode, while reliable lead indicator NEM hit a monthly cycle high at 46.89 way back on 11-1-06. Wave A of the likely vicious 3-6 week 30-40%+ decline may have started today for HUI/XAU. Please see the previous post for the details regarding the likely vicious 3-6 week 30-40%+ decline: http://tradethecycles.blogspot.com/2006/11/what-will-cause-dramatic-huixau-decline.html.

HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be the start of Wave A down of the likely 3-6 weekish vicious decline for HUI/XAU. Since 10-4-06 HUI/XAU have rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, and, may have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), in which HUI/XAU may experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 3 and 5 at http://www.joefrocks.com/GoldStockCharts.html.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 3 and 5 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/ .

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What Will Cause The Dramatic HUI/XAU Decline?

What's likely to cause HUI/XAU to fall 30-40%+ in the next 3-6 weeks and hit their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 3 and 5 at http://www.joefrocks.com/GoldStockCharts.html, is a very weak S & P 500 (SPX) that will lead to index fund selling (the computerized program trading that led to the 1987 crash, now computers can't be used after the Dow falls 500 points or whatever the circuit breaker is now).

SPX may have just put in a Wave 5 cycle high for the minor intermediate term upcycle since mid June or should soon do so. It's technical indicators (RSI, MACD, Stochastics, etc.) have a bearish divergence with price/SPX, trending down recently while SPX trended up.

HUI/NEM/XAU's vicious decline from May 11 until June 13 coincided closely with SPX's correction. Many other sectors such as AMEX Oil and Biotech were also weak due to computerized index fund trading. This why when gold bugs talk about a weak stock market/major averages being good for gold/silver stocks I cringe a little, because the negative correlation exists largely on a Secular/very long term/big picture 15-20 year timeframe. For shorter cycles the correlation between HUI/NEM/XAU and SPX is surprisingly positive much of the time. In 2003 for example SPX soared and so did HUI/NEM/XAU, due largely (major factor at least) to "mechanical" computerized index fund buying. HUI/NEM/XAU's vicious decline from early September until October 4 coincided with three SPX short term downcycles, though SPX did trend up during that time.

Please see the previous post at
http://tradethecycles.blogspot.com/2006/11/critical-chart-huis-one-year-chart.html for many more details as to why a vicious 30-40% decline in HUI/XAU is likely in the next 3-6 weeks.

HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be the start of Wave A down of the likely 3-6 weekish vicious decline for HUI/XAU. Since 10-4-06 HUI/XAU have rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, and, may have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), in which HUI/XAU may experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 3 and 5 at http://www.joefrocks.com/GoldStockCharts.html.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 3 and 5 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/ .

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Saturday, November 25, 2006

...........The Critical Chart - HUI's One Year Chart

A picture really is worth a thousand words. "Trade the Cycles" is based on cycle trendlines/channels used in concert with Elliot Wave patterns and gaps, in other words pictures. In HUI's one year chart, see http://www.joefrocks.com/GoldStockCharts.html, one can see that, in it's monthly upcycle since 10-4-06, HUI has rallied toward it's Wave 2 Cyclical Bear Market downtrend line in effect since 5-11-06. HUI has been in Wave B up of Wave C down (of the Wave 2 Cyclical Bear Market) since 10-4-06.

In chart three (http://www.joefrocks.com/GoldStockCharts.html) one can see that, even if HUI's Secular Bull Market/very long term upcycle trendline (in effect since November 2000) turns up, HUI should still fall to 220ish. HUI closed yesterday at 340.26, so, HUI is likely to fall AT LEAST 35% in the next 3-6 weeks. Buying gold/silver stocks right now is probably "suicide."

The fact that HUI/XAU have well established multi-month Wave 2 Cyclical Bear Market downtrends, and, remain so far above their Secular Bull Market/very long term upcycle trendlines, is why one MUST be bearish/very cautious right now, and, why the vast majority of gold writers, who are generally very bullish/complacent right now, itself a very bearish sign (they're a great contrarian indicator viewed as a group), are ALL WET.

HUI and the XAU modestly exceeded (on Friday 11-24) the cycle highs that occurred on 11-9-06 that appeared to be monthly cycle highs. In order for "Trade the Cycles" to turn bullish HUI/XAU would have to break the Wave 2 Cyclical Bear Market declining peaks downtrend lines since 5-11-06, AND, they would have to follow through by 5%+ in order to flash a major buy signal.

Given an extremely bearish one year NEM Lead Indicator (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem) and a very bearish short term NEM Lead Indicator (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem) as well as the very bearish COT (Commitments Of Traders) data in recent weeks (see three paragraphs below), the big spike/short term upcycle since early Friday 11-17 (see 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==) is probably important spiking/peaking action.

A vicious 3-6 week 30-40% decline is likely that will probably see HUI/XAU fall to their Secular Bull Market/very long term upcycle trendlines in place since November (HUI)/October (XAU) 2000 (conclude their Wave 2 Cyclical Bear Market that began 5-11-06).

The NEM Lead Indicator was a bearish -0.84% versus the XAU on 11-24, was a very bearish -1.03% on 11-22, and, was a very bearish -1.30% on 11-21. So, the very large spike move since early Friday 11-17 was probably the last gasp of the monthly upcycle since 10-4-06. It's peaking in dramatic rollover/flattening out mode.

HUI's very flat action that occurred for a few hours on Friday after the large spike at the open (see 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==) is a sign that an important cycle high may have occurred on Friday.

The COT (Commitments Of Traders) data (five day period ending 11-14) again jives with the vicious decline scenario, since the non contrarian gold Commercial Traders traded significantly net short, while the contrarian/clueless gold Speculators traded significantly net long, see http://www.cftc.gov/dea/options/deacmxsof.htm. The non contrarian gold Commercial Traders aggressively shorted gold again, adding 18,336 short futures and options contracts after adding 25,249 short futures and options contracts the week before, while also correctly anticipating that there would be some significant strength, because they added 8,943 long futures and options contracts.

HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be the start of Wave A down of the likely 3-6 weekish vicious decline for HUI/XAU. Since 10-4-06 HUI/XAU have rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, and, may have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), in which HUI/XAU may experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 2 and 4 at http://www.joefrocks.com/GoldStockCharts.html.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 2 and 4 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 3 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

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Friday, November 24, 2006

HUI And The XAU Modestly Exceeded Their Cycle Highs On 11-9-06

HUI and the XAU modestly exceeded their cycle highs on 11-9-06 that appeared to be monthly cycle highs. In order for "Trade the Cycles" to turn bullish HUI/XAU would have to break their Wave 2 Cyclical Bear Market declining peaks downtrend lines since 5-11-06, AND, they would have to follow through by 5%+ in order to flash a major buy signal.

Given an extremely bearish one year NEM Lead Indicator (see
http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem) and a very bearish short term NEM Lead Indicator (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem) as well as the very bearish COT (Commitments Of Traders) data in recent weeks (see three paragraphs below), this big spike/short term upcycle since early last Friday 11-17 (see 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==) is probably important spiking/peaking action. A vicious 3-6 week 30-40% decline is likely that will probably see HUI/XAU fall to their Secular Bull Market/very long term upcycle trendlines in place since November (HUI)/October (XAU) 2000 (conclude their Wave 2 Cyclical Bear Market that began 5-11-06).

The NEM Lead Indicator was a bearish -0.76% versus the XAU today/on 11-24, was a very bearish -1.03% on 11-22, and, was a very bearish -1.30% on 11-21. So, the very large spike move since early Friday 11-17 was probably the last gasp of the monthly upcycle since 10-4-06. It's peaking in dramatic rollover/flattening out mode.

HUI's very flat action that occurred for a few hours today after the large spike at the open (see
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==) is a sign that an important cycle high may have occurred today.

The COT (Commitments Of Traders) data (five day period ending 11-14) again jives with the vicious decline scenario, since the non contrarian gold Commercial Traders traded significantly net short, while the contrarian/clueless gold Speculators traded significantly net long, see
http://www.cftc.gov/dea/options/deacmxsof.htm. The non contrarian gold Commercial Traders aggressively shorted gold again this week, adding 18,336 short futures and options contracts after adding 25,249 short futures and options contracts the week before, while also correctly anticipating that there would be some significant strength, because they added 8,943 long futures and options contracts.

HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be the start of Wave A down of the likely 3-6 weekish vicious decline for HUI/XAU.

It's very unlikely that they're in a monthly upcycle now because HUI/XAU have rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines, and, appear to have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), HUI/XAU may experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 2 and 4 at
http://www.joefrocks.com/GoldStockCharts.html.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 2 and 4 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 3 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

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Wednesday, November 22, 2006

.................Something To GIve Thanks For

The NEM Lead Indicator. Note how NEM led the past five sessions, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem, and, note how NEM correctly pointed to the two vicious declines this year, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem, and, is currently pointing to another one, that probably began on 11-9-06 when HUI/XAU hit monthly cycle highs (NEM did so on 11-1-06 at 46.89 and put in a bearish Wave B triple top at 46.86 on 11-9-06).

One can do very well trading any market sector using cycle trendlines/channels in concert with Elliot Wave patterns and gaps, which is the crux of my "Trade the Cycles" market timing system, but, having the NEM Lead Indicator is a great asset for trading the precious metals sector. It's a great "finetuner."

The very bearish one year NEM Lead Indicator (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem) and the very bearish COT data in recent weeks (see next paragraph) support the vicious decline scenario.

The COT (Commitments Of Traders) data (five day period ending 11-14) again jives with the vicious decline scenario, since the non contrarian gold Commercial Traders traded significantly net short, while the contrarian/clueless gold Speculators traded significantly net long, see http://www.cftc.gov/dea/options/deacmxsof.htm. The non contrarian gold Commercial Traders aggressively shorted gold again this week, adding 18,336 short futures and options contracts after adding 25,249 short futures and options contracts the week before, while also correctly anticipating that there would be some significant strength, because they added 8,943 long futures and options contracts.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 2 and 4 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 3 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

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Wave 5 Up Of Wave B Up (Began Early Friday) Of Wave A Probably Peaked

In a little over a session's time HUI spiked about +6.50%, see 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==. This big spike was Wave 5 up of Wave B up (began early Friday) of Wave A down, since a monthly cycle high occurred on 11-9-06, and, HUI/NEM/XAU's rebound since early Friday probably peaked early today, which would mean that HUI/XAU are probably in Wave C of Wave A, which is likely to be a brutal short term downcycle.

HUI/XAU were able to complete an Elliot Wave 12345 up down up down up pattern in Wave B up of Wave A down, see 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 very bearish NEM Lead Indicator yesterday and today, at -1.30% yesterday and -1.00%ish early today versus the XAU, suggests that the upcycle since early Friday (Wave B up of Wave A down for HUI/XAU) may have peaked early today. Large spike moves (spikes on the chart), such as yesterday's into early today for HUI/XAU, tend to mark important cycle highs.

HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be Wave C down of Wave A for HUI/XAU. HUI/XAU completed Elliot Wave ABC down up down patterns (since their monthly cycle highs on 11-9-06) on Friday, and, reliable lead indicator NEM has completed it's second Elliot Wave ABC down up down pattern since it's monthly cycle high on 11-1-06. HUI/XAU completed Wave A of Wave A of it's likely 3-6 weekish 30-40% decline on Friday, so, the upcycle since just after Friday's open (see 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=
=) is/was Wave B up of Wave A down, so, HUI/XAU may be in Wave C of Wave A down now (should fill today's downside gaps created at the open). If HUI/XAU were merely doing a monthly downcycle, they would have bottomed just after Friday's open and would now be in Wave 1 of a monthly upcycle.

It's very unlikely that they're in a monthly upcycle now because HUI/XAU rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines in the latest monthly upcycle (ended 11-9-06), and, appear to have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), HUI/XAU may experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 2 and 4 at
http://www.joefrocks.com/GoldStockCharts.html.

The very bearish one year NEM Lead Indicator (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem
) and the very bearish COT data in recent weeks (see next paragraph) support the vicious decline scenario.

The COT (Commitments Of Traders) data (five day period ending 11-14) again jives with the vicious decline scenario, since the non contrarian gold Commercial Traders traded significantly net short, while the contrarian/clueless gold Speculators traded significantly net long, see http://www.cftc.gov/dea/options/deacmxsof.htm. The non contrarian gold Commercial Traders aggressively shorted gold again this week, adding 18,336 short futures and options contracts after adding 25,249 short futures and options contracts the week before, while also correctly anticipating that there would be some significant strength, because they added 8,943 long futures and options contracts.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 2 and 4 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 3 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

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Tuesday, November 21, 2006

HUI/XAU's Wave B Up Of Wave A Down May Have Peaked

HUI/NEM/XAU's rebound (Wave B up of Wave A down for HUI/XAU since they put in monthly cycle highs on 11-9-06) since early Friday might have peaked late today. HUI/XAU were able to complete an Elliot Wave 12345 up down up down up pattern in Wave B up of Wave A down, see 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 very bearish NEM Lead Indicator today, at -1.30% versus the XAU, suggests that the upcycle since early Friday (Wave B up of Wave A down for HUI/XAU) may have peaked today. Large spike moves (spikes on the chart), such as today's for HUI/XAU, tend to mark important cycle highs.

HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be Wave C down of Wave A for HUI/XAU. HUI/XAU completed Elliot Wave ABC down up down patterns (since their monthly cycle highs on 11-9-06) on Friday, and, reliable lead indicator NEM has completed it's second Elliot Wave ABC down up down pattern since it's monthly cycle high on 11-1-06. HUI/XAU completed Wave A of Wave A of it's likely 3-6 weekish 30-40% decline on Friday, so, the upcycle since just after Friday's open (see 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==) is/was Wave B up of Wave A down, so, HUI/XAU may be in Wave C of Wave A down now (should fill today's downside gaps created at the open). If HUI/XAU were merely doing a monthly downcycle, they would have bottomed just after Friday's open and would now be in Wave 1 of a monthly upcycle.

It's very unlikely that they're in a monthly upcycle now because HUI/XAU rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines in the latest monthly upcycle (ended 11-9-06), and, appear to have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), HUI/XAU may experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 2 and 4 at http://www.joefrocks.com/GoldStockCharts.html.

The very bearish one year NEM Lead Indicator (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem) and the very bearish COT data in recent weeks (see next paragraph) support the vicious decline scenario.

The COT (Commitments Of Traders) data (five day period ending 11-14) again jives with the vicious decline scenario, since the non contrarian gold Commercial Traders traded significantly net short, while the contrarian/clueless gold Speculators traded significantly net long, see http://www.cftc.gov/dea/options/deacmxsof.htm. The non contrarian gold Commercial Traders aggressively shorted gold again this week, adding 18,336 short futures and options contracts after adding 25,249 short futures and options contracts the week before, while also correctly anticipating that there would be some significant strength, because they added 8,943 long futures and options contracts.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 2 and 4 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 3 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

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HUI/NEM/XAU's Rebound Since Early Friday Lives

HUI/NEM/XAU's rebound since early Friday lives. HUI was able to complete an Elliot Wave 12345 up down up down up pattern in Wave B up of Wave A down, see 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==. HUI was able to put in a third/Wave 5 cycle high early today, in the upcycle since early Friday. The XAU is trying to complete an Elliot Wave 12345 up down up down up pattern in Wave B up of Wave A down. Sometimes when the longer cycles are strong in the opposite direction, Elliot Wave patterns can be muted/flat or might not even get completed.

HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be Wave C down of Wave A for HUI/XAU. HUI/XAU completed Elliot Wave ABC down up down patterns (since their monthly cycle highs on 11-9-06) on Friday, and, reliable lead indicator NEM has completed it's second Elliot Wave ABC down up down pattern since it's monthly cycle high on 11-1-06.

HUI/XAU completed Wave A of Wave A of it's likely 3-6 weekish 30-40% decline on Friday, so, the upcycle since just after Friday's open (see 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==) is/was Wave B up of Wave A down, so, HUI/XAU may be in Wave C of Wave A down now (should fill today's downside gaps created at the open). If HUI/XAU were merely doing a monthly downcycle, they would have bottomed just after Friday's open and would now be in Wave 1 of a monthly upcycle.

It's very unlikely that they're in a monthly upcycle now because HUI/XAU rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines in the latest monthly upcycle (ended 11-9-06), and, appear to have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), HUI/XAU may experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 2 and 4 at http://www.joefrocks.com/GoldStockCharts.html.

The very bearish one year NEM Lead Indicator (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem) and the very bearish COT data in recent weeks (see next paragraph) support the vicious decline scenario.

The COT (Commitments Of Traders) data (five day period ending 11-14) again jives with the vicious decline scenario, since the non contrarian gold Commercial Traders traded significantly net short, while the contrarian/clueless gold Speculators traded significantly net long, see http://www.cftc.gov/dea/options/deacmxsof.htm. The non contrarian gold Commercial Traders aggressively shorted gold again this week, adding 18,336 short futures and options contracts after adding 25,249 short futures and options contracts the week before, while also correctly anticipating that there would be some significant strength, because they added 8,943 long futures and options contracts.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 2 and 4 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 3 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

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Monday, November 20, 2006

HUI/NEM/XAU's Brief One Session Rebound Appears To Have Ended

It appears that all HUI/NEM/XAU could do was to rally one session in Wave B up of HUI/XAU's Wave A down, see 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==. Assuming that's the case HUI/NEM/XAU should be about to fall off a cliff the next few sessions, which will be Wave C down of Wave A for HUI/XAU.

HUI/XAU completed Elliot Wave ABC down up down patterns (since their monthly cycle highs on 11-9-06) on Friday, and, reliable lead indicator NEM has completed it's second Elliot Wave ABC down up down pattern since it's monthly cycle high on 11-1-06. HUI/XAU completed Wave A of Wave A of it's likely 3-6 weekish 30-40% decline on Friday, so, the upcycle since just after Friday's open (see 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==) is/was Wave B up of Wave A down, which may have peaked 20 minutes into today's session, so, HUI/XAU may be in Wave C of Wave A down now (filled today's downside gaps created at the open). If HUI/XAU were merely doing a monthly downcycle, they would have bottomed just after Friday's open and would now be in Wave 1 of a monthly upcycle.

It's very unlikely that they're in a monthly upcycle now because HUI/XAU rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines in the latest monthly upcycle (ended 11-9-06), and, appear to have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), HUI/XAU may experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 2 and 4 at http://www.joefrocks.com/GoldStockCharts.html.

The very bearish one year NEM Lead Indicator (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem) and the very bearish COT data in recent weeks (see next paragraph) support the vicious decline scenario.

The COT (Commitments Of Traders) data (five day period ending 11-14) again jives with the vicious decline scenario, since the non contrarian gold Commercial Traders traded significantly net short, while the contrarian/clueless gold Speculators traded significantly net long, see http://www.cftc.gov/dea/options/deacmxsof.htm. The non contrarian gold Commercial Traders aggressively shorted gold again this week, adding 18,336 short futures and options contracts after adding 25,249 short futures and options contracts the week before, while also correctly anticipating that there would be some significant strength, because they added 8,943 long futures and options contracts.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 2 and 4 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 3 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

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HUI/XAU Completed Elliot Wave ABC Down Up Down Patterns Since Their Monthly Cycle Highs On 11-9-06

HUI/XAU have completed Elliot Wave ABC down up down patterns since their monthly cycle highs on 11-9-06, and, reliable lead indicator NEM has completed it's second Elliot Wave ABC down up down pattern since it's monthly cycle high on 11-1-06. HUI/XAU completed Wave A of Wave A of it's likely 3-6 weekish 30-40% decline on Friday, so, the upcycle since just after Friday's open (see 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==) is/was Wave B up of Wave A down, which may have peaked 20 minutes into today's session, so, HUI/XAU may be in Wave C of Wave A down now (filling today's downside gaps created at the open). If HUI/XAU were merely doing a monthly downcycle, they would have bottomed just after Friday's open and would now be in Wave 1 of a monthly upcycle.

It's very unlikely that they're in a monthly upcycle now because HUI/XAU rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines in the latest monthly upcycle (ended 11-9-06), and, appear to have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), HUI/XAU may experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 2 and 4 at http://www.joefrocks.com/GoldStockCharts.html.

The very bearish one year NEM Lead Indicator (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem) and the very bearish COT data in recent weeks (see next paragraph) support the vicious decline scenario.

The COT (Commitments Of Traders) data (five day period ending 11-14) again jives with the vicious decline scenario, since the non contrarian gold Commercial Traders traded significantly net short, while the contrarian/clueless gold Speculators traded significantly net long, see http://www.cftc.gov/dea/options/deacmxsof.htm. The non contrarian gold Commercial Traders aggressively shorted gold again this week, adding 18,336 short futures and options contracts after adding 25,249 short futures and options contracts the week before, while also correctly anticipating that there would be some significant strength, because they added 8,943 long futures and options contracts.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 2 and 4 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 3 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

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Saturday, November 18, 2006

......................A Very Complacent XAU

The XAU experienced a very sharp rise in complacency on Friday, since XAU Implied Volatility fell -3.21% to 31.470 from 32.515 on 11-16 versus a slight +0.19% rise in the XAU, which is a very sharp (3-6%) +3.02% rise in complacency that portends potentially severe weakness on Monday (-3.21% + +0.19% = -3.02% decline in the XAU wall of worry = +3.02% rise in complacency).

Also, the XAU Put/Call Ratio for the December expiration is at
0.96771 on 11-17 versus 1.11389 on 11-17 for the final November expiration value, which is a substantial rise in complacency despite a collapsing XAU, which is a major negative.


The NEM Lead Indicator was -0.28% versus the XAU on Friday/11-17, which also points to weakness on Monday.

Wave A of Wave A for HUI/XAU will probably bottom next week, and, Wave A of Wave C of Wave C for NEM will probably bottom next week (NEM has a bearish Wave B triple top at 46.86 on 11-9, so, NEM is doing a big Wave C down that's similar to but "nastier" than a typical entire monthly downcycle).

Please see Thursday's posts for the details regarding HUI/XAU and reliable lead indicator NEM: http://tradethecycles.blogspot.com/2006/11/reliable-lead-indicator-nem-is-in-wave.html, http://tradethecycles.blogspot.com/2006/11/reliable-lead-indicator-nem-has-short.html.

Given that HUI/XAU rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines in the latest monthly upcycle (ended 11-9-06), and, appear to have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), HUI/XAU may experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 2 and 4 at http://www.joefrocks.com/GoldStockCharts.html.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 2 and 4 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 3 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

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Friday, November 17, 2006

............More Weakness Is Likely On Monday

The NEM Lead Indicator was a modestly bearish -0.28% versus the XAU today, which points to more weakness on Monday. HUI/XAU are probably in Wave A of Wave A of a likely vicious (30-40%) 3-6 weekish decline since monthly cycle highs occurred on 11-9-06, in which their Wave 2 Cyclical Bear Market since 5-11-06 should bottom. Please see yesterday's posts for all the details.

The COT (Commitments Of Traders) data (five day period ending 11-14) again jives with the vicious decline scenario, since the non contrarian gold Commercial Traders traded significantly net short, while the contrarian/clueless gold Speculators traded significantly net long, see http://www.cftc.gov/dea/options/deacmxsof.htm. The non contrarian gold Commercial Traders aggressively shorted gold again this week, adding 18,336 short futures and options contracts after adding 25,249 short futures and options contracts the week before, while also correctly anticipating that there would be some significant strength, because they added 8,943 long futures and options contracts.

Given that HUI/XAU rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines in the latest monthly upcycle, and, appear to have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), HUI/XAU may be about to experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 2 and 4 at http://www.joefrocks.com/GoldStockCharts.html.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 2 and 4 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 3 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

Weakness Followed By An Oversold Bounce Followed By Weakness

HUI/NEM/XAU bounced when an oversold condition occurred early today, since Williams %R hit an extremely oversold -100. Use cycle channels (and cycle trendlines of course, you have to know where the upcycle and/or downcycle trendlines are, in a downcycle the top of a channel is the downtrend line and in an upcycle the bottom of the channel is the uptrend line) to gauge when to buy/sell/cover/short, keeping in mind that they usually become more sharply declining in downcycles or sharply rising in upcycles. They're "parabolic" in other words.

The vicious decline scenario appears to be unfolding for HUI/XAU, in which they will probably decline 30-40%. Please see the previous post for all the details.

Reliable lead indicator NEM probably put in a very important Wave 2 Cyclical Bear Market cycle low at 39.84 on 10-4-06, which is great news for precious metals bugs. NEM will probably fall to 40-41 in it's monthly downcycle since 11-1-06 (monthly cycle high at 46.89). This makes sense cyclewise because NEM's five yearish (hopefully, Wave 1 was about five and a half years) Wave 3 Cyclical Bull Market will probably begin relatively flat.

Given that HUI/XAU rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines in the latest monthly upcycle, and, appear to have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), HUI/XAU may be about to experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 2 and 4 at http://www.joefrocks.com/GoldStockCharts.html.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 2 and 4 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 3 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

Thursday, November 16, 2006

Reliable Lead Indicator NEM Is In Wave C Of Wave C

Reliable lead indicator NEM is in Wave C of Wave C, because it's Wave B up of Wave C peaked yesterday (Thursday 11-9's cycle high at 46.86 was a bearish Wave B triple top, see chart 1 at http://www.joefrocks.com/GoldStockCharts.html).

HUI/XAU should be in Wave A OF Wave A, assuming the vicious decline scenario. NEM's Wave C of Wave C, in which it should bottom near the Wave 2 Cyclical Bear Market cycle low at 39.84 (40-41 target range), should have an Elliot Wave ABC down up down pattern, with Wave B up probably corresponding to Wave B up of HUI/XAU's Wave A.

Note that NEM has been in a downtrend/monthly downcycle for over two weeks, since hitting a monthly cycle high at 46.89 on 11-1. This is another sign that supports the HUI/XAU vicious decline scenario. NEM hit resistance near the top of it's monthly downcycle channel on Tuesday, Wednesday, and today.

So, NEM should soon experience a substantial decline (obviously appears to have begun) and approach it's Wave 2 Cyclical Bear Market cycle low at 39.84 that occurred on 10-4-06. Since reliable lead indicator NEM should now be in a five yearish Wave 3 Cyclical Bull Market (see chart 3 at http://www.joefrocks.com/GoldStockCharts.html), the cycle low at 39.84 should hold. NEM approaching 39.84 makes sense cyclewise, because NEM's Wave 3 Cyclical Bull Market uptrend should begin relatively flat.

The fact that NEM is probably about to experience a substantial decline means that HUI/XAU should also. NEM's Wave C of Wave C should coincide with Wave A for HUI/XAU. Then, once NEM hits a monthly cycle low, it's Wave 1 short term upcycle should coincide with HUI/XAU's Wave B up, then NEM's Wave 2 short term downcycle should coincide with HUI/XAU's Wave C down, in which their Wave 2 Cyclical Bear Market since 5-11-06 should bottom.

The very bearish COT (Commitments Of Traders) data for the 5 session period ending 11-7-06(http://www.cftc.gov/dea/options/deacmxsof.htm) and the very bearish one year NEM Lead Indicator (see next link) suggest that a vicious decline is likely in the near future (may have begun on 11-9-06, when HUI/XAU hit monthly cycle highs for the monthly cycle that began on 10-4-06, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem).

The non contrarian gold Commercial Traders added an unusually large (> 10% increase in their short position) 25,249 short futures and options contracts, which is possibly the largest (at least one of the largest) short trade they've made in over a year. The contrarian/clueless gold Speculators added an unusually large (> 10% increase in their long position) 14,552 long futures and options contracts. These very large trades are very bearish on an intermediate term (weeks/months) basis, but, correctly pointed to some strength short term.

Given that HUI/XAU rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines in the latest monthly upcycle, and, appear to have entered Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), HUI/XAU may be about to experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 2 and 4 at http://www.joefrocks.com/GoldStockCharts.html.

The other scenario is the 2 weekish monthly downcycle scenario where HUI/XAU drop 8-15%. If the vicious decline scenario occurs short term there should soon be some big down days (like today's) of 3-5%+. It should make itself obvious.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 2 and 4 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 3 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

Reliable Lead Indicator NEM Has A Short Term Downcycle Channel

Since hitting a bearish Wave B triple top at 46.86 on 11-9, reliable lead indicator NEM has a short term downcycle channel, see http://finance.yahoo.com/q/ta?s=nem&t=6m&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c== (today's candle isn't shown yet). Note that NEM has been in a downtrend/monthly downcycle for over two weeks, since hitting a monthly cycle high at 46.89 on 11-1. This is another sign that supports the HUI/XAU vicious decline scenario. NEM hit resistance near the top of it's monthly downcycle channel on Tuesday, Wednesday, and today.

Reliable lead indicator NEM completed Wave A down of it's Wave C short term downcycle yesterday (Thursday 11-9's cycle high at 46.86 was a bearish Wave B triple top, see chart 1 at http://www.joefrocks.com/GoldStockCharts.html), hitting a Wave A of Wave C cycle low at 44.41. This means that NEM should now be in Wave C of Wave C, because it's Wave B up (of Wave C) peaked yesterday.

So, NEM should soon experience a substantial decline and approach it's Wave 2 Cyclical Bear Market cycle low at 39.84 that occurred on 10-4-06. Since reliable lead indicator NEM should now be in a five yearish Wave 3 Cyclical Bull Market (see chart 2 at http://www.joefrocks.com/GoldStockCharts.html), the cycle low at 39.84 should hold. NEM approaching 39.84 makes sense cyclewise, because NEM's Wave 3 Cyclical Bull Market uptrend should begin relatively flat.

The fact that NEM is probably about to experience a substantial decline means that HUI/XAU should also. NEM's Wave C of Wave C should coincide with Wave C of Wave A for HUI/XAU. Then, once NEM hits a monthly cycle low, it's Wave 1 short term upcycle should coincide with HUI/XAU's Wave B up, then NEM's Wave 2 short term downcycle should coincide with HUI/XAU's Wave C down, in which their Wave 2 Cyclical Bear Market since 5-11-06 should bottom.

The very bearish COT (Commitments Of Traders) data for the 5 session period ending 11-7-06(http://www.cftc.gov/dea/options/deacmxsof.htm) and the very bearish one year NEM Lead Indicator (see next link) suggest that a vicious decline is likely in the near future (may have begun on 11-9-06, when HUI/XAU hit monthly cycle highs for the monthly cycle that began on 10-4-06, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem).

The non contrarian gold Commercial Traders added an unusually large (> 10% increase in their short position) 25,249 short futures and options contracts, which is possibly the largest (at least one of the largest) short trade they've made in over a year. The contrarian/clueless gold Speculators added an unusually large (> 10% increase in their long position) 14,552 long futures and options contracts. These very large trades are very bearish on an intermediate term (weeks/months) basis, but, point to some strength short term.

The XAU Put/Call Ratio (November expiration) has spiked in recent days (to
1.06158 today from 1.03993 on 11-15, 0.98463 on 11-14, 0.94133 on 11-13, 0.90824 on 11-10, 0.90426 on 11-9, 0.87587 on 11-8, 0.81823 on 11-7), which is an unusually large rise in fear that correctly portended weakness.


Given that HUI/XAU rallied toward their Wave 2 Cyclical Bear Market (began 5-11-06) downtrend lines in the latest monthly upcycle, and, appear to be about to enter Wave C of Wave C (Wave C is probably doing an Elliot Wave ABC down up down pattern), HUI/XAU may be about to experience a vicious 3-6 weekish 30-40% decline that should mark the end of their Wave 2 Cyclical Bear Market (began 5-11-06). They should decline to or at least approach their Secular Bull Market/very long term upcycle trendlines at 200ish for HUI (the trendline could turn up to 220ish since HUI is more parabolic/volatile than the XAU) and at 90ish for the XAU, see charts 2 and 4 at http://www.joefrocks.com/GoldStockCharts.html.

The other scenario is the 2 weekish monthly downcycle scenario where HUI/XAU drop 8-15%. If the vicious decline scenario occurs short term there should soon be some big down days of 3-5%+. It should make itself obvious.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 2 and 4 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 3 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .