Most Of Today's Strength Occurred Just After The Open

Most of today's strength occurred during the very brief spike in the first few minutes of the session, 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=. Then the short term upcycle rolled over dramatically and may have peaked near session's end. The very bearish NEM Lead Indicator today at -1.90% vs the XAU indicates there's a good chance that the short term upcycle peaked late today, as does the fact that it flattened out dramatically after the very brief spike at the open. ....... http://www.JoeFRocks.com/

NEM Lead Indicator = Very Bearish -1.90% Versus The XAU Today

The past ten weeks and four days the NEM Lead Indicator is a very bearish -12.29% vs the XAU. There shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&ampt=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

Gold/Silver Negative Correlation With The US Dollar

For the past 180 trading days gold (GCZ) has a -83% correlation coefficient with the US Dollar (DXU) and silver's (SIU) is -69%, see http://www.mrci.com/special/correl.htm. The correlation coefficient must be squared in order to arrive at the actual correlation, so, gold's correlation with the US Dollar is -68.89% the past 180 trading days and silver's is -47.61%.

From February 2005, when gold hit a major cycle low, until November 2005, when the US Dollar hit a major cycle high, gold and the US Dollar had a significant positive correlation. The fact that the US Dollar recently put in a higher major cycle low than it's previous one, which means that a Cyclical Bull Market is in effect, is a strong indication that gold/gold stocks are now in a Cyclical Bear Market, given that gold and the US Dollar have reverted to the usual negative correlation. ....... http://www.JoeFRocks.com/

The Usual Fed Index Fund Trader Punch Spiking

The Fed spiked the index fund trader punch today as they always seem to do on Thursdays, for reasons unbeknownst to me, but the one day Repo was an average sized $7.25 Billion, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE. ....... http://www.JoeFRocks.com/

Probably Wave C Down Of The Cyclical Bear's Wave A Down

Double tops for HUI/XAU occurred at 353.50 on 7-12-06/354.16 on 8-23-06 for HUI, and, the XAU put in a rare perfect double top cycle high at 150.70 on 7-12-06 and 8-23-06 (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=6m&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=). Wave C down of Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) probably began after Wednesday 8-23-06's double tops. A dramatic decline is likely the next few weeks, with the XAU hitting 100-110.

For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

The Goldcorp/Glamis Gold Deal Contributed To The Early Spike

The Goldcorp/Glamis Gold deal probably contributed to the spike at today's open. Glamis is weighted significantly more than Goldcorp in HUI, see
http://www.amex.com/?href=/othProd/prodInf/OpPiIndComp.jsp?Product_Symbol=HUI, so, it appears that Glamis contributed to the spike at today's open, since it rose substantially versus Goldcorp falling substantially, as the acquiring firm usually does in takeovers. 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. ....... http://www.JoeFRocks.com/

The XAU Filled It's Upside Gap at 146.39 From Monday's Open

The XAU filled it's upside gap at 146.39 from Monday's open, the one I didn't think would get filled near term, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c.. ....... http://www.JoeFRocks.com/

...........The Very Bearish NEM Lead Indicator

The past ten weeks and three days the NEM Lead Indicator is a very bearish -10.39% vs the XAU. See the one year NEM Lead Indicator at http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem. There shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==. ....... http://www.JoeFRocks.com/

....................Downside Gap Filling Action

NEM quickly filled it's downside gap at 51.53 created at today's open and the XAU's downside gap at 144.75 created at today's open will probably be filled today or tomorrow. Also watch the XAU's downside gap at 140.77 from 8-21, which will probably get filled this week or early next week.

For recent action, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c. ....... http://www.JoeFRocks.com/

Very Brief Spike After The Open Followed By Weakness

While it turned out that there was some upside surprise early today, the strength was a very brief spike after the open followed by weakness. The NEM Lead Indicator is a very bearish -1.56% vs the XAU right now, which indicates that the bearish conclusion reached in my previous post yesterday was the correct one.

For recent action, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c. Watch the XAU's downside gap at 140.77 from 8-21, which will probably get filled this week or early next week. ....... http://www.JoeFRocks.com/

Bouncing Off The Top Of The Short Term Trading Channel

HUI hit the top of it's short term trading channel FIVE TIMES today, 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==, and it looks like tomorrow's likely to be a weak day despite the NEM Lead Indicator being +0.57% vs the XAU today. Remember it was a very bearish -1.15% vs the XAU yesterday and was slightly bearish on Monday at -0.14% versus the XAU.

After the spike at the open HUI was in a downtrend/very short term downcycle the remainder of the session. Those five HUI cycle highs today form the relatively flat very short term downcycle trendline, so, early tomorrow the very short term downcycle should go parabolic and plunge.

For recent action, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c. Watch the XAU's downside gap at 140.77 from 8-21, which will probably get filled this week. ....... http://www.JoeFRocks.com/

XAU's Downside Gap At 143.99 From Today's Open Got Filled

For recent action, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c. Watch the XAU's downside gap at 140.77 from 8-21, which will probably get filled this week. ....... http://www.JoeFRocks.com/

.......NEM's Downside Gap At 50.97 Got Filled

NEM did an Elliot Wave ABC down up down pattern en route to filling it's downside gap created at today's open at 50.97, after spiking to 51.60 after the open, see http://finance.yahoo.com/q/ta?s=nem&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

NEM Is ABCing En Route To Downside Gap Filling

NEM is doing an Elliot Wave ABC down up down pattern en route to filling it's downside gap created at today's open at 50.97, after spiking to 51.60 after the open, see http://finance.yahoo.com/q/ta?s=nem&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

............................Channel Surfing 101

Once one understands cycles channels are a great tool. One must keep in mind that due to the nature of cycles channels will tend to become increasingly sharply declining during downcycles and vice versa in upcycles. Yesterday HUI hit the bottom of it's short term trading channel, and, it bounced to the top today, 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=. So, the downtrend probably resumed after the early gap up/spike at today's open. ....... http://www.JoeFRocks.com/

...........The Very Bearish NEM Lead Indicator

The past ten weeks and two days the NEM Lead Indicator is a very bearish -10.96% vs the XAU. See the one year NEM Lead Indicator at http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem. There shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

The XAU Probably Won't Fill It's Upside Gap at 146.39 From Monday's Open

The XAU probably won't fill it's upside gap at 146.39 from Monday's open in the near term given how bearish the picture is cyclewise.

For recent action, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c. Watch NEM's downside gap at 50.97 from today's open, the XAU's downside gap at 143.99 from today's open, and, at 140.77 from 8-21, which are likely to get filled this week. ....... http://www.JoeFRocks.com/

...........Indicators Mixed But Mostly Bearish Today

The most important thing to understand now is that after last Wednesday 8-23's important double tops for HUI/XAU Wave A down of the Wave 2 Cyclical Bear Market since 5-11-06 for HUI/XAU (since 1-31-06 for reliable lead indicator NEM) is likely to bottom in the next few weeks in the 100-110 range for the XAU. So, trading long is risky now because the picture is very bearish cyclewise, with Wave C of Wave A down having begun after last Wednesday 8-23's important double tops for HUI/XAU. The XAU put in a perfect double top at 150.70 on 8-23-06 and 7-12-06.

The NEM Lead Indicator was a very bearish -1.15% vs the XAU yesterday, which indicates that day trading long today would probably be very risky. XAU Implied Volatility rose slightly to 34.09 yesterday from 33.99 on Monday, and, the XAU Put/Call Ratio fell sharply to 1.10338 today from 1.13979 yesterday.

XAU Implied Volatility rose slightly despite the XAU rising +0.33% yesterday, which was a modest (0.25-0.49%) rise in fear that portends some strength today. The XAU Put/Call Ratio portends weakness today because of the sharp rise in complacency (it fell sharply). With the XAU Put/Call Ratio I don't do a comparison with the change in the XAU, because I get it before the market opens, so, if it falls that's a rise in complacency that portends weakness, unless it falls more than 6%, that would be an unusually large rise in complacency that portends strength. Cycles are the first and most important consideration. The more bearish the picture is cyclewise then the more weakness is indicated if an indicator portends weakness, and, vice versa if the picture is bullish and an indicator portends strength. ....... http://www.JoeFRocks.com/

NEM Filled It's Upside Gap Created Yesterday At 51.39

The XAU has an upside gap at 146.39 from Monday's open that may get filled today, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c.
Watch NEM's downside gap at 50.97 from today's open, the XAU's downside gap at 143.99 from today's open, and, at 140.77 from 8-21, which are likely to get filled this week. ....... http://www.JoeFRocks.com/

NEM Lead Indicator = Very Bearish -1.15% Versus The XAU Today

The past ten weeks and two days the NEM Lead Indicator is a very bearish -10.96% vs the XAU. There shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

Probably Wave C Down Of The Cyclical Bear's Wave A Down

Double tops for HUI/XAU occurred at 353.50 on 7-12-06/354.16 on 8-23-06 for HUI, and, the XAU put in a rare perfect double top cycle high at 150.70 on 7-12-06 and 8-23-06 (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=6m&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==). Wave C down of Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) probably began after last Wednesday 8-23-06's double tops. A dramatic decline is likely the next few weeks, with the XAU hitting 100-110.

The past ten weeks and one day the NEM Lead Indicator is a very bearish -9.81% vs the XAU. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

NEM's Upside Gap At 51.39 From Today's Open

NEM's upside gap at 51.39 from today's open may get filled today or tomorrow, see http://finance.yahoo.com/q/ta?s=nem&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c, but, as NEM plunges it gets more doubtful. ....... http://www.JoeFRocks.com/

..............Seasonal Weakness Lies Ahead

In three of the past four years the major averages have experienced substantial weakness in the September/October timeframe, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5y&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=. A major factor in September/October is mutual fund tax selling ahead of their fiscal year end on October 31. About 5 years ago or more there was an article that said Fidelity's funds alone accounted for about 12% of daily trading volume on the NYSE. I'm sure that's no longer the case given the explosion of mutual funds, but, the point is that mutual fund trading is a huge part of the stock market's trading activity. ....... http://www.JoeFRocks.com/

NEM Filled It's Downside Gap At 50.71 From 8-21

The XAU may fill it's downside gap at 140.77 from 8-21 today, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=. ....... http://www.JoeFRocks.com/

.......Indicators Portend Some Strength Today

Once short term cycle lows occur, XAU Implied Volatility and the XAU Put/Call Ratio portend strength today. XAU Implied Volatility rose sharply to 33.99 yesterday from 32.87 on Friday, and, the XAU Put/Call Ratio also rose sharply to 1.13979 today from 1.10581 yesterday. XAU Implied Volatility rose more %wise (+3.41%) than the XAU fell yesterday (-1.99%), which was a significant (0.50-1.99%) rise in fear that portends strength. With the XAU Put/Call Ratio I don't do a comparison, because I get it before the market opens, so if it rises that's a rise in fear that portends strength, unless it rises more than 6%, that would be an unusually large rise in fear that portends weakness. ....... http://www.JoeFRocks.com/

Elliot Wave ABC Down Up Down Short Term Downcycle

HUI/NEM/XAU have done an Elliot Wave ABC down up down pattern since last Wednesday 8-23's important double tops (with 7-12-06's cycle highs), but will probably do some downside gap filling before hitting short term cycle lows, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=. ....... http://www.JoeFRocks.com/

The Fed's Punch Spiking Continues To Be Modest

The Fed didn't spike the index fund trader punch last week and isn't doing so so far this week, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE.

Watch NEM's downside gap at 50.71 from 8-21 and the XAU's downside gap at 140.77 from 8-21, which are likely to get filled this week, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=. ....... http://www.JoeFRocks.com/

NEM Filled It's Downside Gap Created Friday At 51.71

Watch NEM's downside gap at 50.71 from 8-21 and the XAU's downside gap at 140.77 from 8-21, which are likely to get filled this week. The XAU has an upside gap at 146.39 from today's open that probably won't get filled short term, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=. ....... http://www.JoeFRocks.com/

Probably Wave C Down Of The Cyclical Bear's Wave A Down

Double tops for HUI/XAU occurred at 353.50 on 7-12-06/354.16 on 8-23-06 for HUI, and, the XAU put in a rare perfect double top cycle high at 150.70 on 7-12-06 and 8-23-06 (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=6m&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==). Wave C down of Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) probably began after last Wednesday 8-23-06's double tops. A dramatic decline is likely the next few weeks, with the XAU hitting 100-110.

XAU Implied Volatility collapsed to 32.87 on Friday 8-25 from 38.37 on 8-15, which indicates that a substantial decline is probably imminent, as does the dramatic rise in the XAU Put/Call Ratio (September expiration) to 1.10581 today from the final August expiration value on Friday 8-18 at 0.66662, because it's an unusually large rise in fear that portends weakness in the near future. The past ten weeks the NEM Lead Indicator is a very bearish -9.67% vs the XAU.

There shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

.............Big Picture Trade The Cycles Charts

See http://www.joefrocks.com/GoldStockCharts.html. The first chart from February shows that the Wave 5 long term upcycle was peaking, and, peaked on 5-11-06, which was a Wave 1 Cyclical Bull Market cycle high for the XAU and HUI. The second chart shows the US Dollar putting in a major cycle low and the third chart is the NEM Lead Indicator chart that reveals NEM dramatically leading to the downside months before the Wave 1 Cyclical Bull Market cycle highs for HUI/XAU. There are also annotated Trade The Cycles charts for HUI/NEM/XAU dated June 2 which show that Trade The Cycles nailed the very important Wave 1 Cyclical Bull Market cycle highs for HUI/XAU.

There shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

.................Good Gold Article With Good Charts

I posted this article's link early last week and I'm posting it again. If you didn't read it and check out the charts you should: See http://www.resourceinvestor.com/pebble.asp?relid=23037. It's rare to find an article regarding gold/silver or gold/silver stock timing that's accurate/worth mentioning, especially since the May 11, 2006 Wave 1 Cyclical Bull Market cycle highs for HUI/XAU.

There shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

.......What's Going On Cycle Wise Since June 13

After the Wave 1 Cyclical Bull Market cycle highs on 5-11-06 for HUI/XAU (on 1-31-06 for reliable lead indicator NEM) they did a vicious Elliot Wave ABC down up down decline until June 13, which was probably Wave A down OF Wave A down, not the entire Wave A down of the Wave 2 Cyclical Bear Market (see http://finance.yahoo.com/q/ta?s=%5EHUI&t=6m&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c). Since June 13 Wave B up of Wave A down has been in effect, with very nice bearish double tops occurring for HUI/XAU at 353.50 on 7-12-06/354.16 on 8-23-06 for HUI, and, with the XAU putting in a rare perfect double top cycle high at 150.70 on 7-12-06 and 8-23-06 (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=6m&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==). If so then Wave C down of Wave A down of the Wave 2 Cyclical Bear Market began after last Wednesday 8-23-06's double tops and a dramatic decline is likely the next few weeks, with the XAU hitting 100-110.

The past ten weeks the NEM Lead Indicator is a very bearish -9.67% vs the XAU. There shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

NEM Lead Indicator = Bullish +0.74% Versus The XAU Today

Which jives with Wave 5 up of the very short term upcycle since mid session yesterday peaking early on Monday, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c.

The COT data (W/E 8-22-06) released at 12:35 pm ish PST (see http://www.cftc.gov/dea/options/deacmxsof.htm) showed the non contrarian gold Commercial Traders trading significantly net long instead of net short. What's happened is they've wisely shortened their trading timeframe to short term (one weekish) cycles versus intermediate term (weeks/months) cycles given the uncertainty regarding exactly how the dramatic Cyclical Bear Market Wave A decline (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) will unfold. The past two weeks they correctly traded net long, in anticipation of the headfake rally that peaked on Wednesday, mostly in the form of short covering (locking in short term profits), but, accompanied by modest long trades. They correctly understood in recent weeks that trading long is risky.

The headfake rally that began early last Friday 8-18 (See http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c) peaked Wednesday. Watch NEM's downside gap at 50.71 from 8-21 and the XAU's downside gap at 140.77 from 8-21, which are likely to get filled next week.

The past ten weeks the NEM Lead Indicator is a very bearish -9.67% vs the XAU. There shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

The Very Short Term Upcycle Since Yesterday

The Very Short Term Upcycle since mid session yesterday will probably do Wave 5 up and peak late today or early on Monday, 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 COT data (W/E 8-22-06) released at 12:35 pm ish PST (see http://www.cftc.gov/dea/options/deacmxsof.htm) should show the non contrarian gold Commercial Traders trading significantly or even aggressively net short. ....... http://www.JoeFRocks.com/

Fed Credit Fell By -$4.209 Billion W/E 8-23-06

Fed Credit fell a substantial -$4.209 Billion in the week ending 8-23-06, see http://www.federalreserve.gov/releases/h41/Current/. Therefore, index fund traders have less ammo and weakness in most indexes is likely, because SPX (S & P 500) weakness is likely. SPX drives index fund trading, which is a huge factor that most are unaware of, see http://finance.yahoo.com/q/ta?t=5d&s=%5EHUI&l=off&z=l&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=&c=%5EGSPC. ....... http://www.JoeFRocks.com/

Rebound/Very Short Term Upcycle After A Very Sharp Decline

Today's early strength is a rebound/Very Short Term Upcycle after a very sharp decline following Wednesday's short term cycle high, which is likely to be an important cycle high (the end of the headfake rally).

The headfake rally/short term upcycle (probably not a multiweek monthly upcycle) that began early on Friday 8-18 (See http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c) peaked Wednesday. HUI/XAU put in bearish double tops with their July 12 monthly cycle highs (at 353.50 and 150.70). HUI's high on Wednesday was 354.16 and the XAU's high was 150.70, a rare perfect double top.

The Fed's Index Fund trader punch spiking has been very modest since last Friday 8-18 (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), which should add to likely weakness the next few sessions. While the Fed did do it's usual Thursday punch spiking, the one day Repo was a modest size.

XAU Implied Volatility collapsed to 33.50 yesterday/8-24 from 38.37 on 8-15, which indicates that a substantial decline is probably imminent, as does the dramatic rise in the XAU Put/Call Ratio (September expiration) to 1.16081 today from the final August expiration value last Friday 8-18 at 0.66662, because it's an unusually large rise in fear that portends weakness in the near future.

The past nine weeks and four days the NEM Lead Indicator is a very bearish -10.41% vs the XAU. There shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

NEM Lead Indicator = Bearish -0.53% Versus The XAU Today

The headfake rally that began early last Friday 8-18 (See http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c) peaked yesterday. Watch NEM's downside gap at 50.71 from 8-21 and the XAU's downside gap at 140.77 from 8-21, which are likely to get filled in the next few days.

The past nine weeks and four days the NEM Lead Indicator is a very bearish -10.41% vs the XAU. There shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

................A Lot Of NEM Sell Interest Today

by the non contrarian Institutional Traders, see
http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?t=NEM&range=0&mgp=0&i=3&hdate=&x=6&y=9. As I said earlier, yesterday's spike/short term cycle high has the hallmark of an important cycle high, and, a substantial decline has probably begun. ....... http://www.JoeFRocks.com/

...............Check Out HUI's Cycle High Spikes

Check out HUI's cycle high spikes that occurred at the July 12 and August 9 monthly cycle highs and at yesterday's short term cycle high:
http://finance.yahoo.com/q/ta?s=%5EHUI&t=3m&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=. Yesterday's short term cycle high looks like an important cycle high that's likely to be followed by a substantial decline. ....... http://www.JoeFRocks.com/

.......Headfake Rally Since Early Friday Peaked

The headfake rally/short term upcycle (probably not a multiweek monthly upcycle) that began early on Friday (See http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c) peaked yesterday. HUI/XAU put in bearish double tops with their July 12 monthly cycle highs at 353.50 and 150.70. HUI's high yesterday was 354.16 and the XAU's high was 150.70, a rare perfect double top.

The Fed's Index Fund trader punch spiking has been very modest since last Friday (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), which should add to likely weakness the next few sessions. While the Fed did do it's usual Thursday punch spiking, the one day Repo was a modest size.

XAU Implied Volatility collapsed to 33.47 yesterday/8-23 from 38.37 on 8-15, which indicates that a substantial decline is probably imminent, as does the dramatic rise in the XAU Put/Call Ratio (September expiration) to 1.16381 today from the final August expiration value last Friday 8-18 at 0.66662, because it's an unusually large rise in fear that portends weakness in the near future.

The past nine weeks and three days the NEM Lead Indicator is a very bearish -9.88% vs the XAU. There shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

NEM Lead Indicator = Bullish +0.64% Versus The XAU Today

Which jives with my expectation that a very short term upcycle will be in effect during some/much of tomorrow's session. The headfake rally that began early on Friday (See http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c) probably peaked today or may peak tomorrow.

The past nine weeks and three days the NEM Lead Indicator is a very bearish -9.88% vs the XAU. There shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

This Downside Gap Filling Action Is A Very Short Term Downcycle

I'll be looking to go short and buy XAU puts during the very short term upcycle that'll follow this gap filling very short term downcycle. The subsequent very short term upcycle will probably peak tomorrow or possibly early Friday. The XAU filled today's downside gap at 148.25 and NEM will probably fill it's downside gap at 52.74 very late today or early tomorrow. ....... http://www.JoeFRocks.com/

Hangover/Sideways Action Is A Post Cycle High Hallmark

The hangover appears to have begun. See http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. The headfake rally/short term upcycle since early last Friday appears to have gone bust. Sideways action is the hallmark of post cycle high behavior. This is probably the flat part of a short term downcycle. The downside gap created at today's open at 148.25 for the XAU got filled, which is another sign that a short term downcycle has probably begun. ....... http://www.JoeFRocks.com/

Final Spike Of Headfake Rally Since Early Friday?

The headfake rally/short term upcycle (probably not a multiweek monthly upcycle) that began early on Friday (See http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c) may have peaked early today. The spike move since late yesterday is typical of what happens at or near cycle highs. Upcycles tend to culminate in spikes. The larger the spike the more likely it's a cycle high. If today's downside gaps created at the open at 52.74 for NEM and at 148.25 for the XAU get filled today, then the short term cycle since early Friday has probably turned down.

HUI/XAU may be putting in nice bearish double tops with their July 12 monthly cycle highs at 353.50 and 150.70. HUI's high today so far is 354.16 and the XAU's high is 150.69.

The Fed's Index Fund trader punch spiking has been very modest since last Friday (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), which should add to likely weakness the next few sessions.

XAU Implied Volatility collapsed to 32.75 yesterday/8-22 from 38.37 on 8-15, which indicates that a substantial decline is probably imminent, as does the dramatic rise in the XAU Put/Call Ratio (September expiration) to 1.23549 today from the final August expiration value last Friday 8-18 at 0.66662, because it's an unusually large rise in fear that portends weakness in the near future.

The past nine weeks and two days the NEM Lead Indicator is a very bearish -10.52% vs the XAU. There shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

NEM Lead Indicator = -0.03% Versus The XAU Today

But, the NEM Lead Indicator became more bearish toward session's end, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem. The headfake rally that began early on Friday (See http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c) may have peaked today or may peak tomorrow.

The past nine weeks and two days the NEM Lead Indicator is a very bearish -10.52% vs the XAU. There shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

Today's Upside Gaps Filled And Bearish HUI Triple Top

NEM and the XAU filled today's upside gaps (created at the open) at 52.55 and 147.68. Watch yesterday's downside gaps at 50.71 for NEM and at 140.77 for the XAU. See http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c= for the XAU 5 day chart. HUI may be putting in a bearish triple top today, with a high so far at 347.90 vs the 348.84 monthly cycle high on 8-9 and 348.74 on 8-2. ....... http://www.JoeFRocks.com/

..............Watch Today's Unfilled Upside Gaps

NEM and the XAU may fill (especially NEM) today's upside gaps (created at the open) at 52.55 and 147.68, after which I'll look to "get my shorts on." After that watch yesterday's downside gaps at 50.71 for NEM and at 140.77 for the XAU. See http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c= for the XAU 5 day chart. ....... http://www.JoeFRocks.com/

.................Good Gold Article With Good Charts

See http://www.resourceinvestor.com/pebble.asp?relid=23037. It's rare to find an article regarding gold/silver or gold/silver stock timing that's accurate/worth mentioning, especially since the May 11, 2006 Wave 1 Cyclical Bull Market cycle highs for HUI/XAU.

There shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

NEM Lead Indicator = Very Bearish -1.28% Versus The XAU Today

The NEM Lead Indicator was a very bearish -1.28% versus the XAU today, so, the headfake rally that began early on Friday (See http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c) may have peaked today or may peak tomorrow. The prior nine weeks the NEM Lead Indicator is a very bearish -9.21% vs the XAU. The past nine weeks and one day the NEM Lead Indicator is a very bearish -10.49% vs the XAU.

There shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

...........This Big Spike Is Probably A Sign

This big spike since early Friday (See http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=) is probably a sign that the rally probably won't be a healthy multiweek monthly upcycle. Monthly upcycles normally begin relatively flat/weak and experience big spike moves near the end of the cycle. So, this type of strength isn't usually seen until the end of a multiweek monthly upcycle. Short covering is probably a major factor in this spike move/headfake rally since early Friday. ....... http://www.JoeFRocks.com/

.....................This Is The Headfake Rally

In the XAU's 3 month chart (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=3m&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=) one can see that an Elliot Wave ABC down up down pattern occurred from 8-9's monthly cycle high until Friday's cycle low. Today's bar isn't shown, but the headfake rally began early on Friday (see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=), probably won't be a multiweek monthly upcycle, and, might even peak today and end up being a one session wonder.

I expect Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) to bottom in the 100-110 range (XAU) in the next few weeks.

For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

........................Potential Headfake Rally

In the latest COT report (http://www.cftc.gov/dea/options/deacmxsof.htm) the non contrarian gold Commercial Traders traded significantly net long while the contrarian speculators traded significantly net short, which points to the potential for a headfake rally in the near future. SPX strength last week also points to a potential near term headfake rally due to index fund buying.

After a potential near term headfake rally, I see the XAU experiencing a dramatic decline to 100-110 in the next few weeks, which should be Wave A down of the 18 monthish Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoming.

The previous monthly upcycle was a muted/anemic one in terms of the gains seen in HUI/NEM/XAU. The latest monthly cycle highs on 8-9 failed to exceed the previous monthly cycle highs on 7-12, despite starting the monthly upcycle at a substantially higher level, which is obviously a major negative short term. The last week of HUI's monthly upcycle was nearly perfectly flat, with a double top monthly cycle high on 8-9 at 348.84 vs 348.74 on 8-2. If there is a headfake rally near term it's likely to be even more anemic than the latest monthly upcycle from 7-24 until 8-9 (for HUI/NEM/XAU).

For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

The XAU Put/Call Ratio Reveals A Dramatic Rise In Fear

The XAU Put/Call Ratio experienced a dramatic rise, from a complacent level at 0.63247 for the final August expiration on 8-18, to a very fearful level at 1.22778 on 8-18 for the September expiration. The dramatic rise in fear points to substantial near term weakness. Many traders understand that a dramatic decline in the XAU (gold/silver stocks) is likely in the next few weeks.

For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

Makin Sense Of The COT (Commitments Of Traders) Data

I expected the non contrarian gold Commercial Traders to be aggressively short selling in the latest COT report (http://www.cftc.gov/dea/options/deacmxsof.htm), instead they traded significantly net long, but, only added modestly to their long position. There was a very sharp decline during the five session stretch from 8-9 thru 8-15 (a monthly cycle high occurred on 8-9 for HUI/NEM/XAU), so, they may have just been locking in some short term profits with the short covering they did.

The one year NEM Lead Indicator chart shows the very bearish wide gap between NEM and HUI/XAU right now, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem, which points to a dramatic decline soon. Also, XAU Implied Volatility collapsed to 33.67 on 8-18 from 38.37 on 8-15 despite the decline in the XAU, which points to substantial weakness in the near future.

The monthly downcycle's (since 8-9) declining peaks downtrend line appears to have turned down and increased in strength/become more sharply declining (see the first chart at http://www.joefrocks.com/GoldStockCharts.html), so, there shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

NEM Lead Indicator = Bearish -0.34% Versus The XAU Today

The NEM Lead Indicator was a bearish -0.34% versus the XAU today, so, some weakness is likely (probably) early on Monday. The past nine weeks (including this week) the NEM Lead Indicator was a very bearish -9.21% vs the XAU. This week was a bearish -1.03% vs the XAU.

The monthly downcycle's (since 8-9) declining peaks downtrend line appears to have turned down and increased in strength/become more sharply declining (see the first chart at http://www.joefrocks.com/GoldStockCharts.html), so, there shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks.

For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

Reliable Lead Indicator NEM's Uptrend Since 6-13-06 Broke Down

If you're hoping that my system/work is full of it and that June 13 was a major cycle low, I have to say forgetaboutit! Reliable lead indicator NEM's uptrend since 6-13-06 broke down about a week ago (see http://finance.yahoo.com/q/ta?s=nem&t=3m&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=).

The monthly downcycle began on 8-9 for HUI/NEM/XAU when HUI put in a near perfect bearish double top at 348.84 versus 348.74 a week prior (8-2).

I expect Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) to bottom in the 100-110 range (XAU) in the next few weeks.

The prior eight weeks the NEM Lead Indicator was a very bearish -8.18% vs the XAU, and, so far this week it's -0.69% vs the XAU, for a total of -8.87% vs the XAU the past eight weeks and four days. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

.......The XAU's Monthly Downcycle Channel

The XAU's monthly downcycle channel should limit it's trading range tomorrow to a maximum of about 142 and a minimum of about 134, see the first chart at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/

NEM Lead Indicator = Bullish +1.40% Versus The XAU Today

The NEM Lead Indicator was a very bullish +1.40% versus the XAU today, so, some strength is likely (probably) early tomorrow. The monthly downcycle's (since 8-9) declining peaks downtrend line appears to have turned down and increased in strength/become more sharply declining, so, there shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks.

The prior eight weeks the NEM Lead Indicator was a very bearish -8.18% vs the XAU, and, so far this week it's -0.69% vs the XAU, for a total of -8.87% vs the XAU the past eight weeks and four days. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

NEM and the XAU Filled Downside Gaps Today

NEM and the XAU filled downside gaps today that were created at yesterday's open at 50.69 and 141.14, and, the XAU filled it's downside gap at 139.71 from Tuesday, but, the XAU barely missed filling an upside gap from today's open at 143.24, with a session high 143.23, which jives with the bearish case (is a bearish sign because it's probably a breakaway gap to the downside). The monthly downcycle began on 8-9 for HUI/NEM/XAU when HUI put in a near perfect bearish double top at 348.84 versus 348.74 a week prior (8-2).

I expect Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) to bottom in the 100-110 range (XAU) in the next few weeks. The prior eight weeks the NEM Lead Indicator was a very bearish -8.18% vs the XAU, and, so far this week it's -2.09% vs the XAU, for a total of -10.27% vs the XAU the past eight weeks and three days. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

The Fed Spiked The Index Fund Trader Punch Today

As they nearly always do on Thursday, but, Fed Credit was well below average this week until today, so, it shouldn't prop things up for long. See http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE. ....... http://www.JoeFRocks.com/

....................NEM/XAU Gap Filling Action

NEM and the XAU have downside gaps created at yesterday's open at 50.69 and 141.14 that should get filled today or tomorrow, but, the XAU has an upside gap from today's open at 143.24 that will probably get filled, so, shortly after that happens, weakness should resume. I don't discuss HUI gaps because they tend to be smaller and less frequent than those of NEM/XAU, and, it's easier to track two.

The monthly downcycle began on 8-9 for HUI/NEM/XAU when HUI put in a near perfect bearish double top at 348.84 versus 348.74 a week prior (8-2).

I expect Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) to bottom in the 100-110 range (XAU) in the next few weeks. The prior eight weeks the NEM Lead Indicator was a very bearish -8.18% vs the XAU, and, so far this week it's -2.09% vs the XAU, for a total of -10.27% vs the XAU the past eight weeks and three days. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

NEM Lead Indicator = Bearish -0.73% Versus The XAU Today

The NEM Lead Indicator was a very bearish -1.41% versus the XAU yesterday. I expect Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) to bottom in the 100-110 range (XAU) in the next few weeks. The prior eight weeks the NEM Lead Indicator was a very bearish -8.18% vs the XAU, and, so far this week it's -2.09% vs the XAU, for a total of -10.27% vs the XAU the past eight weeks and three days. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

The S & P 500 (SPX) Drives Index Fund Trading

Which is a huge factor that most are unaware of, see http://finance.yahoo.com/q/ta?t=5d&s=%5EXAU&l=off&z=l&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=&c=%5EGSPC, and, note how the XAU tends to follow SPX. Here's a 3 month chart of SPX vs the XAU: http://finance.yahoo.com/q/ta?s=%5EXAU&t=3m&l=off&z=l&q=c&p=&a=m26-12-9,m26-12-9,p12,m26-12-9,p12,fs,m26-12-9,p12,fs,w14&c=%5EGSPC.

On a very long term cycle basis (15-20 years for a very long term up or down cycle, about 35 years on average for an entire very long term cycle) SPX (S & P 500 ) and the XAU have a very high negative correlation (SPX hit a very long term cycle high in March 2000 vs the XAU htting a very long term cycle low in October 2000), but, thanks largely to index fund trading, which is driven by SPX, the shorter the cycle timeframe the correlation between SPX (S & P 500 ) and the XAU usually becomes much more positive. For intraday, very short term, short term, and monthly cycles index fund trading is a huge factor because there tends to be a high positive correlation. ....... http://www.JoeFRocks.com/

NEM Lead Indicator = -0.60% Versus The XAU Right Now

After being a very bearish -1.41% versus the XAU yesterday. The XAU had a large gap up at the open, and, most if not all of today's strength is likely to occur early on, see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.

HUI/XAU are rallying to the top of their monthly downcycle channels, which also means that they're rallying to their monthly downcycle declining peaks downtrendlines. There should be a good opportunity to day trade or short term trade short today, though only a small % of traders should be day trading or short term cycle trading. ....... http://www.JoeFRocks.com/

NEM Lead Indicator = -1.41% Versus The XAU Today

The NEM Lead Indicator was a very bearish -1.41% versus the XAU today. I expect Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) to bottom in the 100-110 range (XAU) in the next few weeks.

The prior eight weeks the NEM Lead Indicator was a very bearish -8.18% vs the XAU, and, so far this week it's -1.36% vs the XAU, for a total of -9.54% vs the XAU the past eight weeks and two days, even though it's been positive the prior four sessions at +0.05% versus the XAU yesterday, +0.28% versus the XAU on Friday, +0.59% versus the XAU on Thursday, and +0.69% versus the XAU on Wednesday. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

................The Wave 2 Cyclical Bear Market

Has probably been in effect since 1-31-06 for reliable lead indicator NEM and since 5-11-06 for HUI/XAU. See my charts at http://www.joefrocks.com/GoldStockCharts.html, with chart 1 showing the Elliot Wave count in February, which correctly indicated that the Wave 5 long term upcycle (began 5-10-04, ended 5-11-06) and therefore also the Wave 1 Cyclical Bull Market (began late 2000) was peaking.

The second chart shows that the USD is now in a Cyclical Bull Market, which is a strong indication that gold/silver stocks are now in a Cyclical Bear Market. It's true that the USD and gold can have a positive correlation for a considerable length of time. This occurred from February 2005, when gold hit a major cycle low, to November 2005, when the USD hit a major cycle high. They both trended up for about nine months, so, they enjoyed a positive correlation.

The third chart shows that the NEM Lead Indicator correctly pointed to a major downturn, that is probably an 18 monthish Wave 2 Cyclical Bear Market. ....... http://www.JoeFRocks.com/

NEM Lead Indicator = -1.45% Versus The XAU Right Now

After gapping up and rallying very briefly the XAU has trended down most of the session so far, see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. The NEM Lead Indicator is a very bearish -1.45% vs the XAU right now, which would scare me away from day trading long, even if CDE and SLW weren't near or at resistance, they have been in downtrends for over a week. If they can break those downtrend lines and follow through by at least 1% for at least 2 hours that will be a short term cycle buy signal, and, I may day trade them long, if the NEM Lead Indicator improves dramatically.

The NEM Lead Indicator has been positive the past four sessions at +0.05% versus the XAU yesterday, +0.28% versus the XAU on Friday, +0.59% versus the XAU on Thursday, and +0.69% versus the XAU on Wednesday. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

NEM Lead Indicator = +0.05% Versus The XAU Today

After being a bearish -0.50% vs the XAU early in the session, and, it appears that HUI/NEM/XAU will start to bounce toward the top of their monthly downcycle channels the next few sessions. The NEM Lead Indicator has been positive the past four sessions at +0.05% versus the XAU today, +0.28% versus the XAU on Friday, +0.59% versus the XAU on Thursday, and +0.69% versus the XAU on Wednesday. For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

The XAU Filled It's Upside Gap Created Today At 142.25

And, the XAU has done an Elliot Wave ABC down up down pattern since hitting a monthly cycle high at 149.47 (below the previous one at 150.70 on July 12) last Wednesday, so, HUI/NEM/XAU may rise to the top of their monthly downcycle channels in the next session or two. See http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

.......The XAU Put/Call Ratio At 0.60544 Today

The XAU Put/Call Ratio, at 0.60544 today (August expiration), reveals a very low level of fear = a high level of complacency one would expect to see near an important cycle high. This jives with my expectation that Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) is likely to bottom in the 100-110 range (XAU) in the next few weeks.

For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

Reliable Lead Indicator NEM Is Underperforming The XAU

The NEM Lead Indicator is -0.50% vs the XAU right now. Both the XAU Put/Call Ratio, at 0.60544 today vs 0.63102 on Friday (August expiration), which is a very sharp rise in complacency, to go along with the very sharp rise in complacency revealed by XAU Implied Volatility (see previous post), portended weakness/a potentially sharp decline today.

Williams %R for HUI/NEM/XAU has reached a short term oversold level below -80, and, when it hits an oversold extreme near -100 usually a significant bounce occurs. If you're looking to trade short and/or buy put options as I am wait for HUI/NEM/XAU to rise toward the top of their short term trading channels. They're near the bottom of their short term trading channels right now.

The fact that, over the course of the past eight sessions, HUI/XAU "approached" but failed to exceed the July 12 monthly cycle highs, is a major negative short term. It appears that Wave C down of the Cyclical Bear Market's (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) Wave A down may have begun on July 12, and, it may be doing an Elliot Wave ABC down up down pattern, with Wave C down having begun.

A Wave 2 Cyclical Bear Market has probably been in effect since 1-31-06 for reliable lead indicator NEM and since 5-11-06 for HUI/XAU. See my charts at http://www.joefrocks.com/GoldStockCharts.html, with chart 1 showing the Elliot Wave count in February, which correctly indicated that the Wave 5 long term upcycle (began 5-10-04, ended 5-11-06) and therefore also the Wave 1 Cyclical Bull Market (began late 2000) was peaking.

The second chart shows that the USD is now in a Cyclical Bull Market, which is a strong indication that gold/silver stocks are now in a Cyclical Bear Market. It's true that the USD and gold can have a positive correlation for a considerable length of time. This occurred from February 2005, when gold hit a major cycle low, to November 2005, when the USD hit a major cycle high. They both trended up for about nine months, so, they enjoyed a positive correlation. The third chart shows that the NEM Lead Indicator correctly pointed to a major downturn, that is probably an 18 monthish Wave 2 Cyclical Bear Market.

For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

XAU Implied Volatility Portends Some Weakness On Monday

Falling -0.64% to 37.355 on Friday from 37.595 on Thursday despite a sharp -2.40% decline in the XAU on Friday, which is a very sharp +3.04% rise in complacency (-0.64% + -2.40% = -3.04% decline in the XAU wall of worry = +3.04% rise in complacency) that portends a potentially sharp decline at some point on Monday. ....... http://www.JoeFRocks.com/

.......The One Year NEM Lead Indicator Chart

See http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem, at the May 11, 2006 Wave 5 Long Term and Wave 1 Cyclical Bull Market cycle highs (reliable lead indicator NEM hit those cycle highs on 1-31-06), the gap between NEM's performance and HUI/XAU's became very wide (NEM dramatically underperformed), and, a dramatic decline occurred from 5-11-06 until 6-13-06, which was probably Wave A down of the Wave 2 Cyclical Bear Market's Wave A down.

At the 6-13-06 monthly cycle low the gap between NEM's performance and HUI/XAU's narrowed dramatically (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem), indicating that NEM dramatically outperformed HUI/XAU during the brutal decline from 5-11-06 until 6-13-06, when the XAU fell from 171.71 to 119.11 (a -30.63% decline in a month's time). HUI/XAU then had a healthy monthly upcycle until 7-12-06.

During the monthly upcycle from 6-13-06 until 7-12-06 NEM dramatically underperformed HUI/XAU, as evidenced by the wide gap in the one year NEM Lead Indicator Chart (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem), at which point HUI/XAU began to decline again.

Now the gap in the one year NEM Lead Indicator Chart (between NEM and HUI/XAU) has become very wide again (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem), and, it looks like the final Wave C decline of the Wave 2 Cyclical Bear Market's Wave A down has begun, and, actually began on 7-12-06. This week's action will probably confirm if that's the case.

I plan to take a good look at the one year NEM Lead Indicator Chart often in this Wave 2 Cyclical Bear Market. It's amazing how well the NEM Lead Indicator has worked in recent years. The crux of my Trade the Cycles system is cycle trendlines in concert with Elliot Wave and gaps, but great indicators like the NEM Lead Indicator, the XAU Put/Call Ratio, XAU Implied Volatility, as well as data like Fed Credit (drives index fund trading) and the COT (Commitments of Traders) data, are also very important.

For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

COT Data And Near Term/Long Term Thoughts

The latest COT data doesn't point to a brutal decline this week, see http://www.cftc.gov/dea/options/deacmxsof.htm, but the gold Commercial Traders may have been conservative about short selling ahead of last Tuesday's Fed meeting, and, the NEM Lead Indicator was a modestly bullish (for a one week timeframe) +0.83% vs the XAU last week, but, the prior seven weeks was a combined -9.01% (-0.86%, -4.31%, +0.21%, +1.07%, +1.67%, -2.24%, -4.55% ), which is very bearish. So, a modest rebound at some point next week is likely, but trading long is far too risky right now.

The fact that, over the course of the past eight sessions, HUI/XAU "approached" but failed to exceed the July 12 monthly cycle highs, is a major negative short term. As I discussed yesterday, it appears that Wave C down of the Cyclical Bear Market's (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) Wave A down may have begun on July 12, and, it may be doing an Elliot Wave ABC down up down pattern, with Wave C down having begun.

It could be that the gold Commercial Traders weren't aggressively short selling because of the uncertainty created by last Tuesday's Fed rate decision and accompanying statement. The bottom line is that I expect the XAU's Cyclical Bear Market Wave A down to bottom in the 100-110 range in the next few weeks, and, I expect the ultimate Wave 2 Cyclical Bear Market cycle low (in about 15 months from now for a total of 18 months since 5-11-06) to be in the 95-100 range, based on it's very long term upcycle/Secular Bull Market trendline since October 2000.

For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

NEM Lead Indicator = Bullish +0.28% Versus The XAU Today

The anemic monthly upcycle since 7-24 appears to have peaked, which, if so, means that the minor intermediate term upcycle since 6-13 has peaked (and really was a monthly upcycle not a minor intermediate term upcycle), and, actually peaked on July 12, since July 12's monthly cycle high for HUI/XAU exceeded those in the latest monthly upcycle. It appears that Wave C down of the Cyclical Bear Market's Wave A down may have begun on 7-12, and, may be doing an Elliot Wave ABC down up down pattern, with Wave C occurring now. If so then this is Wave C of Wave C for the Cyclical Bear Market's Wave A down and the next week or two should be brutal. What can you say but buckle up!

An anemic monthly upcycle jives with Wave C of Wave A down of the Cyclical Bear Market since 5-11-06 being in effect, so it makes sense. The gold COT data is clearly bearish with the gold Commercial Traders trading net short and the contrarian Speculators trading net long, see http://www.cftc.gov/dea/options/deacmxsof.htm.

For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

................The Wave 2 Cyclical Bear Market

Has probably been in effect since 1-31-06 for reliable lead indicator NEM and since 5-11-06 for HUI/XAU. See my charts at http://www.joefrocks.com/GoldStockCharts.html, with chart 1 showing the Elliot Wave count in February, which correctly indicated that the Wave 5 long term upcycle (began 5-10-04, ended 5-11-06) and therefore also the Wave 1 Cyclical Bull Market (began late 2000) was peaking.

The second chart shows that the USD is now in a Cyclical Bull Market, which is a strong indication that gold/silver stocks are now in a Cyclical Bear Market. It's true that the USD and gold can have a positive correlation for a considerable length of time. This occurred from February 2005, when gold hit a major cycle low, to November 2005, when the USD hit a major cycle high. They both trended up for about nine months, so, they enjoyed a positive correlation.

The third chart shows that the NEM Lead Indicator correctly pointed to a major downturn, that is probably an 18 monthish Wave 2 Cyclical Bear Market. ....... http://www.JoeFRocks.com/

Collapsing XAU Put/Call Ratio And The XAU's Upside Gap At 148.12

Normally in a monthly upcycle when the XAU Put/Call Ratio collapses more than 6% (an unusually large rise in complacency) from one session to the next, from 0.68080 to 0.63102 today (August expiration), there will be significant strength for a few hours followed by a significant decline. Today the XAU only rallied very briefly after gapping up then plunged, failing to fill the upside gap at 148.12 created yesterday (see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=), which is a bad sign.

The XAU Put/Call Ratio is at a complacent level of 0.63102 (August expiration) which is a major negative. HUI/NEM/XAU have gone nowhere the past seven sessions, which doesn't happen in a healthy monthly upcycle.

Since HUI/XAU are probably in Wave A down of an 18 monthish Wave 2 Cyclical Bear Market that began on 5-11-06 the surprises will tend to be to the downside/risk is high right now. HUI is below where it traded seven sessions ago and technical indicators like RSI and Williams %R have turned sharply lower.

After this minor intermediate term upcycle since 6-13 peaks I expect lower lows to occur than those that occurred on 6-13, because reliable lead indicator NEM began an 18 monthish Wave 2 Cyclical Bear Market on 1-31-06 and HUI/XAU did so on 5-11-06, and, I'm looking for Wave C down of the Cyclical Bear Market's Wave A down after this minor intermediate term upcycle since 6-13 peaks. The XAU may attempt to fill it's upside gap at 159.41 from 5-15 short term, then look out and batten the hatches.

Given/assuming that NEM began an 18 monthish Wave 2 Cyclical Bear Market on 1-31-06 and HUI/XAU did so on 5-11-06 one should be more cautious now about trading long. The risky Monthly Upcycle began early on Monday 7-24 and a 2% buy signal occurred on Tuesday 7-25. ....... http://www.JoeFRocks.com/

NEM Lead Indicator = Bullish +0.59% Versus The XAU Today

The NEM Lead Indicator = Bullish +0.69% versus the XAU yesterday. So, the NEM Lead Indicator has turned bullish the past two days and the Fed spiked the index fund trader punch as they nearly always do on Thursdays, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE. Also, NEM buy interest by the non contrarian institutional investors/traders has been strong in recent days, with relatively little sell interest, see http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?t=NEM&range=7&mgp=0&i=3&hdate=&x=11&y=5. So, there may be a respectable Wave 5 short term upcycle the next few sessions, but I probably won't trade it long other than maybe a day trade or two, given all the negatives I've discussed in recent days.

Another big negative is the news regarding the foiled terror plot. If an attack does occur it could whack the S & P 500 (SPX) and probably also HUI, NEM, and the XAU due to index fund selling.

For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/

Yesterday's 1% Short Term Cycle Buy Signals Failed

Because HUI and the XAU just made slightly lower lows than those that occurred late on Tuesday (see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=). I'm definitely going to stay on the sidelines for now and will probably be looking to trade short/buy put options in the near future. ....... http://www.JoeFRocks.com/

XAU's Downside Gap At 144.96 From Yesterday Filled

The XAU is seriously testing Tuesday's "likely" short term cycle low right now and the XAU's downside gap proved to not be a breakaway gap, which is a bearish sign short term (see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=). The XAU just hit 144.35 versus Tuesday's cycle low at 144.30, which might end up being a near perfect double bottom, which would be a plus in a Bull Market, but probably not (right now at least) in this Wave 2 Cyclical Bear Market that began on 5-11-06.

Given the Wave 2 Cyclical Bear Market that began on 5-11-06 for HUI/XAU (1-31-06 for reliable lead indicator NEM) and that Wave A down is probably in effect, buy signals like yesterday's 1% short term cycle buy signal for HUI/NEM/XAU won't work as well as they do in a Cyclical Bull Market. So far, amazingly, HUI and the XAU's "likely" short term cycle lows that occurred late on Tuesday have (barely) held.

I now have serious doubts about trading long short term and probably won't, at least not right now. Since HUI/XAU are probably in Wave A down of an 18 monthish Wave 2 Cyclical Bear Market that began on 5-11-06 the surprises will tend to be to the downside/risk is high right now. HUI is below where it traded six sessions ago and technical indicators like RSI and Williams %R have turned sharply lower.

The XAU Put/Call Ratio's recent collapse to a complacent 0.68080 today (August expiration), the negative NEM Lead Indicator at -0.04% versus the XAU so far this week, at -0.86% versus the XAU last week, and at -4.31% the week before, and the aggressive long liquidation by the gold Commercial Traders in the five sessions ending 8-1-06, see http://www.cftc.gov/dea/options/deacmxsof.htm, are major warning signs, which jives with my expectation that after this minor intermediate term upcycle since 6-13 peaks I expect lower lows to occur than those that occurred on 6-13, because reliable lead indicator NEM began an 18 monthish Wave 2 Cyclical Bear Market on 1-31-06 and HUI/XAU did so on 5-11-06, and, I'm looking for Wave C down of the Cyclical Bear Market's Wave A down after this minor intermediate term upcycle since 6-13 peaks. The XAU may attempt to fill it's upside gap at 159.41 from 5-15 short term, then look out and batten the hatches.

Given/assuming that NEM began an 18 monthish Wave 2 Cyclical Bear Market on 1-31-06 and HUI/XAU did so on 5-11-06 one should be more cautious now about trading long. The risky Monthly Upcycle began early on Monday 7-24 and a 2% buy signal occurred on Tuesday 7-25. ....... http://www.JoeFRocks.com/

NEM Lead Indicator = Bullish +0.69% Versus The XAU Today

Which gives a green light to daredevil traders like myself willing to risk trading the Wave 5 short term upcycle that began late yesterday, since HUI, NEM, and the XAU all hit 1% follow through short term cycle buy signals today.

Keep in mind that NEM's 6 month+ Wave 2 Cyclical Bear Market downtrend line since 1-31-06 should limit it's upside in this monthly upcycle to 55.50ish. The XAU's downside gap at 144.96 created at today's open, see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c= and NEM's downside gap at 51.92 created at today's open are short term breakaway gaps, since the monthly upcycle's (since 7-24) Wave 5 short term upcycle began late yesterday. ....... http://www.JoeFRocks.com/

Looking To Trade CDE, SLW Wave 5 Short Term Upcycle

SLW, Silver Wheaton, hasn't broken it's short term downcycle trendline yet (see http://finance.yahoo.com/q/ta?s=slw&t=5d&l=off&z=l&q=l&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=) and CDE, Coeur D'Alene Mines, has done so, but has done an Elliot Wave 12345 very short term upcycle that began very late yesterday (see http://finance.yahoo.com/q/ta?s=cde&t=5d&l=off&z=l&q=l&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=) and peaked late today, so I'm waiting for an ABC correction before (probably) buying it. ....... http://www.JoeFRocks.com/