Reliable Lead Indicator NEM Probably Hit A Monthly Cycle High At 45.50 Yesterday

Reliable lead indicator NEM probably hit a monthly cycle high at 45.50 yesterday in rollover mode, for the monthly upcycle since 10-4-06. NEM put in a near perfect double top today at 45.49. HUI and the XAU probably put in monthly cycle highs today in rollover mode. It made perfect sense that HUI would take out last Thursday's cycle high and lag NEM, since NEM is a surprisingly good lead indicator, see HUI's five day chart: 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==.

I want to see (for confirmation) the vicious -5%+ Wave A short term downcycle before (looking to, will wait for Wave B up) shorting/buying puts, but it's likely that HUI/NEM/XAU have or very soon will enter a one to two week monthly downcycle.

NEM and the XAU will probably fill yesterday's downside gaps (created at the open) at 44.32 and 133.02 tomorrow or Thursday.

The NEM Lead Indicator was a bearish -0.88% versus the XAU today, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem, which is another indication that the monthly upcycle since 10-4-06 may have peaked. The NEM Lead Indicator was a slightly bearish -0.19% versus the XAU yesterday.

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

HUI NEM XAU

.........Another Test Of The Monthly Cycle Highs

Another early spike move and test of the monthly/Wave 5 (third) short term cycle highs (monthly upcycle since 10-4-06) is occurring today. It looks like HUI hit a monthly cycle high last Thursday, NEM hit a monthly cycle high yesterday, and, the XAU is probably hitting a monthly cycle high 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==.

The fact that HUI put in a lower cycle high yesterday and today than last Thursday's probably means that it's monthly cycle high occurred last Thursday, and, that NEM/XAU's monthly cycle high occurred yesterday/today. I still want to see (for confirmation) the vicious 5%+ Wave A short term downcycle before (looking to, will wait for Wave B up) shorting/buying puts, but it's likely that HUI/NEM/XAU have or very soon will enter a one to two week monthly downcycle.
As expected/discussed yesterday, it looks like NEM and the XAU will fill yesterday's downside gaps (created at the open) at 44.32 and 133.02 today or tomorrow.

The NEM Lead Indicator is a bearish -0.50% versus the XAU right now, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem.

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

HUI NEM XAU

The Monthly Upcycle Since 10-4-06 Appears To Have Peaked

NEM and the XAU appear to have put in a Wave 5 short term cycle high and a monthly cycle high today in rollover mode, for the monthly upcycle since 10-4-06. HUI probably put in a Wave 5 short term cycle high and a monthly cycle high early last Thursday, with today's early cycle high being a retest of last Thursday's monthly and Wave 5 short term cycle high, 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 fact that HUI put in a lower cycle high today than last Thursday's probably means that it's monthly cycle high occurred last Thursday, and, that NEM/XAU's monthly cycle high occurred early today. I still want to see (for confirmation) the vicious 5%+ Wave A short term downcycle before (looking to, will wait for Wave B up) shorting/buying puts, but it's likely that HUI/NEM/XAU have entered a one to two week monthly downcycle.

As expected/discussed earlier, it looks like NEM and the XAU will fill today's downside gaps (created at the open) at 44.32 and 133.02 early tomorrow.

The NEM Lead Indicator was a slightly bearish -0.19% versus the XAU today, and, note that it turned bearish less than halfway into today's session, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem.

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

HUI NEM XAU

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

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

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

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

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

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

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

HUI NEM XAU

XAU Implied Volatility Reveals A Significant Rise In Complacency

XAU Implied Volatility revealed a significant rise in complacency on Friday, since it fell -1.03% from 34.985 on 10-26 to 34.625 on 10-27 versus a -0.84% decline in the XAU on Friday, which is a significant (0.50-1.99%) +1.87% rise in complacency, since the XAU wall of worry fell by -1.87% (= -1.03% + -0.84%) on Friday, which portends some weakness on Monday.

Also, the XAU Put/Call Ratio for the November expiration rose an unusually large (> 6%) +11.35% to 1.13974 on Friday from 1.01039 on Thursday, which is an
unusually large rise in fear that portends short term weakness (correctly portended weakness on Friday).

When the 2-4 sessionish Wave A down of the monthly downcycle occurs (might have begun late last week) it'll probably be obvious that the monthly upcycle has peaked, since a very sharp 5-8%+ decline will probably occur.

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

HUI NEM XAU

HUI Annotated Three Month Chart With The Elliot Wave Count

I did an annotated HUI three month chart with the Elliot Wave count for the recent vicious downcycle and for the monthly upcycle since 10-4-06, see the first chart at http://www.joefrocks.com/GoldStockCharts.html. I also updated the text for my "Gold/Silver Stocks Charts" web page, so, you might want to read that since I discuss very important HUI/NEM/XAU big picture info and "Trade the Cycles" info.

HUI/NEM/XAU might put in a monthly cycle high (monthly upcycle since 10-4-06) next week as the monthly upcycle rolls over/flattens out dramatically, or, the monthly upcycle may have already peaked this week since Wave 5 short term cycle highs occurred for HUI/NEM/XAU.

When the 2-4 sessionish Wave A down of the monthly downcycle occurs it'll probably be obvious that the monthly upcycle has peaked, since a very sharp 5-8%+ decline will probably occur.

It probably makes a lot of sense to wait for a monthly cycle low to occur in the next week or two before looking to trade gold/silver stocks long. There should be an Elliot Wave ABC down up down pattern to the monthly downcycle, with each Wave (Elliot Waves are upcycles or downcycles) lasting about 2-4 sessions.

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

HUI NEM XAU

The Flat Topping Area Of The Monthly Upcycle

Reliable lead indicator NEM's third/Wave 5 short term cycle high (for the monthly upcycle since 10-4-06) peaked early today in rollover mode at 45.39. HUI/XAU's third/Wave 5 short term cycle high occurred early yesterday (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=).

Not only can the Wave 5 short term upcycle peak in rollover mode as NEM's did today, but, another short term upcycle can occur as the monthly upcycle rolls over/flattens out dramatically/peaks. Given that the NEM Lead Indicator was a slightly bullish +0.10% versus the XAU today and was a bullish +0.54% yesterday, and, that the latest COT (Commitments Of Traders) data (see http://www.cftc.gov/dea/options/deacmxsof.htm) is modestly bullish, because the gold Commercial Traders traded modestly net long and the gold Speculators traded modestly net short, a monthly cycle high occurring next week as the monthly upcycle rolls over dramatically is a definite possibility.

Because NEM is probably in a Wave 3 Cyclical Bull Market since hitting a cycle low at 39.84 on 10-4-06 (see third chart at http://www.joefrocks.com/GoldStockCharts.html), NEM is leading to the upside, and, the NEM Lead Indicator will tend to be more bullish now than it was before it hit an extremely important Wave 2 Cyclical Bear Market cycle low at 39.84 on 10-4-06.

The fact that Wave 5 short term cycle highs have occurred for HUI/NEM/XAU, for the monthly upcycle since 10-4-06, indicates that trading long is risky now. A fourth rollover/relatively flat short term upcycle often occurs in which the monthly upcycle peaks in rollover mode, but, it's obviously much riskier to trade it, because it might not even occur, and, if it occurs it usually does so as the monthly upcycle rolls over/flattens out dramatically.

XAU Implied Volatility and the XAU Put/Call Ratio both indicate that there's too much risk to trade long right now, because XAU Implied Volatility has collapsed recently, which is a very sharp rise in complacency that portends weakness (that may have begun), from 39.400 on 10-19 to 34.985 yesterday, and, the XAU Put/Call Ratio reveals an unusually large (> 6%) rise in fear by XAU options traders, since it rose from 1.01039 yesterday to 1.13974 today (November expiration).

It probably makes a lot of sense to wait for a monthly cycle low to occur in the next week or two before looking to trade gold/silver stocks long. There should be an Elliot Wave ABC down up down pattern to the monthly downcycle, with each Wave (Elliot Waves are upcycles or downcycles) lasting about 2-4 sessions.The monthly cycle since 10-4-06 is the start of the 3-6 monthish Wave B up of HUI/XAU's Wave 2 Cyclical Bear Market since 5-11-06. 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/

HUI NEM XAU

The Economy And Gold/Silver Stocks/Metals

Since the recession of 2001 what fueled the now deceased multi-year economic upcycle was massive stimulus in the form of rock bottom interest rates and an easy credit stance at the Federal Reserve Bank, which led to a massive real estate and mortgage refinancing boom (housing affordability rose dramatically as mortgage rates plummeted, which led to huge home price increases), that went bust about a year ago. Credit cards were a major economic stimulus factor due to an easy lending policy at the Fed and at the banks the Fed lended to during the recent multi-year economic upcycle. Also, President Bush's massive tax cuts were another huge source of economic stimulus in recent years, as were massive budget deficits.

The bubble that occurred in 1999/2000 was a very long term upcycle peaking for the major averages (in March 2000, except for the Dow Jones Industrials, whose Secular Bull Market/very long term upcycle is peaking (probably) this year in rollover mode), and, was also a very long term economic upcycle peaking. Without the massive stimulus in recent years the US and much of the rest of the world would have been in a severe recession/depression. The Fed and the Bush Administration fought a severe economic bust with a huge amount of stimulus, and, despite 911, were able to manufacture a reasonably good multi-year economic upcycle. At what cost remains to be seen.

The precious metals sector does well in an inflationary rising interest rate economic upcycle, which explains why HUI/NEM/XAU enjoyed a Wave 1 Cyclical Bull Market from October 2000 for NEM/XAU/from November 2000 for HUI until January 31, 2006 for NEM/until May 11, 2006 for HUI/XAU.

Now however a multi-year economic downcycle is in effect, as evidenced by the weak +1.6% GDP growth (latest quarter) reported today versus the expected 2% growth, the -17.1% decline in residential housing construction in the latest quarter, the most in 15 years, and, the -9.7% year over year decline in home prices, which is the most in 36 years! This deflationary declining interest rate environment economic bust explains the precious metals/commodities sector collapse recently (HUI/XAU's Wave 2 Cyclical Bear Market that began on 5-11-06 and is now in Wave B up since 10-4-06).

The monthly cycle since 10-4-06 is the start of the 3-6 monthish Wave B up of HUI/XAU's Wave 2 Cyclical Bear Market since 5-11-06. 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/

HUI NEM XAU

The Short Term Downcycle Is Still Relatively Flat

After hitting a third/Wave 5 short term cycle high (for the monthly upcycle since 10-4-06) shortly after the open yesterday, HUI/NEM/XAU have a relatively flat declining peaks downtrend (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==), which suggests that there will be a sharp decline soon/probably today.

Update: Just after I published this post NEM took out yesterday's early cycle high, but, is probably just rolling over dramatically and won't change what I discuss here that much, if NEM's cycle high today is only modestly above yesterday's. Rollover action occurs in probably most monthly upcycles, so, it's not surprising.

HUI/XAU plunged early yesterday, which was probably Wave A down of the short term downcycle's Wave A down (might be Wave A down of a monthly downcycle), then did Wave B up during mid session, and, were in Wave C toward session's end, which points to a plunge today at some point. After that plunge, which will complete what is probably Wave A down of the short term downcycle, some strength is likely because it'll be Wave B up of the short term downcycle, which jives with yesterday's bullish NEM Lead Indicator at +0.54% versus the XAU, which portends some strength today.

The fact that yesterday's short term cycle highs for HUI/XAU were the third/Wave 5 cycle highs of the monthly upcycle since 10-4-06 indicates that trading long is risky now. A fourth rollover/relatively flat short term upcycle often occurs in which the monthly upcycle peaks in rollover mode, but, it's obviously much riskier to trade it, because it might not even occur, and, if it occurs it usually does so as the monthly upcycle rolls over/flattens out dramatically.

XAU Implied Volatility and the XAU Put/Call Ratio both indicate that there's too much risk to trade long right now, because XAU Implied Volatility has collapsed recently, which is a very sharp rise in complacency that portends weakness (that may have begun), from 39.400 on 10-19 to 34.985 yesterday, and, the XAU Put/Call Ratio reveals an unusually large (> 6%) rise in fear by XAU options traders, since it rose from 1.01039 yesterday to 1.13974 today (November expiration).

It probably makes a lot of sense to wait for a monthly cycle low to occur in the next week or two before looking to trade gold/silver stocks long. There should be an Elliot Wave ABC down up down pattern to the monthly downcycle, with each Wave (Elliot Waves are upcycles or downcycles) lasting about 2-4 sessions.

The monthly cycle since 10-4-06 is the start of the 3-6 monthish Wave B up of HUI/XAU's Wave 2 Cyclical Bear Market since 5-11-06. 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/

HUI NEM XAU

Today Was The Flat Part Of The Short Term Downcycle

After hitting a Wave 5 short term cycle high shortly after the open, HUI/NEM/XAU had a relatively flat declining peaks downtrend 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==), which suggests that there will be a sharp decline early tomorrow.

HUI/NEM/XAU plunged early today, which was probably Wave A down of the short term downcycle's Wave A down (might be Wave A down of a monthly downcycle), then did Wave B up during mid session, and, were in Wave C toward session's end, which points to an early plunge tomorrow. After that plunge, which will complete Wave A down of the short term downcycle, some strength is likely because it'll be Wave B up of the short term downcycle, which jives with the bullish NEM Lead Indicator today at +0.54% versus the XAU, which portends some strength tomorrow.

The monthly cycle since 10-4-06 is the start of the 3-6 monthish Wave B up of HUI/XAU's Wave 2 Cyclical Bear Market since 5-11-06. 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/

HUI NEM XAU

HUI/NEM/XAU Appear To Have Hit A Wave 5 Short Term Cycle High

HUI/NEM/XAU appear to have hit a Wave 5 short term cycle high (began on Monday for HUI/XAU and 10-18 for NEM), since they've put in lower intraday cycle highs, which establishs that a short term downcycle is in effect, which might be Wave A down of the monthly cycle that began on 10-4-06, 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 monthly cycle since 10-4-06 is the start of the 3-6 monthish Wave B up of HUI/XAU's Wave 2 Cyclical Bear Market since 5-11-06. 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 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/

HUI NEM XAU

The Wave 5 Short Term Upcycle Since Early Monday For HUI/XAU May Have Peaked

The Wave 5 short term upcycle since early Monday for HUI/XAU (NEM's began 10-18-06) may have peaked early today. This of course means that the monthly upcycle since 10-4-06 for HUI/NEM/XAU might have peaked, but, another short term upcycle might occur in which the monthly upcycle peaks in rollover/flattening out mode.

The collapsing XAU Implied Volatility recently, from 39.400 on Thursday 10-19 to 35.375 yesterday, which is more than a 10% decline versus the XAU's +6.07% rise in the same timeframe, which is a very sharp 4%+ rise in complacency, suggests that a rollover short term upcycle is unlikely, and, even if it occurs, would be too risky to trade long.

The NEM Lead Indicator turned very bearish late in the session yesterday after being bullish earlier in the session, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem. This correctly pointed to some weakness early today following very brief strength 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==. For the session the NEM Lead Indicator was a bearish -0.61% versus the XAU yesterday.

NEM filled today's downside gap at 44.63 and the XAU filled today's downside gap at 134.81. William's %R for HUI/XAU is very near an overbought extreme at 0ish (NEM's is overbought/above -20) and HUI/XAU are very near the top of their respective monthly upcycle (since 10-4-06) channels.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06, but, it ended at 39.84 on Wednesday 10-4, so, NEM is in a Wave 3 Cyclical Bull Market since 10-4-06. NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see third chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

.......The Wave 5 Short Term Upcycle Is Peaking

The Wave 5 short term upcycle since early Monday for HUI/XAU is peaking (NEM's is peaking also), and, may have peaked today or will probably peak tomorrow if it didn't peak today. This of course means that the monthly upcycle since 10-4-06 for HUI/NEM/XAU may be peaking, but, another short term upcycle might occur in which the monthly upcycle peaks in rollover/flattening out mode. The collapsing XAU Implied Volatility recently suggests that a rollover short term upcycle is unlikely, and, even if it occurs, would be too risky to trade long.

The NEM Lead Indicator turned very bearish late in the session today after being bullish earlier in the session, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem. This points to weakness early tomorrow. For the session the NEM Lead Indicator was a bearish -0.61% versus the XAU today.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06, but, it ended at 39.84 on Wednesday 10-4, so, NEM is in a Wave 3 Cyclical Bull Market since 10-4-06. NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see third chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

....................Monthly Upcycle Analysis

Looking at HUI's monthly upcycle (since 10-4-06) peaks/cycle highs, they're rolling over/flattening out (see 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=, today's candle isn't shown), which strongly suggests that trading long after the Wave 5 short term upcycle peaks (might have today) is very risky. Also, the collapse of XAU Implied Volatility from 39.400 last Thursday to 35.815 yesterday, a -9.10% decline versus the XAU's rise of +3.17% in the same timeframe, is a very sharp rise in complacency that portends substantial weakness in the near future, and, indicates that there's a good chance that the monthly upcycle since 10-4-06 for HUI/NEM/XAU is peaking right now.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06, but, it ended at 39.84 on Wednesday 10-4, so, NEM is in a Wave 3 Cyclical Bull Market since 10-4-06. NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see third chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

My Original Wave 5 Short Term Upcycle Count Was Correct

The Wave 5 short term upcycle for HUI/XAU began on Monday shortly after the open, and, began last Wednesday at 42.09 for reliable lead indicator NEM. Wave 1 up of Wave 5 occurred on Monday for HUI/XAU, Wave 2 down occurred early on Tuesday as expected, followed by Wave 3 up and Wave 4 down, and, Wave 5 began early today (NEM is also in Wave 5), 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 Wave 5 short term upcycle and the monthly upcycle (since 10-4-06) for HUI/NEM/XAU will probably peak today or tomorrow, but, there could be another short term upcycle as the monthly upcycle rolls over/flattens out/peaks. The NEM Lead Indicator was a modestly bullish +0.41% versus the XAU yesterday.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see third chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

Revised Wave 5 Short Term Upcycle Elliot Wave Count

The Wave 5 short term upcycle for HUI/XAU began on Monday shortly after the open, and, began last Wednesday at 42.09 for reliable lead indicator NEM. Wave 1 up of Wave 5 occurred early on Monday for HUI/XAU, Wave 2 down followed by Wave 3 up also occurred on Monday, then, Wave 4 down occurred yesterday and Wave 5 is occurring now/since early yesterday, 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 Wave 5 short term upcycle and the monthly upcycle (since 10-4-06) for HUI/NEM/XAU will probably peak today or tomorrow, but, there could be another short term upcycle as the monthly upcycle rolls over/flattens out/peaks.

What made the count tricky was that the Wave 4 cycle low yesterday occurred at the same level as Wave 2, which is unusual, so, I assumed that the likely Wave 2 cycle low was part of Wave 1, but it was probably Wave 2 down of the Wave 5 short term upcycle for HUI/XAU.

The NEM Lead Indicator was a modestly bullish +0.41% versus the XAU yesterday.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see third chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

.......Wave 5 Short Term Upcycle Elliot Wave Count

The Wave 5 short term upcycle for HUI/XAU began yesterday shortly after the open, and, began last Wednesday at 42.09 for reliable lead indicator NEM. Wave 1 up of Wave 5 occurred yesterday for HUI/XAU, Wave 2 down occurred early today as expected, followed by Wave 3 up and Wave 4 down, and, Wave 5 began shortly before session's end (NEM is also in Wave 5), 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 Wave 5 short term upcycle and the monthly upcycle (since 10-4-06) for HUI/NEM/XAU will probably peak tomorrow, but, there could be another short term upcycle as the monthly upcycle rolls over/flattens out/peaks.

The NEM Lead Indicator was a modestly bullish +0.41% versus the XAU today.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see third chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

...........XAU Implied Volatility Is Collapsing

I expected some weakness today, but, the collapse of XAU Implied Volatility the previous two sessions (from 39.400 on Thursday to 36.355 yesterday), while the XAU has actually fallen the past two sessions (-2.08% on Friday and +1.24% yesterday = -0.84%), is a very sharp rise in complacency that partly accounts for today's early weakness, and, is making me cautious, as is an overbought condition. NEM's cycle low yesterday at 42.36 held today, since today's cycle low so far is 42.60, and, it looks like 42.60 will hold today. NEM filled today's upside gap at 43.25.

There's just too much risk to trade long right now (in general), with HUI/NEM/XAU overbought (William's %R near 0, Stochastics overbought), and, with the collapse of XAU Implied Volatility the previous two sessions. Monthly cycle and short term cycle traders should generally be looking to sell right now. There are a few gold/silver stocks that one could trade long right now on a short term cycle basis, but, it probably makes sense to wait for HUI/NEM/XAU to put in monthly cycle lows in the next few weeks. A monthly cycle high for HUI/NEM/XAU will probably occur this week, and, might occur today, for the monthly upcycle since 10-4-06.

The NEM Lead Indicator was a bullish +0.62% versus the XAU yesterday, but, turned bearish late in the session, since it had been +1.50% versus the XAU earlier in the session. Reliable lead indicator NEM's Wave 5 short term upcycle (for the monthly upcycle since 10-4-06) began last Wednesday at 42.09. HUI/XAU's Wave 5 short term upcycle started shortly after yesterday's open. Keep in mind that the Wave 5 short term upcycle may peak today or tomorrow.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see third chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

The NEM Lead Indicator Turned Bearish/Much Less Bullish Late In The Session

The NEM Lead Indicator was a bullish +0.62% versus the XAU today, but, turned bearish late in the session, since it had been +1.50% versus the XAU earlier in the session. Reliable lead indicator NEM's Wave 5 short term upcycle (for the monthly upcycle since 10-4-06) began last Wednesday at 42.09. HUI/XAU's Wave 5 short term upcycle started shortly after today's open.

HUI/XAU will probably do an Elliot Wave ABC down up down pattern tomorrow, since they rallied sharply from today's very early Wave 5 short term cycle lows, 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=, doing Elliot Wave 12345 up down up down up patterns today. So, a good entry point for short term cycle traders may occur tomorrow. Keep in mind that the Wave 5 short term upcycle may only last another session or two, today was Wave 1 of the Wave 5 short term upcycle.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see third chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

NEM's Wave 5 Short Term Upcycle (For The Monthly Upcycle Since 10-4-06) Probably Began Last Wednesday At 42.09

Reliable lead indicator NEM's Wave 5 short term upcycle (for the monthly upcycle since 10-4-06) probably began last Wednesday at 42.09. HUI/XAU's Wave 5 short term upcycle probably started shortly after today's open, but, waiting for HUI/XAU to put in a higher cycle low today or tomorrow probably makes sense. HUI/XAU might, but probably won't (based on the very bullish NEM Lead Indicator right now at +1.50% versus the XAU), do an Elliot Wave ABC down up down pattern and take out today's early cycle lows. HUI/XAU did do Elliot Wave ABC down up down patterns from early Friday's Wave 3 short term cycle highs to today's early likely Wave 4 cycle lows, so, HUI/XAU are probably in the Wave 5 short term upcycle now.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see third chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

The NEM Lead Indicator Is A Very Bullish +1.30% Versus The XAU Right Now

The NEM Lead Indicator is a very bullish +1.30% versus the XAU right now, which suggests that NEM won't fill it's downside gaps at 42.21 and 41.83 this week, but, NEM may be doing an intraday Elliot Wave ABC down up down pattern after hitting an early session cycle high (so far) at 43.23, and, appears to be in Wave B up right now, so waiting for Wave C down to bottom (if 43.23 isn't exceeded in the current intraday upcycle, which would mean that an ABC pattern isn't occurring right now) makes sense.

The NEM Lead Indicator suggests that one should be looking to buy today, which doesn't necessarily mean that you SHOULD buy today, just that you should be looking to buy if that's your intention. You need to gauge the cycles of whatever gold/silver stocks you're trading, using cycle channels/trendlines, Elliot Wave, gaps, technical indicators, volume, etc.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see third chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

.......The XAU Filled It's Downside Gap At 126.88

The XAU filled it's downside gap at 126.88 from last Thursday, but, NEM has failed so far to fill it's downside gaps at 42.21 and at 41.83, with a session cycle low so far at 42.36. The XAU also filled today's upside gap created at the open at 128.79. Right now it makes sense to wait until reliable lead indicator NEM either fills it's downside gaps or clearly puts in a higher cycle low than the session cycle low so far at 42.36, then of course you'll need to gauge the cycles of whatever gold/silver stocks you're trading, using cycle channels/trendlines, Elliot Wave, gaps, technical indicators, volume, etc.

The XAU's downside gap at 125.39 from 10-13-06 probably won't get filled, because it's a likely breakaway gap and because 125.39 is below the bottom of the monthly upcycle channel, see the first chart at http://www.joefrocks.com/GoldStockCharts.html. HUI/XAU began the Wave 4 short term downcycle on Friday (shortly after the open), for the monthly upcycle since 10-4-06. Reliable lead indicator NEM began the Wave 4 short term downcycle last Monday at 43.75, then did a Wave A down to 42.09 on Wednesday, followed by a Wave B up to 43.65 on Friday, and, should complete Wave C down on Monday, probably filling it's downside gaps at 42.21 and 41.83.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see third chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

The NEM Lead Indicator Turned Slightly Bullish On Friday

The NEM Lead Indicator turned slightly bullish on Friday, at +0.07% versus the XAU, and, for the week was a bearish -1.62% versus the XAU (-2.01% vs -2.08% on 10-20, +2.65% vs +3.54% on 10-19, -2.38% vs -1.89% on 10-18, -0.76% vs -0.61% on 10-17, +0.79% vs +0.95% on 10-16). The NEM Lead Indicator turning a very bearish -0.89% versus the XAU on Thursday was a sign to look to sell, and, HUI/XAU hit a Wave 3 short term cycle high just after the open on Friday, versus NEM doing so last Monday at 43.75.

As previously discussed NEM is likely to fill it's downside gaps at 42.21 and 41.83, and, the XAU is likely to fill it's downside gap at 126.88 (127.01?), but, it's downside gap at 125.39 from 10-13-06 probably won't get filled, because it's a likely breakaway gap and because 125.39 is below the bottom of the monthly upcycle channel, see the first chart at http://www.joefrocks.com/GoldStockCharts.html. HUI/XAU began the Wave 4 short term downcycle on Friday (shortly after the open), for the monthly upcycle since 10-4-06. Reliable lead indicator NEM began the Wave 4 short term downcycle last Monday at 43.75, then did a Wave A down to 42.09 on Wednesday, followed by a Wave B up to 43.65 on Friday, and, should complete Wave C down on Monday, probably filling it's downside gaps at 42.21 and 41.83.

So, once the XAU fills it's downside gap at 126.88, and, if the NEM Lead Indicator is bullish, hopefully > +0.50% versus the XAU at the time, then looking to buy probably makes sense, but, one must gauge the cycles of the gold/silver stocks one's trading, using cycle channels/trendlines, Elliot Wave, gaps, technical indicators, volume, etc.

The COT (Commitments Of Traders) data (http://www.cftc.gov/dea/options/deacmxsof.htm) jives with the monthly upcycle since 10-4-06 remaining in effect for another week or more. The week before last's COT data was clearly intermediate (weeks/months) term bullish, with the gold Commercial Traders trading substantially net long, with a net long trade of greater than 10,000 futures and options contracts, including an increase in their long position of > 15,000 futures and options contracts. Last week they traded significantly net short, but, most of the trade was long liquidation (they sold 3,726 long futures and options contracts), they only added a very modest 714 short futures and options contracts. So, the COT data jives with a Wave 5 short term upcycle occurring this week for HUI/NEM/XAU, once Wave 4 bottoms (probably on Monday), and, there may be another short term upcycle after that as the monthly upcycle since 10-4-06 rolls over.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see third chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

The XAU Experienced A Very Sharp Rise In Complacency Yesterday

The XAU experienced a very sharp (3-6%) 5.01% rise in complacency yesterday, because XAU Implied Volatility fell -2.93% to 38.245 yesterday from 39.40 on Thursday despite a -2.08% decline in the XAU (the XAU wall of worry shrank by -5.01% = -2.93% + -2.08% which is a +5.01% rise in complacency), which portends some weakness on Monday (potentially a sharp decline). A Wave 4 short term cycle low (for the monthly upcycle since 10-4-06) is likely on Monday for HUI/NEM/XAU.

As previously discussed NEM is likely to fill it's downside gaps at 42.21 and 41.83, and, the XAU is likely to fill it's downside gap at 126.88 (127.01?), but, it's downside gap at 125.39 from 10-13-06 probably won't get filled, because it's a likely breakaway gap and because 125.39 is below the bottom of the monthly upcycle channel, see the first chart at http://www.joefrocks.com/GoldStockCharts.html. HUI/XAU began the Wave 4 short term downcycle yesterday (shortly after the open), for the monthly upcycle since 10-4-06. Reliable lead indicator NEM began the Wave 4 short term downcycle last Monday at 43.75, then did a Wave A down to 42.09 on Wednesday, followed by a Wave B up to 43.65 yesterday, and, should complete Wave C down on Monday, probably filling it's downside gaps at 42.21 and 41.83.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see third chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

Reliable Lead Indicator NEM Appears To Be In The Wave 4 Short Term Downcycle

Reliable lead indicator NEM appears to be in the Wave 4 short term downcycle (since Monday's Wave 3 short term cycle high at 43.75) as expected, and, as expected, is probably in Wave C of the Wave 4 short term downcycle since today's very early Wave B cycle high at 43.65.

NEM and the XAU have downside gaps created at yesterday's open that must be watched at 42.21 and at 126.88, and, if those gaps get filled (likely), the downside gaps from Friday 10-13-06 at 41.83 and at 125.39 must be watched. It looks like NEM will fill it's downside gaps at 42.21 and at 41.83, and, the XAU may fill both of it's downside gaps at 126.88 and at 125.39, but, the downside gap at 125.39 probably won't get filled. The XAU's monthly upcycle (since 10-4-06) channel bottom is at 125.50 at yesterday's close, see the first chart at http://www.joefrocks.com/GoldStockCharts.html, which suggests that the XAU's downside gap at 125.39 from 10-13-06 won't get filled next week.

So, once the XAU fills it's downside gap at 126.88, and, if the NEM Lead Indicator is bullish, hopefully > +0.50% versus the XAU at the time, then looking to buy probably makes sense, but, one must gauge the cycles of the gold/silver stocks one's trading, using cycle channels/trendlines, Elliot Wave, gaps, technical indicators, volume, etc.

The COT (Commitments Of Traders) data (http://www.cftc.gov/dea/options/deacmxsof.htm) jives with the monthly upcycle since 10-4-06 remaining in effect for another week or more. Last week's COT data was clearly intermediate (weeks/months) term bullish, with the gold Commercial Traders trading substantially net long, with a net long trade of greater than 10,000 futures and options contracts, including an increase in their long position of > 15,000 futures and options contracts. This week they traded significantly net short, but, most of the trade was long liquidation (they sold 3,726 long futures and options contracts), they only added a very modest 714 short futures and options contracts. So, the COT data jives with a Wave 5 short term upcycle occurring next week for HUI/NEM/XAU, once Wave 4 bottoms (probably on Monday), and, there may be another short term upcycle after that as the monthly upcycle since 10-4-06 rolls over.

I did the XAU's one month chart that has the monthly upcycle channel, with annotations, see the first chart at http://www.joefrocks.com/GoldStockCharts.html. HUI/XAU began the Wave 4 short term downcycle today (shortly after the open), for the monthly upcycle since 10-4-06.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see third chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

.....................The XAU's One Month Chart

I did the XAU's one month chart that has the monthly upcycle channel, with annotations, see the first chart at http://www.joefrocks.com/GoldStockCharts.html. HUI/XAU probably began the Wave 4 short term downcycle today (shortly after the open), for the monthly upcycle since 10-4-06.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see third chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

Short Term Elliot Wave Count For Reliable Lead Indicator NEM

I'm confident that HUI/XAU are/were in a big Wave 3 short term upcycle (since 10-10-06 for HUI and since 10-12-06 for the XAU) for the monthly upcycle since 10-4-06. Wave 3 for HUI/XAU may have peaked just after today's open. However, NEM appearing to be in Wave 5 doesn't make sense. It makes sense that NEM is leading, but not by that much. Here's what's probably happening: NEM hit a Wave 3 short term cycle high at 43.75 on Monday 10-16-06, and, has probably been in a Wave 4 short term downcycle since then, with Wave A down of Wave 4 bottoming at 42.09 on Wednesday 10-18-06 and with Wave B up of Wave 4 peaking at 43.62 early today.

In Wave C down of NEM's Wave 4 short term downcycle (since Monday), which began after the Wave B cycle high at today's open at 43.62, NEM should fill it's downside gap from 10-13-06 at 41.83 or at least take out the Wave A cycle low at 42.09. NEM's sharp decline today, from the session cycle high at 43.62 to the session cycle low so far at 42.63, is a sign that Wave C of the Wave 4 short term downcycle since Monday (NEM) is probably in effect.

HUI/XAU probably began the Wave 4 short term downcycle today. So, NEM is leading, having hit a Wave 3 short term cycle high at 43.75 on Monday 10-16-06 versus HUI/XAU probably doing so early today. A good buying opportunity should arise once the Wave 4 short term downcycle for HUI/XAU bottoms in the next session or two.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see second chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

The NEM Lead Indicator Was A Bearish -0.89% Versus The XAU Today

The NEM Lead Indicator was a bearish -0.89% versus the XAU today, which, combined with an extremely overbought short term condition (Williams %R very near zero for HUI/XAU and at an overbought -10.74 for NEM) and the fact that HUI/XAU are relatively close to the top of their monthly upcycle channels, indicates that this strength is probably the big Wave 3 Short Term Upcycle (since 10-10-06 for HUI/NEM and since 10-12-06 for the XAU, but, NEM appears to be in Wave 5, Wave 4 probably bottomed near the bottom of it's monthly upcycle channel yesterday) peaking, rather than the start of the Wave 5 short term upcycle (began late yesterday if it began, as reliable lead indicator NEM's probably did). This makes sense since last Friday's gaps for NEM/XAU were good candidates for breakaway gaps (large gaps were created at the open) and have turned out to be breakaway gaps. I'm probably going to do a 1 month chart for HUI or the XAU with the likely Elliot Wave count either today or tomorow.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see second chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

Probably A Big Wave 3 Short Term Upcycle Peaking

Looking at HUI's daily 3 month chart and at William's %R, which is very near an extremely overbought level of 0 right now, HUI/XAU are probably in a big Wave 3 short term upcycle that's peaking, rather than early in a Wave 5 short term upcycle. Reliable lead indicator NEM is probably in a Wave 5 short term upcycle from looking at it's daily 3 month chart. The NEM Lead Indicator right now is at a bearish -0.65% versus the XAU, after being -0.49% yesterday, which is another sign that one shouldn't be looking to trade long right now.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see second chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

Looks Like The Wave 5 Short Term Upcycle Began Late Yesterday

It's very likely the Wave 5 short term upcycle, that could also still be part of a big Wave 3 short term upcycle (for the monthly upcycle since 10-4-06), began late yesterday. HUI has done an Elliot Wave 12345 up down up down up pattern since late yesterday, and, exceeded the previous short term cycle high that occurred last 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==, which means that a new short term upcycle is in effect.

For recent XAU 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/

HUI NEM XAU

...............Intraday NEM Elliot Wave Count

About 20 minutes into the session reliable lead indicator NEM spiked to a cycle high so far at 43.31, then did what was probably a Wave A down to 42.52, and, in Wave C NEM may fill today's downside gap at 42.21 and last Friday's downside gap at 41.83, 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==. If NEM exceeds 43.31 in this current intraday upcycle since 42.52, then today's downside gap at 42.21 and last Friday's downside gap at 41.83 are breakaway gaps that won't get filled short term, and, HUI/NEM/XAU are in the Wave 5 short term upcycle of the monthly upcycle since 10-4-06.

For recent XAU 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/

HUI NEM XAU

.......A Deceiving Brief/20 Minute Early Spike

After a sharp 20 minute early spike HUI/NEM/XAU are plunging now. NEM and the XAU have downside gaps at today's open that must be watched at 42.21 and at 126.88 (might be 127.01), and, if those gaps get filled the downside gaps from last Friday at 41.83 and at 125.39 must be watched. It would be easy to draw the conclusion that the Wave 5 short term upcycle of the monthly upcycle since 10-4-06 has begun, and, it might have, but, one must watch the downside gaps and wait right now.

Right now there are many negatives such as the very brief 20 minute follow through (one should rarely chase a sharp spike), yesterday's bearish NEM Lead Indicator at -0.49% versus the XAU, and, both XAU Implied Volatility (fell to 40.825 yesterday from 41.435 on Tuesday despite a significant decline in the XAU) and the XAU Put/Call Ratio (fell to 0.61789 today from 0.63593 yesterday, October expiration) portend weakness today. So, three indicators portend weakness today following that very brief spike. In other words, today's tone is likely to be weakness/a downtrend after the very brief early spike.

A major positive today is that the Fed spiked the index fund trader punch in a big way, as they usually do on Thursday, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE,
with nearly $18 Billion in Repos, which is well above average even for a Thursday. One has to make sure that the downside gap filling action has been completed or won't occur before this becomes important.

The NEM Lead Indicator is a modestly bearish -0.40% right now, so, it looks like NEM may fill today's downside gap at 42.21, and, last Friday's downside gap at 41.83 might also get filled. The same is true of the XAU's downside gaps at 127.01 and at 125.39.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (probably ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see second chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

The NEM Lead Indicator Was A Modestly Bearish -0.49% Versus The XAU Today

It looks like NEM will fill it's downside gap at 41.83 from last Friday, and, the XAU may fill it's downside gap at 125.39 from last Friday also, because the NEM Lead Indicator was a modestly bearish -0.49% versus the XAU today. Typically a buy point occurs when the NEM Lead Indicator is clearly bullish (> +0.50%), so, it looks like a Wave 4 short term cycle low may occur early tomorrow. Tomorrow's likely to be a good buying opportunity, but, you have to gauge the cycles for the gold/silver stocks you're trading.

The Yahoo 5 day chart is highly useful for gauging short term cycles, the Wave 4 short term downcycle is likely to have an Elliot Wave ABC down up down pattern. For example HUI hit a Wave 3 short term cycle high on Monday then did a Wave A down to 297.59 yesterday, hit a Wave B cycle high at 305.03 today, and, is probably still in Wave C down at today's close, since the cycle low today at 297.55 is only slightly below Wave A's cycle low yesterday at 297.59, and, Wave C cycle lows are usually well below Wave A's. See HUI's 5 day chart at 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/NEM/XAU are all in a Wave 4 short term downcycle for the monthly upcycle since 10-4-06, that may bottom tomorrow at 41.50-42 for NEM, at 125-126ish for the XAU and at 295-297ish for HUI. HUI did a Wave A down to 297.59 yesterday after the Wave 3 short term upcycle peaked on Monday. Watch the downside gaps from last Friday at 41.83 for NEM and at 125.39 for the XAU. The good buying opportunity/Wave 4 short term cycle low is likely to occur tomorrow.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (probably ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see second chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

It looks Like NEM Will Fill It's Downside Gap At 41.83

It looks like NEM will fill it's downside gap at 41.83 from last Friday, and, the XAU may fill it's downside gap at 125.39 from last Friday also, because the NEM Lead Indicator is a bearish -0.85% versus the XAU right now.

HUI/NEM/XAU are all in a Wave 4 short term downcycle for the monthly upcycle since 10-4-06, that should bottom today or tomorrow at 41.50-42 for NEM, at 125-126ish for the XAU and at 295-297ish for HUI. HUI did a Wave A down to 297.59 yesterday after the Wave 3 short term upcycle peaked on Monday. Watch the downside gaps from last Friday at 41.83 for NEM and at 125.39 for the XAU. The good buying opportunity/Wave 4 short term cycle low is likely to occur today or tomorrow.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (probably ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see second chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

NEM Took Out Yesterday's Cycle Low At 42.48

NEM took out yesterday's cycle low at 42.48, which surprised me. What's important to understand is that HUI/NEM/XAU are all in a Wave 4 short term downcycle for the monthly upcycle since 10-4-06, that should bottom today or tomorrow at 126ish for the XAU and at 296-297ish for HUI, or, lower if the XAU fills it's downside gap at 125.39.

HUI did a Wave A down to 297.59 yesterday after the Wave 3 short term upcycle peaked on Monday. Watch the downside gaps from last Friday at 41.83 for NEM and at 125.39 for the XAU, that I've been calling slam dunk breakaway gaps. Right now it looks like NEM may fill it's downside gap at 41.83, but, I doubt that the XAU will fill it's downside gap at 125.39 from last Friday. The good buying opportunity/Wave 4 short term cycle low is likely to occur today or tomorrow.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (probably ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see second chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

The XAU Filled It's Upside Gap at 130.13 Created At Yesterday's Open

The XAU barely filled it's upside gap (created at yesterday's open) at 130.13 (revised from 130.25) early today, 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 final Wave 3 short term cycle high probably occurred today at 130.17 for the XAU versus 130.13 on Monday, and, occurred on Monday at 306.17 for HUI and just after Monday's open at 43.75 for reliable lead indicator NEM.

NEM has completed an Elliot Wave ABC down up down pattern at 42.48 yesterday, after hitting it's Wave 3 short term cycle high at 43.75 on Monday, HUI is in Wave C down since Wave 3 peaked on Monday, but, the XAU just hit a double top Wave 3 short term cycle high today, so, NEM should be in the Wave 5 short term upcycle, but, one should wait for HUI's Wave C to bottom (after which Wave 5 should begin), then assess whether it makes sense to buy.

The good news is that it's a slam dunk that bullish breakaway gaps occurred last Friday for NEM/XAU (HUI has fewer gaps, so I usually don't discuss HUI's) as previously thought, at 41.83 for NEM and at 125.39 for the XAU. This means that once HUI takes out yesterday's Wave A cycle low at 297.59 (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==) one should assess whether it makes sense to buy. The fact that the NEM Lead Indicator, at a modestly bearish -0.27% versus the XAU right now, has only been slightly bearish in recent sessions, at -0.15% yesterday and at -0.16% versus the XAU on Monday, suggests that once HUI puts in a Wave C cycle low, there should be good buying opportunities.

There should be a third/Wave 5 short term upcycle and possibly another short term upcycle as the monthly upcycle (since 10-4-06) rolls over/flattens out/peaks. As I said previously, there are usually three good short term upcycles in a monthly upcycle for HUI/NEM/XAU from my experience, and, often a fourth short term upcycle occurs as the monthly upcycle rolls over/flattens out/peaks.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (probably ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see second chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

There's Good News And A Piece Of Minor Bad News

The good news is that it's a slam dunk that bullish breakaway gaps occurred last Friday for NEM/XAU (HUI has fewer gaps, so I usually don't discuss HUI's) as previously thought, at 41.83 for NEM and at 125.39 for the XAU. The minor bad news is that it looks like the XAU may fill it's upside gap (created at today's open) at 130.25 early tomorrow, 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=, in which case a Wave 3 short term cycle high didn't occur late yesterday, it'll probably occur tomorrow, and, that cycle high will probably be the final Wave 3 short term cycle high. The NEM Lead Indicator at a slightly bearish -0.15% versus the XAU today suggests that the XAU will probably fill that upside gap early tomorrow. So, an Elliot Wave 4 ABC down up down short term downcycle will probably have to occur for a session or two after likely early strength and a likely Wave 3 short term cycle high tomorrow.

But, there still should be a third/Wave 5 short term upcycle and possibly another short term upcycle as the monthly upcycle (since 10-4-06) rolls over/flattens out/peaks. As I said previously, there are usually three good short term upcycles in a monthly upcycle for HUI/NEM/XAU from my experience, and, often a fourth short term upcycle occurs as the monthly upcycle rolls over/flattens out/peaks.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (probably ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see second chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU

...............HUI/NEM/XAU Elliot Wave/Cycles

Reliable lead indicator NEM, after hitting a Wave 3 short term cycle high at 43.75 just after yesterday's open (I'm being conservative and assuming that Wave 3 peaked, because it was the second short term upcycle of the monthly upcycle since 10-4-06), put in a Wave C short term cycle low today at 42.48 versus the Wave A cycle low at 42.67 early yesterday, and, put in a Wave B cycle high at 43.57 shortly before yesterday's close. It appears that NEM's downside gap from last Friday at 41.83 is a bullish breakaway gap, as expected.

I need to put some thought into whether HUI/NEM/XAU are still in a big/extended Wave 3 (look at the charts more), either way there should be a third short term upcycle corresponding to Elliot Wave 5 . There are usually three good short term upcycles in a monthly upcycle for HUI/NEM/XAU from my experience, and, often a fourth short term upcycle occurs as the monthly upcycle rolls over/flattens out.

Looking at the XAU, it lagged NEM and hit a Wave 3 short term cycle high late yesterday, then did a Wave A down early today, and, is doing a Wave B up right down. It looks like the XAU is going to try (probably tomorrow) and probably fail to fill it's potential breakaway gap from last Friday at 125.39, since the Wave A cycle low was at 126.74 today, 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==.

My thinking is that reliable lead indicator NEM didn't fill it's downside gap from last Friday at 41.83, and, it doesn't look like the XAU will either, which means that bullish breakaway gaps probably occurred last Friday as previously thought, so, there's a good chance that HUI/NEM/XAU are still in a large Wave 3 short term upcycle, but, for now I'm being conservative and assuming that Wave 3 has peaked and will reassess the situation near the next short term cycle high.

The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 (but began the bullish 3-6 month Wave B up on 10-4-06) and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (probably ended at 39.84 on Wednesday 10-4). NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see second chart at http://www.joefrocks.com/GoldStockCharts.html). 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/

HUI NEM XAU