.....The NEM/WMT Lead Indicators Turned Bearish

See today's NEM Lead Indicator at http://finance.yahoo.com/q/ta?s=^XAU&t=1d&l=on&z=m&q=l&p=&a=&c=^hui,nem and note that the gap versus the XAU narrowed dramatically by session's end (turned bearish), and, note that WMT underperformed SPX today, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=1d&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=wmt, but, the gap narrowed near session's end (Became less bearish).

HUI/NEM/XAU did a respectable very short term Wave B since late 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=, and, note that reliable lead indicator NEM peaked well ahead of HUI (not NEM dominated), 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=.

HUI's Wave B did an Elliott Wave 12345 up down up down up pattern, and, looks like it will begin an Elliott Wave ABC down up down Wave C downcycle tomorrow. NEM/XAU probably started Wave C today. In the very short term Wave C NEM should/may fill it's downside gap at 43.06 and the XAU should/may fill it's downside gap at 132.09. I'll be looking to (may not but probably will) exit my NEM short/long XAU puts positions in the very short term Wave C.

The XAU has a downside gap at 132.09, and, NEM has downside gaps at 43.06, 41.83, 41.09, and 40.83. The XAU's downside gap at 132.09 and NEM's downside gap at 43.06 will probably get filled tomorrow or Friday, then there MIGHT BE a meaningful Wave B type of rebound for a session or two. Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps is the basis/crux of "Trade the Cycles."

Lycos Thomson I Watch showed some strong sell interest today for NEM (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?t=NEM&range=0&mgp=0&i=3&hdate=&x=7&y=1) and WMT (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?t=WMT&range=0&mgp=0&i=3&hdate=&x=7&y=1).

Today's first post is at http://tradethecycles.blogspot.com/2007/02/huinemxau-very-short-term-wave-b.html.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 7 and 9 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 5-6 yearish Wave 3 Cyclical Bull Market since 10-4-06, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

HUI NEM XAU

.......HUI/NEM/XAU Very Short Term Wave B

HUI/NEM/XAU are doing a very short term Wave B since late yesterday, after the Wave A crash, 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 Fed added a massive $17.25 Billion in Credit today, which is an unusually large amount for any day except Thursday, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE. This is on top of massive credit the prior 4 days. This week's weekly Fed Credit data (released at 4:30 pm EST tomorrow) should show a very large increase, which will tend to prop up HUI/NEM/XAU.

After HUI/NEM/XAU do a very short term Wave C, in which another big decline is likely, I'll probably exit my NEM short/long XAU puts positions.

Lycos Thomson I Watch reveals very bearish/strong sell interest today for NEM (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=nem).

I read that only 3 of the 500 components of the S & P 500 rose yesterday and there were volume stats that were mind boggling. The huge effect of computerized program trading has to be understood, and, is the reason why the S & P 500 is so important for timing most sectors.

Note how the gold ETF GLD (and HUI/NEM/XAU) tracks SPX due to program trading, see http://finance.yahoo.com/q/ta?t=5d&s=GLD&l=off&z=l&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=&c=%5EGSPC. This shows how clueless the manipulation theory gold writers are. There simply aren't any traders who can overcome the huge program trading money, 70% of the dollar volume on the NYSE. Gold did 30-35%/year on average in it's Wave 1 Cyclical Bull Market from April 2001 until May 2006, yet many gold writers harp on gold price suppression by some "cartel."

NEM/XAU made bearish large likely breakaway gaps to the downside at yesterday's open (HUI makes fewer gaps so I don't usually track them), 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==. So, NEM now has an upside gap at 47.06 and the XAU has an upside gap at 147.75. Yesterday was probably an important technical breakdown for HUI/XAU, and, to a lesser extent for NEM, which should be in a Wave 3 Cyclical Bull Market since 10-4-06, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html.

The XAU has a downside gap at 132.09, and, NEM has downside gaps at 43.06, 41.83, 41.09, and 40.83. The XAU's downside gap at 132.09 and NEM's downside gap at 43.06 will probably get filled tomorrow or Friday, then there MIGHT BE a meaningful Wave B type of rebound for a session or two.

Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps is the basis/crux of "Trade the Cycles."

The NEM Lead Indicator was a very bullish +0.99% versus the XAU yesterday, and, became more bullish toward session's end (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem), which pointed to some strength today.

The WMT Lead Indicator was a slightly bearish -0.12% versus the S & P 500 yesterday, but, became much more bearish toward session's end, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC.

There's a good chance that a vicious decline has begun, and, that by week's end NEM/XAU will fill downside gaps at 45.34 (filled), 43.88 (filled), 43.06 for NEM, and, at 136.10 (filled), and 132.09 for the XAU. So, I'll probably close out my NEM short/long XAU puts positions by week's end or early next week. HUI/XAU might fall 15-20%+ this week.

When the gold/silver (true for any sector or major index) stock market is at oversold/overbought extremes or is simply exhibiting extreme behavior, as it probably will this week, Williams %R, Lycos Thomson I Watch, and the NEM/WMT Lead Indicators become very important, along with Elliott Wave patterns and cycle trendlines/channels of course. Cycle channels become highly useful at extremes.

Obviously, it's now very likely that 2-23-07's HUI/XAU cycle highs (2-22-07 for reliable lead indicator NEM) are minor intermediate term cycle highs for the cycle that began 1-10-07.

Fed Credit was a massive $17.25 Billion today, was a large $8 Billion yesterday, was a large $9.50 Billion on Monday, was an average $5.50 Billion on Friday 2-23 (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), after a very massive $23.75 Billion on Thursday, and, the weekly Fed Credit data has revealed sharp increases in 3 of the past 4 weeks, see http://www.federalreserve.gov/releases/h41/. The Rollover Barometer is at "unlikely" however because of yesterday's likely breakdown, which means one should/might consider selling short/buying puts now.

The average daily Fed Credit (Repos) in the 5 day period ending 2-21-07 was $7.04 Billion. Fed Credit the past 5 days greatly exceeded the 5 day period ending 2-21-07's total of a little more than $35 Billion. It looks like there will be a substantial decline this week followed by a very sharp rebound late this week or early next week.

Annotated chart 1 at http://www.joefrocks.com/GoldStockCharts.html shows HUI as of 2-9-07 with Elliott Wave count. HUI/XAU are in a major Wave C decline of their Wave 2 Cyclical Bear Market since 5-11-06 (Secular Bull Market since late 2000).

So, HUI/XAU are in a very bearish major Wave C decline, the one year NEM Lead Indicator is very bearish (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem), the COT (Commitments Of Traders) data has been very bearish the past 6-7 weeks, Lycos Thomson I Watch has been bearish for most of the past 3 weeks (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?t=NEM&range=0&mgp=0&i=2&hdate=&x=9&y=9), the XAU has a bearish declining peaks chart pattern going back to 5-11-06 (HUI's is only slightly better), HUI/XAU are 40-45%+ above their primary Secular Bull Market trendlines, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html.

Basic technical analysis alone indicates a clearly bearish picture. Would you buy a stock with a declining peaks chart pattern going back over 9 months??? Yet, most gold writers are bullish??? Truth really is stranger than fiction.

The "e mail indicator" was going off lately, with people questioning my system/work. Always happens near important cycle highs.

In the next few months HUI/XAU should decline 40-45%+ to their primary multi year Secular Bull Market trendlines in effect since November/October 2000, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. HUI's target range is 200-220 (220 if the primary trendline turns up) and the XAU's is 85-90.

See the last COT data at http://www.cftc.gov/dea/options/deacmxsof.htm. The savvy gold Commercial Traders traded net short, adding to their short position, though not nearly as much as in previous weeks (been going massively short), and, they also traded a respectable long position for the third straight week, benefitting from last week's gold strength.

HUI put in a near perfect slightly higher bearish double top (assuming HUI has peaked) on Friday with the 12-5-06 minor intermediate term cycle high, so, HUI's Elliott Wave count gets reset to Wave A along with NEM's.

HUI and the XAU probably peaked Friday. The 1 day lag between when NEM and HUI/XAU peaked is a sign that an important cycle high occurred. In the new HUI chart I did the Elliott Wave count indicated that an important peak was imminent, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html.

Massive index fund program trader buying (fueled by Fed Credit) led to much of the strength in recent weeks (upcycle began 1-10-07 and peaked on 2-23-07), propping up SPX/HUI/NEM/XAU (led to a great deal of deceptive rollover action).

HUI/XAU are in Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06. In the next few months HUI/XAU should do exactly what reliable lead indicator NEM has already done, which is to decline to their primary multi-year Secular Bull Market/very long term upcycle trendlines, currently at 200-220ish (could turn up which is why there's a wide range) for HUI and at 85-90ish for the XAU, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. NEM did a Wave A down, a Wave B up, then it's Wave C did an ABC down up down pattern, which is exactly what HUI/XAU appear to be doing, with Wave C of Wave C probably having begun Friday 2-23 for HUI (12-5-06 for the XAU), when minor intermediate term cycle highs occurred, see charts three and four at http://www.joefrocks.com/GoldStockCharts.html.

As a long term multi-year investor in any stock, commodity, etc. you want to buy near the primary multi-year Secular Bull Market/very long term upcycle trendline, for example NEM's is at 40ish right now, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. Therefore, NEM right now would be a great buy in the 40-42 range. Gold's primary multi-year Secular Bull Market/very long term upcycle trendline is at $470ish right now, so, gold would be a great buy in the $470-500 range. When the vast majority of gold writers say it's a great time to buy or are bullish, as they almost always are, it's rarely a good time for long term investors to buy. The vast majority of gold writers couldn't time their way out of a paper bag. They tend to be terrible.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 7 and 9 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 5-6 yearish Wave 3 Cyclical Bull Market since 10-4-06, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

HUI NEM XAU

Relentless Computerized Program Selling, Like The Terminator

HUI at it's cycle low was down -8.84% 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 Dow Jones Industrials Average was down over 500 points at one point, and, may have triggered a program trading circuit breaker, if it's still 500 points where the computers get shut off.

I couldn't help but wonder about and feel sympathy for the longs today. Today was a great example of the power/relentless nature of program trading, which accounts for about 70% of the dollar volume on the NYSE. This is why Fed Credit, which fuels program trading, is very important.

Note that today's HUI/NEM/XAU massacre coincided with S & P 500 (SPX) weakness due to program trading, 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. SPX strength in recent weeks led to HUI/NEM/XAU upside surprise due to computerized program buying fueled by massive Fed Credit.

NEM/XAU made bearish large likely breakaway gaps to the downside at today's open (HUI makes fewer gaps so I don't usually track them), 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==. So, NEM now has an upside gap at 47.06 and the XAU has an upside gap at 147.75.

Today was probably an important technical breakdown for HUI/XAU, and, to a lesser extent for NEM, which should be in a Wave 3 Cyclical Bull Market since 10-4-06, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html.

The XAU filled it's downside gaps at 145.82 and 136.10 today. NEM filled it's downside gaps at 45.34 and 43.88 today. The XAU has a downside gap at 132.09, and, NEM has downside gaps at 43.06, 41.83, 41.09, and 40.83. The XAU's downside gap at 132.09 and NEM's downside gap at 43.06 will probably get filled tomorrow, then there MIGHT BE a meaningful Wave B type of rebound for a session or two. Let's see what the market looks like tomorrow.

Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps is the basis/crux of "Trade the Cycles."

The NEM Lead Indicator was a very bullish +0.99% versus the XAU today, and, became more bullish toward session's end (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem), which points to some probably short lived strength early tomorrow. Today's large bearish NEM/XAU breakaway gaps to the downside at the open point to more downside tomorrow.

The WMT Lead Indicator was a slightly bearish -0.12% versus the S & P 500 today, but, became much more bearish toward session's end, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC.

There's a good chance that a vicious decline has begun, and, that by week's end NEM/XAU will fill downside gaps at 45.34 (filled), 43.88 (filled), 43.06 for NEM, and, at 136.10 (filled), and 132.09 for the XAU. So, I'll probably close out my NEM short/long XAU puts positions by week's end. HUI/XAU might fall 15-20%+ this week.

China crashed yesterday, falling more than 9% I heard. Alan Greenspan warned that a recession might occur this year. The durable goods data was very weak. There were many catalysts for today's "debacle," but, the market, including HUI/NEM/XAU, was simply due to be drubbed in a big way.

When the gold/silver (true for any sector or major index) stock market is at oversold/overbought extremes or is simply exhibiting extreme behavior, as it probably will this week, Williams %R, Lycos Thomson I Watch, and the NEM/WMT Lead Indicators become very important, along with Elliott Wave patterns and cycle trendlines/channels of course. Cycle channels become highly useful at extremes.

Obviously, it's now very likely that 2-23-07's HUI/XAU cycle highs (2-22-07 for reliable lead indicator NEM) are minor intermediate term cycle highs for the cycle that began 1-10-07.

Fed Credit was a large $8 Billion today, was a large $9.50 Billion yesterday, was an average $5.50 Billion on Friday 2-23 (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), after a very massive $23.75 Billion on Thursday, and, the weekly Fed Credit data has revealed sharp increases in 3 of the past 4 weeks, see http://www.federalreserve.gov/releases/h41/. The Rollover Barometer is at "unlikely" however because of today's likely breakdown, which means one should/might consider selling short/buying puts now.

The average daily Fed Credit (Repos) in the 5 day period ending 2-21-07 was $7.04 Billion. Fed Credit the past 4 days has already greatly exceeded the 5 day period ending 2-21-07's total of a little more than $35 Billion. Based on the NEM Lead Indicator, which has been very bearish the past two sessions, and Fed Credit, it looks like there will be a substantial decline this week followed by a very sharp rebound late this week or early next week.

Annotated chart 1 at http://www.joefrocks.com/GoldStockCharts.html shows HUI as of 2-9-07 with Elliott Wave count. HUI/XAU are in a major Wave C decline of their Wave 2 Cyclical Bear Market since 5-11-06 (Secular Bull Market since late 2000).

So, HUI/XAU are in a very bearish major Wave C decline, the one year NEM Lead Indicator is very bearish (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem), the COT (Commitments Of Traders) data has been very bearish the past 6-7 weeks, Lycos Thomson I Watch has been bearish for most of the past 3 weeks (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?t=NEM&range=0&mgp=0&i=2&hdate=&x=9&y=9), the XAU has a bearish declining peaks chart pattern going back to 5-11-06 (HUI's is only slightly better), HUI/XAU are 40-45%+ above their primary Secular Bull Market trendlines, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html.

Basic technical analysis alone indicates a clearly bearish picture. Would you buy a stock with a declining peaks chart pattern going back over 9 months??? Yet, most gold writers are bullish??? Truth really is stranger than fiction.

The "e mail indicator" is going off lately, with people questioning my system/work. Always happens near important cycle highs.

In the next few months HUI/XAU should decline 40-45%+ to their primary multi year Secular Bull Market trendlines in effect since November/October 2000, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. HUI's target range is 200-220 (220 if the primary trendline turns up) and the XAU's is 85-90.

See the last COT data at http://www.cftc.gov/dea/options/deacmxsof.htm. The savvy gold Commercial Traders traded net short, adding to their short position, though not nearly as much as in previous weeks (been going massively short), and, they also traded a respectable long position for the third straight week, benefitting from last week's gold strength.

HUI put in a near perfect slightly higher bearish double top (assuming HUI has peaked) on Friday with the 12-5-06 minor intermediate term cycle high, so, HUI's Elliott Wave count gets reset to Wave A along with NEM's.

HUI and the XAU probably peaked Friday. The 1 day lag between when NEM and HUI/XAU peaked is a sign that an important cycle high occurred.

In the new HUI chart I did the Elliott Wave count indicated that an important peak was imminent, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html.

Massive index fund program trader buying (fueled by Fed Credit) has led to much of the strength in recent weeks (upcycle began 1-10-07 and probably peaked on 2-23-07), propping up SPX/HUI/NEM/XAU (led to a great deal of deceptive rollover action).

HUI/XAU are in Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06. In the next few months HUI/XAU should do exactly what reliable lead indicator NEM has already done, which is to decline to their primary multi-year Secular Bull Market/very long term upcycle trendlines, currently at 200-220ish (could turn up which is why there's a wide range) for HUI and at 85-90ish for the XAU, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. NEM did a Wave A down, a Wave B up, then it's Wave C did an ABC down up down pattern, which is exactly what HUI/XAU appear to be doing, with Wave C of Wave C probably having begun Friday 2-23 for HUI (12-5-06 for the XAU), when minor intermediate term cycle highs occurred, see charts three and four at http://www.joefrocks.com/GoldStockCharts.html.

As a long term multi-year investor in any stock, commodity, etc. you want to buy near the primary multi-year Secular Bull Market/very long term upcycle trendline, for example NEM's is at 40ish right now, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. Therefore, NEM right now would be a great buy in the 40-42 range. Gold's primary multi-year Secular Bull Market/very long term upcycle trendline is at $470ish right now, so, gold would be a great buy in the $470-500 range. When the vast majority of gold writers say it's a great time to buy or are bullish, as they almost always are, it's rarely a good time for long term investors to buy. The vast majority of gold writers couldn't time their way out of a paper bag. They tend to be terrible.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 7 and 9 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 5-6 yearish Wave 3 Cyclical Bull Market since 10-4-06, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

HUI NEM XAU

NEM/XAU Made Likely Bearish Breakaway Gaps To The Downside

NEM/XAU made bearish large likely breakaway gaps to the downside at today's open (HUI makes fewer gaps so I don't usually track them), 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==. So, NEM now has an upside gap at 47.06 and the XAU has an upside gap at 147.75. The XAU filled it's downside gap at 145.82 early today.

The XAU has downside gaps at 136.10, and 132.09, and, NEM has downside gaps at 45.34, 43.88, 43.06, 41.83, 41.09, and 40.83. Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps is the basis/crux of "Trade the Cycles."

Notice that today's HUI/NEM/XAU massacre is coinciding with S & P 500 (SPX) weakness due to program trading, 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. SPX strength in recent weeks led to HUI/NEM/XAU upside surprise due to computerized program buying fueled by massive Fed Credit.

There's a good chance that a vicious decline has begun, and, that by week's end NEM/XAU will fill downside gaps at 45.34, 43.88, 43.06 for NEM, and, at 136.10, and 132.09 for the XAU. So, I'll probably close out my NEM short/long XAU puts positions by week's end. HUI/XAU might fall 15-20%+ this week.

China crashed yesterday, falling more than 9% I heard. Alan Greenspan warned that a recession might occur this year. The durable goods data was very weak. There were many catalysts for today's "debacle," but, the market, including HUI/NEM/XAU, were simply due to be drubbed in a big way.

When the gold/silver (true for any sector or major index) stock market is at oversold/overbought extremes or is simply exhibiting extreme behavior, as it probably will this week, Williams %R, Lycos Thomson I Watch, and the NEM/WMT Lead Indicators become very important, along with Elliott Wave patterns and cycle trendlines/channels of course. Cycle channels become highly useful at extremes.

Obviously, it's now very likely that 2-23-07's HUI/XAU cycle highs (2-22-07 for reliable lead indicator NEM) are minor intermediate term cycle highs for the cycle that began 1-10-07.

Fed Credit was a large $8 Billion today, was a large $9.50 Billion yesterday, was an average $5.50 Billion on Friday 2-23 (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), after a very massive $23.75 Billion on Thursday, and, the weekly Fed Credit data has revealed sharp increases in 3 of the past 4 weeks, see http://www.federalreserve.gov/releases/h41/. The Rollover Barometer is at "unlikely" however because of today's likely breakdown, which means one should/might consider selling short/buying puts right now.

The average daily Fed Credit (Repos) in the 5 day period ending 2-21-07 was $7.04 Billion. Fed Credit the past 4 days has already greatly exceeded the 5 day period ending 2-21-07's total of a little more than $35 Billion. Based on the NEM Lead Indicator, which has been very bearish the past two sessions, and Fed Credit, it looks like there will be a substantial decline this week followed by a very sharp rebound late this week or early next week.

Annotated chart 1 at http://www.joefrocks.com/GoldStockCharts.html shows HUI as of 2-9-07 with Elliott Wave count. HUI/XAU are in a major Wave C decline of their Wave 2 Cyclical Bear Market since 5-11-06 (Secular Bull Market since late 2000).

So, HUI/XAU are in a very bearish major Wave C decline, the one year NEM Lead Indicator is very bearish (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem), the COT (Commitments Of Traders) data has been very bearish the past 6-7 weeks, Lycos Thomson I Watch has been bearish for most of the past 3 weeks (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?t=NEM&range=0&mgp=0&i=2&hdate=&x=9&y=9), the XAU has a bearish declining peaks chart pattern going back to 5-11-06 (HUI's is only slightly better), HUI/XAU are 40-45%+ above their primary Secular Bull Market trendlines, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html.

Basic technical analysis alone indicates a clearly bearish picture. Would you buy a stock with a declining peaks chart pattern going back over 9 months??? Yet, most gold writers are bullish??? Truth really is stranger than fiction.

The "e mail indicator" is going off lately, with people questioning my system/work. Always happens near important cycle highs.

In the next few months HUI/XAU should decline 40-45%+ to their primary multi year Secular Bull Market trendlines in effect since November/October 2000, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. HUI's target range is 200-220 (220 if the primary trendline turns up) and the XAU's is 85-90.

See the last COT data at http://www.cftc.gov/dea/options/deacmxsof.htm. The savvy gold Commercial Traders traded net short, adding to their short position, though not nearly as much as in previous weeks (been going massively short), and, they also traded a respectable long position for the third straight week, benefitting from last week's gold strength.

HUI put in a near perfect slightly higher bearish double top (assuming HUI has peaked) on Friday with the 12-5-06 minor intermediate term cycle high, so, HUI's Elliott Wave count gets reset to Wave A along with NEM's.

HUI and the XAU probably peaked Friday. The 1 day lag between when NEM and HUI/XAU peaked is a sign that an important cycle high occurred. In the new HUI chart I did the Elliott Wave count indicated that an important peak was imminent, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html.

Massive index fund program trader buying (fueled by Fed Credit) has led to much of the strength in recent weeks (upcycle began 1-10-07 and probably peaked on 2-23-07), propping up SPX/HUI/NEM/XAU (led to a great deal of deceptive rollover action).

HUI/XAU are in Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06. In the next few months HUI/XAU should do exactly what reliable lead indicator NEM has already done, which is to decline to their primary multi-year Secular Bull Market/very long term upcycle trendlines, currently at 200-220ish (could turn up which is why there's a wide range) for HUI and at 85-90ish for the XAU, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. NEM did a Wave A down, a Wave B up, then it's Wave C did an ABC down up down pattern, which is exactly what HUI/XAU appear to be doing, with Wave C of Wave C probably having begun Friday 2-23 for HUI (12-5-06 for the XAU), when minor intermediate term cycle highs occurred, see charts three and four at http://www.joefrocks.com/GoldStockCharts.html.

As a long term multi-year investor in any stock, commodity, etc. you want to buy near the primary multi-year Secular Bull Market/very long term upcycle trendline, for example NEM's is at 40ish right now, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. Therefore, NEM right now would be a great buy in the 40-42 range. Gold's primary multi-year Secular Bull Market/very long term upcycle trendline is at $470ish right now, so, gold would be a great buy in the $470-500 range. When the vast majority of gold writers say it's a great time to buy or are bullish, as they almost always are, it's rarely a good time for long term investors to buy. The vast majority of gold writers couldn't time their way out of a paper bag. They tend to be terrible.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 7 and 9 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 5-6 yearish Wave 3 Cyclical Bull Market since 10-4-06, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

HUI NEM XAU

The NEM Lead Indicator Was A Bearish -0.85% Versus The XAU Today

The NEM Lead Indicator was a bearish -0.85% versus the XAU today, after being a very bearish -1.64% on Friday. The major downcycle that probably began on Friday for HUI/XAU has begun very flat, 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=, but, the very bearish NEM Lead Indicator the past two sessions points to likely severe weakness for the next session or two if not longer.

Lycos Thomson I Watch revealed very bearish/strong sell interest today for NEM (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=nem), GFI (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=gfi), and, for WMT (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=wmt).

Offsetting factors that are likely to mitigate the likely decline some are a very bullish WMT Lead Indicator today at +1.00% versus the S & P 500 (SPX), and, continued massive Fed Credit that fuels index fund program traders (accounts for about 70% of the dollar volume on the NYSE).

If the expected very sharp decline occurs during the next day or two, I'll be looking to (doesn't mean I mechanically will, I'll assess the situation at the time) exit my NEM short/XAU puts positions. The next time I trade XAU puts it'll probably be the April expiration, because March expires on the 16th.

Watch NEM's downside gaps at 45.34 and 43.88, and, the XAU's downside gaps at 145.82 and 136.10. If the XAU closely approaches 136.10 it'll probably fill it before a very short term Wave B type rebound occurs. Likewise of course for any gap.

The XAU has downside gaps at 145.82, 136.10, and 132.09, and, NEM has downside gaps at 45.34, 43.88, 43.06, 41.83, 41.09, and 40.83. Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps is the basis/crux of "Trade the Cycles."

Fed Credit was a large $9.50 Billion today, was an average $5.50 Billion on Friday 2-23 (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), after a very massive $23.75 Billion on Thursday, and, the weekly Fed Credit data has revealed sharp increases in 3 of the past 4 weeks, see http://www.federalreserve.gov/releases/h41/. The Rollover Barometer is at "likely," which means one probably shouldn't sell short/buy puts right now.

The average daily Fed Credit (Repos) in the 5 day period ending 2-21-07 was $7.04 Billion. Fed Credit the past 3 days has already exceeded the 5 day period ending 2-21-07's total of a little more than $35 Billion. Based on the NEM Lead Indicator, which has been very bearish the past session+, and Fed Credit, it looks like there will be a very sharp decline early this week followed by a sharp rebound.

Annotated chart 1 at http://www.joefrocks.com/GoldStockCharts.html shows HUI as of 2-9-07 with Elliott Wave count. HUI/XAU are in a major Wave C decline of their Wave 2 Cyclical Bear Market since 5-11-06 (Secular Bull Market since late 2000).

So, HUI/XAU are in a very bearish major Wave C decline, the one year NEM Lead Indicator is very bearish (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem), the COT (Commitments Of Traders) data has been very bearish the past 6-7 weeks, Lycos Thomson I Watch has been bearish for most of the past 3 weeks, and, is very bearish so far today (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?t=NEM&range=0&mgp=0&i=2&hdate=&x=9&y=9), the XAU has a bearish declining peaks chart pattern going back to 5-11-06 (HUI's is only slightly better), HUI/XAU are 40-45%+ above their primary Secular Bull Market trendlines, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html.

Basic technical analysis alone indicates a clearly bearish picture. Would you buy a stock with a declining peaks chart pattern going back over 9 months??? Yet, most gold writers are bullish??? Truth really is stranger than fiction.

The "e mail indicator" is going off lately, with people questioning my system/work. Always happens near important cycle highs.

In the next few months HUI/XAU should decline 40-45%+ to their primary multi year Secular Bull Market trendlines in effect since November/October 2000, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. HUI's target range is 200-220 (220 if the primary trendline turns up) and the XAU's is 85-90.

See the last COT data at http://www.cftc.gov/dea/options/deacmxsof.htm. The savvy gold Commercial Traders traded net short, adding to their short position, though not nearly as much as in previous weeks (been going massively short), and, they also traded a respectable long position for the third straight week, benefitting from last week's gold strength.

HUI put in a near perfect slightly higher bearish double top (assuming HUI has peaked) on Friday with the 12-5-06 minor intermediate term cycle high, so, HUI's Elliott Wave count gets reset to Wave A along with NEM's.

HUI and the XAU probably peaked Friday. The 1 day lag between when NEM and HUI/XAU peaked is a sign that an important cycle high occurred. In the new HUI chart I did the Elliott Wave count indicated that an important peak was imminent, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html.

Massive index fund program trader buying (fueled by Fed Credit) has led to much of the strength in recent weeks (upcycle began 1-10-07 and probably peaked on 2-23-07), propping up SPX/HUI/NEM/XAU (led to a great deal of deceptive rollover action).

HUI/XAU are in Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06. In the next few months HUI/XAU should do exactly what reliable lead indicator NEM has already done, which is to decline to their primary multi-year Secular Bull Market/very long term upcycle trendlines, currently at 200-220ish (could turn up which is why there's a wide range) for HUI and at 85-90ish for the XAU, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. NEM did a Wave A down, a Wave B up, then it's Wave C did an ABC down up down pattern, which is exactly what HUI/XAU appear to be doing, with Wave C of Wave C probably having begun Friday 2-23 for HUI (12-5-06 for the XAU), when minor intermediate term cycle highs occurred, see charts three and four at http://www.joefrocks.com/GoldStockCharts.html.

As a long term multi-year investor in any stock, commodity, etc. you want to buy near the primary multi-year Secular Bull Market/very long term upcycle trendline, for example NEM's is at 40ish right now, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. Therefore, NEM right now would be a great buy in the 40-42 range. Gold's primary multi-year Secular Bull Market/very long term upcycle trendline is at $470ish right now, so, gold would be a great buy in the $470-500 range. When the vast majority of gold writers say it's a great time to buy or are bullish, as they almost always are, it's rarely a good time for long term investors to buy. The vast majority of gold writers couldn't time their way out of a paper bag. They tend to be terrible.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 7 and 9 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 5-6 yearish Wave 3 Cyclical Bull Market since 10-4-06, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

HUI NEM XAU

A Very Brief HUI/NEM/XAU Spike Followed By A Downtrend

HUI/NEM/XAU spiked at the open and soon peaked, 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, there basically was weakness early today as expected. The NEM Lead Indicator was a very bearish -1.64% versus the XAU on Friday and is a bearish -0.70% right now.

HUI and the XAU put in slightly lower cycle highs today versus Friday's likely minor intermediate term cycle highs for the cycle that began 1-10-07. HUI probably put in a nearly perfect bearish double top on Friday at 362.58 versus the minor intermediate term cycle high at 362.53 on 12-5-06 (triple top now counting today's likely cycle high at 362.26). The XAU has a nearly perfect bearish triple top the past two days, and, will probably fill today's downside gap at 145.82 today or 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==.

Fed Credit was a large $9.50 Billion today, was an average $5.50 Billion on Friday 2-23 (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), after a very massive $23.75 Billion on Thursday, and, the weekly Fed Credit data has revealed sharp increases in 3 of the past 4 weeks, see http://www.federalreserve.gov/releases/h41/. The Rollover Barometer is at "likely," which means one probably shouldn't sell short/buy puts right now.

The average daily Fed Credit (Repos) in the 5 day period ending 2-21-07 was $7.04 Billion. Fed Credit the past 3 days has already exceeded the 5 day period ending 2-21-07's total of a little more than $35 Billion. Based on the NEM Lead Indicator, which has been very bearish the past session+, and Fed Credit, it looks like there will be a very sharp decline early this week followed by a sharp rebound.

Annotated chart 1 at http://www.joefrocks.com/GoldStockCharts.html shows HUI as of 2-9-07 with Elliott Wave count. HUI/XAU are in a major Wave C decline of their Wave 2 Cyclical Bear Market since 5-11-06 (Secular Bull Market since late 2000).

So, HUI/XAU are in a very bearish major Wave C decline, the one year NEM Lead Indicator is very bearish (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem), the COT (Commitments Of Traders) data has been very bearish the past 6-7 weeks, Lycos Thomson I Watch has been bearish for most of the past 3 weeks, and, is very bearish so far today (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?t=NEM&range=0&mgp=0&i=2&hdate=&x=9&y=9), the XAU has a bearish declining peaks chart pattern going back to 5-11-06 (HUI's is only slightly better), HUI/XAU are 40-45%+ above their primary Secular Bull Market trendlines, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. Basic technical analysis alone indicates a clearly bearish picture. Would you buy a stock with a declining peaks chart pattern going back over 9 months??? Yet, most gold writers are bullish??? Truth really is stranger than fiction.

The "e mail indicator" is going off lately, with people questioning my system/work. Always happens near important cycle highs.

In the next few months HUI/XAU should decline 40-45%+ to their primary multi year Secular Bull Market trendlines in effect since November/October 2000, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. HUI's target range is 200-220 (220 if the primary trendline turns up) and the XAU's is 85-90.

See the last COT data at http://www.cftc.gov/dea/options/deacmxsof.htm. The savvy gold Commercial Traders traded net short, adding to their short position, though not nearly as much as in previous weeks (been going massively short), and, they also traded a respectable long position for the third straight week, benefitting from last week's gold strength.

HUI put in a near perfect slightly higher bearish double top (assuming HUI has peaked) on Friday with the 12-5-06 minor intermediate term cycle high, so, HUI's Elliott Wave count gets reset to Wave A along with NEM's.

HUI and the XAU probably peaked Friday. The 1 day lag between when NEM and HUI/XAU peaked is a sign that an important cycle high occurred. In the new HUI chart I did the Elliott Wave count indicated that an important peak was imminent, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html.

Massive index fund program trader buying (fueled by Fed Credit) has led to much of the strength in recent weeks (upcycle began 1-10-07), propping up SPX/HUI/NEM/XAU (has led to a great deal of deceptive rollover action).

The XAU has downside gaps at 145.82, 136.10, and 132.09, and, NEM has downside gaps at 45.34, 43.88, 43.06, 41.83, 41.09, and 40.83. Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps is the basis/crux of "Trade the Cycles."

HUI/XAU are in Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06. In the next few months HUI/XAU should do exactly what reliable lead indicator NEM has already done, which is to decline to their primary multi-year Secular Bull Market/very long term upcycle trendlines, currently at 200-220ish (could turn up which is why there's a wide range) for HUI and at 85-90ish for the XAU, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. NEM did a Wave A down, a Wave B up, then it's Wave C did an ABC down up down pattern, which is exactly what HUI/XAU appear to be doing, with Wave C of Wave C probably having begun Friday 2-23 for HUI (12-5-06 for the XAU), when minor intermediate term cycle highs occurred, see charts three and four at http://www.joefrocks.com/GoldStockCharts.html.

As a long term multi-year investor in any stock, commodity, etc. you want to buy near the primary multi-year Secular Bull Market/very long term upcycle trendline, for example NEM's is at 40ish right now, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. Therefore, NEM right now would be a great buy in the 40-42 range. Gold's primary multi-year Secular Bull Market/very long term upcycle trendline is at $470ish right now, so, gold would be a great buy in the $470-500 range. When the vast majority of gold writers say it's a great time to buy or are bullish, as they almost always are, it's rarely a good time for long term investors to buy. The vast majority of gold writers couldn't time their way out of a paper bag. They tend to be terrible.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 7 and 9 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 5-6 yearish Wave 3 Cyclical Bull Market since 10-4-06, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

HUI NEM XAU

HUI Has Probably Put In A Nearly Perfect Bearish Double Top

HUI probably put in a nearly perfect bearish double top today at 362.58 versus the minor intermediate term cycle high at 362.53 on 12-5-06. The NEM Lead Indicator was a very bearish -1.64% versus the XAU today, and, the WMT Lead Indicator was a slightly bullish +0.12% versus the S & P 500 today.

Reliable lead indicator NEM filled it's downside gap at 46.98 (from yesterday's big gap up at the open to 47.90) as expected, which is a strong indication that NEM and probably also HUI/XAU have put in cycle highs for the upcycle since 1-10-07.

From NEM's anemic uptrend today after the early sharp decline (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==) and very bearish underperformance, and, from looking at HUI/XAU's downtrend today (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=), it looks like there will be potentially severe weakness early on Monday. Watch NEM's downside gap at 45.34 and the XAU's downside gap at 136.10 early next week.

Lycos Thomson I Watch revealed bearish/strong sell interest today for NEM (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=nem), GFI (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=gfi), and, for WMT (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=wmt).

Was it the savvy gold Commercial Traders that were "on the ropes" as Clive Maund said in a recent article, or, was it the clueless gold Speculators, including some "well known" (this means that the average person has probably never heard of them) KoolAid drinking gold writers who got their butts kicked? See for yourself in the last data at http://www.cftc.gov/dea/options/deacmxsof.htm.

The savvy gold Commercial Traders traded net short, adding to their short position, though not nearly as much as in previous weeks (been going massively short), and, they also traded a respectable long position for the third straight week, benefitting from this week's gold strength.

It was the clueless gold Speculators who lost their nerve and got squeezed. They engaged in an unusually large (>10% decrease in short position) degree of short covering, and, their long trade was LESS THAN one fifth the size of the gold Commercial Traders long trade.

By the way, despite shorting NEM a bit below 46, I held on to that position despite NEM spiking above 48 (48.33 was the cycle high I think), thanks to my great system, and, it looks like it'll be a good trade.

HUI put in a near perfect slightly higher bearish double top (assuming HUI has peaked) today with the 12-5-06 minor intermediate term cycle high, so, HUI's Elliott Wave count gets reset to Wave A along with NEM's.

In the next few months HUI/XAU should decline 40-45%+ to their primary multi year Secular Bull Market trendlines in effect since November/October 2000, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. HUI's target range is 200-220 (220 if the primary trendline turns up) and the XAU's is 85-90.

HUI and the XAU probably peaked today. The 1 day lag between when NEM and HUI/XAU peaked is a sign that an important cycle high occurred. In the new HUI chart I did the Elliott Wave count indicated that an important peak was imminent, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html.

Fed Credit was an average $5.50 Billion today (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE) after a very massive $23.75 Billion yesterday, and, the weekly Fed Credit data has revealed sharp increases in 3 of the past 4 weeks, see http://www.federalreserve.gov/releases/h41/. The Rollover Barometer is at "likely," which means one probably shouldn't sell short/buy puts right now.

However, since the NEM Lead Indicator was very bearish today, I doubled up on March 130 XAU puts (XAVOF) at only 20 cents versus the original 65 cents, so, my basis is now 42.50 cents or $42.50 per 100 share contract. Next week I'll be looking to roll over to the April expiration.

Annotated chart 1 at http://www.joefrocks.com/GoldStockCharts.html shows HUI as of 2-9-07 with Elliott Wave count.

Massive index fund program trader buying (fueled by Fed Credit) has led to much of the strength in recent weeks (upcycle began 1-10-07), propping up SPX/HUI/NEM/XAU (has led to a great deal of deceptive rollover action).

The XAU has downside gaps at 136.10, and 132.09, and, NEM has downside gaps at 45.34, 43.88, 43.06, 41.83, 41.09, and 40.83. Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps is the basis/crux of "Trade the Cycles."

HUI/XAU are in Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06. In the next few months HUI/XAU should do exactly what reliable lead indicator NEM has already done, which is to decline to their primary multi-year Secular Bull Market/very long term upcycle trendlines, currently at 200-220ish (could turn up which is why there's a wide range) for HUI and at 85-90ish for the XAU, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. NEM did a Wave A down, a Wave B up, then it's Wave C did an ABC down up down pattern, which is exactly what HUI/XAU appear to be doing, with Wave C of Wave C probably having begun Friday 2-23 for HUI (12-5-06 for the XAU), when minor intermediate term cycle highs occurred, see charts three and four at http://www.joefrocks.com/GoldStockCharts.html.

As a long term multi-year investor in any stock, commodity, etc. you want to buy near the primary multi-year Secular Bull Market/very long term upcycle trendline, for example NEM's is at 40ish right now, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. Therefore, NEM right now would be a great buy in the 40-42 range. Gold's primary multi-year Secular Bull Market/very long term upcycle trendline is at $470ish right now, so, gold would be a great buy in the $470-500 range. When the vast majority of gold writers say it's a great time to buy or are bullish, as they almost always are, it's rarely a good time for long term investors to buy. The vast majority of gold writers couldn't time their way out of a paper bag. They tend to be terrible.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 7 and 9 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 5-6 yearish Wave 3 Cyclical Bull Market since 10-4-06, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

HUI NEM XAU

.........Important NEM Gap Filling Action Today

It looks like reliable lead indicator NEM will fill yesterday's downside gap at 46.98 (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==), which means that NEM probably didn't break out yesterday, but, as expected, probably put in a cycle high for the upcycle since 1-10-07.

HUI and the XAU probably peaked today. The 1 day lag between when NEM and HUI/XAU peaked is a sign that an important cycle high occurred. In the new HUI chart I did the Elliott Wave count indicated that an important peak was imminent, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html.

The NEM Lead Indicator is a very bearish -1.75% versus the XAU right now. HUI put in a near perfect slightly higher bearish double top (assuming HUI has peaked) today with the 12-5-06 minor intermediate term cycle high, so, HUI's Elliott Wave count gets reset to Wave A along with NEM's.

In the next few months HUI/XAU should decline 40-45%+ to their primary multi year Secular Bull Market trendlines in effect since November/October 2000, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. HUI's target range is 200-220 (220 if the primary trendline turns up) and the XAU's is 85-90.

Fed Credit was an average $5.50 Billion today (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE) after a very massive $23.75 Billion yesterday, and, the weekly Fed Credit data has revealed sharp increases in 3 of the past 4 weeks, see http://www.federalreserve.gov/releases/h41/Current/. The Rollover Barometer is at "likely," which means one probably shouldn't sell short/buy puts right now.

Annotated chart 1 at http://www.joefrocks.com/GoldStockCharts.html shows HUI as of 2-9-07 with Elliott Wave count.

Massive index fund program trader buying (fueled by Fed Credit) has led to much of the strength in recent weeks (upcycle began 1-10-07), propping up SPX/HUI/NEM/XAU (has led to a great deal of deceptive rollover action).

The XAU has downside gaps at 136.10, and 132.09, and, NEM has downside gaps at 46.98, 45.34, 43.88, 43.06, 41.83, 41.09, and 40.83. Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps is the basis/crux of "Trade the Cycles."

HUI/XAU are in Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06. In the next few months HUI/XAU should do exactly what reliable lead indicator NEM has already done, which is to decline to their primary multi-year Secular Bull Market/very long term upcycle trendlines, currently at 200-220ish (could turn up which is why there's a wide range) for HUI and at 85-90ish for the XAU, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. NEM did a Wave A down, a Wave B up, then it's Wave C did an ABC down up down pattern, which is exactly what HUI/XAU appear to be doing, with Wave C of Wave C probably having begun Friday 2-23 for HUI (12-5-06 for the XAU), when minor intermediate term cycle highs occurred, see charts three and four at http://www.joefrocks.com/GoldStockCharts.html.

As a long term multi-year investor in any stock, commodity, etc. you want to buy near the primary multi-year Secular Bull Market/very long term upcycle trendline, for example NEM's is at 40ish right now, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. Therefore, NEM right now would be a great buy in the 40-42 range. Gold's primary multi-year Secular Bull Market/very long term upcycle trendline is at $470ish right now, so, gold would be a great buy in the $470-500 range. When the vast majority of gold writers say it's a great time to buy or are bullish, as they almost always are, it's rarely a good time for long term investors to buy. The vast majority of gold writers couldn't time their way out of a paper bag. They tend to be terrible.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 7 and 9 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 8 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

HUI NEM XAU

New HUI Chart With Countertrend Wave B Channel And Elliott Wave Count

I did a new chart that shows HUI's countertrend Wave B channel and Elliott Wave count that indicates Thursday 2-22-07 might be the Wave B cycle high, see the second chart at http://www.joefrocks.com/GoldStockCharts.html.

A good solution to avoid getting whipsawed by unexpected strength/rollover action after short selling is to short only after the Fed's weekly credit data reveals a sharp (> $4 Billion) or at least significant (> $2 Billion) drop, as opposed to the sharp increases that occurred in 3 of the past 4 weeks (http://www.federalreserve.gov/releases/h41/), and, the NEM/WMT Lead Indicators should be clearly bearish (in concert with Elliott Wave patterns of course). The NEM Lead Indicator is clearly bearish at -0.50% or more versus the XAU, and, the less volatile WMT Lead Indicator is clearly bearish at -0.25% or more versus the S & P 500.

Also, until the channel clearly breaks down (see the second chart at http://www.joefrocks.com/GoldStockCharts.html), say HUI falling below 335, keep the trading timeframes very short (a day or two, unless (maybe) both lead indicators are very bearish) and use the very short term Elliott Wave patterns plus lead indicators, Lycos Thomson I Watch, etc.

Another great thing about channels is, if they're well defined, one can/might sell/short near the top and cover/go long near the bottom. Channels provide buy/sell zones near the bottom and top of the channel, using Elliott Wave, lead indicators, COT data, Lycos Thomson I Watch, etc (use "Trade the Cycles").

See the previous post at http://tradethecycles.blogspot.com/2007/02/huixaus-countertrend-wave-b-since-1-10.html.

The XAU has downside gaps at 136.10, and 132.09, and, NEM has downside gaps at 46.98, 45.34, 43.88, 43.06, 41.83, 41.09, and 40.83. Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps is the basis/crux of "Trade the Cycles."

HUI/XAU are in Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06. In the next 3-6 weeks HUI/XAU should do exactly what reliable lead indicator NEM has already done, which is to decline to their primary multi-year Secular Bull Market/very long term upcycle trendlines, currently at 200-220ish (could turn up which is why there's a wide range) for HUI and at 85-90ish for the XAU, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. NEM did a Wave A down, a Wave B up, then it's Wave C did an ABC down up down pattern, which is exactly what HUI/XAU appear to be doing, with Wave C of Wave C probably having begun Tuesday 12-5, when minor intermediate term cycle highs occurred, see charts two and three at http://www.joefrocks.com/GoldStockCharts.html.

As a long term multi-year investor in any stock, commodity, etc. you want to buy near the primary multi-year Secular Bull Market/very long term upcycle trendline, for example NEM's is at 40ish right now, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. Therefore, NEM right now would be a great buy in the 40-42 range. Gold's primary multi-year Secular Bull Market/very long term upcycle trendline is at $470ish right now, so, gold would be a great buy in the $470-500 range. When the vast majority of gold writers say it's a great time to buy or are bullish, as they almost always are, it's rarely a good time for long term investors to buy. The vast majority of gold writers couldn't time their way out of a paper bag. They tend to be terrible.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 7 and 9 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 8 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

HUI NEM XAU

HUI/XAU's Countertrend Wave B Since 1-10-07 Might Have Peaked Today

HUI/XAU's countertrend Wave B since 1-10-07 might have peaked today shortly after 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==. HUI/XAU did an intraday Wave A down followed by a Wave B up, and, were in Wave C down at session's end, which points to weakness early tomorrow and potential downside gap filling action, in order to fill the downside gaps created at today's open.

The XAU filled it's downside gap at 145.81 today, which obviously means that it wasn't a breakaway gap, but, reliable lead indicator NEM has a downside gap at 46.98 from today's open. If NEM fills today's downside gap at 46.98 (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==) that will confirm that NEM and HUI/XAU have probably peaked.

However, reliable lead indicator NEM made a large gap up at today's open that may be a bullish breakaway gap, and, the NEM Lead Indicator was a very bullish +1.39% versus the XAU today, BUT, since NEM opened at 47.90 and closed at 47.71, NEM actually declined -0.40% from where it opened, whereas, the XAU fell -1.09% from it's open at 147.67 to the close at 146.06, so, from the open to the close the NEM Lead Indicator was actually a bullish +0.69% versus the XAU today, which is considerably less bullish than +1.39% obviously. The Walmart Lead Indicator was a bearish -0.47% versus the S & P 500 today.

Lycos Thomson I Watch was relatively bearish for NEM (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=nem) and WMT today (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=wmt), but, was relatively bullish for GFI (http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?ticker=gfi) today.

The Fed's weekly credit data released today again (http://www.federalreserve.gov/releases/h41/Current/) revealed a sharp rise, +$4.502 Billion, after a sharp +$5.69 Billion rise the week before. Combined with today's massive $23.75 Billion in credit (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE) and bullish NEM Lead indicator, the Rollover Barometer is at "likely," which means don't sell short/buy puts tomorrow.

Annotated chart 1 at http://www.joefrocks.com/GoldStockCharts.html shows HUI as of 2-9-07 with Elliott Wave count. HUI/XAU should soon enter (may have today) the final major Wave C decline of their Wave 2 Cyclical Bear Market (since 5-11-06).

Massive index fund program trader buying (fueled by Fed Credit) has led to much of the Wave B (began 1-10-07) strength in recent weeks, propping up SPX/HUI/NEM/XAU (has led to a great deal of deceptive rollover action).

The monster spike move that began early on Tuesday, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==, is probably the final blowoff phase of the countertrend Wave B that began on 1-10-07 for HUI/XAU, IF NEM didn't break out today. Since NEM took out the 12-8-06 minor intermediate term cycle high, NEM's count gets reset to Wave A once it peaks (may have early today).

I've realized that I need a "Rollover Barometer" that will gauge the likelihood of rollover action. Fed Credit (fuels program traders), the lead indicators (NEM, WMT), COT data, etc. will be used to determine whether rollover action is likely, mildly likely, or unlikely. Last week's weekly Fed Credit data (http://www.federalreserve.gov/releases/h41/20070215/, released 4:30 on Thursday) revealed a sharp +$5.69 Billion rise in credit, combined with punch spiking since then and somewhat bullish NEM/WMT Lead Indicators, meant that rollover action was likely.

The XAU has downside gaps at 136.10, and 132.09, and, NEM has downside gaps at 46.98, 45.34, 43.88, 43.06, 41.83, 41.09, and 40.83. Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps is the basis/crux of "Trade the Cycles."

HUI/XAU are in Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06. In the next 3-6 weeks HUI/XAU should do exactly what reliable lead indicator NEM has already done, which is to decline to their primary multi-year Secular Bull Market/very long term upcycle trendlines, currently at 200-220ish (could turn up which is why there's a wide range) for HUI and at 85-90ish for the XAU, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. NEM did a Wave A down, a Wave B up, then it's Wave C did an ABC down up down pattern, which is exactly what HUI/XAU appear to be doing, with Wave C of Wave C probably having begun Tuesday 12-5, when minor intermediate term cycle highs occurred, see charts two and three at http://www.joefrocks.com/GoldStockCharts.html.

As a long term multi-year investor in any stock, commodity, etc. you want to buy near the primary multi-year Secular Bull Market/very long term upcycle trendline, for example NEM's is at 40ish right now, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. Therefore, NEM right now would be a great buy in the 40-42 range. Gold's primary multi-year Secular Bull Market/very long term upcycle trendline is at $470ish right now, so, gold would be a great buy in the $470-500 range. When the vast majority of gold writers say it's a great time to buy or are bullish, as they almost always are, it's rarely a good time for long term investors to buy. The vast majority of gold writers couldn't time their way out of a paper bag. They tend to be terrible.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 7 and 9 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 8 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

HUI NEM XAU

...........Watch Reliable Lead Indicator NEM

Reliable lead indicator NEM created a big gap up at the open today to 47.90 from 46.98 (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==), which is an obvious candidate for a bullish breakaway gap, BUT, sometimes that happens near cycle highs also. If NEM fills the downside gap at 46.98 that will confirm that NEM and HUI/XAU have probably peaked.

Annotated chart 1 at http://www.joefrocks.com/GoldStockCharts.html shows HUI as of 2-9-07 with Elliott Wave count. HUI/XAU should soon enter (may have today) the final major Wave C decline of their Wave 2 Cyclical Bear Market (since 5-11-06).

Fed Credit continues to be massive, with $23.75 Billion today, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE. Massive index fund program trader buying (fueled by Fed Credit) has led to much of the Wave B (began 1-10-07) strength in recent weeks, propping up SPX/HUI/NEM/XAU (has led to a great deal of deceptive rollover action).

The monster spike move that began early on Tuesday, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==, is probably the final blowoff phase of the countertrend Wave B that began on 1-10-07 for HUI/XAU, IF NEM didn't break out today. Since NEM took out the 12-8-06 minor intermediate term cycle high, NEM's count gets reset to Wave A once it peaks (may have early today).

I've realized that I need a "Rollover Barometer" that will gauge the likelihood of rollover action. Fed Credit (fuels program traders) and the lead indicators (NEM, WMT) will be used to determine whether rollover action is likely, mildly likely, or unlikely. Last week's weekly Fed Credit data (http://www.federalreserve.gov/releases/h41/Current/, released 4:30 on Thursday) revealed a sharp +$5 .69 Billion rise in credit, combined with punch spiking since then and somewhat bullish NEM/WMT Lead Indicators, meant that rollover action was likely.

The XAU has downside gaps at 136.10, and 132.09, and, NEM has downside gaps at 46.98, 45.34, 43.88, 43.06, 41.83, 41.09, and 40.83. Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps is the basis/crux of "Trade the Cycles."

HUI/XAU are in Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06. In the next 3-6 weeks HUI/XAU should do exactly what reliable lead indicator NEM has already done, which is to decline to their primary multi-year Secular Bull Market/very long term upcycle trendlines, currently at 200-220ish (could turn up which is why there's a wide range) for HUI and at 85-90ish for the XAU, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. NEM did a Wave A down, a Wave B up, then it's Wave C did an ABC down up down pattern, which is exactly what HUI/XAU appear to be doing, with Wave C of Wave C probably having begun Tuesday 12-5, when minor intermediate term cycle highs occurred, see charts two and three at http://www.joefrocks.com/GoldStockCharts.html.

As a long term multi-year investor in any stock, commodity, etc. you want to buy near the primary multi-year Secular Bull Market/very long term upcycle trendline, for example NEM's is at 40ish right now, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html. Therefore, NEM right now would be a great buy in the 40-42 range. Gold's primary multi-year Secular Bull Market/very long term upcycle trendline is at $470ish right now, so, gold would be a great buy in the $470-500 range. When the vast majority of gold writers say it's a great time to buy or are bullish, as they almost always are, it's rarely a good time for long term investors to buy. The vast majority of gold writers couldn't time their way out of a paper bag. They tend to be terrible.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 7 and 9 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 8 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

HUI NEM XAU

......Trust Me, An HUI/XAU Massacre Is Coming

While one can never say with 100% certainty, trust me, an HUI/XAU massacre is (very likely) coming soon, and, massive Fed Credit has been propping up SPX/HUI/NEM/XAU in recent weeks/months, which has led to a great deal of deceptive rollover action.

My bearishness is based on (I don't make "calls" or predictions, I use cycle trendlines, Elliott Wave, indicators, data, TA, etc. and THEY (the system) reveal the picture NOT me):

1. Most importantly, what the cycles in concert with Elliott Wave indicate, see chart 1 at http://www.joefrocks.com/GoldStockCharts.html that shows HUI as of 2-9-07. HUI/XAU should soon enter (may have late today or might do so early tomorrow) the final major Wave C decline of their Wave 2 Cyclical Bear Market (since 5-11-06).

2. HUI is about 45% above it's PRIMARY multi year Secular Bull Market trendline, see chart 1 at http://www.joefrocks.com/GoldStockCharts.html. That alone, basic TA, tells one that the PM sector isn't timely right now for long term investors.

3. More basic TA, HUI/XAU have a DECLINING PEAKS pattern going back to May 11, 2006. That's BEARISH.

4. The savvy non contrarian gold Commercial Traders have gone massively short gold the past 5-6 weeks, while also trading significant long positions in recent weeks to take advantage of the generally modest gold strength (today was probably a final blowoff spike/sucker's rally).

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

6. Letter writers are about 80% bullish now and investors/traders seem to be as well. There's WAY too much bullishness which is BEARISH.

The latest COT data for the 5 day period ending 2-13-07, similar to last week's data, is extremely bearish on an intermediate term cycle basis (weeks/months), but points to some strength in gold this week, see http://www.cftc.gov/dea/options/deacmxsof.htm, since the savvy non contrarian gold Commercial Traders aggressively shorted gold, but also did a significant long trade (points to some strength), that was much smaller than the short selling they engaged in.

The savvy non contrarian gold Commercial Traders engaged in massive long liquidation in the five session period ending 1-30-07 (-17.50% decrease in long position), and, they massively increased their short position in the five session period ending 1-23-07 (nearly 15% increase in short position). The COT data obviously points to a major decline in gold in the near future. The clueless gold Speculators have been trading aggressively net long in recent weeks, which is another very bearish sign. They almost always do the opposite of what the savvy gold Commercial Traders do.

The previous post is at http://tradethecycles.blogspot.com/2007/02/huinemxau-wave-b-blowoff-spikesuckers.html.

HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 7 and 9 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 8 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .

HUI NEM XAU