Yup, Monthly Downcycle Elliot Wave B Up And SPX (S & P 500) Is Firm
The sharp rise in VIX yesterday vs a slight decline in SPX correctly pointed to some firmness today which is causing SPX index funds to buy NEM. A monthly downcycle Elliot Wave B up short term upcycle or at best a risky post monthly sell signal (occurred last Friday) short term upcycle began yesterday for HUI, NEM, and the XAU. Since both XAU Implied Volatility and the XAU Put/Call Ratio point to weakness today I won't be day trading long and therefore will probably be on the sidelines or may be looking to buy XAU Puts. Also, SPX's strength will probably be very modest and short lived today because SPX's monthly cycle may have peaked a few days ago or at best is very flat and has a downside gap from today's open that probably will get filled today, dragging NEM with it.
I looked to do an overnight trade with XAU Calls yesterday, but the fact that NEM didn't fill it's downside gap at 48.75 from 12-7 but threatened to late in the session, made it tough and scary to trade long in a likely monthly downcycle. I'll be looking to buy XAU Puts to trade the monthly downcycle Elliot Wave C plunge, which will be the sharply declining/parabolic part of the monthly downcycle (when capitulation occurs).
XAU Implied Volatility fell -0.93% to 32.460 yesterday from 32.765 on 12-14 vs a +0.78% rise in the XAU yesterday which is a slight rise in complacency that portends some weakness/a downtrend today.The XAU Put/Call Ratio points to some weakness (a downtrend) today by falling very sharply (3-6%) to 0.90369 from 0.94581 yesterday (December expiration expires today).
The NEM Lead Indicator has been very bullish recently at neutral vs the XAU so far today, +0.30% yesterday, +0.36% on 12-14, +0.38% vs the XAU on 12-13, and +1.46% on Monday on top of +1.06% last week, which, combined with HUI and the XAU's very sharp volatility spikes that began Monday and ended early Tuesday as well as Wednesday's plunge, correctly pointed to a sharp rebound and possibly even a test of Monday's likely monthly cycle highs in the near future. The test seems unlikely right now due to the likelihood of SPX index funds selling NEM the next few days. Ciao
I looked to do an overnight trade with XAU Calls yesterday, but the fact that NEM didn't fill it's downside gap at 48.75 from 12-7 but threatened to late in the session, made it tough and scary to trade long in a likely monthly downcycle. I'll be looking to buy XAU Puts to trade the monthly downcycle Elliot Wave C plunge, which will be the sharply declining/parabolic part of the monthly downcycle (when capitulation occurs).
XAU Implied Volatility fell -0.93% to 32.460 yesterday from 32.765 on 12-14 vs a +0.78% rise in the XAU yesterday which is a slight rise in complacency that portends some weakness/a downtrend today.The XAU Put/Call Ratio points to some weakness (a downtrend) today by falling very sharply (3-6%) to 0.90369 from 0.94581 yesterday (December expiration expires today).
The NEM Lead Indicator has been very bullish recently at neutral vs the XAU so far today, +0.30% yesterday, +0.36% on 12-14, +0.38% vs the XAU on 12-13, and +1.46% on Monday on top of +1.06% last week, which, combined with HUI and the XAU's very sharp volatility spikes that began Monday and ended early Tuesday as well as Wednesday's plunge, correctly pointed to a sharp rebound and possibly even a test of Monday's likely monthly cycle highs in the near future. The test seems unlikely right now due to the likelihood of SPX index funds selling NEM the next few days. Ciao
posted by Joe Ferrazzano at
6:44 AM
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