AVNR And DNDN Didn't Rally Enough Today To Hit Short Term Buy Signals
After a session cycle low at 3.28, AVNR didn't rally enough to convince me that yesterday's downside gap at 3.22 won't get filled on Monday, see http://finance.yahoo.com/q/ta?s=avnr&t=5d&l=on&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. AVNR and DNDN didn't rally enough today to hit short term buy signals.
If AVNR fills it's downside gap at 3.22 one has to assume that yesterday's cycle high at 4.00 was the final short term Wave 5 cycle high, but, if 3.22 doesn't get filled, then a bullish breakaway gap occurred and 4.00 is probably just a very short term Wave 1 cycle high of a short term Wave 5. This is why cycle trendlines/channels used in concert with Elliott Wave patterns and gaps are the basis/crux of "Trade the Cycles." "Gaps action" is very important.
AVNR's short term Wave 4 bottomed at 2.94 on Wednesday (monthly cycle low at 2.36), see http://stockcharts.com/charts/gallery.html?avnr.
DNDN didn't rally enough today to convince me that the short term Wave 4 down (since yesterday's early Wave 3 cycle high at 13.00) had bottomed at 7.90 early today, see http://finance.yahoo.com/q/ta?s=dndn&t=5d&l=on&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. It appears to have and had a huge bullish likely breakaway gap from 6.74 at yesterday's open, but, it makes sense to wait for a strong rally and buy a pullback.
Basically, waiting for a buy signal (strong Wave 1 type move) and buying a pullback (Wave 2 type move) is probably the best strategy. The large inverse spike that occurred at 7.90 early today is a sign that DNDN's short term Wave 4 probably bottomed at 7.90 however, see http://finance.yahoo.com/q/ta?s=DNDN&t=1d&l=on&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==.
DNDN is probably a better short term trade than AVNR if yesterday's downside gap at 6.74 doesn't get filled (then a bullish breakaway gap occurred). DNDN's Wave 5 of a short term Wave 3 peaked well above Wave 3 of Wave 3's cycle high (at 7.30, monthly cycle low at 4.95) at 13.00 early yesterday, see http://stockcharts.com/charts/gallery.html?dndn. So, DNDN is in a short term Wave 4 down that may have bottomed at 7.90 today.
CEGE's action yesterday (http://stockcharts.com/charts/gallery.html?cege), in which it made a huge bullish breakaway gap at the open from 4.08 to 4.59, indicates that a monthly cycle low occurred at 3.79, and, CEGE is in a short term Wave 3 (will probably do Wave 5 of Wave 3 in the next session or two). Wave 5 of a short term Wave 3 appears to have begun early today, see http://finance.yahoo.com/q/ta?s=cege&t=5d&l=on&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==. The inverse spike that occurred at today's session cycle low at 4.19, plus the clear uptrend after that, indicates that Wave 5 of a short term Wave 3 probably began early today. I'll be looking at this on Monday.
AGEN entered a short term Wave 5 on Friday 5-25 after putting in a cycle low at 2.65 (monthly cycle low at 2.25), see http://stockcharts.com/charts/gallery.html?agen. It's not acting well though, and, needs to break out of it's short term Wave 5 triangle before I'd think about going long.
FCEL put in a short term Wave 4 cycle low at 6.65 on Wednesday, versus a Wave 3 cycle high at 7.25 and monthly cycle low at 6.30, see http://stockcharts.com/charts/gallery.html?fcel.
QTWW put in a monthly cycle low at 1.17, and, is in Wave 4 of a short term Wave 3, see http://stockcharts.com/charts/gallery.html?qtww. QTWW made a big bullish breakaway gap from 1.46 yesterday on strong volume.
Reliable lead indicators WMT and NEM obviously had big spike moves late this week, so, significant and potentially severe weakness is likely early next week, because, WMT and NEM will probably correct those big spike moves.
The due diligence that I do (as a minimum) on trading stocks is to look at insider trading activity, the balance sheet, mutual fund/institutional ownership, scan the news/maybe read some, check I Watch, make sure that they're probably in a Cyclical Bull Market (should have completed a 9-18+ month Cyclical Bear Market in the past year or two), etc.
There are times when one should wait for strength after hitting a price target (hit a buy signal), such as if there's a well established downtrend line one should wait for it to clearly be broken (might wait for a Wave 1 short term upcycle and buy late in a Wave 2 down or early in a Wave 3 up, in the flat early part of the cycle), and, there are times to consider trying to catch the bottom (when I Watch and the WMT Lead Indicator are clearly bullish and/or a stock bounces at a well established uptrend line, then look to buy a pullback).
If one decides to trade rockets obviously paper trade for a while or trade very modest positions at first.
I'll be using cycle trendlines/channels, Elliott Wave patterns, gaps, the WMT Lead Indicator, I Watch, etc. to time the rockets. If it works the way I think it will it should be a lot of fun. We'll see.
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. 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.
HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. The primary Secular Bull Market trendlines since late 2000 are at 200-220 for HUI and at 85-90 for the XAU. Those are the targets for where the Cyclical Bear Market will bottom. NEM's Wave 2 Cyclical Bear Market began on 1-31-06. ....... http://www.JoeFRocks.com/ .
HUI NEM XAU
If AVNR fills it's downside gap at 3.22 one has to assume that yesterday's cycle high at 4.00 was the final short term Wave 5 cycle high, but, if 3.22 doesn't get filled, then a bullish breakaway gap occurred and 4.00 is probably just a very short term Wave 1 cycle high of a short term Wave 5. This is why cycle trendlines/channels used in concert with Elliott Wave patterns and gaps are the basis/crux of "Trade the Cycles." "Gaps action" is very important.
AVNR's short term Wave 4 bottomed at 2.94 on Wednesday (monthly cycle low at 2.36), see http://stockcharts.com/charts/gallery.html?avnr.
DNDN didn't rally enough today to convince me that the short term Wave 4 down (since yesterday's early Wave 3 cycle high at 13.00) had bottomed at 7.90 early today, see http://finance.yahoo.com/q/ta?s=dndn&t=5d&l=on&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. It appears to have and had a huge bullish likely breakaway gap from 6.74 at yesterday's open, but, it makes sense to wait for a strong rally and buy a pullback.
Basically, waiting for a buy signal (strong Wave 1 type move) and buying a pullback (Wave 2 type move) is probably the best strategy. The large inverse spike that occurred at 7.90 early today is a sign that DNDN's short term Wave 4 probably bottomed at 7.90 however, see http://finance.yahoo.com/q/ta?s=DNDN&t=1d&l=on&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c==.
DNDN is probably a better short term trade than AVNR if yesterday's downside gap at 6.74 doesn't get filled (then a bullish breakaway gap occurred). DNDN's Wave 5 of a short term Wave 3 peaked well above Wave 3 of Wave 3's cycle high (at 7.30, monthly cycle low at 4.95) at 13.00 early yesterday, see http://stockcharts.com/charts/gallery.html?dndn. So, DNDN is in a short term Wave 4 down that may have bottomed at 7.90 today.
CEGE's action yesterday (http://stockcharts.com/charts/gallery.html?cege), in which it made a huge bullish breakaway gap at the open from 4.08 to 4.59, indicates that a monthly cycle low occurred at 3.79, and, CEGE is in a short term Wave 3 (will probably do Wave 5 of Wave 3 in the next session or two). Wave 5 of a short term Wave 3 appears to have begun early today, see http://finance.yahoo.com/q/ta?s=cege&t=5d&l=on&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==. The inverse spike that occurred at today's session cycle low at 4.19, plus the clear uptrend after that, indicates that Wave 5 of a short term Wave 3 probably began early today. I'll be looking at this on Monday.
AGEN entered a short term Wave 5 on Friday 5-25 after putting in a cycle low at 2.65 (monthly cycle low at 2.25), see http://stockcharts.com/charts/gallery.html?agen. It's not acting well though, and, needs to break out of it's short term Wave 5 triangle before I'd think about going long.
FCEL put in a short term Wave 4 cycle low at 6.65 on Wednesday, versus a Wave 3 cycle high at 7.25 and monthly cycle low at 6.30, see http://stockcharts.com/charts/gallery.html?fcel.
QTWW put in a monthly cycle low at 1.17, and, is in Wave 4 of a short term Wave 3, see http://stockcharts.com/charts/gallery.html?qtww. QTWW made a big bullish breakaway gap from 1.46 yesterday on strong volume.
Reliable lead indicators WMT and NEM obviously had big spike moves late this week, so, significant and potentially severe weakness is likely early next week, because, WMT and NEM will probably correct those big spike moves.
The due diligence that I do (as a minimum) on trading stocks is to look at insider trading activity, the balance sheet, mutual fund/institutional ownership, scan the news/maybe read some, check I Watch, make sure that they're probably in a Cyclical Bull Market (should have completed a 9-18+ month Cyclical Bear Market in the past year or two), etc.
There are times when one should wait for strength after hitting a price target (hit a buy signal), such as if there's a well established downtrend line one should wait for it to clearly be broken (might wait for a Wave 1 short term upcycle and buy late in a Wave 2 down or early in a Wave 3 up, in the flat early part of the cycle), and, there are times to consider trying to catch the bottom (when I Watch and the WMT Lead Indicator are clearly bullish and/or a stock bounces at a well established uptrend line, then look to buy a pullback).
If one decides to trade rockets obviously paper trade for a while or trade very modest positions at first.
I'll be using cycle trendlines/channels, Elliott Wave patterns, gaps, the WMT Lead Indicator, I Watch, etc. to time the rockets. If it works the way I think it will it should be a lot of fun. We'll see.
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. 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.
HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. The primary Secular Bull Market trendlines since late 2000 are at 200-220 for HUI and at 85-90 for the XAU. Those are the targets for where the Cyclical Bear Market will bottom. NEM's Wave 2 Cyclical Bear Market began on 1-31-06. ....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
1:25 PM
