.......SPX Has Been Very Flat In Recent Sessions
The S & P 500's (SPX) Wave 1 of a short term Wave 5 upcycle since early Wednesday 7-11 appears to have peaked (probably just Wave 1 of Wave 5), see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c= and http://stockcharts.com/charts/gallery.html?%5Espx. SPX has been very flat in recent sessions, and, is likely to enter the parabolic/sharply declining part of the very short term Wave 2 downcycle tomorrow, which jives with the very bearish WMT Lead Indicator.
The WMT Lead Indicator was a very bearish -1.20% versus SPX today, and, WMT's Wave 1 of a short term Wave 5 peaked at 49.26 on Friday (leading to the downside), see http://finance.yahoo.com/q/ta?s=wmt&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. WMT's Wave 2 down of the short term Wave 5 may have bottomed at 48.30 today. WMT has a likely breakaway gap at 47.68.
In simple terms, both WMT and SPX had large spike moves on Thursday that are correcting. Since WMT should take out the short term Wave 3 cycle high at 51.44 (http://stockcharts.com/charts/gallery.html?wmt), SPX's peaking action now should just be Wave 1 of the short term Wave 5 upcycle. I'll be looking to buy WMT and SSO on weakness tomorrow.
The NEM Lead Indicator was a slightly bullish +0.05% versus the XAU today, but, is bearish short term, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=on&z=m&q=l&p=&a=&c=%5Ehui,nem.
The XAU's recent "major" short term spike move (http://stockcharts.com/charts/gallery.html?%24xau) peaked Friday as expected. Note the Elliott Wave 12345 up down up down up pattern and the bearish large spike on Friday's candle. Also, the latest COT data is clearly bearish, with the savvy non contrarian gold Commercial Traders aggressively shorting gold in the five day period ending 7-10-07 versus the clueless/contrarian indicator gold Speculators trading significantly net long, see the last data at http://www.cftc.gov/dea/options/deacmxsof.htm.
A new rocket, ENCY, appears to have entered a Cyclical Bull Market a few days ago, and, is in Wave 4 down of a short term Wave 1, see http://stockcharts.com/charts/gallery.html?ency. I'm going to wait for the short term Wave 2 down and see if today's potential bullish breakaway gap at 1.70 remains unfilled. If so, I may trade this. However, given how the Biotech/Pharmas like AVNR, CEGE, DNDN, GNBT have disappointed, I'm reluctant to trade one.
BQI broke it's Cyclical Bear Market downtrend line late last week and hit a 5% follow through major buy signal Friday or yesterday (I'd have to chart it to know), which indicates that the Cyclical Bear Market (very likely) ended in early June at 2.37, note the bullish large inverse spike.
BQI's short term Wave 5 of the monthly upcycle since late June (http://stockcharts.com/charts/gallery.html?bqi) probably peaked at 3.97 yesterday (likely monthly cycle high). Note the bearish large spike on yesterday's candle. The downside gap at 2.70 should be a bullish breakaway gap, so, in the monthly downcycle that began yesterday BQI shouldn't fill 2.70, it should bottom above 2.70 for BQI to remain bullish.
Thanks to an unexpected order going to a competitor FRPT took out the likely short term Wave 2 cycle low at 20.71 and the monthly cycle low at 20.39 yesterday, see http://stockcharts.com/charts/gallery.html?frpt and http://finance.yahoo.com/q/ta?s=frpt&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==. FRPT my have hit a monthly cycle low at 19.85 yesterday. FRPT needs to do a strong short term Wave 1 upcycle in order to hit a monthly cycle buy signal, and, should fill yesterday's bearish breakaway gap at 22.89 in the process.
Since FRPT is being gyrated a lot by news recently (may just be that type of stock, in which case I'll avoid it), I probably won't trade it again until I get a better feel for it or decide that the news flow is making it too unpredictable/untradeable. I think the news flow will settle down and it'll be tradeable, it's cycles will probably follow the usual Elliott Wave patterns.
AEZ's short term Wave 2 downcycle may have bottomed today at 6.3o, see http://stockcharts.com/charts/gallery.html?aez. AEZ may fill it's downside gap at 6.22 before bottoming. I'll be looking to buy AEZ tomorrow. A monthly cycle low occurred at 5.74, note the bullish very large inverse spike that occurred.
ACI's Wave 2 short term downcycle probably bottomed at 34.01, and, hit a short term Wave 3 buy signal Friday, see http://stockcharts.com/charts/gallery.html?aci. A monthly cycle low (bullish large inverse spike) occurred for ACI at 32.94 and it hit a monthly cycle buy signal on Thursday 6-28. I'll be looking to buy ACI again tomorrow.
I'm looking to buy VPHM (http://stockcharts.com/charts/gallery.html?vphm) in the short term Wave 4 downcycle or early in Wave 5, now that it filled it's downside gap at 14.48 (the one at 13.80 may not get filled until later based on the monthly upcycle channel), see http://finance.yahoo.com/q/ta?s=vphm&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c. A monthly cycle low occurred for VPHM at 13.09.
Stocks that look great once they complete Elliott Wave ABC down up down monthly downcycles are WWAT (http://stockcharts.com/charts/gallery.html?wwat), TMTA (http://stockcharts.com/charts/gallery.html?tmta), BCON (http://stockcharts.com/charts/gallery.html?bcon), JASO (http://stockcharts.com/charts/gallery.html?jaso), RVNG.OB (http://stockcharts.com/charts/gallery.html?rvng), UVSE.OB (http://stockcharts.com/charts/gallery.html?uvse), and INIS (thin/low average daily volume, http://stockcharts.com/charts/gallery.html?inis).
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.
If one decides to trade rockets obviously paper trade for a while or trade very modest positions at first.
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
The WMT Lead Indicator was a very bearish -1.20% versus SPX today, and, WMT's Wave 1 of a short term Wave 5 peaked at 49.26 on Friday (leading to the downside), see http://finance.yahoo.com/q/ta?s=wmt&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. WMT's Wave 2 down of the short term Wave 5 may have bottomed at 48.30 today. WMT has a likely breakaway gap at 47.68.
In simple terms, both WMT and SPX had large spike moves on Thursday that are correcting. Since WMT should take out the short term Wave 3 cycle high at 51.44 (http://stockcharts.com/charts/gallery.html?wmt), SPX's peaking action now should just be Wave 1 of the short term Wave 5 upcycle. I'll be looking to buy WMT and SSO on weakness tomorrow.
The NEM Lead Indicator was a slightly bullish +0.05% versus the XAU today, but, is bearish short term, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=on&z=m&q=l&p=&a=&c=%5Ehui,nem.
The XAU's recent "major" short term spike move (http://stockcharts.com/charts/gallery.html?%24xau) peaked Friday as expected. Note the Elliott Wave 12345 up down up down up pattern and the bearish large spike on Friday's candle. Also, the latest COT data is clearly bearish, with the savvy non contrarian gold Commercial Traders aggressively shorting gold in the five day period ending 7-10-07 versus the clueless/contrarian indicator gold Speculators trading significantly net long, see the last data at http://www.cftc.gov/dea/options/deacmxsof.htm.
A new rocket, ENCY, appears to have entered a Cyclical Bull Market a few days ago, and, is in Wave 4 down of a short term Wave 1, see http://stockcharts.com/charts/gallery.html?ency. I'm going to wait for the short term Wave 2 down and see if today's potential bullish breakaway gap at 1.70 remains unfilled. If so, I may trade this. However, given how the Biotech/Pharmas like AVNR, CEGE, DNDN, GNBT have disappointed, I'm reluctant to trade one.
BQI broke it's Cyclical Bear Market downtrend line late last week and hit a 5% follow through major buy signal Friday or yesterday (I'd have to chart it to know), which indicates that the Cyclical Bear Market (very likely) ended in early June at 2.37, note the bullish large inverse spike.
BQI's short term Wave 5 of the monthly upcycle since late June (http://stockcharts.com/charts/gallery.html?bqi) probably peaked at 3.97 yesterday (likely monthly cycle high). Note the bearish large spike on yesterday's candle. The downside gap at 2.70 should be a bullish breakaway gap, so, in the monthly downcycle that began yesterday BQI shouldn't fill 2.70, it should bottom above 2.70 for BQI to remain bullish.
Thanks to an unexpected order going to a competitor FRPT took out the likely short term Wave 2 cycle low at 20.71 and the monthly cycle low at 20.39 yesterday, see http://stockcharts.com/charts/gallery.html?frpt and http://finance.yahoo.com/q/ta?s=frpt&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==. FRPT my have hit a monthly cycle low at 19.85 yesterday. FRPT needs to do a strong short term Wave 1 upcycle in order to hit a monthly cycle buy signal, and, should fill yesterday's bearish breakaway gap at 22.89 in the process.
Since FRPT is being gyrated a lot by news recently (may just be that type of stock, in which case I'll avoid it), I probably won't trade it again until I get a better feel for it or decide that the news flow is making it too unpredictable/untradeable. I think the news flow will settle down and it'll be tradeable, it's cycles will probably follow the usual Elliott Wave patterns.
AEZ's short term Wave 2 downcycle may have bottomed today at 6.3o, see http://stockcharts.com/charts/gallery.html?aez. AEZ may fill it's downside gap at 6.22 before bottoming. I'll be looking to buy AEZ tomorrow. A monthly cycle low occurred at 5.74, note the bullish very large inverse spike that occurred.
ACI's Wave 2 short term downcycle probably bottomed at 34.01, and, hit a short term Wave 3 buy signal Friday, see http://stockcharts.com/charts/gallery.html?aci. A monthly cycle low (bullish large inverse spike) occurred for ACI at 32.94 and it hit a monthly cycle buy signal on Thursday 6-28. I'll be looking to buy ACI again tomorrow.
I'm looking to buy VPHM (http://stockcharts.com/charts/gallery.html?vphm) in the short term Wave 4 downcycle or early in Wave 5, now that it filled it's downside gap at 14.48 (the one at 13.80 may not get filled until later based on the monthly upcycle channel), see http://finance.yahoo.com/q/ta?s=vphm&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c. A monthly cycle low occurred for VPHM at 13.09.
Stocks that look great once they complete Elliott Wave ABC down up down monthly downcycles are WWAT (http://stockcharts.com/charts/gallery.html?wwat), TMTA (http://stockcharts.com/charts/gallery.html?tmta), BCON (http://stockcharts.com/charts/gallery.html?bcon), JASO (http://stockcharts.com/charts/gallery.html?jaso), RVNG.OB (http://stockcharts.com/charts/gallery.html?rvng), UVSE.OB (http://stockcharts.com/charts/gallery.html?uvse), and INIS (thin/low average daily volume, http://stockcharts.com/charts/gallery.html?inis).
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.
If one decides to trade rockets obviously paper trade for a while or trade very modest positions at first.
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
1:15 PM
