...........An Alternate Elliott Wave SPX Count
I looked like a genius today, with SPX (S & P 500) peaking just after the open, 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=.
My Elliott Wave count since SPX (S & P 500) entered a countertrend Wave B upcycle at 1370.60 on Thursday 8-16 (http://stockcharts.com/charts/gallery.html?%24spx) has been that SPX is in a short term Wave 1 upcycle that looked like it would peak early today. I now think that SPX's (S & P 500) countertrend Wave B upcycle alternatively may be in Wave 5 up, with Wave 3 peaking just after today's open and with Wave 4 down being today's weakness, 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=. Wave 1 peaked very early last Friday 8-17 when SPX had the very sharp 3 hour rally that began at 1370.60 mid session on Thursday 8-16.
Alternatively, SPX is in a big short term Wave 1 of a countertrend Wave B upcycle. It's impossible to tell right now which count is correct, but, it looks like a big short term Wave 1 upcycle on the daily chart, since there isn't the usual obvious zigzagging pattern on the daily chart, so, it's probably a big short term Wave 1 upcycle.
The fact that the WMT Lead Indicator is very bearish since SPX bottomed at 1370.60 mid session on 8-16 jives with SPX being in a countertrend Wave B upcycle (-1.22% versus SPX today/on 8-23, at -1.06% on 8-22, at +0.14% on 8-21, at +0.26% on 8-20, at -2.48% on 8-17, at +0.18% on 8-16).
Reliable SPX/market lead indicator WMT put in a bullish slightly higher Wave 2 double bottom cycle low at 42.96 on Monday versus at 42.92 early on Thursday 8-16, which is a short term positive for the market, see http://stockcharts.com/charts/gallery.html?wmt. Today's late cycle low at 43.03 appears to be a Wave 4 cycle low, 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=.
Looking at the intraday chart at the previous link, WMT appears to have bottomed at 43.03 late in the session today, because, it did a sharp intraday Elliott Wave ABC down up down downcycle from 43.83 to 43.03, and, it has a large bullish inverse spike on the intraday chart at 43.03.
So, it looks like SPX (S & P 500) will be in Wave 5 of the countertrend Wave B upcycle, or, it could still be a big short term Wave 1 of Wave B (Wave B began at 1370.60 on Thursday 8-16, http://stockcharts.com/charts/gallery.html?%24spx) for the next day or two.
As discussed in a previous post (http://tradethecycles.blogspot.com/2007/08/extremely-important-5-follow-through.html) SPX's upcycle that began on Thursday 8-16 is probably/very likely to be a countertrend Wave B upcycle that will be similar to a monthly upcycle, because, an SPX Cyclical Bear Market probably began in July after peaking at 1555.90, see chart 1 at http://www.joefrocks.com/GoldStockCharts.html.
I'll be looking to day trade the Ultra Long SPX ETF SSO or the Ultra Long Russell 2000 ETF UWM early tomorrow.
Note that in the downcycle from the July cycle high at 1555.90 to Thursday 8-16's cycle low (http://stockcharts.com/charts/gallery.html?%5Espx) that the Wave B up of that downcycle lasted a grand total of only TWO DAYS, which is a clear indication that the downcycle from the July cycle high at 1555.90 to Thursday's cycle low is probably only a Wave A downcycle.
After that vicious Wave C downcycle bottoms, following the current Wave B, THEN a respectable lengthy multi month intermediate term upcycle should occur for SPX.
The NEM Lead Indicator has been very bearish recently (three of the past five days), at +0.57% versus the XAU today/on 8-23, at -2.57% versus the XAU yesterday, at +0.45% versus the XAU on 8-21, at -2.04% versus the XAU on 8-20, and, at -1.82% on Friday 8-17.
I'm probably going to trade only index and sector ETFs for a few months, so, I'm not going to be discussing individual stocks, unless I trade a basket of stocks in a given sector, like I used to do in the previous Wave 1 HUI/XAU Cyclical Bull Market that ended on 5-11-06.
In this market especially, even if you're a daredevil, it makes a lot of sense to wait for a strong short term Wave 1 upcycle to trigger a monthly or intermediate term cycle buy signal, then look to buy late in a short term Wave 2 downcycle or early in Wave 3 up. Using cycle trendlines also makes a lot of sense. Usually at least one important trendline (important short term at least) will be broken before one should look to buy.
Often a bullish large inverse spike will occur when a cycle low occurs, which is a sign to look to go long. Conversely, often a bearish large spike will occur when a cycle high occurs, which is a sign to look to exit a long position.
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 volatile stocks/ETFs 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 $475ish right now, so, gold would be a great buy in the $475-500 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
My Elliott Wave count since SPX (S & P 500) entered a countertrend Wave B upcycle at 1370.60 on Thursday 8-16 (http://stockcharts.com/charts/gallery.html?%24spx) has been that SPX is in a short term Wave 1 upcycle that looked like it would peak early today. I now think that SPX's (S & P 500) countertrend Wave B upcycle alternatively may be in Wave 5 up, with Wave 3 peaking just after today's open and with Wave 4 down being today's weakness, 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=. Wave 1 peaked very early last Friday 8-17 when SPX had the very sharp 3 hour rally that began at 1370.60 mid session on Thursday 8-16.
Alternatively, SPX is in a big short term Wave 1 of a countertrend Wave B upcycle. It's impossible to tell right now which count is correct, but, it looks like a big short term Wave 1 upcycle on the daily chart, since there isn't the usual obvious zigzagging pattern on the daily chart, so, it's probably a big short term Wave 1 upcycle.
The fact that the WMT Lead Indicator is very bearish since SPX bottomed at 1370.60 mid session on 8-16 jives with SPX being in a countertrend Wave B upcycle (-1.22% versus SPX today/on 8-23, at -1.06% on 8-22, at +0.14% on 8-21, at +0.26% on 8-20, at -2.48% on 8-17, at +0.18% on 8-16).
Reliable SPX/market lead indicator WMT put in a bullish slightly higher Wave 2 double bottom cycle low at 42.96 on Monday versus at 42.92 early on Thursday 8-16, which is a short term positive for the market, see http://stockcharts.com/charts/gallery.html?wmt. Today's late cycle low at 43.03 appears to be a Wave 4 cycle low, 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=.
Looking at the intraday chart at the previous link, WMT appears to have bottomed at 43.03 late in the session today, because, it did a sharp intraday Elliott Wave ABC down up down downcycle from 43.83 to 43.03, and, it has a large bullish inverse spike on the intraday chart at 43.03.
So, it looks like SPX (S & P 500) will be in Wave 5 of the countertrend Wave B upcycle, or, it could still be a big short term Wave 1 of Wave B (Wave B began at 1370.60 on Thursday 8-16, http://stockcharts.com/charts/gallery.html?%24spx) for the next day or two.
As discussed in a previous post (http://tradethecycles.blogspot.com/2007/08/extremely-important-5-follow-through.html) SPX's upcycle that began on Thursday 8-16 is probably/very likely to be a countertrend Wave B upcycle that will be similar to a monthly upcycle, because, an SPX Cyclical Bear Market probably began in July after peaking at 1555.90, see chart 1 at http://www.joefrocks.com/GoldStockCharts.html.
I'll be looking to day trade the Ultra Long SPX ETF SSO or the Ultra Long Russell 2000 ETF UWM early tomorrow.
Note that in the downcycle from the July cycle high at 1555.90 to Thursday 8-16's cycle low (http://stockcharts.com/charts/gallery.html?%5Espx) that the Wave B up of that downcycle lasted a grand total of only TWO DAYS, which is a clear indication that the downcycle from the July cycle high at 1555.90 to Thursday's cycle low is probably only a Wave A downcycle.
After that vicious Wave C downcycle bottoms, following the current Wave B, THEN a respectable lengthy multi month intermediate term upcycle should occur for SPX.
The NEM Lead Indicator has been very bearish recently (three of the past five days), at +0.57% versus the XAU today/on 8-23, at -2.57% versus the XAU yesterday, at +0.45% versus the XAU on 8-21, at -2.04% versus the XAU on 8-20, and, at -1.82% on Friday 8-17.
I'm probably going to trade only index and sector ETFs for a few months, so, I'm not going to be discussing individual stocks, unless I trade a basket of stocks in a given sector, like I used to do in the previous Wave 1 HUI/XAU Cyclical Bull Market that ended on 5-11-06.
In this market especially, even if you're a daredevil, it makes a lot of sense to wait for a strong short term Wave 1 upcycle to trigger a monthly or intermediate term cycle buy signal, then look to buy late in a short term Wave 2 downcycle or early in Wave 3 up. Using cycle trendlines also makes a lot of sense. Usually at least one important trendline (important short term at least) will be broken before one should look to buy.
Often a bullish large inverse spike will occur when a cycle low occurs, which is a sign to look to go long. Conversely, often a bearish large spike will occur when a cycle high occurs, which is a sign to look to exit a long position.
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 volatile stocks/ETFs 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 $475ish right now, so, gold would be a great buy in the $475-500 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
1:34 PM
