It Obviously Looks Like WMT Bottomed Last Wednesday And SPX Bottomed Today
WMT and SPX are trying to establish important cycle lows, with WMT trying to establish a monthly cycle low (http://stockcharts.com/charts/gallery.html?wmt), and, with SPX (http://stockcharts.com/charts/gallery.html?%24spx) trying to establish a Wave A cycle low of an intermediate term downcycle, see chart 1 at http://www.joefrocks.com/GoldStockCharts.html.
Today's sharp SPX/WMT rally, plus the bullish large inverse spikes on today's candle, clearly indicate that WMT and SPX have probably hit important cycle lows. WMT has to do a strong short term Wave 1 upcycle in order to hit a monthly cycle buy signal, which would indicate that WMT has probably/very likely bottomed.
Reliable SPX/market lead indicator WMT probably put in a monthly cycle low at 45.4779 on Wednesday (bullish double bottom with Friday's cycle low at 45.50), see http://finance.yahoo.com/q/ta?s=wmt&t=3m&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.
Some mortgage companies that were getting savaged early today rebounded dramatically, which is obviously a good sign for the market that the credit panic was somewhat overblown. Here's one that more than doubled from it's session cycle low, but, still sports a dividend yield of 33.60% at $10 per share, http://finance.yahoo.com/q?s=ras. There's a Fed FOMC meeting tomorrow, so, it'll be interesting to see what they say in their brief statement and in the detailed meeting minutes about the credit panic.
If you have long positions when SPX's Wave B peaks in a week or two (use the Elliott Wave count to time Wave B, and, a large bearish spike may occur on the candle the day it peaks), it makes sense to seriously consider taking some profits.
The WMT Lead Indicator was a very bullish +0.88% versus SPX today, but, it became much less bullish 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, so, some early weakness is likely tomorrow.
The NEM Lead Indicator was a very bullish +0.86% versus the XAU today, but, it became much less bullish toward session's end, see http://finance.yahoo.com/q/ta?s=^XAU&t=1d&l=on&z=m&q=l&p=&a=&c=^hui,nem, so, some early weakness is likely tomorrow.
Fed credit for the 5 day period ending 8-1-07 rose a substantial +$7.417 Billion, which is helping SPX/WMT to bottom, see http://www.federalreserve.gov/releases/h41/Current/. Also, Fed credit was a massive $17 Billion on punch spiking Thursday and a large $9.50 Billion today, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE. Computer program index fund buying (and selling) is a huge factor, with SPX being the key lead index.
MTTG.OB, a beneficiary of the Minnesota bridge collapse (http://tradethecycles.blogspot.com/2007/08/mttgob-is-beneficiary-of-minnesota.html), plunged then rebounded dramatically early today, but, crashed late in the session, see http://finance.yahoo.com/q/ta?s=mttg.ob&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, and, entered a Wave 2 short term downcycle that may have completed Wave A down. I'll look to buy MTTG.OB in the short term Wave 2 down or early in a short term Wave 3 upcycle.
TMTA (http://stockcharts.com/charts/gallery.html?tmta) may have bottomed Friday, but, looking to buy late in a short term Wave 2 downcycle or early in a Wave 3 up probably makes sense if you plan to trade this stock. Keep in mind that TMTA has to do a strong short term Wave 1 upcycle in order to hit a monthly cycle buy signal.
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 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 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 $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
Today's sharp SPX/WMT rally, plus the bullish large inverse spikes on today's candle, clearly indicate that WMT and SPX have probably hit important cycle lows. WMT has to do a strong short term Wave 1 upcycle in order to hit a monthly cycle buy signal, which would indicate that WMT has probably/very likely bottomed.
Reliable SPX/market lead indicator WMT probably put in a monthly cycle low at 45.4779 on Wednesday (bullish double bottom with Friday's cycle low at 45.50), see http://finance.yahoo.com/q/ta?s=wmt&t=3m&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.
Some mortgage companies that were getting savaged early today rebounded dramatically, which is obviously a good sign for the market that the credit panic was somewhat overblown. Here's one that more than doubled from it's session cycle low, but, still sports a dividend yield of 33.60% at $10 per share, http://finance.yahoo.com/q?s=ras. There's a Fed FOMC meeting tomorrow, so, it'll be interesting to see what they say in their brief statement and in the detailed meeting minutes about the credit panic.
If you have long positions when SPX's Wave B peaks in a week or two (use the Elliott Wave count to time Wave B, and, a large bearish spike may occur on the candle the day it peaks), it makes sense to seriously consider taking some profits.
The WMT Lead Indicator was a very bullish +0.88% versus SPX today, but, it became much less bullish 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, so, some early weakness is likely tomorrow.
The NEM Lead Indicator was a very bullish +0.86% versus the XAU today, but, it became much less bullish toward session's end, see http://finance.yahoo.com/q/ta?s=^XAU&t=1d&l=on&z=m&q=l&p=&a=&c=^hui,nem, so, some early weakness is likely tomorrow.
Fed credit for the 5 day period ending 8-1-07 rose a substantial +$7.417 Billion, which is helping SPX/WMT to bottom, see http://www.federalreserve.gov/releases/h41/Current/. Also, Fed credit was a massive $17 Billion on punch spiking Thursday and a large $9.50 Billion today, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE. Computer program index fund buying (and selling) is a huge factor, with SPX being the key lead index.
MTTG.OB, a beneficiary of the Minnesota bridge collapse (http://tradethecycles.blogspot.com/2007/08/mttgob-is-beneficiary-of-minnesota.html), plunged then rebounded dramatically early today, but, crashed late in the session, see http://finance.yahoo.com/q/ta?s=mttg.ob&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, and, entered a Wave 2 short term downcycle that may have completed Wave A down. I'll look to buy MTTG.OB in the short term Wave 2 down or early in a short term Wave 3 upcycle.
TMTA (http://stockcharts.com/charts/gallery.html?tmta) may have bottomed Friday, but, looking to buy late in a short term Wave 2 downcycle or early in a Wave 3 up probably makes sense if you plan to trade this stock. Keep in mind that TMTA has to do a strong short term Wave 1 upcycle in order to hit a monthly cycle buy signal.
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 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 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 $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
1:21 PM
