Reliable SPX/Market Lead Indicator WMT Appears To Have Hit A Short Term Wave 4 Cycle Low At 45.70 On Friday
Reliable SPX/market lead indicator WMT appears to have hit a short term Wave 4 cycle low at 45.70 on Friday , 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=, of the monthly upcycle that began at 45.4779 on 8-1 (http://stockcharts.com/charts/gallery.html?wmt), with the Wave 2 cycle low being the double bottom at 45.50 on 8-3. Wave 3 up peaked at 48.42 late on Wednesday. Note the bullish large inverse spike on Friday's and 8-1's candles.
The WMT monthly upcycle since 8-1 is probably Wave 1 of a minor intermediate term upcycle, and, will probably be more like a long short term upcycle than a typical 3-5 week monthly upcycle.
SPX hit a Wave A cycle low of an intermediate term downcycle on Monday 8-6 (chart 1 at http://www.joefrocks.com/GoldStockCharts.html shows why it's probably just Wave A). Wave 1 of Wave B peaked late Wednesday. Wave 2 down bottomed on Friday, 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=, so, SPX is in Wave 3 up of Wave B (of an intermediate term downcycle).
After peaking early today SPX did an Elliott Wave down up down downcycle that may have bottomed at session's end, 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=, which, combined with the bullish WMT Lead Indicator at +0.27% versus SPX today, 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, and strength is likely early tomorrow for SPX.
The NEM Lead Indicator was a bearish -0.97% versus the XAU today, see http://finance.yahoo.com/q/ta?s=^XAU&t=1d&l=on&z=m&q=l&p=&a=&c=^hui,nem.
SPX (http://stockcharts.com/charts/gallery.html?%24spx) hit a Wave A cycle low (see chart 1 at http://www.joefrocks.com/GoldStockCharts.html) of an intermediate term downcycle on Monday 8-6. If you have long positions when SPX's Wave B peaks in a week or so (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.
Now for the trading stocks:
I bought HOKU today at 9.10. It hit an intermediate term cycle buy signal last week, because it did a strong short term Wave 1 upcycle, see http://stockcharts.com/charts/gallery.html?hoku. It's short term Wave 2 down may have bottomed today, after doing an Elliott Wave down up down downcycle on the daily chart.
ACI hit an intermediate term cycle buy signal on Wednesday, and, the short term Wave 1 upcycle peaked Thursday, see http://stockcharts.com/charts/gallery.html?aci. The short term Wave 2 downcycle has done an Elliott Wave ABC down up down pattern that's evident on the daily chart, so, ACI short term Wave 2 may have bottomed today at 30.83. I'll look to buy tomorrow.
AEZ is a similar situation to ACI, see http://stockcharts.com/charts/gallery.html?aez, except that AEZ probably needs to complete Wave C of the short term Wave 2.
The short term Elliott Wave patterns are almost always discernable on the daily chart, with the intraday/5 day charts (http://finance.yahoo.com/q/ta?s=aci&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=) providing finetuning.
JASO had a huge day on Tuesday 8-7 (strong follow through at Wednesday's open) and hit an intermediate term cycle buy signal, see http://stockcharts.com/charts/gallery.html?jaso. I'll look to buy JASO in the short term Wave 2 down or early in a short term Wave 3 upcycle. The short term Wave 2 down may have bottomed early Thursday, see http://finance.yahoo.com/q/ta?s=jaso&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==.
WWAT.OB hit an intermediate term cycle buy signal on Tuesday 8-7, see http://stockcharts.com/charts/gallery.html?wwat. Note the bullish large inverse spike on Monday 8-6's candle. WWAT.OB probably put in a Wave A of a short term Wave 2 cycle low at 1.65 on Thursday, and, made a perfect double bottom today that might be Wave C of the short term Wave 2 (http://finance.yahoo.com/q/ta?s=wwat.ob&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=). I'll look to buy late in the short term Wave 2 or early in the short term Wave 3 upcycle.
WFMI did a brief parabolic monthly upcycle that peaked at 46.74 on Thursday, note the bearish large spike on Thursday's candle, and, it hit an intermediate term cycle buy signal recently, see http://stockcharts.com/charts/gallery.html?wfmi. It filled it's upside gap at 45.80 (created in May) on Thursday, peaked at 46.74, then plunged dramatically, closing at 44.85 (got gaps?, closed today at 41.85). The dramatic decline indicates that WFMI entered Wave A down of a monthly downcycle on Thursday. Often important cycle highs/lows occur shortly after gap filling action is completed. There's a downside likely breakaway gap at 37.04, which, assuming that gap remains unfilled (the bullish breakaway gap remains) after the monthly downcycle/Elliott Wave ABC down up down correction bottoms, I'll look to go long.
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
The WMT monthly upcycle since 8-1 is probably Wave 1 of a minor intermediate term upcycle, and, will probably be more like a long short term upcycle than a typical 3-5 week monthly upcycle.
SPX hit a Wave A cycle low of an intermediate term downcycle on Monday 8-6 (chart 1 at http://www.joefrocks.com/GoldStockCharts.html shows why it's probably just Wave A). Wave 1 of Wave B peaked late Wednesday. Wave 2 down bottomed on Friday, 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=, so, SPX is in Wave 3 up of Wave B (of an intermediate term downcycle).
After peaking early today SPX did an Elliott Wave down up down downcycle that may have bottomed at session's end, 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=, which, combined with the bullish WMT Lead Indicator at +0.27% versus SPX today, 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, and strength is likely early tomorrow for SPX.
The NEM Lead Indicator was a bearish -0.97% versus the XAU today, see http://finance.yahoo.com/q/ta?s=^XAU&t=1d&l=on&z=m&q=l&p=&a=&c=^hui,nem.
SPX (http://stockcharts.com/charts/gallery.html?%24spx) hit a Wave A cycle low (see chart 1 at http://www.joefrocks.com/GoldStockCharts.html) of an intermediate term downcycle on Monday 8-6. If you have long positions when SPX's Wave B peaks in a week or so (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.
Now for the trading stocks:
I bought HOKU today at 9.10. It hit an intermediate term cycle buy signal last week, because it did a strong short term Wave 1 upcycle, see http://stockcharts.com/charts/gallery.html?hoku. It's short term Wave 2 down may have bottomed today, after doing an Elliott Wave down up down downcycle on the daily chart.
ACI hit an intermediate term cycle buy signal on Wednesday, and, the short term Wave 1 upcycle peaked Thursday, see http://stockcharts.com/charts/gallery.html?aci. The short term Wave 2 downcycle has done an Elliott Wave ABC down up down pattern that's evident on the daily chart, so, ACI short term Wave 2 may have bottomed today at 30.83. I'll look to buy tomorrow.
AEZ is a similar situation to ACI, see http://stockcharts.com/charts/gallery.html?aez, except that AEZ probably needs to complete Wave C of the short term Wave 2.
The short term Elliott Wave patterns are almost always discernable on the daily chart, with the intraday/5 day charts (http://finance.yahoo.com/q/ta?s=aci&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=) providing finetuning.
JASO had a huge day on Tuesday 8-7 (strong follow through at Wednesday's open) and hit an intermediate term cycle buy signal, see http://stockcharts.com/charts/gallery.html?jaso. I'll look to buy JASO in the short term Wave 2 down or early in a short term Wave 3 upcycle. The short term Wave 2 down may have bottomed early Thursday, see http://finance.yahoo.com/q/ta?s=jaso&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c==.
WWAT.OB hit an intermediate term cycle buy signal on Tuesday 8-7, see http://stockcharts.com/charts/gallery.html?wwat. Note the bullish large inverse spike on Monday 8-6's candle. WWAT.OB probably put in a Wave A of a short term Wave 2 cycle low at 1.65 on Thursday, and, made a perfect double bottom today that might be Wave C of the short term Wave 2 (http://finance.yahoo.com/q/ta?s=wwat.ob&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=). I'll look to buy late in the short term Wave 2 or early in the short term Wave 3 upcycle.
WFMI did a brief parabolic monthly upcycle that peaked at 46.74 on Thursday, note the bearish large spike on Thursday's candle, and, it hit an intermediate term cycle buy signal recently, see http://stockcharts.com/charts/gallery.html?wfmi. It filled it's upside gap at 45.80 (created in May) on Thursday, peaked at 46.74, then plunged dramatically, closing at 44.85 (got gaps?, closed today at 41.85). The dramatic decline indicates that WFMI entered Wave A down of a monthly downcycle on Thursday. Often important cycle highs/lows occur shortly after gap filling action is completed. There's a downside likely breakaway gap at 37.04, which, assuming that gap remains unfilled (the bullish breakaway gap remains) after the monthly downcycle/Elliott Wave ABC down up down correction bottoms, I'll look to go long.
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
1:29 PM
