The Reliable WMT Lead Indicator Was Very Bearish Today
The reliable WMT Lead Indicator was very bearish today at -2.48% versus SPX, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=off&z=l&q=l&p=&a=,p12,fs,w14&c=wmt,%5EGSPC, and, it became more bearish toward session's end.
The reliable NEM Lead Indicator was a very bearish -1.82% 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, and, it became more bearish toward session's end.
After SPX and reliable SPX/market lead indicator WMT hit an intermediate term cycle low (probably did yesterday, http://stockcharts.com/charts/gallery.html?wmt) they need to do a strong short term Wave 1 upcycle in order to hit an intermediate term cycle buy signal. It's a good idea to wait for SPX/WMT to hit an intermediate term cycle buy signal before looking to trade long positions and hold them overnight.
In this treacherous market day trading a modest position or sitting on the sidelines makes a lot of sense, so, I won't be discussing trading stocks today. My focus/bread and butter is going to be trading indexes and sectors (more predictable) via ETFs instead of trading individual stocks. I'll probably also trade some modest individual stock positions.
After hitting a likely intermediate term cycle low at 42.92 early yesterday (http://finance.yahoo.com/q/ta?s=WMT&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=), probably leading SPX, which probably did so at mid session yesterday, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=on&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=, they both did (much clearer on SPX's chart) a Wave 1 up, a Wave 2 down, a Wave 3 up that peaked shortly after today's open, then reliable SPX/market lead indicator WMT spent most of the remainder of today's session in Wave 4 down (did an Elliott Wave ABC down up down pattern), that appears to have bottomed before 3 pm well ahead of SPX, which will probably plunge early on Monday and do Wave C of the very short term Wave 4 downcycle.
So, reliable SPX/market lead indicator WMT is probably in a very short term Wave 5 up, but, SPX appears to be doing a long Elliott Wave ABC down up down pattern in it's very short term Wave 4, with most of today's session probably being a countertrend Wave B type move (http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=on&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=), which jives with the very bearish WMT Lead Indicator today at -2.48% versus SPX. So, early on Monday it'll probably seem like the bad times are back.
WMT filled today's downside gap at 43.50 (http://finance.yahoo.com/q/ta?s=WMT&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=), but, SPX will probably at least try to fill it's downside gap at 1,411.27 (created at today's open) early on Monday (http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=on&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=).
If SPX does fill it's downside gap at 1,411.27 early on Monday, it'll probably bottom shortly thereafter, so, keep that in mind. Often important cycle highs/lows will occur shortly after gap filling action is completed.
SPX and reliable SPX/market lead indicator WMT appear to have hit an important and much needed intermediate term cycle low yesterday, with WMT possibly doing so just after the open at 42.92, probably leading to the upside, and, with SPX possibly bottoming at mid session, 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=. Note the bullish very large inverse spike on yesterday's SPX candle, see http://stockcharts.com/charts/gallery.html?%5Espx.
I'm going to look to day trade SSO (Ultra Long SPX ETF, will probably try to fill today's downside gap at 82.95 on Monday) and/or maybe UWM (Ultra Long Russell 2000 ETF, will probably try to fill today's downside gap at 64.519 on Monday) on Monday, after likely early weakness/a Wave C of a very short term Wave 4 downcycle.
Fed credit for the five day period ending 8-15-07 rose a dramatic +$17.223 Billion (http://www.federalreserve.gov/releases/h41/Current/), and, Fed credit was a massive $17 Billion yesterday (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), on punch spiking Thursday, so, strong index related computer program buying is likely the next few days.
The fact that mortgage lender Countrywide, CFC, rallied dramatically off of it's session cycle low at 15.00 yesterday to close at 21.43 today is a sign that bankruptcy fears may be overblown, see http://finance.yahoo.com/q/ta?s=cfc&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.
SPX's Cyclical Bull Market since October 2002 appears to/may have peaked at 1555.90, which is the latest intermediate term cycle high, since the potential intermediate term cycle low that may have occurred today isn't too far above the previous one that occurred last March, see http://stockcharts.com/charts/gallery.html?%5Espx.
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 rockets/volatile stocks 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 reliable NEM Lead Indicator was a very bearish -1.82% 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, and, it became more bearish toward session's end.
After SPX and reliable SPX/market lead indicator WMT hit an intermediate term cycle low (probably did yesterday, http://stockcharts.com/charts/gallery.html?wmt) they need to do a strong short term Wave 1 upcycle in order to hit an intermediate term cycle buy signal. It's a good idea to wait for SPX/WMT to hit an intermediate term cycle buy signal before looking to trade long positions and hold them overnight.
In this treacherous market day trading a modest position or sitting on the sidelines makes a lot of sense, so, I won't be discussing trading stocks today. My focus/bread and butter is going to be trading indexes and sectors (more predictable) via ETFs instead of trading individual stocks. I'll probably also trade some modest individual stock positions.
After hitting a likely intermediate term cycle low at 42.92 early yesterday (http://finance.yahoo.com/q/ta?s=WMT&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=), probably leading SPX, which probably did so at mid session yesterday, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=on&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=, they both did (much clearer on SPX's chart) a Wave 1 up, a Wave 2 down, a Wave 3 up that peaked shortly after today's open, then reliable SPX/market lead indicator WMT spent most of the remainder of today's session in Wave 4 down (did an Elliott Wave ABC down up down pattern), that appears to have bottomed before 3 pm well ahead of SPX, which will probably plunge early on Monday and do Wave C of the very short term Wave 4 downcycle.
So, reliable SPX/market lead indicator WMT is probably in a very short term Wave 5 up, but, SPX appears to be doing a long Elliott Wave ABC down up down pattern in it's very short term Wave 4, with most of today's session probably being a countertrend Wave B type move (http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=on&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=), which jives with the very bearish WMT Lead Indicator today at -2.48% versus SPX. So, early on Monday it'll probably seem like the bad times are back.
WMT filled today's downside gap at 43.50 (http://finance.yahoo.com/q/ta?s=WMT&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=), but, SPX will probably at least try to fill it's downside gap at 1,411.27 (created at today's open) early on Monday (http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=on&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=).
If SPX does fill it's downside gap at 1,411.27 early on Monday, it'll probably bottom shortly thereafter, so, keep that in mind. Often important cycle highs/lows will occur shortly after gap filling action is completed.
SPX and reliable SPX/market lead indicator WMT appear to have hit an important and much needed intermediate term cycle low yesterday, with WMT possibly doing so just after the open at 42.92, probably leading to the upside, and, with SPX possibly bottoming at mid session, 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=. Note the bullish very large inverse spike on yesterday's SPX candle, see http://stockcharts.com/charts/gallery.html?%5Espx.
I'm going to look to day trade SSO (Ultra Long SPX ETF, will probably try to fill today's downside gap at 82.95 on Monday) and/or maybe UWM (Ultra Long Russell 2000 ETF, will probably try to fill today's downside gap at 64.519 on Monday) on Monday, after likely early weakness/a Wave C of a very short term Wave 4 downcycle.
Fed credit for the five day period ending 8-15-07 rose a dramatic +$17.223 Billion (http://www.federalreserve.gov/releases/h41/Current/), and, Fed credit was a massive $17 Billion yesterday (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), on punch spiking Thursday, so, strong index related computer program buying is likely the next few days.
The fact that mortgage lender Countrywide, CFC, rallied dramatically off of it's session cycle low at 15.00 yesterday to close at 21.43 today is a sign that bankruptcy fears may be overblown, see http://finance.yahoo.com/q/ta?s=cfc&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.
SPX's Cyclical Bull Market since October 2002 appears to/may have peaked at 1555.90, which is the latest intermediate term cycle high, since the potential intermediate term cycle low that may have occurred today isn't too far above the previous one that occurred last March, see http://stockcharts.com/charts/gallery.html?%5Espx.
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 rockets/volatile stocks 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
1:14 PM
