SPX (S & P 500) Elliott Wave Count/Patterns Provides Insight
Based on SPX's Elliott Wave count it might 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==. SPX hit a Wave A cycle low of an intermediate term downcycle on Monday (chart 1 at http://www.joefrocks.com/GoldStockCharts.html shows why it's probably just Wave A).
Wave 1 of Wave B peaked late yesterday (could be the entire Wave B, but, Wave 1 of Wave B is the likely scenario). Then SPX did a very brief Wave A of Wave 2 down, that did an Elliott Wave ABC down up down pattern, which bottomed just after today's plunge at the open, followed by a very brief Wave B up of Wave 2 down, then SPX did a big Wave C of Wave 2 down the rest of the 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=, so, SPX will probably enter Wave 3 up of Wave B (of an intermediate term downcycle) early tomorrow.
Today's very bearish WMT Lead Indicator, at -1.12% versus SPX, is probably "factored in" after today's severe SPX weakness, so the WMT Lead Indicator will probably turn bullish tomorrow. Today's massive $24 Billion of Fed credit will probably help a lot tomorrow, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE.
Looking at WMT's 5 day Yahoo chart, 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 appears to have hit a short term Wave 4 cycle low at 46.39 late today, of the monthly upcycle that began at 45.4779 on 8-1 (http://stockcharts.com/charts/gallery.html?wmt). Wave 3 up peaked at 48.42 late yesterday. Because of WMT's double bottom at 45.4779 on 8-1 and 45.50 on 8-3, today's cycle low at 46.39 might really be a Wave 2 cycle low.
The NEM Lead Indicator was a bullish +0.74% versus the XAU today, but, it became 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.
WMT did a strong short term Wave 1 upcycle in order to hit a monthly cycle buy signal, which indicates that WMT has very likely bottomed. Also, there's a bullish large inverse spike on Wednesday 8-1's candle.
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. 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:
MTTG.OB, a beneficiary of the Minnesota bridge collapse (http://tradethecycles.blogspot.com/2007/08/mttgob-is-beneficiary-of-minnesota.html), plunged dramatically Monday and Tuesday, 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 is in Wave B up.
It looks like MTTG.OB is doing a huge Elliott Wave ABC down up down pattern in Wave 2 down, and, volume may dry up, so, risk is high right now, so be careful if you trade this one. I'll look to/may buy MTTG.OB in the short term Wave 2 down or early in a short term Wave 3 upcycle.
JASO had a huge day on Tuesday (strong follow through at yesterday'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 today, 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==.
JRCC (http://stockcharts.com/charts/gallery.html?jrcc) got rocked by a poor earnings report, so, it needs to hit an intermediate term cycle buy signal again.
WWAT.OB hit an intermediate term cycle buy signal on Tuesday, see http://stockcharts.com/charts/gallery.html?wwat. Note the bullish large inverse spike on Monday's candle. WWAT.OB probably put in a Wave A of a short term Wave 2 cycle low at 1.65 today (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 is doing a brief parabolic monthly upcycle, that may have peaked at 46.74 today, note the bearish large spike on today'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) today, peaked at 46.74, then plunged dramatically, closing at 44.85 (got gaps?). The dramatic decline indicates that WFMI may have entered Wave A down of a monthly downcycle today. Often important cycle highs/lows occur 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.
SOPO did a very strong short term Wave 1 upcycle that peaked at Tuesday's open, and, hit an intermediate term cycle buy signal on Tuesday, see http://stockcharts.com/charts/gallery.html?sopo. Assuming the downside gap at 0.48 created at Monday's open remains unfilled (is a bullish breakaway gap) after the short term Wave 2 downcycle bottoms (appears to have bottomed Wednesday at 0.55), I'll look to go long.
IOC did a very strong short term Wave 1 upcycle, and, hit an intermediate term cycle buy signal, see http://stockcharts.com/charts/gallery.html?ioc. Wave 2 down bottomed yesterday at 25.40. IOC may have hit a minor intermediate term cycle high at 36.38 today, note the very bearish very large spike on today's candle, and, note the huge decline from 36.38 to the close at 31.01, which is a major warning sign. Since hitting an intermediate term cycle low in late June IOC has done an Elliott Wave 12345 up down up down up pattern that may have peaked at 36.38 today, so, one should avoid IOC right now. Even though IOC's monthly upcycle Elliott Wave count is/appears to be Wave 4 down, it's negated by the longer minor intermediate term cycle Elliott Wave count and the fact that a huge very bearish spike occurred today followed by a dramatic decline, which is a major warning sign.
HSOA did a very strong short term Wave 1 upcycle, and, hit an intermediate term cycle buy signal, see http://stockcharts.com/charts/gallery.html?hsoa. Wave 2 down appears to have bottomed yesterday at 4.91 (bullish inverse spike on yesterday's candle), which means that the downside gap at 4.73 is probably a bullish breakaway gap. One could wait for the Wave 2 downtrend line to be broken (was broken yesterday) before buying this, but, Wave 3 may have peaked at 5.98 today. I'll reassess the Elliott Wave count tomorrow.
TMTA (http://stockcharts.com/charts/gallery.html?tmta) may have bottomed on Tuesday, 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
Wave 1 of Wave B peaked late yesterday (could be the entire Wave B, but, Wave 1 of Wave B is the likely scenario). Then SPX did a very brief Wave A of Wave 2 down, that did an Elliott Wave ABC down up down pattern, which bottomed just after today's plunge at the open, followed by a very brief Wave B up of Wave 2 down, then SPX did a big Wave C of Wave 2 down the rest of the 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=, so, SPX will probably enter Wave 3 up of Wave B (of an intermediate term downcycle) early tomorrow.
Today's very bearish WMT Lead Indicator, at -1.12% versus SPX, is probably "factored in" after today's severe SPX weakness, so the WMT Lead Indicator will probably turn bullish tomorrow. Today's massive $24 Billion of Fed credit will probably help a lot tomorrow, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE.
Looking at WMT's 5 day Yahoo chart, 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 appears to have hit a short term Wave 4 cycle low at 46.39 late today, of the monthly upcycle that began at 45.4779 on 8-1 (http://stockcharts.com/charts/gallery.html?wmt). Wave 3 up peaked at 48.42 late yesterday. Because of WMT's double bottom at 45.4779 on 8-1 and 45.50 on 8-3, today's cycle low at 46.39 might really be a Wave 2 cycle low.
The NEM Lead Indicator was a bullish +0.74% versus the XAU today, but, it became 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.
WMT did a strong short term Wave 1 upcycle in order to hit a monthly cycle buy signal, which indicates that WMT has very likely bottomed. Also, there's a bullish large inverse spike on Wednesday 8-1's candle.
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. 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:
MTTG.OB, a beneficiary of the Minnesota bridge collapse (http://tradethecycles.blogspot.com/2007/08/mttgob-is-beneficiary-of-minnesota.html), plunged dramatically Monday and Tuesday, 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 is in Wave B up.
It looks like MTTG.OB is doing a huge Elliott Wave ABC down up down pattern in Wave 2 down, and, volume may dry up, so, risk is high right now, so be careful if you trade this one. I'll look to/may buy MTTG.OB in the short term Wave 2 down or early in a short term Wave 3 upcycle.
JASO had a huge day on Tuesday (strong follow through at yesterday'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 today, 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==.
JRCC (http://stockcharts.com/charts/gallery.html?jrcc) got rocked by a poor earnings report, so, it needs to hit an intermediate term cycle buy signal again.
WWAT.OB hit an intermediate term cycle buy signal on Tuesday, see http://stockcharts.com/charts/gallery.html?wwat. Note the bullish large inverse spike on Monday's candle. WWAT.OB probably put in a Wave A of a short term Wave 2 cycle low at 1.65 today (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 is doing a brief parabolic monthly upcycle, that may have peaked at 46.74 today, note the bearish large spike on today'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) today, peaked at 46.74, then plunged dramatically, closing at 44.85 (got gaps?). The dramatic decline indicates that WFMI may have entered Wave A down of a monthly downcycle today. Often important cycle highs/lows occur 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.
SOPO did a very strong short term Wave 1 upcycle that peaked at Tuesday's open, and, hit an intermediate term cycle buy signal on Tuesday, see http://stockcharts.com/charts/gallery.html?sopo. Assuming the downside gap at 0.48 created at Monday's open remains unfilled (is a bullish breakaway gap) after the short term Wave 2 downcycle bottoms (appears to have bottomed Wednesday at 0.55), I'll look to go long.
IOC did a very strong short term Wave 1 upcycle, and, hit an intermediate term cycle buy signal, see http://stockcharts.com/charts/gallery.html?ioc. Wave 2 down bottomed yesterday at 25.40. IOC may have hit a minor intermediate term cycle high at 36.38 today, note the very bearish very large spike on today's candle, and, note the huge decline from 36.38 to the close at 31.01, which is a major warning sign. Since hitting an intermediate term cycle low in late June IOC has done an Elliott Wave 12345 up down up down up pattern that may have peaked at 36.38 today, so, one should avoid IOC right now. Even though IOC's monthly upcycle Elliott Wave count is/appears to be Wave 4 down, it's negated by the longer minor intermediate term cycle Elliott Wave count and the fact that a huge very bearish spike occurred today followed by a dramatic decline, which is a major warning sign.
HSOA did a very strong short term Wave 1 upcycle, and, hit an intermediate term cycle buy signal, see http://stockcharts.com/charts/gallery.html?hsoa. Wave 2 down appears to have bottomed yesterday at 4.91 (bullish inverse spike on yesterday's candle), which means that the downside gap at 4.73 is probably a bullish breakaway gap. One could wait for the Wave 2 downtrend line to be broken (was broken yesterday) before buying this, but, Wave 3 may have peaked at 5.98 today. I'll reassess the Elliott Wave count tomorrow.
TMTA (http://stockcharts.com/charts/gallery.html?tmta) may have bottomed on Tuesday, 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
1:11 PM
