............WMT And SPX Probably Bottomed Yesterday
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 put in a Wave A cycle low of an intermediate term downcycle, see chart 1 at http://www.joefrocks.com/GoldStockCharts.html.
SPX probably entered Wave B up late yesterday. The sharp late session rally, 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==, plus the bullish large inverse spikes on yesterday's candle for SPX/WMT indicate that they probably bottomed.
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.
Reliable SPX/market lead indicator WMT probably put in a monthly cycle low at 45.4779 yesterday, 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=. WMT will have to do a strong short term Wave 1 upcycle in order to hit a monthly cycle buy signal (a higher cycle high tomorrow will do it), which would indicate that WMT has probably/very likely bottomed.
The WMT Lead Indicator was a very bullish +0.66% versus SPX today, and, it became more 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.
The NEM Lead Indicator was a modestly bearish -0.42% 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.
Fed credit for the 5 day period ending 8-1-07 rose a substantial +$7.417 Billion, which is another strong indication that SPX/WMT have probably bottomed, see http://www.federalreserve.gov/releases/h41/Current/. Also, Fed credit was a massive $17 Billion today, on punch spiking Thursday, 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.
Until WMT hits a monthly cycle buy signal one should be cautious, so, I'm not going to discuss the trading stocks much today, other than to say that FRPT (http://stockcharts.com/charts/gallery.html?frpt), ISIS (http://stockcharts.com/charts/gallery.html?isis), JRCC (http://stockcharts.com/charts/gallery.html?jrcc), and JASO (http://stockcharts.com/charts/gallery.html?jaso) probably hit monthly/minor intermediate term cycle lows a few sessions ago based on their Elliott Wave count and the fact that they hit monthly cycle buy signals. Looking to buy late in a short term Wave 2 downcycle or early in Wave 3 up probably makes sense if you plan to trade these.
ACI (http://stockcharts.com/charts/gallery.html?aci) is trying to establish an intermediate term cycle low, as opposed to establishing a monthly cycle low within an existing intermediate term upcycle, so, the fact that it made a slightly lower cycle low today at 28.63 versus 28.70 on 7-27 isn't too surprising, since it's monthly cycle buy signal was a borderline one, and, the more important the cycle low, the more strength that needs to occur in order to get a viable/convincing buy signal. So, one should wait for a convincing strong short term Wave 1 upcycle to occur, which will be an intermediate term cycle buy signal. Looking to buy late in a short term Wave 2 downcycle or early in Wave 3 up probably makes sense.
TMTA (http://stockcharts.com/charts/gallery.html?tmta) may have bottomed today, 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, especially since WMT/SPX need to establish bottoms now.
Some new potential trading stocks, including a few value type Warren Buffett stocks, are WFMI (http://stockcharts.com/charts/gallery.html?wfmi, potential breakaway gap at 37.04), HSOA (http://stockcharts.com/charts/gallery.html?hsoa, potential breakaway gap at 4.73), and OATS (http://stockcharts.com/charts/gallery.html?oats).
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 $470ish right now, so, gold would be a great buy in the $470-500 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
SPX probably entered Wave B up late yesterday. The sharp late session rally, 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==, plus the bullish large inverse spikes on yesterday's candle for SPX/WMT indicate that they probably bottomed.
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.
Reliable SPX/market lead indicator WMT probably put in a monthly cycle low at 45.4779 yesterday, 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=. WMT will have to do a strong short term Wave 1 upcycle in order to hit a monthly cycle buy signal (a higher cycle high tomorrow will do it), which would indicate that WMT has probably/very likely bottomed.
The WMT Lead Indicator was a very bullish +0.66% versus SPX today, and, it became more 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.
The NEM Lead Indicator was a modestly bearish -0.42% 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.
Fed credit for the 5 day period ending 8-1-07 rose a substantial +$7.417 Billion, which is another strong indication that SPX/WMT have probably bottomed, see http://www.federalreserve.gov/releases/h41/Current/. Also, Fed credit was a massive $17 Billion today, on punch spiking Thursday, 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.
Until WMT hits a monthly cycle buy signal one should be cautious, so, I'm not going to discuss the trading stocks much today, other than to say that FRPT (http://stockcharts.com/charts/gallery.html?frpt), ISIS (http://stockcharts.com/charts/gallery.html?isis), JRCC (http://stockcharts.com/charts/gallery.html?jrcc), and JASO (http://stockcharts.com/charts/gallery.html?jaso) probably hit monthly/minor intermediate term cycle lows a few sessions ago based on their Elliott Wave count and the fact that they hit monthly cycle buy signals. Looking to buy late in a short term Wave 2 downcycle or early in Wave 3 up probably makes sense if you plan to trade these.
ACI (http://stockcharts.com/charts/gallery.html?aci) is trying to establish an intermediate term cycle low, as opposed to establishing a monthly cycle low within an existing intermediate term upcycle, so, the fact that it made a slightly lower cycle low today at 28.63 versus 28.70 on 7-27 isn't too surprising, since it's monthly cycle buy signal was a borderline one, and, the more important the cycle low, the more strength that needs to occur in order to get a viable/convincing buy signal. So, one should wait for a convincing strong short term Wave 1 upcycle to occur, which will be an intermediate term cycle buy signal. Looking to buy late in a short term Wave 2 downcycle or early in Wave 3 up probably makes sense.
TMTA (http://stockcharts.com/charts/gallery.html?tmta) may have bottomed today, 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, especially since WMT/SPX need to establish bottoms now.
Some new potential trading stocks, including a few value type Warren Buffett stocks, are WFMI (http://stockcharts.com/charts/gallery.html?wfmi, potential breakaway gap at 37.04), HSOA (http://stockcharts.com/charts/gallery.html?hsoa, potential breakaway gap at 4.73), and OATS (http://stockcharts.com/charts/gallery.html?oats).
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 $470ish right now, so, gold would be a great buy in the $470-500 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
1:12 PM
