The WMT Lead Indicator Was A Very Bullish +1.03% Versus SPX (S & P 500) Today
The WMT Lead Indicator was a very bullish +1.03% versus SPX (S & P 500) today, and, became much more bullish in the last few hours of the session, 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.
Also, SPX did an Elliott Wave ABC down up down pattern today (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=), that may have been a short term Wave 4 downcycle of the countertrend Wave B upcycle that began on 8-16 at 1370.60, and, it may have bottomed near session's end.
Due to the very bullish WMT Lead Indicator today and SPX's significant Elliott Wave ABC down up down downcycle today SPX (S & P 500) strength is likely early tomorrow, and, there may be a good opportunity/entry point to day trade long.
SPX (S & P 500) entered a countertrend Wave B upcycle at 1370.60 on Thursday 8-16 (http://stockcharts.com/charts/gallery.html?%24spx). The fact that this upcycle since 8-16 has been very parabolic/sharply rising, without the usual obvious zigzagging on the daily chart, is probably a sign that it's a countertrend Wave B upcycle/reflex rally, following the dramatic Wave A downcycle from the July cycle high at 1555.90 to 8-16's cycle low at 1370.60, that triggered a major 5% follow through sell signal, which indicates that an SPX (S & P 500) Cyclical Bear Market probably began in July after peaking at 1555.90, to see the major sell signal see chart 1 at http://www.joefrocks.com/GoldStockCharts.html.
The fact that this SPX (S & P 500) upcycle since 8-16 has been very parabolic/sharply rising makes the Elliott Wave count more difficult, but, it appears that SPX will enter a third/final short term Wave 5 upcycle tomorrow, see http://stockcharts.com/charts/gallery.html?%24spx.
Since reliable SPX/market lead indicator WMT hasn't exceeded it's Wave 1 cycle high at 44.70 that occurred on 8-17 , Thursday's cycle low at 43.03 wasn't a Wave 4 cycle low, which means that WMT (http://stockcharts.com/charts/gallery.html?wmt) is still in Wave 3, and, that SPX's countertrend Wave B upcycle since 8-16 probably still has legs. It should peak below July's cycle high at 1555.90.
The fact that the WMT Lead Indicator is bearish since SPX bottomed at 1370.60 mid session on 8-16 jives with SPX being in a countertrend Wave B upcycle (+1.03% versus SPX today/on 8-27, +0.17% on 8-24, -1.22% versus SPX on 8-23, at -1.06% on 8-22, at +0.14% on 8-21, at +0.26% on 8-20, at -2.48% on 8-17, at +0.18% on 8-16).
Reliable SPX/market lead indicator WMT put in a bullish slightly higher Wave 2 double bottom cycle low at 42.96 on Monday 8-20 versus at 42.92 early on Thursday 8-16, which is a short term positive for the market, see http://stockcharts.com/charts/gallery.html?wmt.
I'll be looking to day trade the Ultra Long SPX ETF SSO or some other ETF/stock early on Tuesday.
Note that in the downcycle from the July cycle high at 1555.90 to Thursday 8-16's cycle low (http://stockcharts.com/charts/gallery.html?%5Espx) that the Wave B up of that downcycle lasted a grand total of only TWO DAYS, which is a clear indication that the downcycle from the July cycle high at 1555.90 to Thursday 8-16's cycle low is probably only a Wave A downcycle.
After that vicious Wave C downcycle bottoms, following the current Wave B, THEN a respectable lengthy multi month intermediate term upcycle should occur for SPX.
The NEM Lead Indicator has been very bearish recently, at +0.41% versus the XAU today/on 8-27, at -0.81% versus the XAU on 8-24, at +0.57% versus the XAU on 8-23, at -2.57% versus the XAU on 8-22, at +0.45% versus the XAU on 8-21, at -2.04% versus the XAU on 8-20, and, at -1.82% on Friday 8-17.
I'm probably going to trade only index and sector ETFs for a few months, so, I'm not going to be discussing individual stocks, unless I trade a basket of stocks in a given sector, like I used to do in the previous Wave 1 HUI/XAU Cyclical Bull Market that ended on 5-11-06.
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 volatile stocks/ETFs 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
Also, SPX did an Elliott Wave ABC down up down pattern today (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=), that may have been a short term Wave 4 downcycle of the countertrend Wave B upcycle that began on 8-16 at 1370.60, and, it may have bottomed near session's end.
Due to the very bullish WMT Lead Indicator today and SPX's significant Elliott Wave ABC down up down downcycle today SPX (S & P 500) strength is likely early tomorrow, and, there may be a good opportunity/entry point to day trade long.
SPX (S & P 500) entered a countertrend Wave B upcycle at 1370.60 on Thursday 8-16 (http://stockcharts.com/charts/gallery.html?%24spx). The fact that this upcycle since 8-16 has been very parabolic/sharply rising, without the usual obvious zigzagging on the daily chart, is probably a sign that it's a countertrend Wave B upcycle/reflex rally, following the dramatic Wave A downcycle from the July cycle high at 1555.90 to 8-16's cycle low at 1370.60, that triggered a major 5% follow through sell signal, which indicates that an SPX (S & P 500) Cyclical Bear Market probably began in July after peaking at 1555.90, to see the major sell signal see chart 1 at http://www.joefrocks.com/GoldStockCharts.html.
The fact that this SPX (S & P 500) upcycle since 8-16 has been very parabolic/sharply rising makes the Elliott Wave count more difficult, but, it appears that SPX will enter a third/final short term Wave 5 upcycle tomorrow, see http://stockcharts.com/charts/gallery.html?%24spx.
Since reliable SPX/market lead indicator WMT hasn't exceeded it's Wave 1 cycle high at 44.70 that occurred on 8-17 , Thursday's cycle low at 43.03 wasn't a Wave 4 cycle low, which means that WMT (http://stockcharts.com/charts/gallery.html?wmt) is still in Wave 3, and, that SPX's countertrend Wave B upcycle since 8-16 probably still has legs. It should peak below July's cycle high at 1555.90.
The fact that the WMT Lead Indicator is bearish since SPX bottomed at 1370.60 mid session on 8-16 jives with SPX being in a countertrend Wave B upcycle (+1.03% versus SPX today/on 8-27, +0.17% on 8-24, -1.22% versus SPX on 8-23, at -1.06% on 8-22, at +0.14% on 8-21, at +0.26% on 8-20, at -2.48% on 8-17, at +0.18% on 8-16).
Reliable SPX/market lead indicator WMT put in a bullish slightly higher Wave 2 double bottom cycle low at 42.96 on Monday 8-20 versus at 42.92 early on Thursday 8-16, which is a short term positive for the market, see http://stockcharts.com/charts/gallery.html?wmt.
I'll be looking to day trade the Ultra Long SPX ETF SSO or some other ETF/stock early on Tuesday.
Note that in the downcycle from the July cycle high at 1555.90 to Thursday 8-16's cycle low (http://stockcharts.com/charts/gallery.html?%5Espx) that the Wave B up of that downcycle lasted a grand total of only TWO DAYS, which is a clear indication that the downcycle from the July cycle high at 1555.90 to Thursday 8-16's cycle low is probably only a Wave A downcycle.
After that vicious Wave C downcycle bottoms, following the current Wave B, THEN a respectable lengthy multi month intermediate term upcycle should occur for SPX.
The NEM Lead Indicator has been very bearish recently, at +0.41% versus the XAU today/on 8-27, at -0.81% versus the XAU on 8-24, at +0.57% versus the XAU on 8-23, at -2.57% versus the XAU on 8-22, at +0.45% versus the XAU on 8-21, at -2.04% versus the XAU on 8-20, and, at -1.82% on Friday 8-17.
I'm probably going to trade only index and sector ETFs for a few months, so, I'm not going to be discussing individual stocks, unless I trade a basket of stocks in a given sector, like I used to do in the previous Wave 1 HUI/XAU Cyclical Bull Market that ended on 5-11-06.
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 volatile stocks/ETFs 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
1:16 PM
