I'm Watching NDX's (NASDAQ 100) Upside Gap At 2000.82 Created Today/9-17
I'm watching NDX's (NASDAQ 100, http://stockcharts.com/charts/gallery.html?%24ndx) upside gap at 2000.82 created at today's/9-17 open, see http://finance.yahoo.com/q/ta?s=%5ENDX&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=. It appears to be a bearish breakaway gap, but, with a bullish WMT Lead Indicator the past two sessions (+0.51% versus SPX on 9-17, +0.58% on 9-14) and massive Fed credit in three of the past four sessions (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE) I decided not to buy QID (UltraShort QQQ ProShares, http://stockcharts.com/h-sc/ui?s=qid) today. SPX (S & P 500) created an upside gap at today's open at 1484.25.
If NDX's upside gap at 2000.82 created at today's/9-17 open doesn't get filled tomorrow (would be a likely bearish breakaway gap), then there's a good chance that I'll buy QID, if the WMT Lead Indicator turns bearish.
The fact that reliable lead indicator Walmart (WMT, http://stockcharts.com/charts/gallery.html?wmt) put in a double top cycle high today with Friday's cycle high indicates that the WMT Lead Indicator may turn bearish again tomorrow.
A sell the news significant decline is likely to begin on Tuesday 9-18 at 2:15 pm EST, when the Fed will probably announce a quarter point (0.25%) cut in the Fed Funds rate and probably also the Discount rate. If they don't cut rates (unlikely) there will probably be a mini crash, and, if they cut rates by a half percent (0.50%, unlikely) then the market will probably rally, or, maybe the market will think that the Fed thinks the economy is fragile and needs the sharp rate cut, so it'll sell off sharply. I think the market is likely to rally if the Fed cuts rates by a half point.
My Elliott Wave count for NDX (NASDAQ 100)/SPX (S & P 500) is that they are in a big Wave C downcycle since 9-4-07, when the countertrend Wave B upcycle probably peaked, see http://stockcharts.com/charts/gallery.html?%24ndx, for the major downcycle that began after the July cycle high.
NDX (NASDAQ 100) put in a nearly perfect bearish double top at 2005.96 on Thursday versus Wednesday's cycle high at 2006.37, see http://finance.yahoo.com/q/ta?s=%5Endx&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, so, NDX's countertrend Wave B of Wave A of the big Wave C downcycle since 9-4-07 (http://stockcharts.com/charts/gallery.html?%24ndx) peaked Wednesday.
SPX's (S & P 500) countertrend Wave B of Wave A of the big Wave C downcycle since 9-4-07 surprised to the upside and peaked Thursday, 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=. Thursday's greater than expected NDX/SPX strength was very likely the result of massive Fed Credit being injected into the system Wednesday ($13.50 Billion) and Thursday ($21 Billion) , http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE, which probably resulted in stronger than expected program buying.
The WMT Lead Indicator is mostly bearish recently, at +0.51% versus SPX (S & P 500) today/on 9-17, at +0.58% versus SPX (S & P 500) on 9-14, at -0.02% versus SPX (S & P 500) on 9-13, at -0.55% versus SPX (S & P 500) on 9-12, at +0.23% versus SPX (S & P 500) on 9-11, at -0.15% versus SPX (S & P 500) on 9-10, at +0.82% versus SPX (S & P 500) on 9-7, at +0.30% versus SPX (S & P 500) on 9-6, at -0.81% versus SPX (S & P 500) on 9-5, -1.81% on 9-4, -0.40% on 8-31, -1.55% on 8-30, -0.37% on 8-29, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=on&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC, which jives with SPX/NDX (http://stockcharts.com/charts/gallery.html?%24ndx) having entered Wave C (on 9-4-07) of their major downcycle since the July SPX cycle high at 1555.90.
Wave C should bottom at 1700-1750 for NDX, well below the Wave A cycle low on 8-16 at 1805.66, see http://stockcharts.com/charts/gallery.html?%24ndx.
A great sanity check of the Elliott Wave count is the reliable WMT Lead Indicator, which nearly/seemingly always turns bearish ahead of downcycles and bullish ahead of upcycles. For example, the extremely bearish six month WMT Lead Indicator (see http://finance.yahoo.com/q/ta?s=%5EHUI&t=6m&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC) jives with NDX/SPX having entered a big Wave C downcycle on 9-4-07, that should bottom well below the Wave A cycle lows that occurred on 8-16-07 for NDX/SPX, see http://stockcharts.com/charts/gallery.html?%24ndx.
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.
The dramatic Wave A downcycle from the July cycle high at 1555.90 to 8-16's cycle low at 1370.60 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 NEM Lead Indicator = -0.53% versus the XAU today/on 9-17, +0.12% versus the XAU on 9-14, -1.34% versus the XAU on 9-13,+0.02% versus the XAU on 9-12, +0.25% versus the XAU on 9-11, -0.69% versus the XAU on 9-10, +0.42% on 9-7, -1.39% on 9-6, +0.06% on 9-5, -1.81% on 9-4, -0.98% on 8-31, -0.03% on 8-30, -1.86% on 8-29 = an extremely bearish -7.76% versus the XAU the past 13 sessions, see six month NEM Lead Indicator at http://finance.yahoo.com/q/ta?s=%5EXAU&t=6m&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem.
Gold's Wave B of it's Wave 2 Cyclical Bear Market since 5-11-06 surprised to the upside recently, see charts 1 and 2 at http://stockcharts.com/charts/gallery.html?$GOLD, taking out April's cycle high at $698 that appeared to be the Wave B cycle high of the Wave 2 Cyclical Bear Market since 5-11-06 (Wave 1 Cyclical Bull Market cycle high occurred at $730.40 on 5-11-06).
The huge spike move is typical of what happens near very important cycle highs, and, Gold's Wave B of the Wave 2 Cyclical Bear Market since 5-11-06 may have peaked today.
Most of the amateur wannabe gold analysts (some were just born into rich families and are pretending to be gold "gurus") have led and continue to lead most people to a financial disaster. There are far too many dingbats pretending to be gold analysts/timers in the gold/silver sector.
Wave A bottomed at $542.27 in June 2006 and the Wave 1 Cyclical Bull Market cycle high occurred at $730.40 on 5-11-06, see http://stockcharts.com/charts/gallery.html?$GOLD. From April 2007 until today gold managed to rise about +4% in five months, which is obviously not a Bull Market uptrend. Only a gold "guru" would think that's a Bull Market.
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
If NDX's upside gap at 2000.82 created at today's/9-17 open doesn't get filled tomorrow (would be a likely bearish breakaway gap), then there's a good chance that I'll buy QID, if the WMT Lead Indicator turns bearish.
The fact that reliable lead indicator Walmart (WMT, http://stockcharts.com/charts/gallery.html?wmt) put in a double top cycle high today with Friday's cycle high indicates that the WMT Lead Indicator may turn bearish again tomorrow.
A sell the news significant decline is likely to begin on Tuesday 9-18 at 2:15 pm EST, when the Fed will probably announce a quarter point (0.25%) cut in the Fed Funds rate and probably also the Discount rate. If they don't cut rates (unlikely) there will probably be a mini crash, and, if they cut rates by a half percent (0.50%, unlikely) then the market will probably rally, or, maybe the market will think that the Fed thinks the economy is fragile and needs the sharp rate cut, so it'll sell off sharply. I think the market is likely to rally if the Fed cuts rates by a half point.
My Elliott Wave count for NDX (NASDAQ 100)/SPX (S & P 500) is that they are in a big Wave C downcycle since 9-4-07, when the countertrend Wave B upcycle probably peaked, see http://stockcharts.com/charts/gallery.html?%24ndx, for the major downcycle that began after the July cycle high.
NDX (NASDAQ 100) put in a nearly perfect bearish double top at 2005.96 on Thursday versus Wednesday's cycle high at 2006.37, see http://finance.yahoo.com/q/ta?s=%5Endx&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, so, NDX's countertrend Wave B of Wave A of the big Wave C downcycle since 9-4-07 (http://stockcharts.com/charts/gallery.html?%24ndx) peaked Wednesday.
SPX's (S & P 500) countertrend Wave B of Wave A of the big Wave C downcycle since 9-4-07 surprised to the upside and peaked Thursday, 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=. Thursday's greater than expected NDX/SPX strength was very likely the result of massive Fed Credit being injected into the system Wednesday ($13.50 Billion) and Thursday ($21 Billion) , http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE, which probably resulted in stronger than expected program buying.
The WMT Lead Indicator is mostly bearish recently, at +0.51% versus SPX (S & P 500) today/on 9-17, at +0.58% versus SPX (S & P 500) on 9-14, at -0.02% versus SPX (S & P 500) on 9-13, at -0.55% versus SPX (S & P 500) on 9-12, at +0.23% versus SPX (S & P 500) on 9-11, at -0.15% versus SPX (S & P 500) on 9-10, at +0.82% versus SPX (S & P 500) on 9-7, at +0.30% versus SPX (S & P 500) on 9-6, at -0.81% versus SPX (S & P 500) on 9-5, -1.81% on 9-4, -0.40% on 8-31, -1.55% on 8-30, -0.37% on 8-29, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=on&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC, which jives with SPX/NDX (http://stockcharts.com/charts/gallery.html?%24ndx) having entered Wave C (on 9-4-07) of their major downcycle since the July SPX cycle high at 1555.90.
Wave C should bottom at 1700-1750 for NDX, well below the Wave A cycle low on 8-16 at 1805.66, see http://stockcharts.com/charts/gallery.html?%24ndx.
A great sanity check of the Elliott Wave count is the reliable WMT Lead Indicator, which nearly/seemingly always turns bearish ahead of downcycles and bullish ahead of upcycles. For example, the extremely bearish six month WMT Lead Indicator (see http://finance.yahoo.com/q/ta?s=%5EHUI&t=6m&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC) jives with NDX/SPX having entered a big Wave C downcycle on 9-4-07, that should bottom well below the Wave A cycle lows that occurred on 8-16-07 for NDX/SPX, see http://stockcharts.com/charts/gallery.html?%24ndx.
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.
The dramatic Wave A downcycle from the July cycle high at 1555.90 to 8-16's cycle low at 1370.60 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 NEM Lead Indicator = -0.53% versus the XAU today/on 9-17, +0.12% versus the XAU on 9-14, -1.34% versus the XAU on 9-13,+0.02% versus the XAU on 9-12, +0.25% versus the XAU on 9-11, -0.69% versus the XAU on 9-10, +0.42% on 9-7, -1.39% on 9-6, +0.06% on 9-5, -1.81% on 9-4, -0.98% on 8-31, -0.03% on 8-30, -1.86% on 8-29 = an extremely bearish -7.76% versus the XAU the past 13 sessions, see six month NEM Lead Indicator at http://finance.yahoo.com/q/ta?s=%5EXAU&t=6m&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem.
Gold's Wave B of it's Wave 2 Cyclical Bear Market since 5-11-06 surprised to the upside recently, see charts 1 and 2 at http://stockcharts.com/charts/gallery.html?$GOLD, taking out April's cycle high at $698 that appeared to be the Wave B cycle high of the Wave 2 Cyclical Bear Market since 5-11-06 (Wave 1 Cyclical Bull Market cycle high occurred at $730.40 on 5-11-06).
The huge spike move is typical of what happens near very important cycle highs, and, Gold's Wave B of the Wave 2 Cyclical Bear Market since 5-11-06 may have peaked today.
Most of the amateur wannabe gold analysts (some were just born into rich families and are pretending to be gold "gurus") have led and continue to lead most people to a financial disaster. There are far too many dingbats pretending to be gold analysts/timers in the gold/silver sector.
Wave A bottomed at $542.27 in June 2006 and the Wave 1 Cyclical Bull Market cycle high occurred at $730.40 on 5-11-06, see http://stockcharts.com/charts/gallery.html?$GOLD. From April 2007 until today gold managed to rise about +4% in five months, which is obviously not a Bull Market uptrend. Only a gold "guru" would think that's a Bull Market.
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
1:19 PM
