SPX (S & P 500) Did A Wave 5 Upcycle For The Upcycle Since Early Wednesday
SPX (S & P 500) did a Wave 5 up move just after today's open, for the upcycle since early Wednesday (Wave B began), 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=, then SPX made higher highs late in the session, which was probably Wave 5 rollover action.
Yesterday's massive $31 Billion credit injection by the Fed (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE) was probably a major factor behind the market's strength today, due to strong program buying. A year ago $15-20 Billion was a massive credit injection for punch spiking Thursday. In recent months it's been about $30 Billion due to the credit/mortgage crisis.
SPX (S & P 500) entered a countertrend Wave B upcycle early on Wednesday 10-24-07 (http://stockcharts.com/charts/gallery.html?%24spx) and put in a likely Cyclical Bull Market cycle high at 1576.09 on 10-11-07.
SPX's countertrend Wave B upcycle (and RUT's (Russell 2000), which began on Monday 10-22-07) might peak at about the time of next Wednesday 10-31-07's Fed rate decision. There should be an Elliott Wave 12345 up down up down up pattern on the daily chart (http://stockcharts.com/charts/gallery.html?%24spx).
HUI's likely Cyclical Bull Market cycle high at 423.16 on 10-11-07 held today (http://stockcharts.com/charts/gallery.html?%24hui), with a cycle high at 421.71, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=, and, HUI might have peaked near session's end (it was rolling over), which would probably be a countertrend Wave B cycle high at 421.71, for the cycle since early Monday 10-22.
The XAU managed to barely exceed it's cycle high at 182.82 on 10-15-07 today (http://stockcharts.com/charts/gallery.html?%24xau), with a cycle high at 182.96, a whopping +0.077% above the cycle high on 10-15-07. If the XAU peaked today it's a bearish nearly perfect triple top (on 10-11, 15, 26), that's basically the same as a Wave B cycle high. The XAU is dominated more by a few large cap components than HUI is, and, was probably a bit more influenced by program buying.
The only reason that HUI/XAU took out their 5-11-06 cycle highs was probably the huge M2 money supply spike in August due to the mortgage/credit crisis, see http://tradethecycles.blogspot.com/2007/10/huge-spike-in-m2-money-supply-occurred.html.
The NEM Lead Indicator and the gold COT data are extremely bearish. I don't see today's action changing anything regarding either the precious metals sector or the major averages. In the next week or two I'll be looking to aggressively short the precious metals sector via GDX, the Gold Miners ETF, that closely tracks HUI, and via TWM, the Ultra Short Russell 2000 (RUT) ETF.
The WMT Lead Indicator was a bullish +0.35% versus SPX today/on 10-26. The NEM Lead Indicator was a slightly bullish +0.09% versus the XAU today/on 10-26.
What follows is previous analysis/info, except for the updated gold COT data and the NEM Lead Indicator data.
Since Thursday 10-11-07's likely very important Cyclical Bull Market (and minor intermediate term since 8-16-07) cycle high for SPX (S & P 500) (and HUI), SPX has done a short term Wave A downcycle (did Elliott Wave ABC down up down pattern), that bottomed Wednesday 10-24, 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=.
When SPX (S & P 500), HUI, RUT do/complete a short term countertrend Wave B upcycle for few days/weeks I'm probably going to aggressively (large positions) short GDX, the Gold Miners ETF (tracks HUI), and short the Russell 2000 (RUT, http://stockcharts.com/charts/gallery.html?%24rut) via the Ultra Short ETF TWM.
TWM did a big short term Wave 1 upcycle that peaked at 68.69 on Monday 10-22 when RUT's Wave A (probably) bottomed, see http://stockcharts.com/charts/gallery.html?twm. I'll be looking to buy TWM when the short term Wave 2 downcycle bottoms some time in the next few days to a week.
RUT's (Russell 2000) short term countertrend Wave B upcycle should do an Elliott Wave 12345 up down up down up pattern for a few days/weeks. I'll be looking to go short shortly after I think Wave 5 of the short term Wave B has peaked.
Notice that the Russell 2000 (RUT, http://stockcharts.com/charts/gallery.html?%24rut) probably peaked in July at 856.48 versus a countertrend Wave B cycle high at 852.06 on 10-11-07, so, RUT is in a substantial Wave C type decline that should bottom well below the Wave A cycle low at 736.00 on 8-16-07. If RUT bottoms at 700ish then it has about 18% to fall from it's countertrend Wave B cycle high at 852.06 on 10-11-07.
The S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) is up all of 1.30% from July 2007's cycle high at 1555.90 to 10-11-07's likely Cyclical Bull Market cycle high at 1576.09, thanks to massive Fed credit due to the mortgage/credit crisis. Once the market/SPX breaks down nearly sectors will get whacked. SPX actually broke down a few months ago, hitting a 5% major sell signal, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html, and, the recent strength was rollover action, which was the upcycle/Cyclical Bull Market since October 2002 running out of gas. What was going on in the market was very important peaking action.
The reliable WMT Lead Indicator is extremely bearish, see the six month chart (shows WMT, SPX, HUI relative performance) at 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.
The point of sell signals is much more to indicate that risk has increased dramatically than it is to be a psychic nailing every cycle high. Double and even triple tops are fairly common, as is rollover action with modestly, and, much less frequently (especially for major 5% sell signals), sometimes substantially higher cycle highs occurring. SPX's (S & P 500) 5% major sell signal, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html, indicated that July's cycle high at 1555.90 was a likely/potential Cyclical Bull Market cycle high, and, more importantly, that trading SPX long was risky, because, a very important cycle trendline had broken down.
The recent gold COT (Commitments Of Traders) data is extremely bearish, see the last/third data at http://www.cftc.gov/dea/options/deacmxsof.htm. The savvy non contrarian gold Commercial Traders traded significantly net long in the five day period ending 10-23-07, correctly anticipating the recent strength, after having gone massively short the prior six weeks, covering 5567 short gold futures and options contracts (adding 19,360 two weeks ago, added 16,788 three weeks ago, added 1751 four weeks ago, added 27,946 five weeks ago, added over 17,000 six weeks ago, and, added a massive 53,207 seven weeks ago), while adding 9632 (added 5075 two weeks ago, liquidated 192 three weeks ago, liquidated 5492 four weeks ago, liquidated 2977 five weeks ago) long gold futures and options contracts.
HUI/XAU put in bearish triple top cycle highs on Friday 10-26-07 with Monday 10-15-07 and Thursday 10-11-07's cycle highs, see http://stockcharts.com/charts/gallery.html?%24hui, which is probably the Cyclical Bull Market since late 2000 peaking in dramatic rollover mode versus 5-11-06's cycle highs.
For all practical purposes HUI's Wave 1 Cyclical Bull Market ended on 5-11-06 at 401.69 (XAU at 171.71). HUI/XAU/gold have only risen about 5% from 5-11-06 to the recent cycle highs. Technically HUI/XAU's Wave 1 Cyclical Bull Market is peaking (HUI probably did on 10-11-07, XAU on Monday 10-15-07) in dramatic rollover mode versus 5-11-06's cycle highs at 401.69/171.71 (http://stockcharts.com/charts/gallery.html?%24hui).
Once a sell signal occurs it's time to exit. Actually, I hopefully exit earlier using the Elliott Wave count. The 5% major sell signal, see annotated charts 15 and 18 at http://www.joefrocks.com/GoldStockCharts.html, that occurred in May 2006, correctly indicated that it was time to turn bearish on HUI/XAU.
The NEM Lead Indicator is BIG TIME SCARY. The NEM Lead Indicator = +0.09% versus the XAU today/on 10-26, -0.72% on 10-25, +0.32% on 10-24, -1.33% on 10-23, +0.91% on 10-22 (yes, same as Friday), +0.91% on 10-19, -0.88% on 10-18, -2.00% on 10-17, +1.11% on 10-16, -0.31% on 10-15, -0.19% on 10-12, +1.62% on 10-11, -1.28% on 10-10, -0.25% on 10-9, -0.06% on 10-8, -0.57% on 10-5, -1.17% on 10-4, +0.37% on 10-3, +1.35% on 10-2, +0.33% on 10-1, -0.41% on 9-28, -2.21% on 9-27, -4.13% on 9-26, +0.40% on 9-25, +2.03% on 9-24, +0.07% on 9-21, -1.46% on 9-20, +0.69% on 9-19, -2.33% on 9-18, -0.53% on 9-17, +0.12% on 9-14, -1.34% on 9-13,+0.02% on 9-12, +0.25% on 9-11, -0.69% 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 -16.86% versus the XAU the past 42 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 has been lagging HUI/XAU as it tends to do. Gold was still rising after HUI/XAU peaked (http://stockcharts.com/charts/gallery.html?%24gold). HUI probably/very likely peaked on 10-11-07 and the XAU probably/very likely peaked on 10-15-07.
A brief rockets summary (none are recommendations, just timing examples/info):
Because a major market downcycle has begun one has to be very careful about trading rockets right now (should be very careful anyway with rockets), if one trades them at all. Generally it's a good idea to trade with the wind/market at your back. Trading long in the midst of a major or even minor downcycle is risky.
Some new rockets I'm watching are TMY (http://tradethecycles.blogspot.com/2007/10/transmeridian-exploration-inc-tmy.html), Titanium Metals Corp (TIE, strong insider buying), VLNC (strong insider buying), PKTR (insider buying), Linux Gold LNXGF (new Cyclical Bull Market).
Spicy Pickle (SPKL.OB, http://stockcharts.com/charts/gallery.html?spkl) needs to do an Elliott Wave ABC down up down monthly downcycle for about a week before I look to trade it long. I'm excited about trading this one. I probably will trade this one once it does a monthly downcycle.
Lincoln Gold, LGCP.OB (http://stockcharts.com/charts/gallery.html?lgcp) looks good once it does an Elliott Wave ABC down up down monthly downcycle for about a week.
I'm "imminently" looking to/might buy VG (Vonage) for a short term Wave 5 upcycle 1 to 2 week trade (trade a Wave 5 short term upcycle of a monthly upcycle).
I'm looking to trade a tiny ICO (http://stockcharts.com/charts/gallery.html?ico) position once it does Elliott Wave ABC down up down monthly downcycle.
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
Yesterday's massive $31 Billion credit injection by the Fed (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE) was probably a major factor behind the market's strength today, due to strong program buying. A year ago $15-20 Billion was a massive credit injection for punch spiking Thursday. In recent months it's been about $30 Billion due to the credit/mortgage crisis.
SPX (S & P 500) entered a countertrend Wave B upcycle early on Wednesday 10-24-07 (http://stockcharts.com/charts/gallery.html?%24spx) and put in a likely Cyclical Bull Market cycle high at 1576.09 on 10-11-07.
SPX's countertrend Wave B upcycle (and RUT's (Russell 2000), which began on Monday 10-22-07) might peak at about the time of next Wednesday 10-31-07's Fed rate decision. There should be an Elliott Wave 12345 up down up down up pattern on the daily chart (http://stockcharts.com/charts/gallery.html?%24spx).
HUI's likely Cyclical Bull Market cycle high at 423.16 on 10-11-07 held today (http://stockcharts.com/charts/gallery.html?%24hui), with a cycle high at 421.71, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=, and, HUI might have peaked near session's end (it was rolling over), which would probably be a countertrend Wave B cycle high at 421.71, for the cycle since early Monday 10-22.
The XAU managed to barely exceed it's cycle high at 182.82 on 10-15-07 today (http://stockcharts.com/charts/gallery.html?%24xau), with a cycle high at 182.96, a whopping +0.077% above the cycle high on 10-15-07. If the XAU peaked today it's a bearish nearly perfect triple top (on 10-11, 15, 26), that's basically the same as a Wave B cycle high. The XAU is dominated more by a few large cap components than HUI is, and, was probably a bit more influenced by program buying.
The only reason that HUI/XAU took out their 5-11-06 cycle highs was probably the huge M2 money supply spike in August due to the mortgage/credit crisis, see http://tradethecycles.blogspot.com/2007/10/huge-spike-in-m2-money-supply-occurred.html.
The NEM Lead Indicator and the gold COT data are extremely bearish. I don't see today's action changing anything regarding either the precious metals sector or the major averages. In the next week or two I'll be looking to aggressively short the precious metals sector via GDX, the Gold Miners ETF, that closely tracks HUI, and via TWM, the Ultra Short Russell 2000 (RUT) ETF.
The WMT Lead Indicator was a bullish +0.35% versus SPX today/on 10-26. The NEM Lead Indicator was a slightly bullish +0.09% versus the XAU today/on 10-26.
What follows is previous analysis/info, except for the updated gold COT data and the NEM Lead Indicator data.
Since Thursday 10-11-07's likely very important Cyclical Bull Market (and minor intermediate term since 8-16-07) cycle high for SPX (S & P 500) (and HUI), SPX has done a short term Wave A downcycle (did Elliott Wave ABC down up down pattern), that bottomed Wednesday 10-24, 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=.
When SPX (S & P 500), HUI, RUT do/complete a short term countertrend Wave B upcycle for few days/weeks I'm probably going to aggressively (large positions) short GDX, the Gold Miners ETF (tracks HUI), and short the Russell 2000 (RUT, http://stockcharts.com/charts/gallery.html?%24rut) via the Ultra Short ETF TWM.
TWM did a big short term Wave 1 upcycle that peaked at 68.69 on Monday 10-22 when RUT's Wave A (probably) bottomed, see http://stockcharts.com/charts/gallery.html?twm. I'll be looking to buy TWM when the short term Wave 2 downcycle bottoms some time in the next few days to a week.
RUT's (Russell 2000) short term countertrend Wave B upcycle should do an Elliott Wave 12345 up down up down up pattern for a few days/weeks. I'll be looking to go short shortly after I think Wave 5 of the short term Wave B has peaked.
Notice that the Russell 2000 (RUT, http://stockcharts.com/charts/gallery.html?%24rut) probably peaked in July at 856.48 versus a countertrend Wave B cycle high at 852.06 on 10-11-07, so, RUT is in a substantial Wave C type decline that should bottom well below the Wave A cycle low at 736.00 on 8-16-07. If RUT bottoms at 700ish then it has about 18% to fall from it's countertrend Wave B cycle high at 852.06 on 10-11-07.
The S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) is up all of 1.30% from July 2007's cycle high at 1555.90 to 10-11-07's likely Cyclical Bull Market cycle high at 1576.09, thanks to massive Fed credit due to the mortgage/credit crisis. Once the market/SPX breaks down nearly sectors will get whacked. SPX actually broke down a few months ago, hitting a 5% major sell signal, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html, and, the recent strength was rollover action, which was the upcycle/Cyclical Bull Market since October 2002 running out of gas. What was going on in the market was very important peaking action.
The reliable WMT Lead Indicator is extremely bearish, see the six month chart (shows WMT, SPX, HUI relative performance) at 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.
The point of sell signals is much more to indicate that risk has increased dramatically than it is to be a psychic nailing every cycle high. Double and even triple tops are fairly common, as is rollover action with modestly, and, much less frequently (especially for major 5% sell signals), sometimes substantially higher cycle highs occurring. SPX's (S & P 500) 5% major sell signal, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html, indicated that July's cycle high at 1555.90 was a likely/potential Cyclical Bull Market cycle high, and, more importantly, that trading SPX long was risky, because, a very important cycle trendline had broken down.
The recent gold COT (Commitments Of Traders) data is extremely bearish, see the last/third data at http://www.cftc.gov/dea/options/deacmxsof.htm. The savvy non contrarian gold Commercial Traders traded significantly net long in the five day period ending 10-23-07, correctly anticipating the recent strength, after having gone massively short the prior six weeks, covering 5567 short gold futures and options contracts (adding 19,360 two weeks ago, added 16,788 three weeks ago, added 1751 four weeks ago, added 27,946 five weeks ago, added over 17,000 six weeks ago, and, added a massive 53,207 seven weeks ago), while adding 9632 (added 5075 two weeks ago, liquidated 192 three weeks ago, liquidated 5492 four weeks ago, liquidated 2977 five weeks ago) long gold futures and options contracts.
HUI/XAU put in bearish triple top cycle highs on Friday 10-26-07 with Monday 10-15-07 and Thursday 10-11-07's cycle highs, see http://stockcharts.com/charts/gallery.html?%24hui, which is probably the Cyclical Bull Market since late 2000 peaking in dramatic rollover mode versus 5-11-06's cycle highs.
For all practical purposes HUI's Wave 1 Cyclical Bull Market ended on 5-11-06 at 401.69 (XAU at 171.71). HUI/XAU/gold have only risen about 5% from 5-11-06 to the recent cycle highs. Technically HUI/XAU's Wave 1 Cyclical Bull Market is peaking (HUI probably did on 10-11-07, XAU on Monday 10-15-07) in dramatic rollover mode versus 5-11-06's cycle highs at 401.69/171.71 (http://stockcharts.com/charts/gallery.html?%24hui).
Once a sell signal occurs it's time to exit. Actually, I hopefully exit earlier using the Elliott Wave count. The 5% major sell signal, see annotated charts 15 and 18 at http://www.joefrocks.com/GoldStockCharts.html, that occurred in May 2006, correctly indicated that it was time to turn bearish on HUI/XAU.
The NEM Lead Indicator is BIG TIME SCARY. The NEM Lead Indicator = +0.09% versus the XAU today/on 10-26, -0.72% on 10-25, +0.32% on 10-24, -1.33% on 10-23, +0.91% on 10-22 (yes, same as Friday), +0.91% on 10-19, -0.88% on 10-18, -2.00% on 10-17, +1.11% on 10-16, -0.31% on 10-15, -0.19% on 10-12, +1.62% on 10-11, -1.28% on 10-10, -0.25% on 10-9, -0.06% on 10-8, -0.57% on 10-5, -1.17% on 10-4, +0.37% on 10-3, +1.35% on 10-2, +0.33% on 10-1, -0.41% on 9-28, -2.21% on 9-27, -4.13% on 9-26, +0.40% on 9-25, +2.03% on 9-24, +0.07% on 9-21, -1.46% on 9-20, +0.69% on 9-19, -2.33% on 9-18, -0.53% on 9-17, +0.12% on 9-14, -1.34% on 9-13,+0.02% on 9-12, +0.25% on 9-11, -0.69% 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 -16.86% versus the XAU the past 42 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 has been lagging HUI/XAU as it tends to do. Gold was still rising after HUI/XAU peaked (http://stockcharts.com/charts/gallery.html?%24gold). HUI probably/very likely peaked on 10-11-07 and the XAU probably/very likely peaked on 10-15-07.
A brief rockets summary (none are recommendations, just timing examples/info):
Because a major market downcycle has begun one has to be very careful about trading rockets right now (should be very careful anyway with rockets), if one trades them at all. Generally it's a good idea to trade with the wind/market at your back. Trading long in the midst of a major or even minor downcycle is risky.
Some new rockets I'm watching are TMY (http://tradethecycles.blogspot.com/2007/10/transmeridian-exploration-inc-tmy.html), Titanium Metals Corp (TIE, strong insider buying), VLNC (strong insider buying), PKTR (insider buying), Linux Gold LNXGF (new Cyclical Bull Market).
Spicy Pickle (SPKL.OB, http://stockcharts.com/charts/gallery.html?spkl) needs to do an Elliott Wave ABC down up down monthly downcycle for about a week before I look to trade it long. I'm excited about trading this one. I probably will trade this one once it does a monthly downcycle.
Lincoln Gold, LGCP.OB (http://stockcharts.com/charts/gallery.html?lgcp) looks good once it does an Elliott Wave ABC down up down monthly downcycle for about a week.
I'm "imminently" looking to/might buy VG (Vonage) for a short term Wave 5 upcycle 1 to 2 week trade (trade a Wave 5 short term upcycle of a monthly upcycle).
I'm looking to trade a tiny ICO (http://stockcharts.com/charts/gallery.html?ico) position once it does Elliott Wave ABC down up down monthly downcycle.
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
1:18 PM
0 Comments:
Post a Comment
<< Home