SPX (S & P 500), RUT (Russell 2000), HUI, etc Elliott Wave Count
Since SPX (S & P 500) entered a (likely) countertrend short term Wave B upcycle on 10-24-07 (likely Cyclical Bull Market (began October 2002) and minor intermediate term cycle (began 8-16-07) high at 1576.09 on 10-11-07), see http://stockcharts.com/charts/gallery.html?%24spx, SPX has done an up down up pattern on the daily chart, which would (usually) mean that today's move was Wave 3 of the countertrend short term Wave B upcycle.
However, SPX (S & P 500) has a near perfect double bottom on 10-22-07/10-24-07 (http://stockcharts.com/charts/gallery.html?%24spx), with 10-22-07's cycle low being slightly higher than 10-24-07's cycle low, but, one begins the Elliott Wave count with the cycle low obviously on 10-24-07.
However, given the near perfect SPX double bottom and the fact that RUT (Russell 2000, http://stockcharts.com/charts/gallery.html?%24rut) does have an Elliott Wave 12345 up down up down up pattern since 10-22-07, when it's (likely) countertrend short term Wave B upcycle began, it could be that SPX (S & P 500) is peaking now and is really in the final Wave 5 of the short term Wave B since 10-24-07, not Wave 3, which would be very bearish if SPX couldn't complete the usual Elliott Wave 12345 up down up down up pattern since 10-24-07.
Today's very bearish WMT Lead Indicator, at -1.55% versus SPX today/on 10-31, that became more bearish as the session progressed (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), suggests that SPX might be in Wave 5 of Wave B instead of Wave 3, we'll see.
HUI appears to be in a final/third short term Wave 5 (since 10-22-07) of the minor intermediate term upcycle since 8-16-07. HUI, XAU, and gold are likely to soon return to the Cyclical Bear Market that existed from 5-11-06 to September 2007. This major spike move since 8-16-07 is a liquidity/weak USD spike move due to the credit/mortgage crisis.
Sometimes/occasionally cycles will put in a huge spike (in dramatic rollover mode) long after it looks like they've peaked. That's what's probably happening now, and, it jives with the extremely bearish gold COT (Commitments of Traders) data, the extremely bearish NEM Lead Indicator, SPX (S & P 500) peaking etc etc etc. When everything jives, especially in such a big way, one has to go with what's indicated.
The more important the cycle the longer it takes to peak, and, the more deceptive the Elliott Wave count tends to be, because of Elliott Wave patterns tending to occur within Elliott Wave patterns, but, the situation is very clear cut for SPX (S & P 500), HUI, XAU, gold, etc when the cycles, Elliott Wave count, indicators, etc are considered in concert.
See http://tradethecycles.blogspot.com/2007/10/huixau-might-have-peaked-yesterday.html for all the previous analysis/info, and, a big Halloween BOOYAH! Have fun all.
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
However, SPX (S & P 500) has a near perfect double bottom on 10-22-07/10-24-07 (http://stockcharts.com/charts/gallery.html?%24spx), with 10-22-07's cycle low being slightly higher than 10-24-07's cycle low, but, one begins the Elliott Wave count with the cycle low obviously on 10-24-07.
However, given the near perfect SPX double bottom and the fact that RUT (Russell 2000, http://stockcharts.com/charts/gallery.html?%24rut) does have an Elliott Wave 12345 up down up down up pattern since 10-22-07, when it's (likely) countertrend short term Wave B upcycle began, it could be that SPX (S & P 500) is peaking now and is really in the final Wave 5 of the short term Wave B since 10-24-07, not Wave 3, which would be very bearish if SPX couldn't complete the usual Elliott Wave 12345 up down up down up pattern since 10-24-07.
Today's very bearish WMT Lead Indicator, at -1.55% versus SPX today/on 10-31, that became more bearish as the session progressed (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), suggests that SPX might be in Wave 5 of Wave B instead of Wave 3, we'll see.
HUI appears to be in a final/third short term Wave 5 (since 10-22-07) of the minor intermediate term upcycle since 8-16-07. HUI, XAU, and gold are likely to soon return to the Cyclical Bear Market that existed from 5-11-06 to September 2007. This major spike move since 8-16-07 is a liquidity/weak USD spike move due to the credit/mortgage crisis.
Sometimes/occasionally cycles will put in a huge spike (in dramatic rollover mode) long after it looks like they've peaked. That's what's probably happening now, and, it jives with the extremely bearish gold COT (Commitments of Traders) data, the extremely bearish NEM Lead Indicator, SPX (S & P 500) peaking etc etc etc. When everything jives, especially in such a big way, one has to go with what's indicated.
The more important the cycle the longer it takes to peak, and, the more deceptive the Elliott Wave count tends to be, because of Elliott Wave patterns tending to occur within Elliott Wave patterns, but, the situation is very clear cut for SPX (S & P 500), HUI, XAU, gold, etc when the cycles, Elliott Wave count, indicators, etc are considered in concert.
See http://tradethecycles.blogspot.com/2007/10/huixau-might-have-peaked-yesterday.html for all the previous analysis/info, and, a big Halloween BOOYAH! Have fun all.
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
3:26 PM
1 Comments:
Use logarithmic scale price charts, not arithmetic charts, for trendlines over 1 year in length. The HUI and the XAU both tested their primary multi-year Secular Bull Market/very long term upcycle trendlines in Aug 2007, just as you have been forecasting, but not at the price levels you were expecting because you were not using the correct (logarithmic) scale on your longer-term charts. Check the log charts for those indices. They have tested their uptrends lines many times over the last 6 years, proving and reconfirming the validity those uptrend lines. The XAU touched/tested it's uptrend line in 11/2001, 07/2002, 03/2003, approached 05/2004, broke/regained 03-06/2005, tested 07&08/2005, broke/regained 08/2007. The uptrend line is now at ~130. The HUI log chart is even more interesting, showing the 2000-2004 WAVE I upmove, 2004-2005 WAVE II ABC correction requiring a new uptrend line to be drawn, 2005-2006 Wave 1 of III upmove, 2006-2007 Wave 2 of III correction which broke/regained it's secular uptrendline drawn from the 2000 and 2005 lows, and shows that Wave 3 of III is now in progress. The HUI Secular Bull Market/very long term upcycle trendline is now at ~375.
FWIW,
MKB
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Anonymous, at 10:32 AM
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