The WMT And NEM Lead Indicators Were Very Bearish Today
The WMT and NEM Lead Indicators were very bearish today, at
-3.80% versus the S & P 500 (SPX) today/on 10-23 for WMT (tended to get more bearish as the session progressed, 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) and at -1.33% versus the XAU today/on 10-23 for NEM.
The WMT Lead Indicator was exaggerated today by bad news regarding a lowered capital spending projection, but, when an economic heavyweight like Walmart lowers their capital spending that's obviously not something to ignore.
Given today's very bearish lead indicators it's possible that yesterday's early cycle lows might not be short term Wave A (since 10-11-07 for SPX/RUT/HUI) cycle lows, see http://stockcharts.com/charts/gallery.html?%24spx. We'll see in the next day or two if those cycle lows hold. There might be a very sharp decline the next session or two.
The upcycle since early yesterday is definitely a countertrend Wave B type of rebound (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=), but, it might not be a short term countertrend Wave B upcycle that will last a week or two.
I day traded the gold ETF short today, shorting it at 74.93 and covering it at 74.80. When GLD didn't fill today's downside gap at 74.60 I looked to cover.
Early tomorrow there might be a good entry point for shorting GDX, the Gold Miners ETF, or GLD, based upon today's very bearish WMT and NEM Lead Indicators (-3.80% versus the S & P 500 (SPX) today/on 10-23 for WMT (tended to get more bearish as the session progressed, 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) and at -1.33% versus the XAU today/on 10-23 for NEM). The trade would probably turn out to be either a day trade or an overnight trade.
For much more info see the previous post at http://tradethecycles.blogspot.com/2007/10/short-term-wave-cycle-low-might-have.html. If you haven't been reading this Blog you need to read that post, because, it contains a lot of very important info, like the S & P 500 (SPX), HUI, XAU etc recently putting in likely Cyclical Bull Market cycle highs.
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
-3.80% versus the S & P 500 (SPX) today/on 10-23 for WMT (tended to get more bearish as the session progressed, 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) and at -1.33% versus the XAU today/on 10-23 for NEM.
The WMT Lead Indicator was exaggerated today by bad news regarding a lowered capital spending projection, but, when an economic heavyweight like Walmart lowers their capital spending that's obviously not something to ignore.
Given today's very bearish lead indicators it's possible that yesterday's early cycle lows might not be short term Wave A (since 10-11-07 for SPX/RUT/HUI) cycle lows, see http://stockcharts.com/charts/gallery.html?%24spx. We'll see in the next day or two if those cycle lows hold. There might be a very sharp decline the next session or two.
The upcycle since early yesterday is definitely a countertrend Wave B type of rebound (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=), but, it might not be a short term countertrend Wave B upcycle that will last a week or two.
I day traded the gold ETF short today, shorting it at 74.93 and covering it at 74.80. When GLD didn't fill today's downside gap at 74.60 I looked to cover.
Early tomorrow there might be a good entry point for shorting GDX, the Gold Miners ETF, or GLD, based upon today's very bearish WMT and NEM Lead Indicators (-3.80% versus the S & P 500 (SPX) today/on 10-23 for WMT (tended to get more bearish as the session progressed, 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) and at -1.33% versus the XAU today/on 10-23 for NEM). The trade would probably turn out to be either a day trade or an overnight trade.
For much more info see the previous post at http://tradethecycles.blogspot.com/2007/10/short-term-wave-cycle-low-might-have.html. If you haven't been reading this Blog you need to read that post, because, it contains a lot of very important info, like the S & P 500 (SPX), HUI, XAU etc recently putting in likely Cyclical Bull Market cycle highs.
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
1:11 PM
2 Comments:
should we now be looking for 5 waves down, 3 waves up ... mark p
By
Anonymous, at 4:51 PM
Hi Mark,
I always think of downcycles as Elliott Wave ABC down up down patterns and upcycles as 12345 up down up down up patterns, and, it usually works pretty well. There are Elliott Wave patterns within Elliott Wave patterns obviously.
Substantial downcycles (or upcycles), like the one that began on 10-11-07 for SPX/RUT/HUI, almost always have Elliott Wave patterns that are discernable on the daily charts.
Keep in mind that I'm not an expert on Elliott Wave Theory, but, the patterns usually work well, and, I have the WMT/NEM Lead Indicators, Fed credit, etc.
Since 10-11-07 SPX/RUT/HUI have done a short term Wave A downcycle that might have bottomed early yesterday or should do so in the next few days. Then there should be a countertrend Wave B upcycle for a week or two followed by a short term Wave C for a week or two. Anyone trying to trade long better be very careful or better be a good stock picker the next month or so. Good luck.
By
Joe Ferrazzano, at 11:23 PM
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