Trade the Cycles

Thursday, January 31, 2008

A Very Strong Walmart (WMT) Led To A Strong SPX/NDX/RUT Rebound Today (Edited - Added Paragraphs 3 And 4)

A very strong Walmart (WMT, +3.21%) led to a strong SPX/NDX/RUT rebound today, 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=.

SPX (S & P 500) appears to have put in a very short term bearish double top countertrend Wave B cycle high today (Wave B of a short term Wave 2) versus yesterday's late short term Wave 1 cycle high, see http://stockcharts.com/charts/gallery.html?%24spx. SPX is probably in a short term Wave 2 downcycle, as discussed yesterday, if today was Wave B of Wave 2.

The short term Wave 2 downcycle should bottom tomorrow/Friday or Monday. It looks like SPX entered Wave C of Wave 2 just before today's close, 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.

In the next session or two I'll be looking to trade SPX (S & P 500) ultra long via SSO, NDX (NASDAQ 100) ultra long via QLD, or RUT (Russell 2000) ultra long via UWM. It looks like SPX and NDX will bottom before RUT, because RUT's short term Wave 1 peaked in rollover mode today, so, I'll probably trade SSO or QLD.

The cycles/Elliott Wave count discussed yesterday is basically the same for NDX/RUT, except that NDX's countertrend Wave B of a short term Wave 2 downcycle probably peaked today in rollover mode versus yesterday's cycle high (see http://stockcharts.com/charts/gallery.html?%24ndx), and, RUT's short term Wave 1 upcycle probably peaked today in rollover mode versus yesterday's cycle high (http://stockcharts.com/charts/gallery.html?%24rut).

The Walmart (WMT) Lead Indicator was a very bullish +1.53% versus SPX (S & P 500) today, BUT, WMT was peaking in rollover mode on the intraday chart, see http://finance.yahoo.com/q/ta?s=wmt&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c, and, has a bearish large spike on the daily candlestick chart, see http://stockcharts.com/charts/gallery.html?wmt, so, the Walmart (WMT) Lead Indicator probably doesn't portend much if any upside tomorrow for the market. Indicators are secondary to cycles, Elliott Wave patterns, and gaps, which are the basis/crux of "Trade the Cycles."

As I said before, likely Wave A intermediate term (Cyclical Bear Market began 10-11-07 for SPX, late October 2007 for NDX, late July 2007 for RUT) cycle lows occurred on 1-23 for SPX/NDX and on 1-22 for RUT (Russell 2000).

I did a new annotated XAU candlestick chart, see chart one at http://www.joefrocks.com/GoldStockCharts.html.

The XAU's intermediate term upcycle that began 8-16-07 (http://stockcharts.com/charts/gallery.html?%24xau) and the Wave 1 Cyclical Bull Market since October 2000 (HUI's started November 2000) probably peaked in dramatic rollover mode on 1-14-08 versus the 11-7-07 and the 5-11-06 cycle highs (5-11-06 obviously applies to only the Wave 1 Cyclical Bull Market).

Yesterday 1-30's HUI/XAU cycle high was the short term countertrend Wave B upcycle peaking in dramatic rollover mode versus 1-25's cycle high, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.

HUI/XAU put in bearish slightly higher double top cycle highs yesterday 1-30 versus the 1-25 cycle highs, see http://stockcharts.com/charts/gallery.html?%24hui and http://stockcharts.com/charts/gallery.html?%24xau.

HUI/XAU's short term countertrend Wave B upcycle clearly broke down today, so, tomorrow I'll be looking to hold a short position (short GDX, the Gold Miners ETF) overnight. There might be a good entry point for shorting GDX early tomorrow.

The NEM Lead Indicator was a bearish -0.87% versus the XAU today/on 1-31.

Since 11-7-07 the XAU has had only one session (1-14-08) where it made any upside progress (HUI had three), see http://stockcharts.com/charts/gallery.html?%24xau. The XAU obviously dramatically rolled over, probably put in a Wave 1 Cyclical Bull Market cycle high on 1-14-08 at 199.25, then put in a short term countertrend Wave B cycle high yesterday/on 1-30-08.

....... http://www.JoeFRocks.com/ .

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Wednesday, January 30, 2008

.......A New Annotated XAU Candlestick Chart

I did a new annotated XAU candlestick chart, see chart one at http://www.joefrocks.com/GoldStockCharts.html.

The XAU's intermediate term upcycle that began 8-16-07 (http://stockcharts.com/charts/gallery.html?%24xau) and the Wave 1 Cyclical Bull Market since October 2000 (HUI's started November 2000) probably peaked in dramatic rollover mode on 1-14-08 versus the 11-7-07 and the 5-11-06 cycle highs (5-11-06 obviously applies to only the Wave 1 Cyclical Bull Market).

An XAU/HUI short term countertrend Wave B cycle high probably occurred today/on 1-30-08, when this chart was made.

....... http://www.JoeFRocks.com/ .

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The Market Quickly Bitchslapped The Large Post Fed Rate Cut Spike!

The market quickly bitchslapped the large post Fed rate cut transitory spike (lasted less than an hour), see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, and, see http://stockcharts.com/charts/gallery.html?%24spx, with SPX (S & P 500) closing down -6.49 points after being up +23 to +24 points less than an hour earlier.

This might surprise some of you, but, the large post Fed rate cut transitory spike, combined with the fact that it so quickly got bitchslapped in a sharp intraday Wave A downcycle (see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=), gives me even more confidence about what's going on with both the major averages and with HUI/XAU.

Here we go. SPX (S & P 500) and RUT (Russell 2000) probably put in short term Wave 1 cycle highs in rollover mode today, see http://stockcharts.com/charts/gallery.html?%24spx and http://stockcharts.com/charts/gallery.html?%24rut. Note the bearish very large spikes on today's bearish black candle, which indicates a bearish close below the open.

NDX (NASDAQ 100) is underperforming (and/or lagging) SPX/RUT, having put in a short term Wave 1 cycle high on Friday 1-25, see http://stockcharts.com/charts/gallery.html?%24ndx. Today's cycle high was a countertrend Wave B cycle high of a short term Wave 2 downcycle.

I'm even more confident now that SPX/NDX/RUT entered a countertrend Wave B minor intermediate term upcycle last week, on 1-23 for NDX/SPX and on 1-22 for RUT. I'll feel better about going "ultra" long RUT via UWM in a few days.

As I said before, likely Wave A intermediate term (Cyclical Bear Market began 10-11-07 for SPX, late October 2007 for NDX, late July 2007 for RUT) cycle lows occurred on 1-23 for SPX/NDX and on 1-22 for RUT (Russell 2000).

The WMT Lead Indicator was a bullish +0.79% versus SPX (S & P 500) today/on 1-30, so, a rebound/some strength is likely early tomorrow, after possibly more weakness at the open/very early on.

Concerning HUI/XAU, today's cycle high was probably the short term countertrend Wave B upcycle peaking in dramatic rollover mode versus 1-25's cycle high, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.

HUI/XAU might have put in bearish slightly higher double top cycle highs today versus the 1-25 cycle highs, see http://stockcharts.com/charts/gallery.html?%24hui and http://stockcharts.com/charts/gallery.html?%24xau.

Obviously, until HUI/XAU's short term countertrend Wave B upcycle clearly breaks down I'll be looking to day trade only and won't hold a short position (short GDX, the Gold Miners ETF) overnight.

Reliable lead indicator NEM put in a bearish large spike on it's intraday chart near session's end, see http://finance.yahoo.com/q/ta?s=NEM&t=1d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=, so, the sharp intraday Wave A downcycle that began less than an hour before session's end, might not have bottomed yet.

The NEM Lead Indicator was a bullish +0.85% versus the XAU today/on 1-30, which jives with a rebound/some likely strength early tomorrow, after possibly more weakness at the open/very early on.

Since 11-7-07 the XAU has had only one session (1-14-08) where it made any upside progress, see http://stockcharts.com/charts/gallery.html?%24xau. The XAU obviously dramatically rolled over, probably put in a Wave 1 Cyclical Bull Market cycle high on 1-14-08 at 199.25, then put in a short term countertrend Wave B cycle high today/on 1-30-08.

....... http://www.JoeFRocks.com/ .

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The Fed's 50 Basis Point Rate Cut Led To A Transitory Blowoff Short Covering Spike

The Fed's 50 basis point (0.50%) rate cut led to a transitory blowoff short covering large spike, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=. I'm still looking to short GDX, the Gold Miners ETF, but, it probably won't be today.

I'm getting comments regarding gold. Gold lags HUI/XAU at important cycle highs/lows (by months sometimes) as I've said many times.

Since 11-7-07 the XAU has had only one session (1-14-08) where it made any upside progress, see http://stockcharts.com/charts/gallery.html?%24xau. The XAU obviously dramatically rolled over, probably put in a Wave 1 Cyclical Bull Market cycle high on 1-14-08 at 199.25, then put in a short term countertrend Wave B cycle high at 191.58 on 1-25-08, and, probably put in a very short term countertrend Wave B cycle high at 190.09 yesterday/on 1-29-08.

The 5 day Walmart (WMT) Lead Indicator is extremely bearish (was neutral at +0.00% versus the S & P 500 (SPX) yesterday/1-29), see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC.

....... http://www.JoeFRocks.com/ .

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HUI/XAU's Short Term Wave C Downcycle Is Relatively Flat

HUI/XAU's short term Wave C downcycle's (since early Friday 1-25) downtrend is relatively flat so far,
see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=. Since the flat part of the downcycle is lasting a relatively long time that points to a substantial decline, because, it's a large downcycle, which isn't surprising given that the short term Wave A downcycle brought a decline of -15.15% for HUI, from 489.45 on 1-14-08 to 415.35 on 1-22-08.

A preliminary but reasonable target for the short term Wave C cycle low is 161 for the XAU (http://stockcharts.com/charts/gallery.html?%24xau), shortly after filling it's downside gap at 161.75 (important cycle highs/lows tend to occur shortly after gap filling action is completed, other downside gaps at 143.64, 133.19 will get filled later), versus it's short term Wave A cycle low at 167.49 on 1-23-08 and it's current level at 188ish.

HUI's preliminary short term Wave C cycle low target range is 380-400 versus it's short term Wave A cycle low at 415.35 on 1-22-08. HUI's historical data (at Yahoo) shows few gaps, which is why I rarely discuss HUI gaps.

I think HUI often is opened at the previous session's level THEN gaps up or down versus the XAU, NEM, etc and most indexes/stocks experiencing gaps at the open. I'll take a look at HUI's historical data (at Yahoo) to try to determine gaps that occurred just after the open.

Reliable lead indicator NEM might bottom at 47ish, shortly after filling it's downside gap at 47.39 (other downside gaps at 42.29, 41.52 might get filled later).

There might be a good entry point to short GDX (Gold Miners ETF) today, 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=. There's a good chance that I'll short GDX, the Gold Miners ETF, today, since HUI has trended down since early last Friday, when a short term Wave C downcycle probably began, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.

The NEM Lead Indicator was a bearish -0.55% versus the XAU yesterday/1-29, but, is modestly bullish right now, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=on&z=l&q=l&p=&a=&c=%5Ehui,nem.

Since 11-7-07 the XAU has had only one session (1-14-08) where it made any upside progress, see http://stockcharts.com/charts/gallery.html?%24xau. The XAU obviously dramatically rolled over, probably put in a Wave 1 Cyclical Bull Market cycle high on 1-14-08 at 199.25, then put in a short term countertrend Wave B cycle high at 191.58 on 1-25-08, and, probably put in a very short term countertrend Wave B cycle high at 190.09 yesterday/on 1-29-08.

The 5 day Walmart (WMT) Lead Indicator is extremely bearish (was neutral at +0.00% versus the S & P 500 (SPX) yesterday/1-29), see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC.

....... http://www.JoeFRocks.com/ .

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Tuesday, January 29, 2008

There Might Be A Good Entry Point To Short GDX (Gold Miners ETF) Tomorrow

There might be a good entry point to short GDX (Gold Miners ETF) early tomorrow, 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=. The NEM Lead Indicator was a bearish -0.55% versus the XAU today/1-29, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=on&z=l&q=l&p=&a=&c=%5Ehui,nem.

As I wrote earlier: Since 11-7-07 the XAU has had only one session (1-14-08) where it made any upside progress, see http://stockcharts.com/charts/gallery.html?%24xau. The XAU obviously dramatically rolled over, probably put in a Wave 1 Cyclical Bull Market cycle high on 1-14-08 at 199.25, then put in a short term countertrend Wave B cycle high at 191.58 on 1-25-08, and, probably put in a very short term countertrend Wave B cycle high at 190.09 today/on 1-29-08.

The 5 day Walmart (WMT) Lead Indicator is extremely bearish (was neutral at +0.00% versus the S & P 500 (SPX) today), see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC.

After putting in a Wave A intermediate term cycle low last week, it isn't clear whether the major averages entered a short term Wave 3 upcycle early yesterday (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=), or, are doing a long countertrend Wave B of a short term Wave 2 downcycle, thanks to Fed punch spiking the past two days ($24.25 Billion in credit added), see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE.
When I'm convinced that RUT (Russell 2000) has entered a short term Wave 3 upcycle I'll look to trade "ultra" long via UWM, probably tomorrow or Thursday.

Likely Wave A intermediate term (Cyclical Bear Market began 10-11-07 for SPX, late October 2007 for NDX, late July 2007 for RUT) cycle lows occurred on 1-23 for SPX/NDX and on 1-22 for RUT (Russell 2000).

....... http://www.JoeFRocks.com/ .

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.........The Informative XAU Candlestick Chart

Since 11-7-07 the XAU has had only one session (1-14-08) where it made any upside progress, see http://stockcharts.com/charts/gallery.html?%24xau. The XAU obviously dramatically rolled over, probably put in a Wave 1 Cyclical Bull Market cycle high on 1-14-08 at 199.25, then put in a short term countertrend Wave B cycle high at 191.58 on 1-25-08, and, probably put in a very short term countertrend Wave B cycle high at 190.09 today/on 1-29-08.

Combine the XAU's bearish chart with the fact that the US Dollar probably bottomed in November 2007, see http://stockcharts.com/charts/gallery.html?%24usd, and one has to be bearish on HUI/XAU/gold. Many/probably most gold writers are either clueless regarding technical analysis/market timing/COT data analysis and/or they are gold pimps/con artists.

How are the gold pimps/nitwits/con artists any better than the mortgage firms who made so many irresponsible loans and didn't properly inform homebuyers or those refinancing mortgages of the risks involved in adjustable rate mortgages (whether they were subprime or not)?

Gold's primary Secular Bull Market trendline is at $490-500 right now, see http://www.joefrocks.com/GoldStockCharts.html. Are the gold pimps/nitwits/con artists properly informing investors about the risks involved with buying gold now?

....... http://www.JoeFRocks.com/ .

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The Five Day Reliable Walmart (WMT) Lead Indicator Says Look To SHORT

The five day reliable Walmart (WMT) Lead Indicator says/"screams" look to SHORT, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC. The five day WMT Lead Indicator chart is a great chart to save and refer to every day.

Since the major averages put in Wave A intermediate term cycle lows last week (http://stockcharts.com/charts/gallery.html?%24spx) and HUI/XAU are in a short term Wave C downcycle since early last Friday (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 see http://stockcharts.com/charts/gallery.html?%24hui) after putting in an intermediate term and probably also Wave 1 Cyclical Bull Market cycle high on 1-14-08, it obviously makes sense to look to short HUI/XAU via shorting the Gold Miners ETF GDX.

....... http://www.JoeFRocks.com/ .

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Monday, January 28, 2008

.......Got More HUI/XAU And SPX/NDX/RUT Strength Than Expected

Thanks partly to the Fed's large $10.25 Billion 1 day Repo (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), that fueled program buying and is probably what caused the intraday rollover action, there was more HUI/XAU (http://stockcharts.com/charts/gallery.html?%24hui) and SPX/NDX/RUT (http://stockcharts.com/charts/gallery.html?%24spx) strength than expected today, see HUI at 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, see SPX at 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.

I shorted GDX, the Gold Miners ETF, at 50.83 today, but, due to the fact that the NEM Lead Indicator became/remained very bullish toward session's end (closed at +2.10% versus the XAU), I covered my short position at 50.74.

I'll be looking to short GDX, the Gold Miners ETF, again tomorrow, and, I'll be looking to go "ultra" long RUT (Russell 2000) via the Ultra Long RUT ETF UWM tomorrow (possibly early if RUT appears to have entered a short term Wave 3 upcycle, since RUT appeared to do an intraday countertrend Wave B just before session's end, see http://finance.yahoo.com/q/ta?s=%5Erut&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c) or Wednesday.

HUI/XAU's brief but substantial short term countertrend Wave B upcycle (since 1-22 for HUI and since 1-23 for the XAU) probably peaked Friday, right after the open, see the 5 day intraday candlestick chart at http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c, and, see the daily candlestick chart at http://stockcharts.com/charts/gallery.html?%24hui. Note the large bearish spike on Friday's daily candle, and, the bearish black candle indicates a close below the open.

Friday's HUI/XAU decline was probably a Wave A type decline and today's was probably a countertrend Wave B type rebound, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c.

The NEM Lead Indicator was a very bullish +2.10% versus the XAU today/1-28, was a bullish +0.74% versus the XAU on 1-25, was a very bearish -0.94% versus the XAU on 1-24, was a very bearish -1.92% on 1-23, -1.69% on 1-22, -1.11% on 1-18.

A 12-18 month Wave 2 Cyclical Bear Market probably/very likely began on Monday 1-14-08 for HUI/XAU, which is Wave 2 down of the Secular 20 yearish Bull Market that began in late 2000 for HUI/XAU, began in April 2001 for gold, and, began in late 2001 for silver. Gold lags HUI/XAU and silver lags gold.

HUI/XAU peaked in rollover mode versus the 11-7-07 cycle highs, and, peaked in dramatic rollover mode versus the 5-11-06 cycle highs, see http://stockcharts.com/charts/gallery.html?%24hui.

Likely Wave A intermediate term (Cyclical Bear Market began 10-11-07 for SPX, late October 2007 for NDX, late July 2007 for RUT) cycle lows occurred on 1-23 for SPX/NDX and on 1-22 for RUT (Russell 2000).

SPX (S & P 500)/NDX (NASDAQ 100)/RUT (Russell 2000) are probably still in a short term Wave 2 downcycle, as opposed to early in a short term Wave 3 upcycle, as discussed in the next paragraph. One obviously can't rule out that a short term Wave 3 upcycle began early today. Tomorrow's action should shed some light on that.

Since SPX/NDX/RUT probably put in Wave A intermediate term cycle lows last week (http://stockcharts.com/charts/gallery.html?%24spx), it's likely that they will put in modestly higher cycle lows than the intermediate term cycle lows that occurred last week, since cycle uptrends usually begin relatively flat, which is another factor pointing to likely additional weakness/downside on Tuesday and/or Wednesday for SPX/NDX/RUT. Always keep in mind the nature of cycles.

The WMT Lead Indicator was a bearish -0.47% versus SPX (S & P 500) today/on 1-28, was a slightly bearish -0.09% versus SPX (S & P 500) on 1-25, and, was an extremely bearish -3.50% on 1-24.

....... http://www.JoeFRocks.com/ .


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Sunday, January 27, 2008

......."Saving Sears Doesn’t Look Easy Anymore"

"Saving Sears Doesn’t Look Easy Anymore," see http://www.nytimes.com/2008/01/27/business/27eddie.html. Competing with 800 pound gorilla Walmart (WMT) is a very difficult thing to do, for Sears and the other competitors like Target.

Walmart (WMT) is the New England Patriots/Microsoft of the Retailors world. They are relentlessly efficient, forcing companies they do business with to sell for less/become more efficient, and, lowering their cost of doing business. I think they're installing solar panels in many stores to lower their electricity costs. They are a RELENTLESS juggernaut, for better or for worse.

....... http://www.JoeFRocks.com/ .

Saturday, January 26, 2008

There's A Backup Trade the Cycles Blog At AOL

I'm going to start backing up this Blog at AOL, see http://journals.aol.com/joefrocks/trade-the-cycles---market-timing/, just in case something happens to this Blog (Blogger might be down for some reason, etc).

Also, it'll be a way to get more exposure. Please save it to your favorite places just in case. Obviously, you can also check my web site's home page (http://www.JoeFRocks.com/) for the Blog link if something happens to this Blog. Ciao

.......A Very Complacent Gold And XAU Market

XAU Implied Volatility (see http://www.ivolatility.com/options.j?ticker=xau:&R=1&period=12&chart=2) points to likely severe weakness on Monday, after the expected (see next paragraph) early (probably brief) strength, because, it fell -3.00% to 47.500 on 1-25 from 48.970 on 1-24 despite a -0.19% decline in the XAU on 1-25 (normally XAU Implied Volatility will rise in response to weakness, indicating a rise in fear), which is a very sharp (3-6%) +3.19% rise in complacency (-3.00% decline in XAU Implied Volatility on 1-25 + -0.19% decline in the XAU on 1-25 = -3.19% decline in the XAU wall of worry on 1-25 = +3.19% rise in complacency on 1-25) that points to likely severe weakness on Monday.

"Today 1-25's HUI/XAU decline was probably a Wave A type decline. Based on the intraday cycles/Elliott Wave count (http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c), and, today's bullish NEM Lead Indicator, at +0.74% versus the XAU today/1-25, HUI/XAU will probably experience a (probably brief) countertrend Wave B rebound early on Monday, in which I'm going to look to short GDX, the Gold Miners ETF." See previous post at http://tradethecycles.blogspot.com/2008/01/huixau-short-term-countertrend-wave-b.html.

CBOE Market Statistics reveals a very complacent gold market (see http://www.cboe.com/data/mktstat5.aspx#DGL), that's probably going to get crushed soon:

PowerShares DB Gold Fund - (DGL) Put/Call Ratio is 114/254 = 0.449 on 1-25, and, the open interest DB Gold Fund - (DGL) Put/Call Ratio is 615/1677 = 0.367.

A DB Gold Fund - (DGL) Put/Call Ratio below 0.500 reveals a very high level of complacency that points to dramatic/substantial weakness soon. From 0.500 to 0.749 is a complacent gold market. From 0.750 to 0.999 is a neutral/typical range. From 1.000 to 1.200 is a fearful gold market. From 1.200 to 1.399 is a very high level of fear, and, at or above 1.400 is an extremely fearful gold market.

....... http://www.JoeFRocks.com/ .

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Friday, January 25, 2008

HUI/XAU Short Term Countertrend Wave B Upcycle Probably/Very Likely Peaked Today

HUI/XAU's brief but substantial short term countertrend Wave B upcycle (since 1-22 for HUI and since 1-23 for the XAU) probably/very likely peaked today, right after the open, see the 5 day intraday candlestick chart at http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c, and, see the daily candlestick chart at http://stockcharts.com/charts/gallery.html?%24hui. Note the large bearish spike on today's daily candle, and, the bearish black candle indicates a close below the open.

Today's HUI/XAU decline was probably a Wave A type decline. Based on the intraday cycles/Elliott Wave count (http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c), and, today's bullish NEM Lead Indicator, at +0.74% versus the XAU today/1-25, HUI/XAU will probably experience a (probably brief) countertrend Wave B rebound early on Monday, in which I'm going to look to short GDX, the Gold Miners ETF.

The NEM Lead Indicator was a bullish +0.74% versus the XAU today/1-25, was a very bearish -0.94% versus the XAU on 1-24, was a very bearish -1.92% on 1-23, -1.69% on 1-22, -1.11% on 1-18.

A 12-18 month Wave 2 Cyclical Bear Market probably/very likely began on Monday 1-14-08 for HUI/XAU, which is Wave 2 down of the Secular 20 yearish Bull Market that began in late 2000 for HUI/XAU, began in April 2001 for gold, and, began in late 2001 for silver. Gold lags HUI/XAU and silver lags gold.

HUI/XAU peaked in rollover mode versus the 11-7-07 cycle highs, and, peaked in dramatic rollover mode versus the 5-11-06 cycle highs, see http://stockcharts.com/charts/gallery.html?%24hui.

SPX (S & P 500)/NDX's (NASDAQ 100) monster short term Wave 1 upcycle since 1-23 peaked just after today's open (RUT's (Russell 2000) began 1-22 and peaked 1-24), see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c. Note the bearish large spike on today 1-25's candle, see http://stockcharts.com/charts/gallery.html?%24spx, and, the bearish black candle indicates a close below the open.

The short term Wave 2 downcycle that began just after the open probably didn't bottom yet. SPX/NDX probably need to complete Wave B of Wave 2 and then do Wave C of Wave 2 on Monday. It looks like SPX (S & P 500)/NDX (NASDAQ 100)/RUT's (Russell 2000) short term Wave 2 downcycle will probably bottom on Monday, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, after which I'll be looking to go "ultra" long via probably UWM, or, QLD, SSO.

Since SPX/NDX/RUT probably put in Wave A intermediate term cycle lows this week (http://stockcharts.com/charts/gallery.html?%24spx), it's likely that they will put in modestly higher cycle lows than the intermediate term cycle lows that occurred this week, since cycle uptrends usually begin relatively flat, which is another factor pointing to likely additional weakness/downside on Monday for SPX/NDX/RUT. Always keep in mind the nature of cycles.

The WMT Lead Indicator was a slightly bearish -0.09% versus SPX (S & P 500) today/on 1-25, and, was an extremely bearish -3.50% on 1-24.

Likely Wave A intermediate term (Cyclical Bear Market began 10-11-07 for SPX, late October 2007 for NDX, late July 2007 for RUT) cycle lows occurred on 1-23 for SPX/NDX and on 1-22 for RUT (Russell 2000).

....... http://www.JoeFRocks.com/ .

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Pimco High Income Fund (PHK) Hit A 2% Monthly Cycle Buy Signal

Pimco High Income Fund (PHK, trades like a stock, and, has enough average daily volume for most traders) hit a monthly cycle 2% follow through buy signal/did a strong multi day Wave 1 upcycle, see http://stockcharts.com/charts/gallery.html?phk. Note the very large bullish inverse spike on Tuesday 1-22's candle, when a monthly cycle low occurred at 11.72. Next week PHK should do a short term Wave 2 downcycle for a few days, and, once it bottoms, I'll look to go long.

I never recommend any investments or trades on this Blog (obviously I discuss ones I like), so much depends on when one buys and sells anyway (therefore Trade the Cycles).

PHK's income portfolio is mostly investment quality I think, but, do your own due diligence. PHK appears to be a great trading vehicle for someone seeking both capital gains and high income. In recent months at least, due to the credit crisis, PHK has had high volatility, see http://stockcharts.com/charts/gallery.html?phk.

....... http://www.JoeFRocks.com/ .

Watch Today's Downside Gaps For GDX, NEM, And The XAU

Watch today's and yesterday's downside gaps (created at the open) for GDX (Gold Miners ETF) at 50.35, 48.19, for NEM at 52.97, 50.50, and, for the XAU at 185.89, 175.65. They could get filled today or Monday, see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.

The XAU entered a countertrend Wave B upcycle on Wednesday 1-23 versus 1-22 for HUI, see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, and, appears to have done a complete Elliott Wave 12345 up down up down up upcycle, so, the entire countertrend Wave B upcycle might have peaked early today, which jives with the very bearish NEM Lead Indicator, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=on&z=l&q=l&p=&a=&c=%5Ehui,nem.

The NEM Lead Indicator was a very bearish -0.94% versus the XAU on 1-24, after being a very bearish -1.92% on 1-23, -1.69% on 1-22, -1.11% on 1-18.

A 12-18 month Wave 2 Cyclical Bear Market probably/very likely began on Monday 1-14-08 for HUI/XAU, which is Wave 2 down of the Secular 20 yearish Bull Market that began in late 2000 for HUI/XAU, began in April 2001 for gold, and, began in late 2001 for silver. Gold lags HUI/XAU and silver lags gold.

HUI/XAU peaked in rollover mode versus the 11-7-07 cycle highs, and, peaked in dramatic rollover mode versus the 5-11-06 cycle highs, see http://stockcharts.com/charts/gallery.html?%24hui.

....... http://www.JoeFRocks.com/ .

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Thursday, January 24, 2008

Tomorrow Should Be A Great Day To Day Trade SPX/NDX/RUT And HUI/XAU Short

Tomorrow should be a great day to day trade SPX (S & P 500)/NDX (NASDAQ 100)/RUT (Russell 2000) and HUI/XAU/gold short, based on the extremely bearish WMT Lead Indicator, at -3.50% versus SPX (S & P 500) today/1-24, that became progressively more bearish as the session progessed, 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, based on the cycles/Elliott Wave count, 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.

After SPX (S & P 500) (and NDX) put in a likely Wave A intermediate term (began 10-11-07) cycle low yesterday (RUT on Tuesday), 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, it did a monster Elliott Wave 12345 up down up down up upcycle, that probably would have peaked just after today's open, but, the usual massive Thursday Fed credit injection ($19.25 Billion in Repos, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), is probably what led to an intraday Wave 5 rollover upcycle due to strong program buying, as opposed to the start of an Elliott Wave ABC down up down downcycle.

Notice how similar HUI's 5 day intraday chart is to SPX's, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c and 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.

The NEM Lead Indicator was a very bearish -0.94% versus the XAU today/1-24, after being a very bearish -1.92% on 1-23, -1.69% on 1-22, -1.11% on 1-18.

HUI/XAU began a short term countertrend Wave B upcycle on Tuesday 1-22 (http://stockcharts.com/charts/gallery.html?%24hui), 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=. The huge Wave A downcycle and likely start of a Wave 2 Cyclical Bear Market began on 1-14-08.

Tomorrow, I'll be looking to day trade SPX (S & P 500)/NDX (NASDAQ 100)/RUT (Russell 2000) "ultra" short via either SDS, QID, or (probably) UWM, and/or, I'll be looking to day trade HUI/XAU short via shorting the Gold Miners ETF GDX.

I'll wait for a significant/sharp intraday Wave A type decline and look to go short during an intraday countertrend Wave B upcycle. A bearish large spike on the intraday candlestick chart is something to look for when the intraday countertrend Wave B upcycle peaks.

Downside gaps to watch tomorrow are GDX's downside gap at 48.19, the XAU's downside gap at 175.65, and, NEM's downside gap at 50.50, all created at today's open.

Since putting in a short term Wave A downcycle cycle low early on Tuesday 1-22, HUI/XAU have done an up down, and, are either still in a very short term Wave 3 upycle or are early in Wave 4 down, 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, which is why I'll only be looking to day trade HUI/XAU short tomorrow, and won't hold a short position overnight, because, there should be a higher very short term Wave 5 cycle high a few sessions from now. I'll have to figure out at that time if the short term countertrend Wave B upcycle (began Tuesday 1-22) is peaking (likely), since a large short term Elliott Wave 12345 up down up down up upcycle will have occurred.

I day traded GDX short today (33 minute trade), shorting it at 50.22 and covering at 50.00. The large gap up by GDX made me cautious, and, GDX became oversold when I covered.

A 12-18 month Wave 2 Cyclical Bear Market probably/very likely began on Monday 1-14-08 for HUI/XAU, which is Wave 2 down of the Secular 20 yearish Bull Market that began in late 2000 for HUI/XAU, began in April 2001 for gold, and, began in late 2001 for silver. Gold lags HUI/XAU and silver lags gold.

HUI/XAU peaked in rollover mode versus the 11-7-07 cycle highs, and, peaked in dramatic rollover mode versus the 5-11-06 cycle highs, see http://stockcharts.com/charts/gallery.html?%24hui.

....... http://www.JoeFRocks.com/ .

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HUI/XAU Began A Short Term Countertrend Wave B Upcycle Tuesday 1-22

HUI/XAU began a short term countertrend Wave B upcycle Tuesday 1-22 (http://stockcharts.com/charts/gallery.html?%24hui), 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=. The huge Wave A downcycle began on 1-14-08 and obviously, after today's huge spike at the open, bottomed Tuesday.

The great day trade shorting opportunity didn't arise today, but, there's still a good day trade shorting opportunity. My thinking yesterday was that Wave A (began on 1-14-08) probably hadn't bottomed yet and that HUI/XAU would experience a huge decline today. They probably will experience a sharp decline today, so, I might still day trade short. There should be a great shorting opportunity in the next few days, to catch the short term Wave C downcycle, which should bring a huge decline.

A 12-18 month Wave 2 Cyclical Bear Market probably began on Monday 1-14-08 for HUI/XAU, which is Wave 2 down of the Secular 20 yearish Bull Market that began in late 2000 for HUI/XAU, began in April 2001 for gold, and, began in late 2001 for silver. Gold lags HUI/XAU and silver lags gold.

HUI/XAU peaked in rollover mode versus the 11-7-07 cycle highs, and, peaked in dramatic rollover mode versus the 5-11-06 cycle highs, see http://stockcharts.com/charts/gallery.html?%24hui.

I'm looking to trade RUT (Russell 2000) long today or tomorrow via the Ultra Long ETF UWM. Since hitting a likely intermediate term cycle low early on Tuesday 1-22 RUT has done an up down up and is now in a Wave 4 downcycle move, see http://finance.yahoo.com/q/ta?s=%5ERUT&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c, that should bottom today or tomorrow, when I'll be looking to go "ultra" long via UWM for a very short term 1 to 2 day trade.

....... http://www.JoeFRocks.com/ .

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Wednesday, January 23, 2008

Downside Gaps To Watch Tomorrow For GDX, NEM, And The XAU

Downside gaps to watch tomorrow for GDX (Gold Miners ETF), NEM, and the XAU, are, brace yourself, 44.33 for GDX, 161.75 for the XAU, and, 47.39 for NEM, versus today's intraday Wave A downcycle cycle lows at 46.27 for GDX (see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c), at 167.49 for the XAU, and, at 48.59 for NEM.

The cycle low targets for the expected Wave C downcycle tomorrow are 44 for GDX, 161 for the XAU, and 47 for NEM, which jives with today/1-23's very bearish NEM Lead Indicator, at -1.92% versus the XAU.

This means that GDX/HUI/XAU might experience -8%+ declines tomorrow at the session cycle low. The NEM Lead Indicator turned very bearish the past three sessions, at -1.92% versus the XAU today/on 1-23, at -1.69% on 1-22, and, at -1.11% on 1-18. There should be another great shorting opportunity early tomorrow, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c.

HUI fell a massive -6.67% intraday today in only a few hours, during an intraday Wave A downcycle, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. During the last few hours of today/1-23's session HUI did an intraday countertrend Wave B upcycle, which looks like it'll peak early tomorrow, so, a great shorting opportunity is likely to arise early tomorrow. I'll be looking to short the Gold Miners ETF GDX.

A 12-18 month Wave 2 Cyclical Bear Market probably began on Monday 1-14-08 for HUI/XAU, which is Wave 2 down of the Secular 20 yearish Bull Market that began in late 2000 for HUI/XAU, began in April 2001 for gold, and, began in late 2001 for silver. Gold lags HUI/XAU and silver lags gold.

HUI/XAU peaked in rollover mode versus the 11-7-07 cycle highs, and, peaked in dramatic rollover mode versus the 5-11-06 cycle highs, see http://stockcharts.com/charts/gallery.html?%24hui.

....... http://www.JoeFRocks.com/ .

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SPX (S & P 500) And NDX (NASDAQ 100) Probably Bottomed Today

SPX (S & P 500) and NDX (NASDAQ 100, http://stockcharts.com/charts/gallery.html?%24ndx) probably bottomed/put in Wave A intermediate term cycle lows today, 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=. SPX (S & P 500) has a bullish very large inverse spike on today's candle, which is white, indicating a bullish close above the open, see http://stockcharts.com/charts/gallery.html?%24spx.

RUT (Russell 2000, http://stockcharts.com/charts/gallery.html?%24rut) probably bottomed/put in a Wave A intermediate term cycle low yesterday, see http://finance.yahoo.com/q/ta?s=%5Erut&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.

SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) did a monster Elliott Wave 12345 up down up down up upcycle in the second half of today/1-23's session, 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=, in which SPX filled the upside gaps created at yesterday and today's open at 1325.19 and 1310.50, which, along with the very strong rally, is a sign that SPX (S & P 500) has probably bottomed/put in a Wave A intermediate term cycle low.

The WMT Lead Indicator has turned very bullish recently, at -0.19% versus the S & P 500 (SPX) today/on 1-23, at +4.52% on 1-22, +0.82% on 1-18, +2.89% on 1-17, +1.62% on 1-16, +1.06% on 1-15, -1.20% on 1-14, -0.05% on 1-11, +2.40% on 1-10, +0.66% on 1-9, +0.57% on 1-8, +1.21% on 1-7, +1.04% on 1-4, -1.11% on 1-3, +0.11% on 1-2.

The NEM Lead Indicator has turned very bearish the past three sessions, at
-1.92% versus the XAU today/on 1-23, at -1.69% on 1-22, and, at -1.11% on 1-18. There should be another great shorting opportunity early tomorrow, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.


HUI fell a massive -7%ish intraday today in only a few hours, during an intraday Wave A downcycle, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. During the last few hours of today/1-23's session HUI did an intraday countertrend Wave B upcycle, which looks like it'll peak early tomorrow, so, a great shorting opportunity is likely to arise early tomorrow. I'll be looking to short the Gold Miners ETF GDX.

A 12-18 month Wave 2 Cyclical Bear Market probably began on Monday 1-14-08 for HUI/XAU, which is Wave 2 down of the Secular 20 yearish Bull Market that began in late 2000 for HUI/XAU, began in April 2001 for gold, and, began in late 2001 for silver. Gold lags HUI/XAU and silver lags gold.

HUI/XAU peaked in rollover mode versus the 11-7-07 cycle highs, and, peaked in dramatic rollover mode versus the 5-11-06 cycle highs, see http://stockcharts.com/charts/gallery.html?%24hui.

I didn't buy the Pimco High Yield Fund PHK yet, see http://stockcharts.com/charts/gallery.html?PHK. It has a bearish large spike on today's candle, but, might have put in a monthly cycle low yesterday.

I didn't buy the US Natural Gas ETF UNG yet, see http://stockcharts.com/charts/gallery.html?ung. UNG wasn't able to complete a healthy looking Elliott Wave 12345 up down up down up monthly upcycle, so, I've turned cautious on UNG right now. I'll probably wait for a strong buy signal, then look to buy during a countertrend downcycle if I'm still interested in UNG.

....... http://www.JoeFRocks.com/ .


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SPX (S & P 500) Just Took Out Yesterday's Cycle Low

SPX (S & P 500) just took out yesterday's cycle low, 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 fills the upside gaps created at yesterday and today's open, at 1325.19 and 1310.50, then an intermediate term cycle low will have probably occurred.

Obviously, in this very treacherous market it's wise (it's wise in any market before trading aggressively long, or, before trading long at all, if you're a risk averse trader) to wait for SPX (S & P 500)/NDX (NASDAQ 100)/RUT (Russell 2000) to do a strong multi day short term Wave 1 upcycle, that will trigger a 2% follow through (after breaking the intermediate term downcycle trendline) monthly cycle buy signal, then look to go long during a short term Wave 2 downcycle, that should do an Elliott Wave ABC down up down pattern for about 2-3 days.

The WMT Lead Indicator is very bullish again today, as it's been in recent weeks, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC.

HUI/XAU/gold are getting crushed along with SPX/major averages, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. The real safe haven in deflationary crashing markets is T Bills /T Bonds and the US Dollar, NOT gold.

The US Dollar probably entered a Cyclical Bull Market in November 2007 after being in a Cyclical Bear Market since late 2005, see http://stockcharts.com/charts/gallery.html?%24usd.

Notice that the gold criminals and nitwits don't point out the fact that the US Dollar probably bottomed in November, and, that the gold Commercial Traders have gone massively short in recent months, while also trading adeptly long on a short term basis? This is because they're engaged in FRAUD.

....... http://www.JoeFRocks.com/ .

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Tuesday, January 22, 2008

I'm Looking To Trade The Pimco High Yield Fund (PHK) And The Natural Gas ETF UNG

I'm looking to trade the Pimco High Yield Fund (PHK, Yahoo indicates the yield is 11.60%, do your due diligence), see http://stockcharts.com/charts/gallery.html?phk, that probably put in a monthly cycle low on Tuesday 1-22. Note the bullish very large inverse spike and the white candle, indicating a bullish close above the open.

PHK (Pimco High Yield Fund) has had good volatility recently (http://stockcharts.com/charts/gallery.html?phk), and, is reasonably liquid (enough average daily trading volume), making it a good trading vehicle right now at least. It trades like a stock, though, to my knowledge, it's not considered to be an ETF. All I care is that it trades like a stock and their income portfolio is fairly high quality, do your own due diligence. This Blog is about the "Trade the Cycles" market timing system, not about recommending anything.

I'm also looking to go long UNG, the natural gas ETF (6%ish yield (?)), as discussed previously, see http://tradethecycles.blogspot.com/2008/01/potential-trades-for-tuesday.html.

Also, if Novagold (NG) can clearly break it's short term Wave 4 downcycle of the past two weeks, I might trade it long, see http://stockcharts.com/charts/gallery.html?ng.

Based on the very bearish NEM Lead Indicator the past two sessions, at
-1.69% versus the XAU on 1-22 and at -1.11% on 1-18, I might day trade GDX, the Gold Miners ETF, short on Wednesday.


I did a post market update, but, it got lost, because, my internet connection got disconnected, I did the update without being signed in to Blogger, and it got lost. Normally, even if I'm not signed in (rare), Blogger prompts me to sign in, and I don't lose any work.

Obviously, SPX (S & P 500) didn't fill 1-22's upside gap at 1325.19 (created at the open) on 1-22, 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, which surprised me. I suspect that it'll get filled early on 1-23 (likely scenario), but, this obviously is a treacherous market now.

....... http://www.JoeFRocks.com/ .

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It Looks Like SPX (S & P 500)/NDX (NASDAQ 100)/RUT (Russell 2000) Hit A Wave A Intermediate Term Cycle Low Today

It looks like SPX (S & P 500)/NDX (NASDAQ 100)/RUT (Russell 2000) hit a Wave A intermediate term cycle low today, which is the start of a Cyclical Bear Market (SPX on 10-11-07, NDX in late October 2007, and, RUT in late July 2007). SPX (S & P 500) has a very large bullish inverse spike on today's candle right now, see http://stockcharts.com/charts/gallery.html?%24spx.

If SPX fills today's upside gap at 1325.19 (failed on the first attempt, 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, it's likely that SPX/NDX/RUT hit an intermediate term cycle low today.

Once I'm convinced that SPX (S & P 500)/NDX (NASDAQ 100)/RUT (Russell 2000) hit a Wave A intermediate term cycle low, I'll look to trade them ultra long via the Ultra Long ETFs SSO, QLD, or UWM.

Obviously, in this very treacherous market it's wise (it's wise in any market before trading aggressively long, or, before trading long at all, if you're a risk averse trader) to wait for SPX (S & P 500)/NDX (NASDAQ 100)/RUT (Russell 2000) to do a strong multi day short term Wave 1 upcycle, that will trigger a 2% follow through (after breaking the intermediate term downcycle trendline) monthly cycle buy signal, then look to go long during a short term Wave 2 downcycle, that should do an Elliott Wave ABC down up down pattern for about 2-3 days.

The WMT Lead Indicator is very bullish again today, as it's been in recent weeks, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC.

The vicious/huge HUI/XAU short term Wave A downcycle since Monday 1-14-08 probably bottomed early today, and, is probably/very likely the start of the Wave 2 Cyclical Bear Market, 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=. The huge HUI -15.15% decline in only five sessions time is probably a sign that a very important downcycle has begun. It's a very strong sell signal/indication.

I'm looking to short the Gold Miners ETF GDX some time in the next week or so, during a short term countertrend Wave B upcycle, that might have begun early today/1-22.

A 12-18 month Wave 2 Cyclical Bear Market probably began on Monday 1-14-08 for HUI/XAU, which is Wave 2 down of the Secular 20 yearish Bull Market that began in late 2000 for HUI/XAU, began in April 2001 for gold, and, began in late 2001 for silver. Gold lags HUI/XAU and silver lags gold.

HUI/XAU peaked in rollover mode versus the 11-7-07 cycle highs, and, peaked in dramatic rollover mode versus the 5-11-06 cycle highs, see http://stockcharts.com/charts/gallery.html?%24hui.

....... http://www.JoeFRocks.com/ .

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Monday, January 21, 2008

.......Major World Stock Markets Are Crashing

Major world stock markets are crashing, see http://biz.yahoo.com/ap/080121/world_markets.html. It looks like tomorrow will be a bloodbath in the US, barring a 50 to 75 basis (0.50% to 0.75%) point Fed Funds rate cut by the Fed, and, even that might not prevent a bloodbath.

As far as the precious metals, one might see HUI/XAU down more than -10%, and, gold might plunge -$30, -$40, -$50+ tomorrow, and, silver might crash over -$1.00. The US Dollar was up sharply today. Some gold stocks were down -10%+ and even -20%+ today in Canada.

The vicious/huge HUI/XAU short term Wave A downcycle since early Monday 1-14-08 is probably/very likely the start of the Wave 2 Cyclical Bear Market, 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=. The huge -13.54% decline (so far) in only four sessions time (on an intraday basis) is probably a sign that a very important downcycle has begun. It's a very strong sell signal/indication.

A 12-18 month Wave 2 Cyclical Bear Market probably began on Monday 1-14-08 for HUI/XAU, which is Wave 2 down of the Secular 20 yearish Bull Market that began in late 2000 for HUI/XAU, began in April 2001 for gold, and, began in late 2001 for silver. Gold lags HUI/XAU and silver lags gold.

HUI/XAU peaked in rollover mode versus the 11-7-07 cycle highs, and, peaked in dramatic rollover mode versus the 5-11-06 cycle highs, see http://stockcharts.com/charts/gallery.html?%24hui.

....... http://www.JoeFRocks.com/ .

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........Black Monday For Precious Metals Sector

Gold is down over -1.5% right now and Barrick Gold (ABX) is down over -4% right now on the Toronto Exchange, where gold stocks are getting crushed so far today, see http://finance.yahoo.com/q?s=ABX.TO. It's a sea of red in Canada right now, see http://ca.finance.yahoo.com/q/cp?s=%5EGSPTSE.

Is gold the safe haven in crashing markets that many gold "gurus" would have us believe? Obviously not. Try T Bills and T Bonds, US Dollar denominated assets.

Foreign markets are crashing along with the US, and, the US Dollar probably entered a Cyclical Bull Market in November 2007 after being in a Cyclical Bear Market since late 2005, see http://stockcharts.com/charts/gallery.html?%24usd. But, it doesn't matter whether the US Dollar is in a Cyclical Bull or Bear Market, T Bills and T Bonds, US Dollar denominated assets, are a safe haven in deflationary crashing markets, NOT gold.

Gold IS a safe haven against inflationary economic upcycles, such as the real estate/mortgage/credit (credit cards, auto loans, electronics loans, furniture, etc) boom of 2002 to early 2006, which created massive monetary inflation.

The world has entered a deflationary economic downcycle, which is a poor environment for gold. Most gold "analysts" (clowns or frauds in most cases) don't even understand fundamentally what drives gold.

Given the extreme volatility of the precious metals sector, it doesn't take too much brainpower and common sense to realize that market timing and technical analysis are very important. How does one explain all the goofy idiotic gold/silver writers? Money makes fools or worse out of many people, as occurred to a great extent during the 1999-2000 stock market bubble/very long term upcycle peaking. Look at all the CEOs/execs that have gone to jail.

Just remember, professionals focus on risk, amateurs focus on reward.

....... http://www.JoeFRocks.com/ .

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Saturday, January 19, 2008

"Job Data Passes Threshold Where Recessions Dwell"

"Job Data Passes Threshold Where Recessions Dwell," see http://www.nytimes.com/2008/01/19/business/19charts.html.

Here's one paragraph from the article:

"The Labor Department reported that in December some 7,655,000 people were unemployed, meaning they were both without a job and looking for one. That figure was 13.2 percent higher than the 6,760,000 figure in the previous December. In the past, a 13 percent annual rise has been the sign of a recession every time."

The deflationary major economic downcycle is a major negative for most commodities, which have entered, or soon will, a Cyclical Bear Market.

....... http://www.JoeFRocks.com/ .

..............Potential Trades For Tuesday

The natural gas ETF UNG (6%ish yield) is a potential long trade on Tuesday, see http://stockcharts.com/charts/gallery.html?ung. It's doing a short term Wave 4 downcycle (might bottom Tuesday) of the monthly upcycle since putting in an intermediate term cycle low at 33.58 on 12-27-07, which is a slightly higher bullish double bottom with the intermediate term cycle low at 33.23 on 9-4-07, which shows up on the second/weekly view candlestick chart, but not on the first daily candlestick chart, for some weird reason.

The natural gas COT (Commitments Of Traders) data points to strength/a short term Wave 5 upcycle beginning this week, because, the Commercial Traders traded significantly net long, see the fifth data at http://www.cftc.gov/dea/futures/deanymesf.htm. Crude Oil, Light Sweet, COT data is near the bottom at the link above, and, supports a likely short term countertrend Wave B upcycle next week. I discuss oil two paragraphs down.

Since the double bottom at 33.58 on 12-27-07 is slightly higher than the cycle low at 33.23 on 9-4-07, it's a more bullish uptrending double bottom than if the 12-27-07 cycle low had been a slightly lower downtrending double bottom.

Interestingly, oil looks like it's a short from a big picture perspective, see http://stockcharts.com/charts/gallery.html?uso, but, obviously wait for a short term countertrend Wave B upcycle before shorting it, if that's your intention. The 11 month long term rollover upcycle since January 2007 appears to be a multi year Cyclical Bull Market peaking in dramatic rollover mode (might have peaked at 79.09 in late December 2007 (note the bearish large spike), note the Elliott Wave 12345 up down up down up pattern since January 2007, with all the price points labeled), versus the prior peak at 74.60 in July 2006.

Novagold (NG, http://stockcharts.com/charts/gallery.html?ng) is a potential long trade next week. NG should clearly/decisively break it's short term Wave 4 downcycle trendline before being held overnight. I might day trade it on Tuesday.

Concerning the major averages COT (Commitments Of Traders) data, the NASDAQ 100 (NDX) COT data is the most bullish (very bullish), followed by the modestly bullish S & P 500 (SPX) COT data, and, the mixed Russell 2000 (RUT) COT data, scroll down halfway+ at http://www.cftc.gov/dea/futures/deacmelf.htm to see the COT data, with SPX's being the closest to the top.

The previous two weeks the Russell 2000 (RUT) COT data was the most bullish, so, I may trade RUT (ultra) long via UWM or NDX (ultra) long via QLD, with trading SPX (ultra) long via SSO being the least likely trade next week of the three.

....... http://www.JoeFRocks.com/ .

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Friday, January 18, 2008

SPX/NDX/RUT Might Have Put In Intermediate Term Cycle Lows Today

SPX (S & P 500)/NDX (NASDAQ 100)/RUT (Russell 2000) might have put in intermediate term cycle lows today, see http://stockcharts.com/charts/gallery.html?%24spx, but, today's candle was black, indicating a bearish close below the open, and, there's a large bearish spike on today's candle, larger than the bullish inverse spike on today's candle.

The WMT Lead Indicator was a bullish +0.82% versus the S & P 500 today/1-18, but, the gap narrowed/turned bearish/less bullish late in 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. The WMT Lead Indicator was +2.89% versus the S & P 500 on 1-17, +1.62% on 1-16, +1.06% on 1-15, -1.20% on 1-14, -0.05% on 1-11, +2.40% on 1-10, +0.66% on 1-9, +0.57% on 1-8, +1.21% on 1-7, +1.04% on 1-4. So, the WMT Lead Indicator has turned very bullish, and, obviously points to a substantial rally soon.

Keep in mind that SPX probably/very likely entered a Cyclical Bear Market on 10-11-07, NDX probably did so in late October 2007, and, RUT probably did so in late July 2007.

Once I'm convinced that SPX (S & P 500)/NDX (NASDAQ 100)/RUT (Russell 2000) have bottomed, I'll look to trade RUT (Russell 2000) long via the Ultra Long RUT ETF UWM, possibly doing a day trade or two on Tuesday. I might also trade SPX long via SSO or NDX long via QLD.

Option expiration this week was a factor behind market volatility/weakness, as of course are well founded concerns about the economy and the credit/poor lending practices crisis.

The vicious/huge HUI/XAU short term Wave A downcycle since early Monday 1-14-08 appears to have bottomed today, see http://stockcharts.com/charts/gallery.html?%24hui and see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c. HUI/XAU have bullish large inverse spikes on today's candle, and, the candle is white, indicating a bullish close above the open.

The very bearish NEM Lead Indicator, at -1.11% versus the XAU today/on 1-18, that got much more bearish toward session's end, see http://finance.yahoo.com/q/ta?s=^XAU&t=1d&l=on&z=m&q=l&p=&a=&c=^hui,nem, suggests that the vicious/huge HUI/XAU short term Wave A downcycle since early Monday 1-14-08 might not have bottomed yet.

I might day trade Novagold, NG (http://stockcharts.com/charts/gallery.html?ng), long on Tuesday.

I'm looking to short HUI/XAU via shorting the Gold Miners ETF GDX in the next few sessions, during a short term countertrend Wave B upcycle, that appears to/might have begun today, 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=. I'll look to go short during an intraday countertrend Wave B upcycle. The NEM Lead Indicator should be clearly intraday bearish when I go short, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=on&z=l&q=l&p=&a=&c=%5Ehui,nem.

The huge HUI/XAU decline this week points to a crash in gold/silver soon, because, HUI/XAU lead gold.

The vicious/huge HUI/XAU short term Wave A downcycle since early Monday 1-14-08 is probably/very likely the start of the Wave 2 Cyclical Bear Market, 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=. The huge -13.54% decline (so far) in only four sessions time (on an intraday basis) is probably a sign that a very important downcycle has begun. It's a very strong sell signal/indication.

A 12-18 month Wave 2 Cyclical Bear Market probably began on Monday 1-14-08 for HUI/XAU, which is Wave 2 down of the Secular 20 yearish Bull Market that began in late 2000 for HUI/XAU, began in April 2001 for gold, and, began in late 2001 for silver. Gold lags HUI/XAU and silver lags gold.

HUI/XAU peaked in rollover mode versus the 11-7-07 cycle highs, and, peaked in dramatic rollover mode versus the 5-11-06 cycle highs, see http://stockcharts.com/charts/gallery.html?%24hui.

An HUI/XAU 2% follow through (after breaking the monthly upcycle trendline) monthly cycle (began 12-18-07) sell signal occurred early on 1-16-08, see HUI's daily chart at http://stockcharts.com/charts/gallery.html?%24hui, and, see HUI's 5 day intraday chart at 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=.

The US Dollar was up sharply Wednesday, and, probably entered a Cyclical Bull Market in November 2007 after being in a Bear Market since late 2005, see http://stockcharts.com/charts/gallery.html?%24usd.

For the third straight week the savvy non contrarian US Dollar Commercial Traders traded aggressively net long (five day period ending 1-15-08), more so the prior two weeks, see the last/sixth data at http://www.cftc.gov/dea/options/deanybtsof.htm.

The gold COT (Commitments Of Traders) data remains bearish, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm. The savvy non contrarian gold Commercial Traders traded significantly net short again in the five day period ending 1-15-08 (traded net short 2293 gold futures and options contracts versus trading net short 8529, 16,658, and 12,456 the previous three weeks), trading a large long position (added 25,754 long gold futures and options contracts versus 14,077, 5608, and 8002 added the previous three weeks), correctly anticipating substantial short term strength, but, continued to go massively short (added 28,047 short gold futures and options contracts versus 22,606, 22,266, and 20,458 added the previous three weeks), as they've done in recent months.

So, the gold COT (Commitments Of Traders) data is short term mixed and long term bearish. Some probably brief significant gold strength next week won't be surprising (a crash is likely soon also), but, it's very likely to be a great shorting opportunity.

Gold's action recently is exactly what one would expect near a very important cycle high.

In new annotated chart one at http://www.joefrocks.com/GoldStockCharts.html one can see that gold's Wave 1 Cyclical Bull Market (since April 2001) uptrend line (note that it went parabolic in mid 2005) is at $700ish, and, the primary Secular Bull Market (should last about 20 years, there should be two more Cyclical Bull markets, corresponding to Elliott Waves 3 and 5) uptrend line is at $490ish.

If you think that gold will keep rising in the parabolic fashion it has since mid 2005 for the next 10-15 years I have some very affordable prime real estate in Afghanistan for you, with a great view of all the action.

Gold should fall to $700ish or less in the next few months, and, in the next 12-18 months (Wave 2 Cyclical Bear Market) gold should fall to $500-525.

Trust me, ignore the gold nitwits and con artists who don't understand (or are conning people) cycles, basic technical analysis (such as relatively flat primary trendlines), Elliott Wave patterns, the COT (Commitments of Traders) data, etc.

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 $490ish right now, so, gold would be a great buy in the $490-520 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 basically began 5-11-06 (the long term upcycle from June 2006 to 11-7-07 was an anemic rollover upcycle, in which HUI/XAU were underwater until October 2007 versus the 5-11-06 cycle highs), see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. The primary Secular Bull Market trendlines since late 2000 are at 210-230 for HUI and at 90-95 for the XAU. Those are the targets for where the Wave 2 Cyclical Bear Market will bottom. ....... http://www.JoeFRocks.com/ .

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Look At The Gold ETF GLD Follow The S & P 500 (SPX)

Look at the gold ETF GLD follow the S & P 500 (SPX), see http://finance.yahoo.com/q/ta?t=5d&s=GLD&l=off&z=l&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=&c=%5EGSPC. Ignore the gold nitwits and con artists. Agendas are for rank amateurs and criminals.

Far too many gold writers obviously have bullish agendas and are trying to benefit at the expense of others. That's fraud. I believe/imagine that deliberately publishing misleading investment info/having an agenda is breaking SEC law. If you see a gold writer doing that you should report it to the SEC.

See http://tradethecycles.blogspot.com/2008/01/vicious-huixau-very-short-term-wave.html. The decline since early Monday is now -13.54% for HUI, 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, which is an obvious major sell signal/indication.

Newmont Mining (NEM) and Barrick Gold (ABX) insiders have been big time sellers recently, see http://tradethecycles.blogspot.com/2008/01/barrick-gold-abx-and-newmont-mining-nem.html.

A 12-18 month Wave 2 Cyclical Bear Market probably/very likely (95%+ probability) began on Monday 1-14-08 for HUI/XAU, which is Wave 2 down of the Secular 20 yearish Bull Market that began in late 2000 for HUI/XAU, began in April 2001 for gold, and, began in late 2001 for silver. Gold lags HUI/XAU and silver lags gold.

HUI/XAU peaked in rollover mode versus the 11-7-07 cycle highs, and, peaked in dramatic rollover mode versus the 5-11-06 cycle highs, see http://stockcharts.com/charts/gallery.html?%24hui.

....... http://www.JoeFRocks.com/ .

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