SPX And RUT Are Testing Their 1-9-08 Potential Intermediate Term Cycle Lows
SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) and RUT (Russell 2000, http://stockcharts.com/charts/gallery.html?%24rut) are testing their 1-9-08 potential intermediate term cycle lows, 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=. NDX (NASDAQ 100, http://stockcharts.com/charts/gallery.html?%24ndx) took out it's 1-9-08 cycle low today, and, might fill it's downside gap at 1846.09.
The WMT Lead Indicator was a very bullish +1.06% versus SPX (S & P 500) today/on 1-15, and, became more bullish toward session's end, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=off&z=l&q=l&p=&a=,p12,fs,w14&c=wmt,%5EGSPC, so, an important intermediate term cycle low might occur early tomorrow for most if not all of the major averages.
It looks like I'll probably trade the Ultra Long Russell 2000 (RUT, http://stockcharts.com/charts/gallery.html?%24rut) ETF UWM tomorrow, possibly doing a day trade or two.
HUI/XAU might have put in Wave 1 Cyclical Bull Market cycle highs yesterday (cycle began in late 2000), 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,p12,fs,w14&c=, peaking in rollover mode versus the 11-7-07 cycle highs as well as peaking in dramatic rollover mode versus the 5-11-06 cycle highs.
However, the NEM Lead Indicator has turned very bullish in recent days, at +3.23% versus the XAU today/on 1-15, +0.84% on 1-14, +1.10% on 1-11, and, +0.59% on 1-10.
But, the unusually bullish NEM Lead Indicator today (at +3.23% versus the XAU today/on 1-15) might actually be a sign that HUI/XAU have peaked, because, normally they would start to rally sharply shortly after the NEM Lead Indicator became very bullish above +1.00%. The fact that HUI/XAU didn't respond to a very/extremely bullish NEM Lead Indicator today might be a sign that a potentially very important downcycle has begun.
Gold lags HUI/XAU at important cycle highs/lows, so gold might peak in rollover mode a few months after HUI/XAU, or, might put in a slightly higher bearish double top, as occurred in 2004 (January/April 2004 double top versus HUI Wave 3 long term cycle high on 12-2-03 and the XAU peaked 1-6-04).
I'm looking to short HUI/XAU this week (in a very short term countertrend Wave B upcycle), after the monthly upcycle trendline since 12-18-07 clearly breaks down (hasn't happened yet) and does a very short term 2-3+ day Wave A downcycle.
The US Dollar 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, gold stocks have been underperforming gold since 11-7-07, which is a very bearish sign, and, the gold COT data is very bearish from a big picture perspective, etc.
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.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
The WMT Lead Indicator was a very bullish +1.06% versus SPX (S & P 500) today/on 1-15, and, became more bullish toward session's end, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=off&z=l&q=l&p=&a=,p12,fs,w14&c=wmt,%5EGSPC, so, an important intermediate term cycle low might occur early tomorrow for most if not all of the major averages.
It looks like I'll probably trade the Ultra Long Russell 2000 (RUT, http://stockcharts.com/charts/gallery.html?%24rut) ETF UWM tomorrow, possibly doing a day trade or two.
HUI/XAU might have put in Wave 1 Cyclical Bull Market cycle highs yesterday (cycle began in late 2000), 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,p12,fs,w14&c=, peaking in rollover mode versus the 11-7-07 cycle highs as well as peaking in dramatic rollover mode versus the 5-11-06 cycle highs.
However, the NEM Lead Indicator has turned very bullish in recent days, at +3.23% versus the XAU today/on 1-15, +0.84% on 1-14, +1.10% on 1-11, and, +0.59% on 1-10.
But, the unusually bullish NEM Lead Indicator today (at +3.23% versus the XAU today/on 1-15) might actually be a sign that HUI/XAU have peaked, because, normally they would start to rally sharply shortly after the NEM Lead Indicator became very bullish above +1.00%. The fact that HUI/XAU didn't respond to a very/extremely bullish NEM Lead Indicator today might be a sign that a potentially very important downcycle has begun.
Gold lags HUI/XAU at important cycle highs/lows, so gold might peak in rollover mode a few months after HUI/XAU, or, might put in a slightly higher bearish double top, as occurred in 2004 (January/April 2004 double top versus HUI Wave 3 long term cycle high on 12-2-03 and the XAU peaked 1-6-04).
I'm looking to short HUI/XAU this week (in a very short term countertrend Wave B upcycle), after the monthly upcycle trendline since 12-18-07 clearly breaks down (hasn't happened yet) and does a very short term 2-3+ day Wave A downcycle.
The US Dollar 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, gold stocks have been underperforming gold since 11-7-07, which is a very bearish sign, and, the gold COT data is very bearish from a big picture perspective, etc.
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.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
1:30 PM
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