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/ .
HUI NEM XAU
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/ .
HUI NEM XAU
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
1:13 PM
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