Concerning The Major Averages Bearish Short Term Outlook
Concerning the major averages bearish short term outlook, see http://stockcharts.com/charts/gallery.html?%24spx, SPX (S & P 500)/NDX (NASDAQ 100)/RUT (Russell 2000) might still be in a short term Wave 2 downcycle. A short term Wave 3 upcycle might not have begun on 2-7-08 as I've been saying. If you're long you should be ok, because, SPX/NDX very likely put in minor intermediate term cycle lows on 1-23-08 and RUT probably did so on 1-22-08, as I've said many times.
The plunge in early February looks like a Wave A type move (of a short term Wave 2 downcycle), and, the decline that began last Wednesday 2-13 (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=) might be the start of Wave C of a short term Wave 2 downcycle.
The WMT Lead Indicator has turned bearish, at -1.14% versus SPX (S & P 500) on 2-15, -0.02% on 2-14, and -0.54% on 2-13. Also, the COT data for SPX/NDX/RUT in the latest report (5 day period ending 2-12-08) is bearish/mixed, see data halfway down+ at http://www.cftc.gov/dea/futures/deacmelf.htm.
A very sharp decline in SPX/NDX/RUT next week also jives with the very sharp/substantial decline that's likely to occur for HUI/XAU in their short Wave C downcycle that began 1-30-08, in which the XAU (http://stockcharts.com/charts/gallery.html?%24xau) will probably fill it's downside gap at 161.75 (bottom at 161ish shortly after filling 161.75), versus a close on Friday 2-15 at 177.33, for a substantial decline of about -9.21% in the next week or so.
Because of index program trading, with the S & P 500 (SPX) being the key lead index, most indexes tend to follow SPX on a very short term (hours/days), short term (days/weeks), and sometimes intermediate term basis (weeks/months).
For example, NEM and FCX are in SPX, so, when SPX gets hit NEM and FCX get sold, which then drives down the gold stock indexes like HUI/XAU that have NEM/FCX as components, which then drives down the components in those indexes as those indexes are program traded, and, then most gold/silver stocks end up being affected. A similar process occurs for all sectors represented in SPX. SPX basically IS the market, or at least is the best proxy for the market and computerized index program trading makes SPX the key lead index.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
The plunge in early February looks like a Wave A type move (of a short term Wave 2 downcycle), and, the decline that began last Wednesday 2-13 (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=) might be the start of Wave C of a short term Wave 2 downcycle.
The WMT Lead Indicator has turned bearish, at -1.14% versus SPX (S & P 500) on 2-15, -0.02% on 2-14, and -0.54% on 2-13. Also, the COT data for SPX/NDX/RUT in the latest report (5 day period ending 2-12-08) is bearish/mixed, see data halfway down+ at http://www.cftc.gov/dea/futures/deacmelf.htm.
A very sharp decline in SPX/NDX/RUT next week also jives with the very sharp/substantial decline that's likely to occur for HUI/XAU in their short Wave C downcycle that began 1-30-08, in which the XAU (http://stockcharts.com/charts/gallery.html?%24xau) will probably fill it's downside gap at 161.75 (bottom at 161ish shortly after filling 161.75), versus a close on Friday 2-15 at 177.33, for a substantial decline of about -9.21% in the next week or so.
Because of index program trading, with the S & P 500 (SPX) being the key lead index, most indexes tend to follow SPX on a very short term (hours/days), short term (days/weeks), and sometimes intermediate term basis (weeks/months).
For example, NEM and FCX are in SPX, so, when SPX gets hit NEM and FCX get sold, which then drives down the gold stock indexes like HUI/XAU that have NEM/FCX as components, which then drives down the components in those indexes as those indexes are program traded, and, then most gold/silver stocks end up being affected. A similar process occurs for all sectors represented in SPX. SPX basically IS the market, or at least is the best proxy for the market and computerized index program trading makes SPX the key lead index.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
posted by Joe Ferrazzano at
1:40 PM
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