The Major Averages Might Have Bottomed Today
The major averages might have bottomed today, since SPX (S & P 500) did an Elliott Wave ABC down up down pattern on the intraday chart since last Wednesday 3-5, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c.
Also, looking at the one day intraday chart, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=1d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c, SPX appears to have done an intraday Wave 1 upcycle followed by a Wave 2 down at session's end. It's likely that SPX will pop early on Monday and do a Wave 3 type move. If so then SPX has probably finally bottomed.
On the daily chart SPX (S & P 500) has done a five week Wave 2 downcycle since putting in a short term Wave 1 cycle high at 1396.02, see http://stockcharts.com/charts/gallery.html?%24spx. The Wave A of Wave 2 cycle low was 1316.75. The countertrend Wave B of Wave 2 cycle high was 1388.34. The final Wave C of Wave 2 cycle low might have occurred late today at 1282.43. There's a respectable bullish inverse spike on today 3-7's candle, which is another good sign.
The WMT Lead Indicator is extremely bullish short term, 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. It was +0.68% versus the S & P 500 (SPX) today/on 3-7 and it was an extremely bullish +3.07% on 3-6.
The Fed has been aggressively adding credit since Thursday 2-28, see http://www.federalreserve.gov/releases/h41/Current/ and see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE, which should soon result in very strong program buying, that might have begun late today 3-7.
Watch SPX's upside gap at 1333.70 from 3-6's open that should/might get filled in the next session or two, and, WMT filled it's upside gap at 50.70 from Friday 2-29's open today.
I'll probably be looking to trade the major averages ultra long via SSO, QLD, or UWM on Monday.
NDX (NASDAQ 100) took out it's cycle low that occurred on 1-23-08 today, so, NDX might have hit a Wave A intermediate term cycle low today (downcycle since late October 2007), see http://stockcharts.com/charts/gallery.html?%24ndx. SPX and RUT's (Russell 2000) cycle lows from 1-23-08 (SPX) and 1-22-08 (RUT) held today, so, those Wave A intermediate term cycle lows will probably hold.
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, on 1-22 for RUT (Russell 2000), and, possibly on 3-7-08 for NDX (NASDAQ 100), so, SPX/RUT and possibly NDX are in a countertrend Wave B minor intermediate term upcycle.
Concerning HUI/XAU/gold (http://stockcharts.com/charts/gallery.html?%24hui), they might have substantial or at least significant upside ahead of them short term. Assuming the major averages have bottomed or nearly so, then program buying should be a major factor boosting HUI/XAU/gold on a short term basis.
The fact is that HUI/XAU/gold aren't a safe haven from stock market turmoil on a short term basis or even on an intermediate term basis much of the time (cycles are the primary consideration). HUI/XAU got whacked today along with the major averages, and, they rebounded late in the session along with the major averages. They are clearly a safe haven from stock market/major averages turmoil on a Secular 20 yearish basis.
HUI/XAU are in the process of putting in a very important Wave 1 Cyclical Bull Market (began late 2000) cycle high. An 18 monthish Wave 2 Cyclical Bear Market should soon begin if it didn't already/on 3-4.
As I said in the comments area:
"HUI/XAU's rate of ascent since 11-7-07 has declined dramatically. They've only made upside progress in about 5 to 7 sessions since 11-7-07. However, HUI/XAU might not have peaked yet, and, gold might blast through $1000. Normally, a very obvious very large spike will occur on the candle the day a market peaks, and that didn't happen yet.
Because this is a very long seven+ year upcycle (Wave 1 Cyclical Bull Market) peaking, the amount of rollover action in terms of time and price is making it very difficult to nail the final cycle high."
Gold had two Cyclical Bear Markets in the previous Secular Bull Market, see http://tradethecycles.blogspot.com/2008/03/gold-had-two-cyclical-bear-markets-in.html.
The action in HUI/XAU/gold clearly points to very important peaking action. See a previous post at http://tradethecycles.blogspot.com/2008/03/huixau-are-in-wave-5-of-rollover-wave-5.html.
Gold fell from $730 on 5-11-06 to $542 in mid June 2006, which is only one month's time, so, if you think gold can't fall to $500-550 in 12-18 months, think again. Gold's primary trendline is at $500ish right now, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html. Beware of all the gold nitwits and scam artists. Trust me.
Gold is extremely untimely from a long term investor's point of view, since it's primary multi year Secular Bull Market uptrend line is at $500ish versus a spot price at $975ish now, which is basic technical analysis.
See the very bearish five day NEM Lead Indicator at http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem, and, see the extremely bearish three month NEM Lead Indicator at http://finance.yahoo.com/q/ta?s=%5EXAU&t=3m&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem.
The NEM Lead Indicator is extremely bearish the past month+, it was a modestly bullish +0.43% versus the XAU today/3-7, it was a bearish -0.51% versus the XAU on 3-6, it was -1.69% on 3-5, it was -0.53% on 3-4, it was -0.89% on 3-3, -0.07% on 2-29, at +0.29% on 2-28, at -0.58% on 2-27, at +0.09% on 2-26, -0.96% on 2-25, -0.84% on 2-22, -1.53% on 2-21, -0.53% on 2-20, +0.46% on 2-19, -1.65% on 2-15, -0.03% on 2-14, +0.08% on 2-13, -1.79% on 2-12, -1.18% on 2-11, -1.51% on 2-8, +0.75% on 2-7, -0.21% on 2-6, +1.08% on 2-5, -1.99% on 2-4, -0.97% on 2-1.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Also, looking at the one day intraday chart, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=1d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c, SPX appears to have done an intraday Wave 1 upcycle followed by a Wave 2 down at session's end. It's likely that SPX will pop early on Monday and do a Wave 3 type move. If so then SPX has probably finally bottomed.
On the daily chart SPX (S & P 500) has done a five week Wave 2 downcycle since putting in a short term Wave 1 cycle high at 1396.02, see http://stockcharts.com/charts/gallery.html?%24spx. The Wave A of Wave 2 cycle low was 1316.75. The countertrend Wave B of Wave 2 cycle high was 1388.34. The final Wave C of Wave 2 cycle low might have occurred late today at 1282.43. There's a respectable bullish inverse spike on today 3-7's candle, which is another good sign.
The WMT Lead Indicator is extremely bullish short term, 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. It was +0.68% versus the S & P 500 (SPX) today/on 3-7 and it was an extremely bullish +3.07% on 3-6.
The Fed has been aggressively adding credit since Thursday 2-28, see http://www.federalreserve.gov/releases/h41/Current/ and see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE, which should soon result in very strong program buying, that might have begun late today 3-7.
Watch SPX's upside gap at 1333.70 from 3-6's open that should/might get filled in the next session or two, and, WMT filled it's upside gap at 50.70 from Friday 2-29's open today.
I'll probably be looking to trade the major averages ultra long via SSO, QLD, or UWM on Monday.
NDX (NASDAQ 100) took out it's cycle low that occurred on 1-23-08 today, so, NDX might have hit a Wave A intermediate term cycle low today (downcycle since late October 2007), see http://stockcharts.com/charts/gallery.html?%24ndx. SPX and RUT's (Russell 2000) cycle lows from 1-23-08 (SPX) and 1-22-08 (RUT) held today, so, those Wave A intermediate term cycle lows will probably hold.
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, on 1-22 for RUT (Russell 2000), and, possibly on 3-7-08 for NDX (NASDAQ 100), so, SPX/RUT and possibly NDX are in a countertrend Wave B minor intermediate term upcycle.
Concerning HUI/XAU/gold (http://stockcharts.com/charts/gallery.html?%24hui), they might have substantial or at least significant upside ahead of them short term. Assuming the major averages have bottomed or nearly so, then program buying should be a major factor boosting HUI/XAU/gold on a short term basis.
The fact is that HUI/XAU/gold aren't a safe haven from stock market turmoil on a short term basis or even on an intermediate term basis much of the time (cycles are the primary consideration). HUI/XAU got whacked today along with the major averages, and, they rebounded late in the session along with the major averages. They are clearly a safe haven from stock market/major averages turmoil on a Secular 20 yearish basis.
HUI/XAU are in the process of putting in a very important Wave 1 Cyclical Bull Market (began late 2000) cycle high. An 18 monthish Wave 2 Cyclical Bear Market should soon begin if it didn't already/on 3-4.
As I said in the comments area:
"HUI/XAU's rate of ascent since 11-7-07 has declined dramatically. They've only made upside progress in about 5 to 7 sessions since 11-7-07. However, HUI/XAU might not have peaked yet, and, gold might blast through $1000. Normally, a very obvious very large spike will occur on the candle the day a market peaks, and that didn't happen yet.
Because this is a very long seven+ year upcycle (Wave 1 Cyclical Bull Market) peaking, the amount of rollover action in terms of time and price is making it very difficult to nail the final cycle high."
Gold had two Cyclical Bear Markets in the previous Secular Bull Market, see http://tradethecycles.blogspot.com/2008/03/gold-had-two-cyclical-bear-markets-in.html.
The action in HUI/XAU/gold clearly points to very important peaking action. See a previous post at http://tradethecycles.blogspot.com/2008/03/huixau-are-in-wave-5-of-rollover-wave-5.html.
Gold fell from $730 on 5-11-06 to $542 in mid June 2006, which is only one month's time, so, if you think gold can't fall to $500-550 in 12-18 months, think again. Gold's primary trendline is at $500ish right now, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html. Beware of all the gold nitwits and scam artists. Trust me.
Gold is extremely untimely from a long term investor's point of view, since it's primary multi year Secular Bull Market uptrend line is at $500ish versus a spot price at $975ish now, which is basic technical analysis.
See the very bearish five day NEM Lead Indicator at http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem, and, see the extremely bearish three month NEM Lead Indicator at http://finance.yahoo.com/q/ta?s=%5EXAU&t=3m&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem.
The NEM Lead Indicator is extremely bearish the past month+, it was a modestly bullish +0.43% versus the XAU today/3-7, it was a bearish -0.51% versus the XAU on 3-6, it was -1.69% on 3-5, it was -0.53% on 3-4, it was -0.89% on 3-3, -0.07% on 2-29, at +0.29% on 2-28, at -0.58% on 2-27, at +0.09% on 2-26, -0.96% on 2-25, -0.84% on 2-22, -1.53% on 2-21, -0.53% on 2-20, +0.46% on 2-19, -1.65% on 2-15, -0.03% on 2-14, +0.08% on 2-13, -1.79% on 2-12, -1.18% on 2-11, -1.51% on 2-8, +0.75% on 2-7, -0.21% on 2-6, +1.08% on 2-5, -1.99% on 2-4, -0.97% on 2-1.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
1:56 PM
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