SPX (S & P 500) Took Out Tuesday's Cycle Low
SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) took out Tuesday's cycle low today that appeared to be a short term Wave 2 cycle low, 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=.
There are a number of good reasons why SPX (S & P 500) is probably very near a Wave 2 short term cycle low (one might have occurred shortly before session's end). SPX's technical indicators like RSI, Williams %R, etc are very oversold. The Elliott Wave patterns in the five day intraday chart at the link above point to an imminent cycle low. Also, the WMT Lead Indicator was an extremely bullish +3.07% versus SPX (S & P 500) today, 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. Lastly, index related program buying, fueled by massive Fed credit since Thursday 2-28 (humongous $41 Billion on Thursday 2-28 alone), see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE, should kick in in a big way soon.
The WMT Lead Indicator was an extremely bullish +3.07% versus SPX today/3-6, was a very bearish -1.16% versus SPX on 3-5, was +0.31% on 3-4, +0.56% on 3-3, +0.52% on 2-29, -0.53% on 2-28, +0.15% on 2-27, +1.44% on 2-26.
Watch SPX's upside gap at 1333.70 from today 3-6's open, and, watch WMT's upside gap at 50.70 from Friday 2-29's open, that should/might get filled in the next day or two.
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), so, SPX/NDX/RUT are in a countertrend Wave B minor intermediate term upcycle.
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."
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 $977ish 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 bearish -0.51% versus the XAU today/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
There are a number of good reasons why SPX (S & P 500) is probably very near a Wave 2 short term cycle low (one might have occurred shortly before session's end). SPX's technical indicators like RSI, Williams %R, etc are very oversold. The Elliott Wave patterns in the five day intraday chart at the link above point to an imminent cycle low. Also, the WMT Lead Indicator was an extremely bullish +3.07% versus SPX (S & P 500) today, 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. Lastly, index related program buying, fueled by massive Fed credit since Thursday 2-28 (humongous $41 Billion on Thursday 2-28 alone), see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE, should kick in in a big way soon.
The WMT Lead Indicator was an extremely bullish +3.07% versus SPX today/3-6, was a very bearish -1.16% versus SPX on 3-5, was +0.31% on 3-4, +0.56% on 3-3, +0.52% on 2-29, -0.53% on 2-28, +0.15% on 2-27, +1.44% on 2-26.
Watch SPX's upside gap at 1333.70 from today 3-6's open, and, watch WMT's upside gap at 50.70 from Friday 2-29's open, that should/might get filled in the next day or two.
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), so, SPX/NDX/RUT are in a countertrend Wave B minor intermediate term upcycle.
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."
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 $977ish 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 bearish -0.51% versus the XAU today/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
1:16 PM
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