SPX's Wave 4 Of The Big Short Term Wave 1 Upcycle Might Still Be In Effect
SPX's Wave 4 of the big short term Wave 1 upcycle (since 3-17) might still be in effect. Yesterday's rising bottoms uptrend was very flat/anemic, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c, so, today's downside wasn't too surprising.
Also, reliable lead indicator Walmart (WMT) is correcting the big spike move it made recently, see http://stockcharts.com/charts/gallery.html?wmt.
The WMT Lead Indicator was +0.15% versus SPX on 3-27 and was +0.60% on 3-26. The 5 day WMT Lead Indicator is modestly bullish, 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.
SPX (S & P 500) has an upside gap at 1367.68 that might get filled in the near future, and, has a downside gap at 1329.51. SPX (S & P 500) has a bullish breakaway gap at 1276.60 from 3-18's open and WMT has one at 49.95 from 3-18's open.
SPX (S & P 500) and NDX (NASDAQ 100) probably put in Wave A intermediate term cycle (since 10-11-07 for SPX and late October 2007 for NDX) lows on 3-17, while RUT (Russell 2000) probably did so on 3-10, see http://stockcharts.com/charts/gallery.html?%24spx for SPX.
VIX fell a significant -1.23% today/on 3-27 versus the S & P 500 falling a significant -1.15% on 3-27, which is a sharp +2.38% rise in complacency (the SPX wall of worry shrank by -2.38% = -1.23% + -1.15% = +2.38% rise in complacency) that points to some significant/potentially sharp weakness on Friday 3-27.
I'll be looking to day trade the major averages ultra long early on Friday via SSO, QLD, or UWM once the very short term downcycle bottoms, and, I'll be looking to short GDX, the Gold Miners ETF. I'll also be looking at trading some major averages options (probably calls) on Friday.
The Upside Surprise/Rollover Barometer is at "Likely" due to the aggressive Fed credit extended since 2-28-08, that fuels index related program buying ("only" 70% of the dollar volume on the NYSE), see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE.
A Cyclical Bear Market probably began on 10-11-07 for SPX (S & P 500), began in late October 2007 for NDX (NASDAQ 100), began in late July 2007 for RUT (Russell 2000).
HUI/XAU/gold are doing a short term countertrend Wave B upcycle, following last week's huge short term Wave A downcycle (HUI fell -18.29% in a little under three sessions, and, bottomed on 3-20) that triggered a very important 5% follow through major sell signal, see http://stockcharts.com/charts/gallery.html?%24xau.
HUI/XAU/gold are probably still in (began today 3-27 as expected) Wave 4 of the short term countertrend Wave B upcycle, since there's an up down up down pattern on the daily chart since 3-20, when Wave B started.
The five day NEM Lead Indicator has turned extremely bearish, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=on&z=l&q=l&p=&a=&c=%5Ehui,nem.
The NEM Lead Indicator was a modestly bearish -0.42% versus the XAU today/on 3-27, was a very bearish -1.44% versus the XAU on 3-26, was an extremely bearish -1.85% on 3-25, was an extremely bearish -2.19% on 3-20, and, was a bearish -0.63% on 3-24, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem.
From HUI's 5 day intraday candlestick chart it looks like Wave 4 down of the short term countertrend Wave B upcycle (began 3-20) might bottom tomorrow, 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, so, there might be a good shorting opportunity early tomorrow. I'll be looking to short GDX, the Gold Miners ETF.
Concerning HUI/XAU/gold, the important thing now is that HUI/XAU/gold hit a 5% follow through major sell signal, see http://stockcharts.com/charts/gallery.html?%24xau. The multi month uptrend lines broke down and 5%+ follow through occurred to the downside. HUI/XAU/gold (gold might lag and peak in rollover mode) are in the midst of a major intermediate term downcycle, that's probably the start of an 18 monthish Wave 2 Cyclical Bear Market. HUI/XAU/gold will probably fall -50%+ in this bear market. Got cycles?
Gold and silver had two Cyclical Bear Markets in the previous Secular Bull Market that peaked in 1980, corresponding to Elliott Wave 2 and 4 downcycles, see http://tradethecycles.blogspot.com/2008/03/gold-and-silvers-two-cyclical-bear.html.
HUI/XAU very likely put in an intermediate term and a Wave 1 Cyclical Bull Market cycle high on 3-17 for HUI and on 3-14 for the XAU, see http://stockcharts.com/charts/gallery.html?%5Ehui. The XAU has a large bearish spike on 3-14's candle.
The -18.29% HUI short term Wave A downcycle in a little under three sessions time last week, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, is very likely an (probably extremely) important turning point/very strong sell signal. The more severe the weakness the stronger the sell signal tends to be, and, the weakness was about as severe as it gets.
The severe weakness/action recently tells us something, just as the severe weakness/5% sell signal that occurred in May 2006 was a good one, since HUI/XAU/gold (http://stockcharts.com/charts/gallery.html?%24xau) were underwater versus the May 2006 cycle high for about 17 months.
A rollover long term upcycle was in effect from June 2006 (from October 2006 for the XAU, http://stockcharts.com/charts/gallery.html?%24xau) until the recent cycle highs, that was probably the Wave 1 Cyclical Bull Market (began in late 2000 for HUI/XAU and in April 2001 for gold, which was a slightly higher bullish double bottom with the 1999 cycle low) peaking in dramatic rollover mode versus the May 2006 cycle high. One can only discuss likely scenarios, not certainties.
Gold and gold mining scams are commonplace, see http://tradethecycles.blogspot.com/2008/03/gold-and-gold-mining-scams-are.html.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Also, reliable lead indicator Walmart (WMT) is correcting the big spike move it made recently, see http://stockcharts.com/charts/gallery.html?wmt.
The WMT Lead Indicator was +0.15% versus SPX on 3-27 and was +0.60% on 3-26. The 5 day WMT Lead Indicator is modestly bullish, 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.
SPX (S & P 500) has an upside gap at 1367.68 that might get filled in the near future, and, has a downside gap at 1329.51. SPX (S & P 500) has a bullish breakaway gap at 1276.60 from 3-18's open and WMT has one at 49.95 from 3-18's open.
SPX (S & P 500) and NDX (NASDAQ 100) probably put in Wave A intermediate term cycle (since 10-11-07 for SPX and late October 2007 for NDX) lows on 3-17, while RUT (Russell 2000) probably did so on 3-10, see http://stockcharts.com/charts/gallery.html?%24spx for SPX.
VIX fell a significant -1.23% today/on 3-27 versus the S & P 500 falling a significant -1.15% on 3-27, which is a sharp +2.38% rise in complacency (the SPX wall of worry shrank by -2.38% = -1.23% + -1.15% = +2.38% rise in complacency) that points to some significant/potentially sharp weakness on Friday 3-27.
I'll be looking to day trade the major averages ultra long early on Friday via SSO, QLD, or UWM once the very short term downcycle bottoms, and, I'll be looking to short GDX, the Gold Miners ETF. I'll also be looking at trading some major averages options (probably calls) on Friday.
The Upside Surprise/Rollover Barometer is at "Likely" due to the aggressive Fed credit extended since 2-28-08, that fuels index related program buying ("only" 70% of the dollar volume on the NYSE), see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE.
A Cyclical Bear Market probably began on 10-11-07 for SPX (S & P 500), began in late October 2007 for NDX (NASDAQ 100), began in late July 2007 for RUT (Russell 2000).
HUI/XAU/gold are doing a short term countertrend Wave B upcycle, following last week's huge short term Wave A downcycle (HUI fell -18.29% in a little under three sessions, and, bottomed on 3-20) that triggered a very important 5% follow through major sell signal, see http://stockcharts.com/charts/gallery.html?%24xau.
HUI/XAU/gold are probably still in (began today 3-27 as expected) Wave 4 of the short term countertrend Wave B upcycle, since there's an up down up down pattern on the daily chart since 3-20, when Wave B started.
The five day NEM Lead Indicator has turned extremely bearish, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=on&z=l&q=l&p=&a=&c=%5Ehui,nem.
The NEM Lead Indicator was a modestly bearish -0.42% versus the XAU today/on 3-27, was a very bearish -1.44% versus the XAU on 3-26, was an extremely bearish -1.85% on 3-25, was an extremely bearish -2.19% on 3-20, and, was a bearish -0.63% on 3-24, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem.
From HUI's 5 day intraday candlestick chart it looks like Wave 4 down of the short term countertrend Wave B upcycle (began 3-20) might bottom tomorrow, 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, so, there might be a good shorting opportunity early tomorrow. I'll be looking to short GDX, the Gold Miners ETF.
Concerning HUI/XAU/gold, the important thing now is that HUI/XAU/gold hit a 5% follow through major sell signal, see http://stockcharts.com/charts/gallery.html?%24xau. The multi month uptrend lines broke down and 5%+ follow through occurred to the downside. HUI/XAU/gold (gold might lag and peak in rollover mode) are in the midst of a major intermediate term downcycle, that's probably the start of an 18 monthish Wave 2 Cyclical Bear Market. HUI/XAU/gold will probably fall -50%+ in this bear market. Got cycles?
Gold and silver had two Cyclical Bear Markets in the previous Secular Bull Market that peaked in 1980, corresponding to Elliott Wave 2 and 4 downcycles, see http://tradethecycles.blogspot.com/2008/03/gold-and-silvers-two-cyclical-bear.html.
HUI/XAU very likely put in an intermediate term and a Wave 1 Cyclical Bull Market cycle high on 3-17 for HUI and on 3-14 for the XAU, see http://stockcharts.com/charts/gallery.html?%5Ehui. The XAU has a large bearish spike on 3-14's candle.
The -18.29% HUI short term Wave A downcycle in a little under three sessions time last week, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, is very likely an (probably extremely) important turning point/very strong sell signal. The more severe the weakness the stronger the sell signal tends to be, and, the weakness was about as severe as it gets.
The severe weakness/action recently tells us something, just as the severe weakness/5% sell signal that occurred in May 2006 was a good one, since HUI/XAU/gold (http://stockcharts.com/charts/gallery.html?%24xau) were underwater versus the May 2006 cycle high for about 17 months.
A rollover long term upcycle was in effect from June 2006 (from October 2006 for the XAU, http://stockcharts.com/charts/gallery.html?%24xau) until the recent cycle highs, that was probably the Wave 1 Cyclical Bull Market (began in late 2000 for HUI/XAU and in April 2001 for gold, which was a slightly higher bullish double bottom with the 1999 cycle low) peaking in dramatic rollover mode versus the May 2006 cycle high. One can only discuss likely scenarios, not certainties.
Gold and gold mining scams are commonplace, see http://tradethecycles.blogspot.com/2008/03/gold-and-gold-mining-scams-are.html.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
1:40 PM
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