.......Today's Major Averages Action Made Sense
After a likely Wave A intermediate term cycle low occurred for SPX (S & P 500)/NDX (NASDAQ 100) late on Monday 3-17, a very sharp rally/Wave 1 type spike move occurred that peaked just after today's open (filled upside gap at 1333.70 as expected), see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, then, the remainder of the session was a sharp decline/Wave 2 type decline that corrected the very sharp rally/Wave 1 type move.
At session's end SPX's Wave 2 down move (began just after today's open) appeared to be near a cycle low, because, it appeared to be in the final Wave C move of an Elliott Wave ABC down up down pattern, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c. This jives with today 3-19's extremely bullish WMT Lead Indicator, at +2.04% versus the S & P 500, that became more bullish as the session progressed, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=off&z=l&q=l&p=&a=,p12,fs,w14&c=wmt,%5EGSPC. So, some brief weakness is likely at tomorrow 3-20's open followed by significant/potentially sharp strength.
SPX (S & P 500) has a likely bullish breakaway gap at 1276.60 from yesterday 3-18's open and WMT has one at 49.95. SPX's upside gap at 1333.70 got filled early today, now watch the upside gap at 1367.68.
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 rose a dramatic +15.70% today/3-19 versus the S & P 500 falling a sharp -2.43% today/3-19, which is an unusually large +13.27% rise in fear (the SPX wall of worry grew by +13.27% = +15.70% + -2.43% = +13.27% rise in fear) that points to some weakness followed by strength on Thursday 3-20.
I'll be looking to day trade the major averages ultra long tomorrow via SSO, QLD, or UWM.
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 crashed -6.93% today 3-19 (http://stockcharts.com/charts/gallery.html?%5Ehui), the XAU crashed -7.67%, and, gold crashed about -6% from it's session cycle high to it's session cycle low. They appear to be done (This Is It!!!), see http://tradethecycles.blogspot.com/2008/03/huixau-appear-to-be-done.html.
The fact that the NEM Lead Indicator was an extremely bullish +3.41% today 3-19 actually points to likely more downside early tomorrow 3-20, because, NEM outperforming strongly didn't rally HUI/XAU, 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=p12%2Cfs%2Cw14&c.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
At session's end SPX's Wave 2 down move (began just after today's open) appeared to be near a cycle low, because, it appeared to be in the final Wave C move of an Elliott Wave ABC down up down pattern, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c. This jives with today 3-19's extremely bullish WMT Lead Indicator, at +2.04% versus the S & P 500, that became more bullish as the session progressed, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=off&z=l&q=l&p=&a=,p12,fs,w14&c=wmt,%5EGSPC. So, some brief weakness is likely at tomorrow 3-20's open followed by significant/potentially sharp strength.
SPX (S & P 500) has a likely bullish breakaway gap at 1276.60 from yesterday 3-18's open and WMT has one at 49.95. SPX's upside gap at 1333.70 got filled early today, now watch the upside gap at 1367.68.
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 rose a dramatic +15.70% today/3-19 versus the S & P 500 falling a sharp -2.43% today/3-19, which is an unusually large +13.27% rise in fear (the SPX wall of worry grew by +13.27% = +15.70% + -2.43% = +13.27% rise in fear) that points to some weakness followed by strength on Thursday 3-20.
I'll be looking to day trade the major averages ultra long tomorrow via SSO, QLD, or UWM.
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 crashed -6.93% today 3-19 (http://stockcharts.com/charts/gallery.html?%5Ehui), the XAU crashed -7.67%, and, gold crashed about -6% from it's session cycle high to it's session cycle low. They appear to be done (This Is It!!!), see http://tradethecycles.blogspot.com/2008/03/huixau-appear-to-be-done.html.
The fact that the NEM Lead Indicator was an extremely bullish +3.41% today 3-19 actually points to likely more downside early tomorrow 3-20, because, NEM outperforming strongly didn't rally HUI/XAU, 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=p12%2Cfs%2Cw14&c.
....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
1:34 PM
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