Tomorrow Will Probably Bring Good Shorting Opportunities
After early weakness SPX (S & P 500) spent most of the session doing what appears to be a countertrend Wave B type move, 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=, which jives with today's very bearish WMT Lead Indicator, at -1.31% versus SPX today 3-25 (-0.78% yesterday), 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.
The Fed's massive $17 Billion credit injection today (unusual for a Tuesday), see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE, fueled index related program traders/buying, and, propped up the market today.
SPX's (S & P 500) Wave 3 of a big short term Wave 1 upcycle appears to have peaked yesterday, see http://stockcharts.com/charts/gallery.html?%24spx and see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c. SPX has a large bearish spike on 3-24's candle, see http://stockcharts.com/charts/gallery.html?%24spx.
SPX (S & P 500) has an upside gap at 1367.68 and 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 slight -0.04% today/on 3-25 versus the S & P 500 rising a slight +0.23% on 3-25, which is a slight +0.19% rise in fear (the SPX wall of worry grew by +0.19% = -0.04% + +0.23% = +0.19% rise in fear) that points to some slight strength (probably early) on Wednesday 3-26.
I'll be looking to day trade the major averages ultra short early on Wednesday via SDS, QID, or TWM, and, I'll be looking to short GDX, the Gold Miners ETF. I'll also be looking at trading some major averages options (probably puts) on Wednesday.
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).
The NEM Lead Indicator was an extremely bearish -1.85% versus the XAU today/3-25, was an extremely bearish -2.19% versus the XAU on 3-20, and, was a bearish -0.63% yesterday, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem.
Looking at HUI's five day intraday candlestick chart, 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, the upcycle that began early on 3-20 is a very short term countertrend Wave B type move, so, it looks like another potentially large decline might begin tomorrow/on Wednesday.
The XAU has a large bearish spike on 3-24's candle, see http://stockcharts.com/charts/gallery.html?%5Exau. I'll be looking to short GDX, the Gold Miners Index, early tomorrow.
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 Wave A type decline 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
The Fed's massive $17 Billion credit injection today (unusual for a Tuesday), see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE, fueled index related program traders/buying, and, propped up the market today.
SPX's (S & P 500) Wave 3 of a big short term Wave 1 upcycle appears to have peaked yesterday, see http://stockcharts.com/charts/gallery.html?%24spx and see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c. SPX has a large bearish spike on 3-24's candle, see http://stockcharts.com/charts/gallery.html?%24spx.
SPX (S & P 500) has an upside gap at 1367.68 and 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 slight -0.04% today/on 3-25 versus the S & P 500 rising a slight +0.23% on 3-25, which is a slight +0.19% rise in fear (the SPX wall of worry grew by +0.19% = -0.04% + +0.23% = +0.19% rise in fear) that points to some slight strength (probably early) on Wednesday 3-26.
I'll be looking to day trade the major averages ultra short early on Wednesday via SDS, QID, or TWM, and, I'll be looking to short GDX, the Gold Miners ETF. I'll also be looking at trading some major averages options (probably puts) on Wednesday.
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).
The NEM Lead Indicator was an extremely bearish -1.85% versus the XAU today/3-25, was an extremely bearish -2.19% versus the XAU on 3-20, and, was a bearish -0.63% yesterday, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem.
Looking at HUI's five day intraday candlestick chart, 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, the upcycle that began early on 3-20 is a very short term countertrend Wave B type move, so, it looks like another potentially large decline might begin tomorrow/on Wednesday.
The XAU has a large bearish spike on 3-24's candle, see http://stockcharts.com/charts/gallery.html?%5Exau. I'll be looking to short GDX, the Gold Miners Index, early tomorrow.
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 Wave A type decline 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
2:19 PM
5 Comments:
I'm probably going to (look to, doesn't mean that I will) "ultra" short the Russell 2000 (RUT) tomorrow via TWM, as opposed to shorting SPX or NDX.
Also, shorting the Gold Miners ETF might be a great trade tomorrow (not a recommendation, just an observation), given today 3-25's big spike move and the very bearish short term NEM Lead Indicator, which was -1.85% versus the XAU today 3-25. Buckle up!
By
Joe Ferrazzano, at 3:30 PM
So? Did you buy TWM or not? Paulsen is talking on TV and the market is getting worse the more he speaks. Aren't you worried Treasury will intervene to make his speech look like it worked to reassure markets?
They do this sh#t you know. Psychological warfare on the bears. It stinks to high heaven. Luck.
By
Anonymous, at 7:46 AM
The S & P 500 has done an Elliott Wave ABC down up down pattern since mid session Monday, while NDX and RUT did a Wave A down since late yesterday, so, I'm looking to trade SPX (S & P 500) long now and may trade NDX or RUT (and HUI/XAU via GDX) short later on.
I check the Fed Open Market Operations every day shortly after the market opens. I factor that in. Good luck.
By
Joe Ferrazzano, at 8:11 AM
joe,
why do the gold guys on yahoo hate you so much ? i thought you liked gold. are you into paper money now or something? did you read alf field's elliott wave forecast? he said 900 could maybe have been the end of big wave 2. if true, then you might have lots of crow to eat. those gold guys are spittin' mad at you. i didnt know they even heard of you. you made so many enemies wow. take it easy. ~ walt
By
Anonymous, at 11:13 AM
Yes, I'm a REAL Goldbug. The "guys on Yahoo." Who are they? What are they so angry about? Because they know what I said is true and in some/too many cases they're clowns and/or criminal con artists.
Gold had a very obvious technical breakdown last week when it's multi month uptrend line broke down. Basic technical analysis.
Deception for personal gain is FRAUD, it's criminal activity. People like that are the enemy. I'm about pure science. Screw them.
By
Joe Ferrazzano, at 11:35 AM
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