SPX (S & P 500) Filled It's Upside Gap At 1367.68 Late Today

SPX (S & P 500) filled it's upside gap at 1367.68 late today, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=on&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c.

Williams %R is extremely overbought at 0 and the WMT Lead Indicator was a bearish -0.93% versus SPX today (http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=on&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC), so, after likely strength at the open, because SPX (http://stockcharts.com/charts/gallery.html?%24spx) closed right at the session cycle high of 1370.18, there should be significant/sharp weakness tomorrow 4-2. Tomorrow will probably be a good day to trade short/trade puts.

SPX's (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) Wave 4 down (began mid session Monday 3-24) of the big short term Wave 1 Upcycle since 3-17 bottomed just after 3-31's open, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=. SPX's decline that occurred during the last 2/3 of the Friday 3-28's session was a final Wave C type parabolic/steep decline as expected/discussed Friday.

The WMT Lead Indicator (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) was a bearish -0.93% versus SPX today/on 4-1, was a bullish +0.50% versus SPX on 3-31, was a modestly bullish +0.32% on 3-28, was +0.15% on 3-27, and, was +0.60% on 3-26.

SPX (S & P 500) had an upside gap at 1367.68 that got filled as expected. 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) 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) did so on 3-10, see http://stockcharts.com/charts/gallery.html?%24spx for SPX.

VIX fell a dramatic -11.44% today/on 4-1 versus the S & P 500 rising a very sharp +3.59% on 4-1, which is an unusually large +7.85% rise in complacency (the SPX wall of worry shrank by -7.85% = -11.44% + +3.59% = +7.85% rise in complacency) that points to early strength followed by weakness on Wednesday 4-2.

I'll be looking to day trade the major averages ultra short early on Wednesday via SDS, QID, or TWM. I'll also be looking at trading some major averages options (probably puts) on Wednesday.

I sold UWM (Ultra Long Russell 2000 ETF) at 48.801 today versus a purchase yesterday at 47.9599, and, I sold SXZDJ (April 1450 SPX calls) at 1.15 after hours today versus a purchase at 1.10.

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/gold are doing/did (probably bottomed today) a short term Wave A downcycle (the XAU entered Wave B on 3-20), following the week before last's huge very 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. The upcycle that began on 3-20 for HUI/gold turned out to be a very short term countertrend Wave B upcycle within a short term Wave A downcycle, not a short term Wave B upcycle.

If you're looking to exit gold/silver stock and/or metals positions, the short term countertrend Wave B upcycle, that probably began today for HUI/gold and on 3-20 for the XAU, will be an opportunity to do so.

When the final short term countertrend Wave B cycle high occurs there's likely to be a large bearish spike on the daily candle, and, the NEM Lead Indicator should be extremely bearish. Also, waiting for a sharp very short term Wave A type downcycle (sell signal, look for the short term Wave B upcycle trendline to clearly break down) before holding a short position/puts overnight (look to enter trades in a very short term countertrend Wave B) makes a lot of sense.

From HUI's 5 day intraday candlestick chart (intraday Elliott Wave count, ABC down up down pattern near session's end) and today 4-1's very bullish NEM Lead Indicator, at +1.10% versus the XAU (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem), it looks like there will be early strength on Wednesday 4-2, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.

For the five day NEM Lead Indicator, 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 very bullish +1.10% versus the XAU today/on 4-1, was a bearish -0.74% versus the XAU on 3-31, was a bullish +0.80% versus the XAU on 3-28, was a modestly bearish -0.42% on 3-27, was a very bearish -1.44% 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.

NEM has a white candle with bullish large inverse spike on the daily chart (http://stockcharts.com/charts/gallery.html?nem) /bullish very large inverse spike on the intraday chart (http://finance.yahoo.com/q/ta?s=nem&t=5d&l=on&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c).

Gold's primary Secular Bull Market (since April 2001) uptrend line is at $500ish, see chart two at http://www.joefrocks.com/GoldStockCharts.html. Morons leaving phony comments (and most gold writers) don't even understand basic technical analysis.

Nearly all if not all gold writers have long term investors chase huge parabolic spike moves, which is poor advice. Any investment is only timely for long term investors near it's primary trendline.

I constantly get bogus comments from morons saying how gold can't fall to it's primary trendline, currently at $500ish. Gold HAS to fall to it's primary trendline. This is very basic stuff.

Try finding a link to a gold writer who shows (even if the trendline is wrong) and discusses gold's primary multi year uptrend line since April 2001, without which it's impossible to know when gold is timely for long term investors.

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 very short term Wave A downcycle in a little under three sessions time the week before last, 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.

Here's a bearish gold article http://www.marketoracle.co.uk/Article4159.html. Ski/Jeff Kern (http://www.321gold.com/editorials/kern/current.html) and Jack Chan (http://www.321gold.com/editorials/chan/chan033108.html) have turned bearish also.

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