SPX (S & P 500) Short Term Wave 1 Appears To Be Peaking In Dramatic Rollover Mode
SPX's (S & P 500) short term Wave 1 since 4-15 appears to be peaking in dramatic rollover mode, see the daily candlestick chart at http://stockcharts.com/charts/gallery.html?%24spx. Today 4-24's cycle high might be a slightly higher bearish short term double top with last Friday 4-18's cycle high.
The vertical spiking action yesterday and today is typical peaking (or countertrend Wave B) type action, 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 an Elliott Wave 12345 up down up down up pattern on the daily chart since the monthly cycle low on 4-15, see http://stockcharts.com/charts/gallery.html?%24spx, which suggests that the short term Wave 1 upcycle since 4-15 has or soon will peak. Also, there's a bearish spike on today 4-24's candle, Williams %R is overbought, and, stochastics are very near an overbought condition (were overbought intraday, before the late session decline.
NDX (NASDAQ 100) also has an Elliott Wave 12345 up down up down up pattern on the daily chart since the monthly cycle low on 4-15, see http://stockcharts.com/charts/gallery.html?%24spx, which suggests that the short term Wave 1 upcycle either has or soon will peak (appears to have peaked today).
VIX, the SPX Volatility Index, fell -0.99% today 4-24 versus SPX rising +0.64%, which is a modest +0.35% rise in complacency that points to some modest weakness tomorrow, since the SPX wall of worry fell -0.35% = -0.99% + +0.64%.
It looks like NDX will probably fill 4-23's downside gap at 1881.65 in a short term Wave 2 downcycle, and, might make a run at Friday 4-18's downside gap at 1840.88, which appears to be a bullish breakaway gap. If 1840.88 doesn't get filled then NDX appears to be the best long trade (I'll use QLD, the Ultra Long QQQQ ETF) for the short term Wave 3 upcycle that will probably begin early next week.
So, it looks like SPX will try to fill it's downside gap at 1365.56 in the short term Wave 2 downcycle. RUT (Russell 2000) will probably try to fill it's downside gap at 692.06 in the short term Wave 2 downcycle.
There might be a good opportunity to day trade SPX/NDX/RUT short tomorrow. I will look to trade SDS, QID, or TWM early tomorrow.
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.
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), and, began in late July 2007 for RUT (Russell 2000).
SPX created a bullish breakaway gap at 1322.70 on 4-1 and WMT created one at 52.68, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=on&z=l&q=c&p=&a=p12,fs,w14&c=. 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.
The XAU's (http://stockcharts.com/charts/gallery.html?%24xau) short term countertrend Wave B upcycle that began on 3-20 (HUI/gold since 4-1) did an Elliott Wave 12345 up down up down up pattern, and, peaked on 4-17 (bearish double top with 4-16), and, the Wave B trendline broke down yesterday.
Wave A of the short term Wave C since 4-17 might have bottomed today or might do so early tomorrow 4-25, see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c. The NEM Lead Indicator was a very bullish +1.83% versus the XAU today 4-24 and was a very bullish +1.67% versus the XAU on 4-23. The NEM Lead Indicator was a bearish -0.65% versus the XAU on 4-22 and was a very bearish -1.43% on 4-21.
The XAU's downside gap at 172.87 got filled today. NEM has downside gaps at 42.29, 41.52.
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.
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?
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.
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 rest of the info is for reference purposes or for new readers.
Gold's primary Secular Bull Market (since April 2001) uptrend line is at $500ish, see chart two at http://www.joefrocks.com/GoldStockCharts.html.
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.
The real estate/too easy mortgage boom from 2002 until early 2006 was very inflationary. The current bust is obviously the diametric opposite/very deflationary. Combined with plummeting major world stock markets, many annihilated financial stocks, plummeting money market rates and bond yields, plummeting credit/debt instruments, tight credit and mortgage lending, real estate bust, etc and it's pretty obvious that the environment is very deflationary.
.......http://www.JoeFROCKS.com/ .
NEM XAU HUI
The vertical spiking action yesterday and today is typical peaking (or countertrend Wave B) type action, 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 an Elliott Wave 12345 up down up down up pattern on the daily chart since the monthly cycle low on 4-15, see http://stockcharts.com/charts/gallery.html?%24spx, which suggests that the short term Wave 1 upcycle since 4-15 has or soon will peak. Also, there's a bearish spike on today 4-24's candle, Williams %R is overbought, and, stochastics are very near an overbought condition (were overbought intraday, before the late session decline.
NDX (NASDAQ 100) also has an Elliott Wave 12345 up down up down up pattern on the daily chart since the monthly cycle low on 4-15, see http://stockcharts.com/charts/gallery.html?%24spx, which suggests that the short term Wave 1 upcycle either has or soon will peak (appears to have peaked today).
VIX, the SPX Volatility Index, fell -0.99% today 4-24 versus SPX rising +0.64%, which is a modest +0.35% rise in complacency that points to some modest weakness tomorrow, since the SPX wall of worry fell -0.35% = -0.99% + +0.64%.
It looks like NDX will probably fill 4-23's downside gap at 1881.65 in a short term Wave 2 downcycle, and, might make a run at Friday 4-18's downside gap at 1840.88, which appears to be a bullish breakaway gap. If 1840.88 doesn't get filled then NDX appears to be the best long trade (I'll use QLD, the Ultra Long QQQQ ETF) for the short term Wave 3 upcycle that will probably begin early next week.
So, it looks like SPX will try to fill it's downside gap at 1365.56 in the short term Wave 2 downcycle. RUT (Russell 2000) will probably try to fill it's downside gap at 692.06 in the short term Wave 2 downcycle.
There might be a good opportunity to day trade SPX/NDX/RUT short tomorrow. I will look to trade SDS, QID, or TWM early tomorrow.
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.
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), and, began in late July 2007 for RUT (Russell 2000).
SPX created a bullish breakaway gap at 1322.70 on 4-1 and WMT created one at 52.68, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=on&z=l&q=c&p=&a=p12,fs,w14&c=. 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.
The XAU's (http://stockcharts.com/charts/gallery.html?%24xau) short term countertrend Wave B upcycle that began on 3-20 (HUI/gold since 4-1) did an Elliott Wave 12345 up down up down up pattern, and, peaked on 4-17 (bearish double top with 4-16), and, the Wave B trendline broke down yesterday.
Wave A of the short term Wave C since 4-17 might have bottomed today or might do so early tomorrow 4-25, see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c. The NEM Lead Indicator was a very bullish +1.83% versus the XAU today 4-24 and was a very bullish +1.67% versus the XAU on 4-23. The NEM Lead Indicator was a bearish -0.65% versus the XAU on 4-22 and was a very bearish -1.43% on 4-21.
The XAU's downside gap at 172.87 got filled today. NEM has downside gaps at 42.29, 41.52.
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.
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?
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.
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 rest of the info is for reference purposes or for new readers.
Gold's primary Secular Bull Market (since April 2001) uptrend line is at $500ish, see chart two at http://www.joefrocks.com/GoldStockCharts.html.
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.
The real estate/too easy mortgage boom from 2002 until early 2006 was very inflationary. The current bust is obviously the diametric opposite/very deflationary. Combined with plummeting major world stock markets, many annihilated financial stocks, plummeting money market rates and bond yields, plummeting credit/debt instruments, tight credit and mortgage lending, real estate bust, etc and it's pretty obvious that the environment is very deflationary.
.......http://www.JoeFROCKS.com/ .
NEM XAU HUI
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
1:52 PM
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