SPX's (S & P 500) Short Term Wave 1 Upcycle Might Have Peaked Yesterday In Dramatic Rollover Mode
SPX's (S & P 500) short term Wave 1 upcycle since 4-15-08 (monthly upcycle began, Wave B intermediate term upcycle began on 3-17-08 for SPX/NDX and on 3-10-08 for RUT) might have peaked yesterday in dramatic rollover mode versus 4-18-08's cycle high, see the daily candlestick chart at http://stockcharts.com/charts/gallery.html?%24spx, and, see the 5 day intraday candlestick chart at http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
SPX completed a Wave A down type move (of the short term Wave 2 downcycle that began yesterday) early today, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=, then did a countertrend Wave B type move that appears to have peaked late in the session, followed by weakness near session's end, that appears to be the beginning of Wave C of the short term Wave 2 downcycle that began yesterday. SPX's short term Wave 2 will probably bottom shortly after the downside gap at 1365.56 gets filled.
NDX's (NASDAQ 100) short term Wave 1 upcycle since 4-15-08 peaked on 4-24, see http://stockcharts.com/charts/gallery.html?%24ndx, and, today's strength/cycle high was Wave B of a short term Wave 2 downcycle. NDX (NASDAQ 100) will probably fill it's downside gap at 1881.65 on Wednesday or Thursday.
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 this week.
I'll be looking to trade SPX or NDX ultra short early tomorrow 4-30 via SDS or QID. Watch downside gaps at 1365.56 for SPX and at 1881.65 for NDX. SPX and NDX should bottom shortly after those gaps (probably) get filled. RUT (Russell 2000) appears to be in a short term Wave 3 upcycle (downside gap at 692.06).
The WMT Lead Indicator was an extremely bullish +2.59% versus SPX today 4-29, was a modestly bearish -0.41% versus SPX on 4-28 and a modestly bearish -0.30% versus SPX on 4-25 (+0.29% on 4-24, +0.36% on 4-23, +1.18% on 4-22, +0.28% on 4-21, -0.85% on 4-16, +1.57% on 4-15, +0.98% on 4-14, +2.30% on 4-11, +0.51% on 4-10, +0.24% on 4-9, +0.92% on 4-8).
VIX rose +3.06% today 4-29 versus SPX falling -0.39%, which is a sharp +2.67% rise in fear (+3.06% + -0.39% = +2.67% rise in the SPX (S & P 500) wall of worry) that points to some sharp strength on Wednesday 4-30.
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/very likely 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 Wednesday 4-23.
Wave A of the short term Wave C since 4-17 probably didn't bottom yet, see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c. The XAU had a large bearish spike on yesterday 4-28's bearish black candle (indicates a close below the open), see http://stockcharts.com/charts/gallery.html?%24xau, and, today's very bullish NEM Lead Indicator (+2.06% versus the XAU today 4-29) didn't rally HUI/XAU, see http://finance.yahoo.com/q/ta?s=^XAU&t=1d&l=on&z=m&q=l&p=&a=&c=^hui,nem, which points to more downside tomorrow, as does the fact that NEM didn't try to fill today's upside gap at 43.99, which appears to be a bearish breakaway gap (bearish big gap down on the intraday chart and bearish weak/anemic NEM action today, see http://finance.yahoo.com/q/ta?s=NEM&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=).
I'll be looking to/might trade GDX (Gold Miners ETF) short early tomorrow 4-30. If reliable lead indicator NEM trys to fill it's downside gap at 42.29, then tomorrow could be another big down day for HUI/XAU. Watch the XAU's downside gap at 161.75 if severe weakness occurs and watch GDX's downside gaps at 42.87 (filled today), 38.48, 37.65, 36.51, 35.71, 34.49, 32.20. NEM has downside gaps at 43 (filled today), 42.29, 41.52.
The NEM Lead Indicator was a very bullish +2.06% versus the XAU today 4-29, was a modestly bearish -0.35% versus the XAU on 4-28, was a very bullish +2.02% on 4-25, was a very bullish +1.83% on 4-24, and, was a very bullish +1.67% on 4-23. The NEM Lead Indicator was a bearish -0.65% on 4-22 and was a very bearish -1.43% on 4-21.
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.
See http://tradethecycles.blogspot.com/2008/04/crashing-velocity-circulation-of-money.html. My 18 month $500-550 cycle low target range for gold's Wave 2 Cyclical Bear Market is probably too optimistic. Probably 2-3 years and $450-500 is more realistic, given the extremely deflationary environment.
"The Bull Case For Gold And Why It Is Totally Incorrect," see http://tradethecycles.blogspot.com/2008/04/bull-case-for-gold-and-why-it-is.html.
Concerning HUI/XAU/gold, the important thing now is that HUI/XAU/gold hit a 5% follow through major sell signal six weeks ago, 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
SPX completed a Wave A down type move (of the short term Wave 2 downcycle that began yesterday) early today, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=, then did a countertrend Wave B type move that appears to have peaked late in the session, followed by weakness near session's end, that appears to be the beginning of Wave C of the short term Wave 2 downcycle that began yesterday. SPX's short term Wave 2 will probably bottom shortly after the downside gap at 1365.56 gets filled.
NDX's (NASDAQ 100) short term Wave 1 upcycle since 4-15-08 peaked on 4-24, see http://stockcharts.com/charts/gallery.html?%24ndx, and, today's strength/cycle high was Wave B of a short term Wave 2 downcycle. NDX (NASDAQ 100) will probably fill it's downside gap at 1881.65 on Wednesday or Thursday.
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 this week.
I'll be looking to trade SPX or NDX ultra short early tomorrow 4-30 via SDS or QID. Watch downside gaps at 1365.56 for SPX and at 1881.65 for NDX. SPX and NDX should bottom shortly after those gaps (probably) get filled. RUT (Russell 2000) appears to be in a short term Wave 3 upcycle (downside gap at 692.06).
The WMT Lead Indicator was an extremely bullish +2.59% versus SPX today 4-29, was a modestly bearish -0.41% versus SPX on 4-28 and a modestly bearish -0.30% versus SPX on 4-25 (+0.29% on 4-24, +0.36% on 4-23, +1.18% on 4-22, +0.28% on 4-21, -0.85% on 4-16, +1.57% on 4-15, +0.98% on 4-14, +2.30% on 4-11, +0.51% on 4-10, +0.24% on 4-9, +0.92% on 4-8).
VIX rose +3.06% today 4-29 versus SPX falling -0.39%, which is a sharp +2.67% rise in fear (+3.06% + -0.39% = +2.67% rise in the SPX (S & P 500) wall of worry) that points to some sharp strength on Wednesday 4-30.
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/very likely 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 Wednesday 4-23.
Wave A of the short term Wave C since 4-17 probably didn't bottom yet, see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c. The XAU had a large bearish spike on yesterday 4-28's bearish black candle (indicates a close below the open), see http://stockcharts.com/charts/gallery.html?%24xau, and, today's very bullish NEM Lead Indicator (+2.06% versus the XAU today 4-29) didn't rally HUI/XAU, see http://finance.yahoo.com/q/ta?s=^XAU&t=1d&l=on&z=m&q=l&p=&a=&c=^hui,nem, which points to more downside tomorrow, as does the fact that NEM didn't try to fill today's upside gap at 43.99, which appears to be a bearish breakaway gap (bearish big gap down on the intraday chart and bearish weak/anemic NEM action today, see http://finance.yahoo.com/q/ta?s=NEM&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=).
I'll be looking to/might trade GDX (Gold Miners ETF) short early tomorrow 4-30. If reliable lead indicator NEM trys to fill it's downside gap at 42.29, then tomorrow could be another big down day for HUI/XAU. Watch the XAU's downside gap at 161.75 if severe weakness occurs and watch GDX's downside gaps at 42.87 (filled today), 38.48, 37.65, 36.51, 35.71, 34.49, 32.20. NEM has downside gaps at 43 (filled today), 42.29, 41.52.
The NEM Lead Indicator was a very bullish +2.06% versus the XAU today 4-29, was a modestly bearish -0.35% versus the XAU on 4-28, was a very bullish +2.02% on 4-25, was a very bullish +1.83% on 4-24, and, was a very bullish +1.67% on 4-23. The NEM Lead Indicator was a bearish -0.65% on 4-22 and was a very bearish -1.43% on 4-21.
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.
See http://tradethecycles.blogspot.com/2008/04/crashing-velocity-circulation-of-money.html. My 18 month $500-550 cycle low target range for gold's Wave 2 Cyclical Bear Market is probably too optimistic. Probably 2-3 years and $450-500 is more realistic, given the extremely deflationary environment.
"The Bull Case For Gold And Why It Is Totally Incorrect," see http://tradethecycles.blogspot.com/2008/04/bull-case-for-gold-and-why-it-is.html.
Concerning HUI/XAU/gold, the important thing now is that HUI/XAU/gold hit a 5% follow through major sell signal six weeks ago, 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
1:28 PM
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