Today's SPX (S & P 500) Cycle High Was Probably Wave B Of The Short Term Wave 2 Downcycle Since Friday 4-18
Today's SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) cycle high was probably a countertrend Wave B cycle high of the short term Wave 2 downcycle since Friday 4-18, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c.
Yesterday it looked like Wave 2 had bottomed, because, SPX had completed an Elliott Wave ABC down up down pattern and the WMT Lead Indicator was a very bullish +1.18% versus SPX yesterday 4-22 (+0.36% today).
The reasons why it looks like a short term Wave 2 downcycle is still in progress are:
1. SPX failed to do an Elliott Wave 12345 up down up down up pattern from mid session yesterday 4-22's cycle low to early today 4-23's cycle high, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c. The intraday Wave 2 cycle low late yesterday was slightly below the orignal cycle low that occurred at mid session yesterday.
2. The plunge that occurred after today's cycle high appears to be a Wave A type decline, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=. Also, the late rebound today appears to be an anemic countertrend Wave B type rebound. Reliable lead indicator Walmart's (WMT) rebound was anemic also in the second half of the session, see http://finance.yahoo.com/q/ta?s=WMT&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c.
3. Looking at the daily SPX (S & P 500) chart, see http://stockcharts.com/charts/gallery.html?%24spx, the two day decline/Elliott Wave ABC down up down pattern (can be seen on 5 day intraday chart) appears to be Wave A of the short term Wave 2 since Friday 4-18, and, today's rebound/spike on the daily candle looks like a Wave B type move. Also, it looks like the large spike move that occurred in the short term Wave 1 from 4-15 to 4-18 needs to correct more.
4. VIX, the SPX Volatility Index, fell -2.92% today 4-23 versus SPX rising only +0.29%, which is a sharp +2.63% rise in complacency that points to a likely sharp decline tomorrow, since the SPX wall of worry fell -2.63% = -2.92% + +0.29%.
5. NDX's (NASDAQ 100) short term Wave 1 peaked on Monday and today's slightly lower cycle high/bearish double top looks like a Wave B of Wave 2 cycle high, and, confirms/jives with the SPX analysis, see http://finance.yahoo.com/q/ta?s=%5Endx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
It looks like NDX will fill today 4-23's downside gap at 1881.65 early tomorrow, and, might make a run at Friday'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'd use QLD, the Ultra Long QQQQ ETF) for the short term Wave 3 upcycle that will probably begin early to mid session tomorrow.
So, it looks like SPX will try to fill it's downside gap at 1365.56 early tomorrow.
RUT (Russell 2000) will probably try to fill it's downside gap at 692.06 early tomorrow.
There might be a good opportunity to day trade SPX/NDX/RUT short early tomorrow. I will look to trade SDS, QID, or TWM early tomorrow, and I'll look to trade SSO, QLD, UWM later on once I'm convinced that a short term Wave 3 has begun.
Today I traded UWM in the second half of the session (bought at 49.8499 and sold at 49.90), but, quickly sold when I realized that a short term Wave 2 downcycle was probably in effect. I nearly caught the big spike move/likely Wave B type spiking action early in the session, but, it took off like a rocket and I didn't get the expected pullback/entry point, see http://finance.yahoo.com/q/ta?s=uwm&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
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 since 3-20 (HUI/gold since 4-1) has done an Elliott Wave 12345 up down up down up pattern, and, probably/very likely peaked on 4-17 (bearish double top with 4-16), and, the Wave B trendline broke down today. The XAU filled it's downside gap at 184.35 today 4-23 and GDX filled 46.39.
Wave A of a short term Wave C since 4-17 might have bottomed late today or might do so early tomorrow 4-24, 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 +1.67% versus the XAU today 4-23.
The XAU had a large bearish spike on yesterday 4-22's bearish black candle, which indicated a close below the open (the black candle indicates a close below the open), see http://stockcharts.com/charts/gallery.html?%24xau. Also, 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 has a downside gap at 172.87. NEM has downside gaps at 42.29, 41.52.
I'll be looking to short the Gold Miners ETF GDX and might buy some GDX/XAU puts late in Wave B/early in Wave C of the short term Wave C (began 4-17).
From HUI's 5 day intraday candlestick chart it looks like there might be brief early weakness on Thursday 4-24 followed by strength, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
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, real estate bust, etc and it's pretty obvious that the environment is very deflationary.
.......http://www.JoeFROCKS.com/ .
HUI NEM XAU
Yesterday it looked like Wave 2 had bottomed, because, SPX had completed an Elliott Wave ABC down up down pattern and the WMT Lead Indicator was a very bullish +1.18% versus SPX yesterday 4-22 (+0.36% today).
The reasons why it looks like a short term Wave 2 downcycle is still in progress are:
1. SPX failed to do an Elliott Wave 12345 up down up down up pattern from mid session yesterday 4-22's cycle low to early today 4-23's cycle high, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c. The intraday Wave 2 cycle low late yesterday was slightly below the orignal cycle low that occurred at mid session yesterday.
2. The plunge that occurred after today's cycle high appears to be a Wave A type decline, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=. Also, the late rebound today appears to be an anemic countertrend Wave B type rebound. Reliable lead indicator Walmart's (WMT) rebound was anemic also in the second half of the session, see http://finance.yahoo.com/q/ta?s=WMT&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c.
3. Looking at the daily SPX (S & P 500) chart, see http://stockcharts.com/charts/gallery.html?%24spx, the two day decline/Elliott Wave ABC down up down pattern (can be seen on 5 day intraday chart) appears to be Wave A of the short term Wave 2 since Friday 4-18, and, today's rebound/spike on the daily candle looks like a Wave B type move. Also, it looks like the large spike move that occurred in the short term Wave 1 from 4-15 to 4-18 needs to correct more.
4. VIX, the SPX Volatility Index, fell -2.92% today 4-23 versus SPX rising only +0.29%, which is a sharp +2.63% rise in complacency that points to a likely sharp decline tomorrow, since the SPX wall of worry fell -2.63% = -2.92% + +0.29%.
5. NDX's (NASDAQ 100) short term Wave 1 peaked on Monday and today's slightly lower cycle high/bearish double top looks like a Wave B of Wave 2 cycle high, and, confirms/jives with the SPX analysis, see http://finance.yahoo.com/q/ta?s=%5Endx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
It looks like NDX will fill today 4-23's downside gap at 1881.65 early tomorrow, and, might make a run at Friday'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'd use QLD, the Ultra Long QQQQ ETF) for the short term Wave 3 upcycle that will probably begin early to mid session tomorrow.
So, it looks like SPX will try to fill it's downside gap at 1365.56 early tomorrow.
RUT (Russell 2000) will probably try to fill it's downside gap at 692.06 early tomorrow.
There might be a good opportunity to day trade SPX/NDX/RUT short early tomorrow. I will look to trade SDS, QID, or TWM early tomorrow, and I'll look to trade SSO, QLD, UWM later on once I'm convinced that a short term Wave 3 has begun.
Today I traded UWM in the second half of the session (bought at 49.8499 and sold at 49.90), but, quickly sold when I realized that a short term Wave 2 downcycle was probably in effect. I nearly caught the big spike move/likely Wave B type spiking action early in the session, but, it took off like a rocket and I didn't get the expected pullback/entry point, see http://finance.yahoo.com/q/ta?s=uwm&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
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 since 3-20 (HUI/gold since 4-1) has done an Elliott Wave 12345 up down up down up pattern, and, probably/very likely peaked on 4-17 (bearish double top with 4-16), and, the Wave B trendline broke down today. The XAU filled it's downside gap at 184.35 today 4-23 and GDX filled 46.39.
Wave A of a short term Wave C since 4-17 might have bottomed late today or might do so early tomorrow 4-24, 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 +1.67% versus the XAU today 4-23.
The XAU had a large bearish spike on yesterday 4-22's bearish black candle, which indicated a close below the open (the black candle indicates a close below the open), see http://stockcharts.com/charts/gallery.html?%24xau. Also, 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 has a downside gap at 172.87. NEM has downside gaps at 42.29, 41.52.
I'll be looking to short the Gold Miners ETF GDX and might buy some GDX/XAU puts late in Wave B/early in Wave C of the short term Wave C (began 4-17).
From HUI's 5 day intraday candlestick chart it looks like there might be brief early weakness on Thursday 4-24 followed by strength, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
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, real estate bust, etc and it's pretty obvious that the environment is very deflationary.
.......http://www.JoeFROCKS.com/ .
HUI NEM XAU
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
1:40 PM
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