SPX (S & P 500) Might Have Put In A Wave 2 Minor Intermediate Term Cycle Low Late Yesterday
SPX (S & P 500) might have put in a Wave 2 (since 5-19-08) minor intermediate term cycle low late yesterday 6-12, 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, but, it's doubtful. StockCharts labeled it a cycle low, so, this will be another test of their (unknown) approach.
If a relatively large pop/spike move occurs at Monday 6-16's open, which is likely, since SPX closed right at the session cycle high 1360.03, then SPX's Wave 2 (since 5-19-08) minor intermediate term downcycle probably bottomed late yesterday 6-12.
SPX (S & P 500) trended up less than two hours from late yesterday's cycle low to early today's cycle high, then, what looks like a rollover type upcycle occurred late in the session (http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c), that might end up being similar to a countertrend Wave B type upcycle. The Walmart (WMT) Lead Indicator was a very bearish -1.39% versus SPX today 6-13.
If SPX (S & P 500) put in a Wave 2 (since 5-19-08) minor intermediate term cycle low late yesterday 6-12, see http://stockcharts.com/charts/gallery.html?%24spx, then, some time in the next session or two SPX should put in a cycle low modestly above that cycle low, such that the Wave 3 minor intermediate term upcycle's uptrend begins relatively flat. One should always keep the nature of cycles in mind.
So, between the very bearish Walmart Lead Indicator today (was -1.39% versus SPX today 6-13), and, the fact that SPX should experience a significant/sharp decline early next week due to the nature of cycles, Monday will probably provide good opportunities to trade the major averages short. Watch SPX's downside gap at 1339.87, created at today 6-13's open.
I'll look to trade SDS or QID or TWM, or, maybe I'll short WMT. Today I did a very brief day trade, buying SSO at 68.37 and selling at 68.44. If one trades a large enough position one can make a significant profit on tiny % gains. Not knowing if SPX had bottomed, I had a very quick trigger.
Reliable lead indicator Walmart (WMT) appears to have put in a monthly cycle high at 59.95 on Tuesday 6-10, see http://stockcharts.com/charts/gallery.html?wmt. StockCharts labeled it a cycle high, which will be another test of their approach.
The Walmart (WMT) Lead Indicator was a very bearish -1.39% versus SPX today/on 6-13, and, see the five day WMT Lead Indicator at http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=l&p=&a=p12,fs,w14&c=wmt,%5EGSPC (+0.68% versus SPX on 6-12, -0.42% on 6-11, +0.59% on 6-10, +1.98% on 6-9, +0.70% on 6-6, +1.73% on 6-5, -0.13% on 6-4, +1.58% on 6-3, +0.11% on 6-2, -0.50% on 5-30, +0.96% on 5-29, +0.82% on 5-28, +0.48% on 5-27, +0.78% on 5-23, +1.23% on 5-22, +0.32% on 5-21, +0.13% on 5-20).
Reliable lead indicator Walmart (WMT) created a downside gap at 58.52 early yesterday 6-12, see http://finance.yahoo.com/q/ta?s=wmt&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=. Watch it Monday, and, WMT has more downside gaps at 58.37, 57.68, 57.20, 56.40, 55.75, and 52.68, see http://finance.yahoo.com/q/ta?s=wmt&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.
Once SPX puts in a Wave 2 minor intermediate term cycle low watch upside gaps at 1358.44 (filled today 6-13), 1404.05, 1426.63, 1447.16, 1467.95, 1488.41, and, there are probably additional upside gaps I need to identify.
VIX fell an unusually large -9.04% today 6-13 versus SPX rising a significant +1.51%, which is an unusually large +7.53% rise in complacency (-9.04% + +1.51% = -7.53% decline in the SPX (S & P 500) wall of worry) that points to some significant strength early on Monday 6-16 followed by significant weakness. A pop followed by weakness appears likely early on Monday, similar to what happened today.
The SPX/NDX/RUT Wave 3 monthly upcycle that began on 4-15-08 peaked in early May, and, the Wave 1 minor intermediate term upcycle peaked on 5-19-08, see http://stockcharts.com/charts/gallery.html?%24spx. Note the large bearish spike on 5-19's candle.
An SPX Wave 2 monthly cycle low occurred on 4-15-08, and, a countertrend Wave B intermediate term upcycle began on 3-17-08 for SPX and NDX (3-10-08 for the Russell 2000 (RUT)). A Wave 1 monthly cycle high occurred on 4-7-08.
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.
GDX/HUI/XAU/GLD failed to fill, and, NEM barely filled yesterday 6-12's large bearish breakaway type upside gaps at 44.11, 406.61, 177.58, 87.02, and 47.20 (filled), see http://stockcharts.com/charts/gallery.html?%24HUI.
The NEM Lead Indicator has turned bearish again (the cycles are very bearish also), see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=on&z=m&q=l&p=&a=&c=%5Ehui,nem, and, NEM's Elliott Wave pattern on the intraday chart points to weakness on Monday 6-16, see http://finance.yahoo.com/q/ta?s=nem&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
Monday 6-16 will probably bring significant and potentially severe weakness for GDX/HUI/XAU/GLD. The fact that they didn't respond to yesterday's very bullish NEM Lead Indicator, at +1.26% versus the XAU on 6-12, is obviously a very bearish sign. The NEM Lead Indicator was a bearish -0.49% versus the XAU today/on 6-13. Also, the WMT Lead Indicator was a very bearish -1.39% versus SPX today. You better buckle up on Monday.
GDX/HUI/XAU/GLD are in Wave C of Wave A of the Wave C minor intermediate term downcycle since 5-21-08, see http://stockcharts.com/charts/gallery.html?gdx, and, they created large bearish breakaway type gaps at 6-10's open (and 6-12's discussed earlier) at 46.65, 433.01, 185.15, and 87.99, see GDX at http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c. NEM created a large bearish breakaway type gap at 6-10's open at 49.02.
Watch GDX's downside gaps at 44.49 (filled 6-5), 44.10 (filled 6-10), 43.18 (filled ), and 42.65. Watch NEM's downside gaps at 45.10 from 5-15, and, at 42.29, 41.52.
HUI/XAU put in an intermediate term and very likely 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.
GDX/HUI/XAU/GLD (http://stockcharts.com/charts/gallery.html?gdx) entered the Wave C downcycle of Wave A of Wave C (since 5-21-08) of the Wave A major intermediate term downcycle since mid March 2008, see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
The NEM Lead Indicator was a bearish -0.49% versus the XAU today/on 6-13, was a very bullish +1.26% on 6-12, was a bullish +0.64% on 6-11, was -0.22% on 6-10, was +0.66% on 6-9, was -0.85% on 6-6, was a bordering on very bearish -0.98% on 6-5, was a very bullish +1.61% on 6-4, was +0.25% on 6-3, +0.33% on 6-2, was -0.65% on 5-30, was a very bullish +1.11% on 5-29, was +0.14% on 5-28, was +0.42% on 5-27, +0.14% on 5-23, was -0.23% on 5-22, was +0.68% on 5-21, was -0.83% on 5-20, was -0.21% on 5-19, was +1.56% on 5-16, was -0.27% on 5-15, +1.93% on 5-14, was -0.37% on 5-13, was -0.65% on 5-12, at -0.32% on 5-9, at -1.32% on 5-8, at -0.21% on 5-7, at -0.25% on 5-6, at -1.33% on 5-5.
GDX/HUI/XAU/GLD entered Wave C of the Wave A major intermediate term downcycle since mid March 2008 on Wednesday 5-21-08, see http://tradethecycles.blogspot.com/2008/05/gold-etf-gld-analysis.html. Also, see the COT data that jives big time with that analysis at http://tradethecycles.blogspot.com/2008/05/latest-gold-cot-commitments-of-traders.html.
GDX/GLD/NEM/XAU created huge bearish breakaway gaps at 46.96 (filled), 89.14 (filled), 48.22 (filled), and 185.02 (filled) at 5-29's open, see http://finance.yahoo.com/q/ta?s=GDX&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c.
GDX/GLD/NEM/XAU created huge bearish breakaway gaps at 47.75, 91.23, 48.74 (filled), and 188.10 at 5-27's open, which correctly pointed to more downside early on 5-28, see http://finance.yahoo.com/q/ta?s=GDX&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c.
GLD failed to fill it's big bearish breakaway gap at 92.56 from April 18 recently, confirming the bearish case, see http://stockcharts.com/charts/gallery.html?gld, and, it created additional big bearish breakaway gaps at 91.23 on 5-27, at 89.14 (filled) on 5-29, at 87.96 (filled) on 6-3, at 87.99 on 6-10, and, at 87.02 on 6-12. Therefore, GLD has four very large very bearish breakaway gaps now, at 92.56, 91.23, 87.99, and 87.02.
I hope you realize that "Deflation Is Everywhere!," see http://tradethecycles.blogspot.com/2008/05/deflation-is-everywhere.html.
NEM is in Wave C down of a monthly downcycle, see http://stockcharts.com/charts/gallery.html?nem. NEM created large bullish breakaway gaps at 45.10 on 5-15 and 47.90 on 6-6 (filled 6-10), and, another one at 46.73 on 5-16 that got filled on 5-29 (46.50 cycle low on 5-29). NEM filled it's bearish upside breakaway gap at 48.72 from 3-20 on 5-15, which confirmed the 5% follow through major buy signal.
5-21 is an HUI/XAU/GDX Wave 5 cycle high of the countertrend Wave B monthly upcycle since 5-1-08, see http://stockcharts.com/charts/gallery.html?%24xau. Note the large bearish spike on 5-21's candle.
NEM has remaining downside gaps at 45.10, 42.29, and 41.52. 45.22 (filled) and 44.51 (filled) got filled in the short term Wave 2 downcycle that began on 5-8 and bottomed on 5-13.
Reliable Lead Indicator NEM put in a Wave 2 major intermediate term cycle low on 5-1 at 42.36, see http://stockcharts.com/charts/gallery.html?nem. Wave 1 peaked in January at 57.44 and NEM entered a Cyclical Bull Market in June 2007 after putting in a Cyclical Bear Market (began 1-31-06) cycle low at 37.84.
NEM is a good example of a gold stock that's in a Cyclical Bull Market, and, can be traded aggressively long now that a 5% follow through major buy signal occurred on 5-8 (after breaking the Wave 2 major intermediate term downcycle trendline). I'm sure there are many other gold/silver stocks that are in a Cyclical Bull Market. The HUI/XAU likely Wave 2 Cyclical Bear Market isn't a "death knell" for all gold/silver stocks.
However, the gold/silver stock trading long/investing environment is likely to be much more difficult now that HUI/XAU are probably in a Cyclical Bear Market. In other words one should probably trade in the same direction as HUI/XAU (with the wind at your back).
Reliable Lead Indicator NEM's Cyclical Bear Market from 1-31-06 until June 2007 (about 17 months, fell -38.51%, and, since NEM tends to be less volatile than most gold/silver stocks, HUI/XAU falling -45-50%+ is likely) is further strong evidence that HUI/XAU probably entered a 15-18+ month Cyclical Bear Market in March 2008.
Probably over half of all gold/silver stocks are in a Cyclical Bear Market right now, and, some of the ones that aren't might have been helped a lot by program buying. It would be interesting to see what % of gold/silver stocks that are in a Cyclical Bull Market are also in indexes.
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 previous 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.
For HUI/XAU/gold, the important thing now is that HUI/XAU/gold hit a 5% follow through major sell signal ten 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 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?
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
If a relatively large pop/spike move occurs at Monday 6-16's open, which is likely, since SPX closed right at the session cycle high 1360.03, then SPX's Wave 2 (since 5-19-08) minor intermediate term downcycle probably bottomed late yesterday 6-12.
SPX (S & P 500) trended up less than two hours from late yesterday's cycle low to early today's cycle high, then, what looks like a rollover type upcycle occurred late in the session (http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c), that might end up being similar to a countertrend Wave B type upcycle. The Walmart (WMT) Lead Indicator was a very bearish -1.39% versus SPX today 6-13.
If SPX (S & P 500) put in a Wave 2 (since 5-19-08) minor intermediate term cycle low late yesterday 6-12, see http://stockcharts.com/charts/gallery.html?%24spx, then, some time in the next session or two SPX should put in a cycle low modestly above that cycle low, such that the Wave 3 minor intermediate term upcycle's uptrend begins relatively flat. One should always keep the nature of cycles in mind.
So, between the very bearish Walmart Lead Indicator today (was -1.39% versus SPX today 6-13), and, the fact that SPX should experience a significant/sharp decline early next week due to the nature of cycles, Monday will probably provide good opportunities to trade the major averages short. Watch SPX's downside gap at 1339.87, created at today 6-13's open.
I'll look to trade SDS or QID or TWM, or, maybe I'll short WMT. Today I did a very brief day trade, buying SSO at 68.37 and selling at 68.44. If one trades a large enough position one can make a significant profit on tiny % gains. Not knowing if SPX had bottomed, I had a very quick trigger.
Reliable lead indicator Walmart (WMT) appears to have put in a monthly cycle high at 59.95 on Tuesday 6-10, see http://stockcharts.com/charts/gallery.html?wmt. StockCharts labeled it a cycle high, which will be another test of their approach.
The Walmart (WMT) Lead Indicator was a very bearish -1.39% versus SPX today/on 6-13, and, see the five day WMT Lead Indicator at http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=l&p=&a=p12,fs,w14&c=wmt,%5EGSPC (+0.68% versus SPX on 6-12, -0.42% on 6-11, +0.59% on 6-10, +1.98% on 6-9, +0.70% on 6-6, +1.73% on 6-5, -0.13% on 6-4, +1.58% on 6-3, +0.11% on 6-2, -0.50% on 5-30, +0.96% on 5-29, +0.82% on 5-28, +0.48% on 5-27, +0.78% on 5-23, +1.23% on 5-22, +0.32% on 5-21, +0.13% on 5-20).
Reliable lead indicator Walmart (WMT) created a downside gap at 58.52 early yesterday 6-12, see http://finance.yahoo.com/q/ta?s=wmt&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=. Watch it Monday, and, WMT has more downside gaps at 58.37, 57.68, 57.20, 56.40, 55.75, and 52.68, see http://finance.yahoo.com/q/ta?s=wmt&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.
Once SPX puts in a Wave 2 minor intermediate term cycle low watch upside gaps at 1358.44 (filled today 6-13), 1404.05, 1426.63, 1447.16, 1467.95, 1488.41, and, there are probably additional upside gaps I need to identify.
VIX fell an unusually large -9.04% today 6-13 versus SPX rising a significant +1.51%, which is an unusually large +7.53% rise in complacency (-9.04% + +1.51% = -7.53% decline in the SPX (S & P 500) wall of worry) that points to some significant strength early on Monday 6-16 followed by significant weakness. A pop followed by weakness appears likely early on Monday, similar to what happened today.
The SPX/NDX/RUT Wave 3 monthly upcycle that began on 4-15-08 peaked in early May, and, the Wave 1 minor intermediate term upcycle peaked on 5-19-08, see http://stockcharts.com/charts/gallery.html?%24spx. Note the large bearish spike on 5-19's candle.
An SPX Wave 2 monthly cycle low occurred on 4-15-08, and, a countertrend Wave B intermediate term upcycle began on 3-17-08 for SPX and NDX (3-10-08 for the Russell 2000 (RUT)). A Wave 1 monthly cycle high occurred on 4-7-08.
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.
GDX/HUI/XAU/GLD failed to fill, and, NEM barely filled yesterday 6-12's large bearish breakaway type upside gaps at 44.11, 406.61, 177.58, 87.02, and 47.20 (filled), see http://stockcharts.com/charts/gallery.html?%24HUI.
The NEM Lead Indicator has turned bearish again (the cycles are very bearish also), see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=on&z=m&q=l&p=&a=&c=%5Ehui,nem, and, NEM's Elliott Wave pattern on the intraday chart points to weakness on Monday 6-16, see http://finance.yahoo.com/q/ta?s=nem&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
Monday 6-16 will probably bring significant and potentially severe weakness for GDX/HUI/XAU/GLD. The fact that they didn't respond to yesterday's very bullish NEM Lead Indicator, at +1.26% versus the XAU on 6-12, is obviously a very bearish sign. The NEM Lead Indicator was a bearish -0.49% versus the XAU today/on 6-13. Also, the WMT Lead Indicator was a very bearish -1.39% versus SPX today. You better buckle up on Monday.
GDX/HUI/XAU/GLD are in Wave C of Wave A of the Wave C minor intermediate term downcycle since 5-21-08, see http://stockcharts.com/charts/gallery.html?gdx, and, they created large bearish breakaway type gaps at 6-10's open (and 6-12's discussed earlier) at 46.65, 433.01, 185.15, and 87.99, see GDX at http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c. NEM created a large bearish breakaway type gap at 6-10's open at 49.02.
Watch GDX's downside gaps at 44.49 (filled 6-5), 44.10 (filled 6-10), 43.18 (filled ), and 42.65. Watch NEM's downside gaps at 45.10 from 5-15, and, at 42.29, 41.52.
HUI/XAU put in an intermediate term and very likely 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.
GDX/HUI/XAU/GLD (http://stockcharts.com/charts/gallery.html?gdx) entered the Wave C downcycle of Wave A of Wave C (since 5-21-08) of the Wave A major intermediate term downcycle since mid March 2008, see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
The NEM Lead Indicator was a bearish -0.49% versus the XAU today/on 6-13, was a very bullish +1.26% on 6-12, was a bullish +0.64% on 6-11, was -0.22% on 6-10, was +0.66% on 6-9, was -0.85% on 6-6, was a bordering on very bearish -0.98% on 6-5, was a very bullish +1.61% on 6-4, was +0.25% on 6-3, +0.33% on 6-2, was -0.65% on 5-30, was a very bullish +1.11% on 5-29, was +0.14% on 5-28, was +0.42% on 5-27, +0.14% on 5-23, was -0.23% on 5-22, was +0.68% on 5-21, was -0.83% on 5-20, was -0.21% on 5-19, was +1.56% on 5-16, was -0.27% on 5-15, +1.93% on 5-14, was -0.37% on 5-13, was -0.65% on 5-12, at -0.32% on 5-9, at -1.32% on 5-8, at -0.21% on 5-7, at -0.25% on 5-6, at -1.33% on 5-5.
GDX/HUI/XAU/GLD entered Wave C of the Wave A major intermediate term downcycle since mid March 2008 on Wednesday 5-21-08, see http://tradethecycles.blogspot.com/2008/05/gold-etf-gld-analysis.html. Also, see the COT data that jives big time with that analysis at http://tradethecycles.blogspot.com/2008/05/latest-gold-cot-commitments-of-traders.html.
GDX/GLD/NEM/XAU created huge bearish breakaway gaps at 46.96 (filled), 89.14 (filled), 48.22 (filled), and 185.02 (filled) at 5-29's open, see http://finance.yahoo.com/q/ta?s=GDX&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c.
GDX/GLD/NEM/XAU created huge bearish breakaway gaps at 47.75, 91.23, 48.74 (filled), and 188.10 at 5-27's open, which correctly pointed to more downside early on 5-28, see http://finance.yahoo.com/q/ta?s=GDX&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c.
GLD failed to fill it's big bearish breakaway gap at 92.56 from April 18 recently, confirming the bearish case, see http://stockcharts.com/charts/gallery.html?gld, and, it created additional big bearish breakaway gaps at 91.23 on 5-27, at 89.14 (filled) on 5-29, at 87.96 (filled) on 6-3, at 87.99 on 6-10, and, at 87.02 on 6-12. Therefore, GLD has four very large very bearish breakaway gaps now, at 92.56, 91.23, 87.99, and 87.02.
I hope you realize that "Deflation Is Everywhere!," see http://tradethecycles.blogspot.com/2008/05/deflation-is-everywhere.html.
NEM is in Wave C down of a monthly downcycle, see http://stockcharts.com/charts/gallery.html?nem. NEM created large bullish breakaway gaps at 45.10 on 5-15 and 47.90 on 6-6 (filled 6-10), and, another one at 46.73 on 5-16 that got filled on 5-29 (46.50 cycle low on 5-29). NEM filled it's bearish upside breakaway gap at 48.72 from 3-20 on 5-15, which confirmed the 5% follow through major buy signal.
5-21 is an HUI/XAU/GDX Wave 5 cycle high of the countertrend Wave B monthly upcycle since 5-1-08, see http://stockcharts.com/charts/gallery.html?%24xau. Note the large bearish spike on 5-21's candle.
NEM has remaining downside gaps at 45.10, 42.29, and 41.52. 45.22 (filled) and 44.51 (filled) got filled in the short term Wave 2 downcycle that began on 5-8 and bottomed on 5-13.
Reliable Lead Indicator NEM put in a Wave 2 major intermediate term cycle low on 5-1 at 42.36, see http://stockcharts.com/charts/gallery.html?nem. Wave 1 peaked in January at 57.44 and NEM entered a Cyclical Bull Market in June 2007 after putting in a Cyclical Bear Market (began 1-31-06) cycle low at 37.84.
NEM is a good example of a gold stock that's in a Cyclical Bull Market, and, can be traded aggressively long now that a 5% follow through major buy signal occurred on 5-8 (after breaking the Wave 2 major intermediate term downcycle trendline). I'm sure there are many other gold/silver stocks that are in a Cyclical Bull Market. The HUI/XAU likely Wave 2 Cyclical Bear Market isn't a "death knell" for all gold/silver stocks.
However, the gold/silver stock trading long/investing environment is likely to be much more difficult now that HUI/XAU are probably in a Cyclical Bear Market. In other words one should probably trade in the same direction as HUI/XAU (with the wind at your back).
Reliable Lead Indicator NEM's Cyclical Bear Market from 1-31-06 until June 2007 (about 17 months, fell -38.51%, and, since NEM tends to be less volatile than most gold/silver stocks, HUI/XAU falling -45-50%+ is likely) is further strong evidence that HUI/XAU probably entered a 15-18+ month Cyclical Bear Market in March 2008.
Probably over half of all gold/silver stocks are in a Cyclical Bear Market right now, and, some of the ones that aren't might have been helped a lot by program buying. It would be interesting to see what % of gold/silver stocks that are in a Cyclical Bull Market are also in indexes.
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 previous 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.
For HUI/XAU/gold, the important thing now is that HUI/XAU/gold hit a 5% follow through major sell signal ten 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 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?
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
2:17 PM
0 Comments:
Post a Comment
<< Home