The NEM Lead Indicator Was An Extremely Bullish +5.67% Versus The XAU Today/on 7-24

The NEM Lead Indicator was an extremely bullish +5.67% versus the XAU today/on 7-24. The fact that GDX/HUI/XAU/GLD (http://stockcharts.com/charts/gallery.html?gdx) didn't respond/rally today as they normally would, see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c, with a super bullish NEM Lead Indicator points to more downside tomorrow.

NEM created what appears to be a bullish breakaway gap at 46.95 at today 7-24's open, see http://finance.yahoo.com/q/ta?s=nem&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c. NEM obviously had a very big rally today. In the next session or two I'll look to trade NEM long, once I'm convinced that a Wave 2 minor intermediate term cycle low has occurred, of a Wave 3 major intermediate term upcycle, see http://stockcharts.com/charts/gallery.html?nem.

I day traded NEM short today, with an entry point at 48.8301 and an exit point at 48.517. I might day trade NEM or GDX (Gold Miners ETF) or WMT short early tomorrow. I'll look to go long DZZ/double short gold (http://finance.yahoo.com/q/ta?s=dzz&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, double short gold ETN) early on Friday.

Watch downside gaps at 45.10, 42.29 (shouldn't get filled as previously discussed, see the last gold sector paragraph if you're a first time reader), and 41.52 (shouldn't get filled as previously discussed) for NEM, and, at 43.88 (filled today 7-24) and 42.65 for GDX. Downside gaps to watch for GLD (Gold ETF) are 91.50 (filled 7-23), 87.42, 85.83, and, 84.58.

GDX/HUI/XAU/GLD are very oversold right now, with Williams %R near an extremely oversold -100, so, a significant bounce is likely at some point tomorrow.

Upside gaps were created yesterday at 47 for GDX, 432.50 for HUI, 185.04 for the XAU, and, at 93.06.

GDX/HUI/XAU/GLD entered Wave C of the big Short Term Wave A Downcycle since 7-15-08 early on 7-22, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=, and, see http://stockcharts.com/charts/gallery.html?gdx.

GDX/HUI/XAU/GLD entered Wave C of the Wave A Major Intermediate Term Downcycle (since mid March) on 7-15-08, see http://stockcharts.com/charts/gallery.html?gdx.

The NEM Lead Indicator was an extremely bullish +5.67% versus the XAU today/on 7-24, was a bullish +0.83% on 7-23, was an extremely bullish +2.51% on 7-22, was +0.71% on 7-21, was +0.62% on 7-18, was a very bearish -1.91% on 7-17, +0.31% on 7-16, +0.52% on 7-15, -1.91% on 7-14, +0.22% on 7-11, +0.65% on 7-10, -0.71% on 7-9, -0.28% on 7-8, -0.85% on 7-7, -0.80% on 7-3, -0.82% on 7-2, +1.15% on 7-1, -1.38% on 6-30, -2.45% on 6-27, -0.95% on 6-26, -0.08% on 6-25.

The savvy non contrarian gold Commercial Traders continue to go massively short!, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm. The 51,879 increase in the short gold futures and options contracts is one of the largest I've ever seen. They also traded aggressively long during the recent countertrend strength, adding 23,089 long gold futures and options contracts in the 5 day period ending 7-15-08.

Note that the savvy US Dollar Commercial Traders traded aggressively net long in the 5 day period ending 7-15-08, see the second from the last data at http://www.cftc.gov/dea/options/deanybtsof.htm.

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.

Reliable lead indicator NEM is in Wave C down of a Wave 2 minor intermediate term 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.

Reliable lead indicator NEM put in a Wave 2 major intermediate term cycle low on 5-1 at 42.36 (StockCharts uses slightly different price data ???, for reasons which escape me, there obviously needs to be consistency), see http://stockcharts.com/charts/gallery.html?nem, then, obviously 42.29 and 41.52 shouldn't get filled/should be bullish breakaway gaps. 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.

SPX (S & P 500)/NDX (NASDAQ 100)/RUT (Russell 2000) probably finally bottomed on 7-15, see http://stockcharts.com/charts/gallery.html?%24spx, http://stockcharts.com/charts/gallery.html?%24ndx, and http://stockcharts.com/charts/gallery.html?%24rut.

SPX's big short term Wave 1 upcycle peaked in rollover mode yesterday 7-23, and, is doing Wave A of a short term Wave 2 downcycle since early yesterday, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c. I'll be looking to trade SPX, NDX, or RUT ultra short via SDS, QID or TWM, once Wave B of the short term Wave 2 downcycle peaks.

Walmart (WMT) created an upside gap at 59.06 yesterday 7-23.

7-15's very bullish candles and the strong short term Wave 1 upcycle suggest that SPX/NDX/RUT probably finally bottomed. RUT's chart is the most bullish, with the largest bullish inverse spike and best chart.

SPX probably put in a Wave A major intermediate term (since 10-11-07) cycle low on 7-15-08, and, NDX/RUT probably put in a Wave 2 minor intermediate term cycle low on 7-15-08, for the countertrend Wave B major intermediate term upcycle since 3-17-08 for NDX and since 3-10-08 for RUT.

The WMT (Walmart) Lead Indicator was a modestly bullish +0.38% versus SPX (S & P 500) today/on 7-24, was an extremely bearish -2.05% on 7-23, was a very bullish +1.70% on 7-22, was a very bearish -1.00% on 7-21, was +0.39% on 7-18, was +0.06% on 7-17, was -0.32% on 7-16, was +0.97% on 7-15, +0.94% on 7-14, -0.50% on 7-11, was a very bearish -1.50% on 7-10, -0.16% on 7-9, +2.16% on 7-8, +1.39% on 7-7, +0.07% on 7-3, +0.89% on 7-2, +1.10% on 7-1, -0.31% on 6-30, -0.56% on 6-27, +0.72% on 6-26, +0.82% on 6-25, +1.48% on 6-24, +0.67% on 6-23. The more important/longer the cycle is that's bottoming or peaking the longer the lag time tends to be before the indication kicks in, in this case strength (began on 7-15-08).

Trade the Cycles won't indicate that a major cycle low very likely occurred until a 5% follow through major buy signal occurs, but, since a strong short term Wave 1 upcycle occurred, then SPX has probably bottomed (on 7-15-08).

At least waiting for a strong multi day short term Wave 1 upcycle (typically about 2 to 3 sessions, which occurred/peaked on 7-23) before looking to trade long overnight, then, one should wait for a pullback/short term Wave 2 downcycle (typically about 1.5 to 3 sessions, began early on 7-23) before trading long overnight (look to go long early in a short term Wave 3 upcycle, that typically lasts 3 to 5 sessions).

Since SPX (S & P 500) probably bottomed I'll look to trade rockets. It makes a lot of sense to trade with the wind at your back.

Once SPX puts in a Wave A major intermediate term cycle low (probably did on 7-15-08) watch upside gaps at 1321.97, 1342.83, 1350.93, 1404.05, 1426.63, 1447.16, 1467.95, 1488.41, and, there are probably additional upside gaps I need to identify.

VIX rose an unusually large +10.42% today 7-24 versus SPX falling a sharp -2.31%, which is an unusually large +8.11% rise in fear (+10.42% + -2.31% = +8.11% rise in the SPX (S & P 500) wall of worry) that points to some significant weakness early on Friday 7-25, followed by strength.

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).

.......http://www.JoeFRocks.com/

NEM XAU HUI