Some Severe SPX (S & P 500) Weakness Is Likely Early Tomorrow
Some severe SPX (S & P 500) weakness is likely early tomorrow, see
http://stockcharts.com/charts/gallery.html?%24spx. The upcycle that began very early in the session appears to be a countertrend Wave B rebound, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, and, SPX probably ended the session in Wave B of a Wave C type move, so, early tomorrow SPX will probably experience severe weakness after maybe a pop at the open, since the Walmart (WMT) Lead Indicator was a very bearish -1.50% versus SPX (S & P 500) today 7-10. I'll look to ultra short NDX (NASDAQ 100) via QID very early tomorrow.
SPX (S & P 500) probably didn't bottom yet/remains in a Wave A major intermediate term (since 10-11-07) downcycle, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c= and http://stockcharts.com/charts/gallery.html?%24spx.
I day traded GDX (Gold Miners ETF) short today, with an entry point at 46.8001 and I covered at 46.6499. I shorted GDX again at 46.3401 later in the session for an overnight trade.
The NEM Lead Indicator was a bullish +0.65% versus the XAU today/on 7-10, but, probably most or all of the strength indicated by today's NEM Lead Indicator is already factored in, see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
Also, the Walmart (WMT) Lead Indicator was a very bearish -1.50% versus SPX (S & P 500) today 7-10, which points to severe GDX/GLD/HUI/XAU weakness tomorrow 7-11. I'll look to cover GDX after it probably fills today's downside gap at 45.36.
In the second set of data at http://www.federalreserve.gov/releases/h6/Current/ in the far right column (not seasonally adjusted data) note that M2 money supply is contracting in recent months. Welcome to deflation and the gold Wave 2 Cyclical Bear Market that began on 3-17-08.
The WMT Lead Indicator was a very bearish -1.50% versus SPX today/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.
Trade the Cycles won't indicate that a major cycle low very likely occurred until a 5% follow through major buy signal occurs, but, if a strong short term Wave 1 upcycle occurs, then SPX has probably bottomed (probably didn't yet).
Once SPX/NDX/RUT bottoms, at least waiting for a strong multi day short term Wave 1 upcycle (typically about 2 to 3 sessions) 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) before trading long overnight (look to go long early in a short term Wave 3 upcycle, that typically lasts 3 to 5 sessions).
Until SPX (S & P 500) establishes a bottom I won't be trading or discussing 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 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 a significant +1.31% today 7-10 versus SPX rising a significant +0.70%, which is a sharp +2.01% rise in fear (+1.31% + +0.70% = +2.01% rise in the SPX (S & P 500) wall of worry) that points to some sharp strength early on Friday 7-11.
NDX (NASDAQ 100) put in a Wave A major intermediate term cycle (since 10-11-07 for SPX and late October 2007 for NDX) low on 3-17-08, while RUT (Russell 2000) did so on 3-10, see http://stockcharts.com/charts/gallery.html?%24ndx for NDX.
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).
For the gold sector the short term outlook is extremely bearish.
The NEM Lead Indicator is extremely bearish short term, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=on&z=m&q=l&p=&a=&c=%5Ehui,nem.
The savvy gold Commercial Traders entered a massive short trade in the 5 day period ending 7-1-08, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm.
A GDX/GLD/HUI/XAU short term Wave A downcycle bottomed on Tuesday 7-7. A short term countertrend Wave B upcycle is/was in effect, but, might have peaked early today 7-10, see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
GDX/HUI/XAU/GLD entered Wave C of the Wave A major intermediate term downcycle (since mid March) on 7-1-08, peaking in rollover mode versus May's cycle high, see http://stockcharts.com/charts/gallery.html?gdx. Note the very large very bearish spike on GDX's candle yesterday 7-9, which is another major negative.
GDX/HUI/XAU/GLD created downside gaps at today 7-10's open at 46.35, 419.06, 182.27, 91.50. NEM created a downside gap today at 47.54.
I day traded GDX (Gold Miners ETF) short today, with an entry point at 46.8001 and I covered at 46.6499. I shorted GDX again at 46.3401 later in the session for an overnight trade.
The NEM Lead Indicator was a bullish +0.65% versus the XAU today/on 7-10, but, probably most or all of the strength indicated by today's NEM Lead Indicator is already factored in, see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
Also, the Walmart (WMT) Lead Indicator was a very bearish -1.50% versus SPX (S & P 500) today 7-10, which points to severe GDX/GLD/HUI/XAU weakness tomorrow 7-11. I'll look to cover GDX after it probably fills today's downside gap at 45.36.
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.
NEM is in Wave B up of a monthly downcycle 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.
GDX/GLD/HUI/XAU gapped down on 7-8 (upside gaps at 46.25, 91.23, 424.99, 185.86 got filled on 7-9), see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, and, a short term Wave B upcycle since Monday 7-7 might still be in effect, but, the extremely bearish NEM Lead Indicator points to severe weakness, at a bullish +0.65% versus the XAU today/on 7-10, at -0.71% versus the XAU 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 best shorting opportunities usually occur when both the NEM and WMT Lead Indicators are very bearish.
The latest gold COT data is extremely bearish short term, since the savvy gold Commercial Traders entered a massive short trade, while the clueless contrarian gold Speculators (including some "gurus") blundered, entering a massive long trade in the five day period ending 7-1-08, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm.
GDX (Gold Miners ETF) and reliable lead indicator NEM's downside gaps to watch this week are 46.42 (filled 7-7), 43.88, and 42.65 for GDX, and, 47.01, 45.10, 42.29, and 41.52 for NEM. Downside gaps to watch for GLD (Gold ETF) are 91.40 (filled 7-7), 87.42, 85.83, and, 84.58.
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.
.......http://www.JoeFRocks.com/
NEM XAU HUI
http://stockcharts.com/charts/gallery.html?%24spx. The upcycle that began very early in the session appears to be a countertrend Wave B rebound, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, and, SPX probably ended the session in Wave B of a Wave C type move, so, early tomorrow SPX will probably experience severe weakness after maybe a pop at the open, since the Walmart (WMT) Lead Indicator was a very bearish -1.50% versus SPX (S & P 500) today 7-10. I'll look to ultra short NDX (NASDAQ 100) via QID very early tomorrow.
SPX (S & P 500) probably didn't bottom yet/remains in a Wave A major intermediate term (since 10-11-07) downcycle, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c= and http://stockcharts.com/charts/gallery.html?%24spx.
I day traded GDX (Gold Miners ETF) short today, with an entry point at 46.8001 and I covered at 46.6499. I shorted GDX again at 46.3401 later in the session for an overnight trade.
The NEM Lead Indicator was a bullish +0.65% versus the XAU today/on 7-10, but, probably most or all of the strength indicated by today's NEM Lead Indicator is already factored in, see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
Also, the Walmart (WMT) Lead Indicator was a very bearish -1.50% versus SPX (S & P 500) today 7-10, which points to severe GDX/GLD/HUI/XAU weakness tomorrow 7-11. I'll look to cover GDX after it probably fills today's downside gap at 45.36.
In the second set of data at http://www.federalreserve.gov/releases/h6/Current/ in the far right column (not seasonally adjusted data) note that M2 money supply is contracting in recent months. Welcome to deflation and the gold Wave 2 Cyclical Bear Market that began on 3-17-08.
The WMT Lead Indicator was a very bearish -1.50% versus SPX today/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.
Trade the Cycles won't indicate that a major cycle low very likely occurred until a 5% follow through major buy signal occurs, but, if a strong short term Wave 1 upcycle occurs, then SPX has probably bottomed (probably didn't yet).
Once SPX/NDX/RUT bottoms, at least waiting for a strong multi day short term Wave 1 upcycle (typically about 2 to 3 sessions) 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) before trading long overnight (look to go long early in a short term Wave 3 upcycle, that typically lasts 3 to 5 sessions).
Until SPX (S & P 500) establishes a bottom I won't be trading or discussing 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 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 a significant +1.31% today 7-10 versus SPX rising a significant +0.70%, which is a sharp +2.01% rise in fear (+1.31% + +0.70% = +2.01% rise in the SPX (S & P 500) wall of worry) that points to some sharp strength early on Friday 7-11.
NDX (NASDAQ 100) put in a Wave A major intermediate term cycle (since 10-11-07 for SPX and late October 2007 for NDX) low on 3-17-08, while RUT (Russell 2000) did so on 3-10, see http://stockcharts.com/charts/gallery.html?%24ndx for NDX.
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).
For the gold sector the short term outlook is extremely bearish.
The NEM Lead Indicator is extremely bearish short term, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=on&z=m&q=l&p=&a=&c=%5Ehui,nem.
The savvy gold Commercial Traders entered a massive short trade in the 5 day period ending 7-1-08, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm.
A GDX/GLD/HUI/XAU short term Wave A downcycle bottomed on Tuesday 7-7. A short term countertrend Wave B upcycle is/was in effect, but, might have peaked early today 7-10, see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
GDX/HUI/XAU/GLD entered Wave C of the Wave A major intermediate term downcycle (since mid March) on 7-1-08, peaking in rollover mode versus May's cycle high, see http://stockcharts.com/charts/gallery.html?gdx. Note the very large very bearish spike on GDX's candle yesterday 7-9, which is another major negative.
GDX/HUI/XAU/GLD created downside gaps at today 7-10's open at 46.35, 419.06, 182.27, 91.50. NEM created a downside gap today at 47.54.
I day traded GDX (Gold Miners ETF) short today, with an entry point at 46.8001 and I covered at 46.6499. I shorted GDX again at 46.3401 later in the session for an overnight trade.
The NEM Lead Indicator was a bullish +0.65% versus the XAU today/on 7-10, but, probably most or all of the strength indicated by today's NEM Lead Indicator is already factored in, see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
Also, the Walmart (WMT) Lead Indicator was a very bearish -1.50% versus SPX (S & P 500) today 7-10, which points to severe GDX/GLD/HUI/XAU weakness tomorrow 7-11. I'll look to cover GDX after it probably fills today's downside gap at 45.36.
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.
NEM is in Wave B up of a monthly downcycle 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.
GDX/GLD/HUI/XAU gapped down on 7-8 (upside gaps at 46.25, 91.23, 424.99, 185.86 got filled on 7-9), see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, and, a short term Wave B upcycle since Monday 7-7 might still be in effect, but, the extremely bearish NEM Lead Indicator points to severe weakness, at a bullish +0.65% versus the XAU today/on 7-10, at -0.71% versus the XAU 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 best shorting opportunities usually occur when both the NEM and WMT Lead Indicators are very bearish.
The latest gold COT data is extremely bearish short term, since the savvy gold Commercial Traders entered a massive short trade, while the clueless contrarian gold Speculators (including some "gurus") blundered, entering a massive long trade in the five day period ending 7-1-08, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm.
GDX (Gold Miners ETF) and reliable lead indicator NEM's downside gaps to watch this week are 46.42 (filled 7-7), 43.88, and 42.65 for GDX, and, 47.01, 45.10, 42.29, and 41.52 for NEM. Downside gaps to watch for GLD (Gold ETF) are 91.40 (filled 7-7), 87.42, 85.83, and, 84.58.
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.
.......http://www.JoeFRocks.com/
NEM XAU HUI
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
1:23 PM
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