SPX (S & P 500) Is Probably Still In A Major Intermediate Term Downcycle
SPX (S & P 500) is probably still in a Wave A Major Intermediate Term Downcycle (since 10-11-07), see http://stockcharts.com/charts/gallery.html?%24spx. Today 7-7's bearish black candle (close below the open) and bearish large spike would be unusual for an important cycle low, and, points to significant weakness tomorrow.
The late session strength appears to be a countertrend Wave B type rebound (vertical spiking action and today's intraday chart cycle low doesn't have a bullish large inverse spike), see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, that will probably do a brief Wave 5 at tomorrow 7-8's open, so, there might be a good shorting opportunity very early tomorrow (via SDS, QID, or TWM).
Since today's SPX (S & P 500) cycle low at 1240.68 is probably an intraday Wave A type cycle low, tomorrow 7-8 SPX will probably bottom at 1230ish, then there might an opportunity to trade long.
Given that the Walmart (WMT) Lead Indicator has turned extremely bullish, at a very bullish +1.39% versus SPX today/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, it's reasonable to assume that SPX is approaching a Wave A Major Intermediate Term cycle low, but, 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.
SPX will have to hit a 5% follow through major buy signal before Trade the Cycles will indicate that SPX has very likely bottomed. I'll of course look for a very large bullish inverse spike to occur on the candle when SPX 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 very sharp +3.95% today 7-7 versus SPX falling a significant -0.84%, which is a very sharp +3.11% rise in fear (+3.95% + -0.84% = +3.11% rise in the SPX (S & P 500) wall of worry) that points to some very sharp strength early on Tuesday 7-8.
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).
Based upon GDX's (Gold Miners ETF) intraday Elliott Wave count (http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, it looks like it'll pop/peak early tomorrow, along with the S & P 500), and, today 7-7's bearish NEM Lead Indicator, at -0.85% versus the XAU on 7-7, as well as the short term extremely bearish NEM Lead Indicator, at -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, I'll look to short GDX early tomorrow 7-8.
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 today 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 today 7-7), 87.42, 85.83, and, 84.58.
Since 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, 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.
On Tuesday 7-1 GDX/GLD/HUI/XAU entered Wave C of the Wave A major intermediate term downcycle since mid March, see http://stockcharts.com/charts/gallery.html?gdx, peaking in rollover mode versus May's cycle high.
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 A down 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.
.......http://www.JoeFRocks.com/
NEM XAU HUI
The late session strength appears to be a countertrend Wave B type rebound (vertical spiking action and today's intraday chart cycle low doesn't have a bullish large inverse spike), see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, that will probably do a brief Wave 5 at tomorrow 7-8's open, so, there might be a good shorting opportunity very early tomorrow (via SDS, QID, or TWM).
Since today's SPX (S & P 500) cycle low at 1240.68 is probably an intraday Wave A type cycle low, tomorrow 7-8 SPX will probably bottom at 1230ish, then there might an opportunity to trade long.
Given that the Walmart (WMT) Lead Indicator has turned extremely bullish, at a very bullish +1.39% versus SPX today/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, it's reasonable to assume that SPX is approaching a Wave A Major Intermediate Term cycle low, but, 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.
SPX will have to hit a 5% follow through major buy signal before Trade the Cycles will indicate that SPX has very likely bottomed. I'll of course look for a very large bullish inverse spike to occur on the candle when SPX 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 very sharp +3.95% today 7-7 versus SPX falling a significant -0.84%, which is a very sharp +3.11% rise in fear (+3.95% + -0.84% = +3.11% rise in the SPX (S & P 500) wall of worry) that points to some very sharp strength early on Tuesday 7-8.
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).
Based upon GDX's (Gold Miners ETF) intraday Elliott Wave count (http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, it looks like it'll pop/peak early tomorrow, along with the S & P 500), and, today 7-7's bearish NEM Lead Indicator, at -0.85% versus the XAU on 7-7, as well as the short term extremely bearish NEM Lead Indicator, at -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, I'll look to short GDX early tomorrow 7-8.
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 today 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 today 7-7), 87.42, 85.83, and, 84.58.
Since 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, 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.
On Tuesday 7-1 GDX/GLD/HUI/XAU entered Wave C of the Wave A major intermediate term downcycle since mid March, see http://stockcharts.com/charts/gallery.html?gdx, peaking in rollover mode versus May's cycle high.
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 A down 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.
.......http://www.JoeFRocks.com/
NEM XAU HUI
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
1:53 PM
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