SPX (S & P 500) Might Have Finally Put In A Wave A Major Intermediate Term Cycle Low
SPX (S & P 500) might have finally put in a Wave A Major Intermediate Term (since 10-11-07) cycle low yesterday 7-7, see http://stockcharts.com/charts/gallery.html?%24spx, but, yesterday's inverse spike isn't convincingly large/bullish for a major cycle low.
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.
SPX closed very near the session cycle high today, so, some upside follow through is likely early tomorrow, in which I'll be looking to ultra short SPX, NDX, or RUT via SDS, QID, or TWM.
The Walmart (WMT) Lead Indicator was an extremely bullish +2.16% versus SPX (S & P 500) today/on 7-8, and, was +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, so, the Walmart (WMT) Lead Indicator is extremely bullish short term, 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.
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 fell an unusually large -10.20% today 7-8 versus SPX rising a significant +1.71%, which is an unusually large +8.49% rise in complacency (-10.20% + +1.71% = -8.49% decline in the SPX (S & P 500) wall of worry) that points to some significant strength early on Wednesday 7-9, followed by weakness.
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).
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.
GDX/GLD/HUI/XAU gapped down today 7-8 (now are upside gaps at 46.25, 91.23, 424.99, 185.86), see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, and, the short term Wave A downcycle since Tuesday 7-1 probably remains in effect, which jives with today's modestly bearish NEM Lead Indicator, at -0.28% versus the XAU on 7-8, and, jives with the extremely bearish NEM Lead Indicator recently, at -0.85% versus the XAU 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. I'll look to short GDX early tomorrow 7-9.
For overnight trading, I'm waiting for a short term countertrend Wave B upcycle, but, I probably should be trading modest short positions overnight. The extremely bullish Walmart (WMT) Lead Indicator makes holding a large short position overnight risky. 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.
Since 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
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.
SPX closed very near the session cycle high today, so, some upside follow through is likely early tomorrow, in which I'll be looking to ultra short SPX, NDX, or RUT via SDS, QID, or TWM.
The Walmart (WMT) Lead Indicator was an extremely bullish +2.16% versus SPX (S & P 500) today/on 7-8, and, was +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, so, the Walmart (WMT) Lead Indicator is extremely bullish short term, 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.
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 fell an unusually large -10.20% today 7-8 versus SPX rising a significant +1.71%, which is an unusually large +8.49% rise in complacency (-10.20% + +1.71% = -8.49% decline in the SPX (S & P 500) wall of worry) that points to some significant strength early on Wednesday 7-9, followed by weakness.
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).
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.
GDX/GLD/HUI/XAU gapped down today 7-8 (now are upside gaps at 46.25, 91.23, 424.99, 185.86), see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, and, the short term Wave A downcycle since Tuesday 7-1 probably remains in effect, which jives with today's modestly bearish NEM Lead Indicator, at -0.28% versus the XAU on 7-8, and, jives with the extremely bearish NEM Lead Indicator recently, at -0.85% versus the XAU 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. I'll look to short GDX early tomorrow 7-9.
For overnight trading, I'm waiting for a short term countertrend Wave B upcycle, but, I probably should be trading modest short positions overnight. The extremely bullish Walmart (WMT) Lead Indicator makes holding a large short position overnight risky. 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.
Since 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
1:25 PM
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