SPX/NDX/RUT Continue To Plumb New Lows
SPX/NDX/RUT continue to plumb new lows, see http://stockcharts.com/charts/gallery.html?%24spx.
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.
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 bearish -0.50% versus SPX (S & P 500) today/on 7-11, was a very bearish -1.50% versus SPX 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.
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 very sharp +5.86% today 7-11 versus SPX falling a significant -1.11%, which is a very sharp +4.75% rise in fear (+5.86% + -1.11% = +4.75% rise in the SPX (S & P 500) wall of worry) that points to some very sharp strength early on Monday 7-14.
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).
The extremely Bullish Walmart Lead Indicator early in the week correctly portended substantial GDX/HUI/XAU/GLD strength late this week, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC. As I said before, the extremely Bullish Walmart Lead Indicator made holding a short position overnight risky, as I found out today.
The best shorting opportunities usually occur when both the NEM and WMT Lead Indicators are very bearish.
However, the Walmart (WMT) Lead Indicator turned bearish again, at -0.50% versus SPX (S & P 500) today/on 7-11, -1.50% on 7-10, -0.16% on 7-9, which is good news for my GDX (Gold Miners Index) short position.
Also, the NEM Lead Indicator is very bearish, at +0.22% versus the XAU today/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 gold COT data is bearish again this week, with the savvy gold Commercial Traders trading significantly net short, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm, and, note that they correctly anticipated this strength, with a significant addition to their long position.
The previous week the savvy gold Commercial Traders added a massive 43,755 short futures and options contracts, while the clueless contrarian gold Speculators added a massive 36,224 long futures and options contracts. The gold Speculators look brilliant right now, but, will they exit at the right time? The massive short trade by the savvy gold Commercial Traders is probably a multi week type trade.
GDX, HUI, and GLD created downside gaps at 46.67, 432.61, 93.53 at today 7-11's open. The XAU doesn't have one according to Yahoo's data.
Looking at GLD's (gold ETF) intraday chart today, see http://finance.yahoo.com/q/ta?s=gld&t=1d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c, note that GLD put in a very large bearish spike at about 11 am, when it put in a session cycle high at 95.50.
Then, GLD appears to have done an intraday Wave A downcycle, followed by an intraday countertrend Wave B upcycle, that appeared to be peaking at session's end, so, early on Monday it looks like the gold sector will be weak, which jives with the bearish Walmart Lead Indicator the past three days (-0.50% versus SPX (S & P 500) today/on 7-11, -1.50% on 7-10, -0.16% on 7-9).
Also, GDX (Gold Miners ETF) put in an intraday double top, and, looks like it'll plunge early on Monday, see http://finance.yahoo.com/q/ta?s=gdx&t=1d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c, and, reliable lead indicator Newmont Mining appears to have peaked late in the session, note the large bearish spike, see http://finance.yahoo.com/q/ta?s=NEM&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c, and, appears to have entered an intraday Wave C downcycle shortly before session's end.
For the gold sector the short term outlook is extremely bearish, but, a short term countertrend Wave B upcycle that began on 7-8 might still be in effect.
The NEM Lead Indicator is very 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, and, are positioned massively net short, 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 7-8. A short term countertrend Wave B upcycle is/was in effect, but, might have peaked early today 7-11, 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.
GDX/HUI/XAU/GLD created downside gaps at 7-10's open at 46.35, 419.06, 182.27, 91.50. NEM created a downside gap today at 47.54.
I shorted GDX at 46.3401 on 7-10. I'll look to cover GDX after it probably fills 7-10's downside gap at 45.36 next week.
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 (Gold Miners ETF) and reliable lead indicator NEM's downside gaps to watch next 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
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.
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 bearish -0.50% versus SPX (S & P 500) today/on 7-11, was a very bearish -1.50% versus SPX 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.
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 very sharp +5.86% today 7-11 versus SPX falling a significant -1.11%, which is a very sharp +4.75% rise in fear (+5.86% + -1.11% = +4.75% rise in the SPX (S & P 500) wall of worry) that points to some very sharp strength early on Monday 7-14.
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).
The extremely Bullish Walmart Lead Indicator early in the week correctly portended substantial GDX/HUI/XAU/GLD strength late this week, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC. As I said before, the extremely Bullish Walmart Lead Indicator made holding a short position overnight risky, as I found out today.
The best shorting opportunities usually occur when both the NEM and WMT Lead Indicators are very bearish.
However, the Walmart (WMT) Lead Indicator turned bearish again, at -0.50% versus SPX (S & P 500) today/on 7-11, -1.50% on 7-10, -0.16% on 7-9, which is good news for my GDX (Gold Miners Index) short position.
Also, the NEM Lead Indicator is very bearish, at +0.22% versus the XAU today/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 gold COT data is bearish again this week, with the savvy gold Commercial Traders trading significantly net short, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm, and, note that they correctly anticipated this strength, with a significant addition to their long position.
The previous week the savvy gold Commercial Traders added a massive 43,755 short futures and options contracts, while the clueless contrarian gold Speculators added a massive 36,224 long futures and options contracts. The gold Speculators look brilliant right now, but, will they exit at the right time? The massive short trade by the savvy gold Commercial Traders is probably a multi week type trade.
GDX, HUI, and GLD created downside gaps at 46.67, 432.61, 93.53 at today 7-11's open. The XAU doesn't have one according to Yahoo's data.
Looking at GLD's (gold ETF) intraday chart today, see http://finance.yahoo.com/q/ta?s=gld&t=1d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c, note that GLD put in a very large bearish spike at about 11 am, when it put in a session cycle high at 95.50.
Then, GLD appears to have done an intraday Wave A downcycle, followed by an intraday countertrend Wave B upcycle, that appeared to be peaking at session's end, so, early on Monday it looks like the gold sector will be weak, which jives with the bearish Walmart Lead Indicator the past three days (-0.50% versus SPX (S & P 500) today/on 7-11, -1.50% on 7-10, -0.16% on 7-9).
Also, GDX (Gold Miners ETF) put in an intraday double top, and, looks like it'll plunge early on Monday, see http://finance.yahoo.com/q/ta?s=gdx&t=1d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c, and, reliable lead indicator Newmont Mining appears to have peaked late in the session, note the large bearish spike, see http://finance.yahoo.com/q/ta?s=NEM&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c, and, appears to have entered an intraday Wave C downcycle shortly before session's end.
For the gold sector the short term outlook is extremely bearish, but, a short term countertrend Wave B upcycle that began on 7-8 might still be in effect.
The NEM Lead Indicator is very 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, and, are positioned massively net short, 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 7-8. A short term countertrend Wave B upcycle is/was in effect, but, might have peaked early today 7-11, 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.
GDX/HUI/XAU/GLD created downside gaps at 7-10's open at 46.35, 419.06, 182.27, 91.50. NEM created a downside gap today at 47.54.
I shorted GDX at 46.3401 on 7-10. I'll look to cover GDX after it probably fills 7-10's downside gap at 45.36 next week.
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 (Gold Miners ETF) and reliable lead indicator NEM's downside gaps to watch next 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
11:03 AM
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