It Looks Like 8-27's GDX/HUI/XAU/NEM Downside Gaps Will Get Filled On Tuesday

It looks like 8-27's GDX/HUI/XAU/NEM (http://stockcharts.com/charts/gallery.html?gdx) downside gaps will probably get filled on Tuesday 9-2, 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=. GLD has a downside gap to watch at 80.06. SPX (S & P 500) created a downside gap at 1281.66 on 8-28, that will probably get filled early on Tuesday, 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.

Here are the clues pointing to downside gap filling action/weakness on Tuesday:

First, despite a very bullish intraday NEM Lead Indicator for much of the session, see http://finance.yahoo.com/q/ta?s=^XAU&t=1d&l=on&z=m&q=l&p=&a=&c=^hui,nem, GDX/HUI/XAU had bearish/ugly downtrending intraday action for most of the session, for the sixth straight session, 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.

Secondly, HUI closely approached it's 8-27 downside gap today late in the session, 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, so, it obviously looks like downside gap filling action was already in progress late today 8-29.

Third, reliable lead indicator NEM (http://stockcharts.com/charts/gallery.html?nem) started to plunge at session's end, see http://finance.yahoo.com/q/ta?s=NEM&t=1d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c, and, created a large bearish spike on it's intraday candlestick chart shortly before session's end, so, it looks like NEM will probably try to fill it's downside gap at 44.20 early on Tuesday, and, GDX/HUI/XAU will probably try to fill 8-27's downside gaps early on Tuesday.

Fourth, HUI created a very large bearish spike just after today 8-29's open, 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.

Lastly, the Elliott Wave count points to weakness on Tuesday, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c, because, GDX/HUI/XAU did a big Wave A down plunge early yesterday 8-28, then did a countertrend Wave B type rebound that peaked just after today's open, and, were in a Wave A of Wave C type decline for nearly all of today's session, and, appear to have entered a Wave C of Wave C type decline shortly before session's end.

If those downside gaps get filled (37.02 for GDX (watch 36.18, 34.46, 32.20 also), 44.20 for NEM (watch 43.25 also)), then the GDX/HUI/XAU countertrend Wave B upcycle since 8-11-08, of the Wave C crash since 7-15-08 (Wave C down of the GDX/HUI/XAU/GLD Wave A Major Intermediate Term Downcycle since 3-17-08, which is Wave A down of the Wave 2 Cyclical Bear Market since 3-17-08), probably/very likely peaked just after 8-28's open, which would mean that, on 8-28-08 GDX/HUI/XAU (http://stockcharts.com/charts/gallery.html?gdx) probably entered Wave C of the Wave C crash since 7-15-08, 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.

The cycles for reliable lead indicator NEM and GDX/HUI/XAU/GLD are vastly different, because, NEM obviously leads. NEM is in a Cyclical Bull Market since the mid 2007 cycle low at 37.84. NEM's bear market from 1-31-06 until mid 2007 correctly portended the current GDX/HUI/XAU/GLD Wave 2 Cyclical Bear Market since 3-17-08. NEM is in a Wave 3 major intermediate term upcycle since 8-11-08 versus GDX/HUI/XAU/GLD are in a Wave A major intermediate term downcycle (Wave C crash began 7-15-08) since 3-17-08.

The five day sector NEM Lead Indicator (+0.90% versus the XAU on 8-29, +0.19% on 8-28, -0.25% on 8-27, +0.78% on 8-26, -0.07% on 8-25, +1.87% on 8-22, -2.00% on 8-21, -0.87% on 8-20, -0.47% on 8-19) is very bullish, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=on&z=m&q=l&p=&a=&c=%5Ehui,nem, which points to a significant bounce after likely GDX/HUI/XAU/NEM downside gap filling action early on Tuesday.

The five day broad market Walmart Lead Indicator (+0.02% versus the S & P 500 on 8-29, -0.48% on 8-28, -0.31% on 8-27, +0.40% on 8-26, +0.46% on 8-25, +0.48% on 8-22, -0.01% on 8-21, -0.34% on 8-20, -0.14% on 8-19), used in concert with the sector NEM Lead Indicator, is neutral, 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.

I bought DZZ, the Double Short Gold Exchange Traded Note (ETN), at 33.17 on 8-26. I'm short GDX (Gold Miners ETF) at 35.7501. I'll look to possibly cover GDX on Tuesday if it's downside gap at 36.18 gets filled, then look to go short again later on Tuesday.

Wave A down of the HUI/XAU/Gold Wave 2 Cyclical Bear Market since 3-17-08 probably didn't bottom yet, see http://stockcharts.com/charts/gallery.html?%24hui. At important cycle lows there's almost always a bullish very large inverse spike, and, on 8-11 the inverse spike is relatively small compared to prior important cycle lows, see the second chart down at the link above. Also, GDX (Gold Miners ETF) has unfilled downside gaps at 32.20, 34.46, 36.18, and 37.02 that will probably get filled before the bottom occurs.

Reliable lead indicator NEM has a respectably large bullish inverse spike on 8-11's candle, and, might have bottomed on 8-11, see http://stockcharts.com/charts/gallery.html?nem, and, NEM took out the cycle low that occurred in early May (which was a surprise), so, NEM is putting in/put in a Wave 2 major intermediate term cycle low, not a Wave 2 minor intermediate term cycle low.

The Wave 1 major intermediate term upcycle 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.

The NEM Lead Indicator was a bullish +0.90% versus the XAU today/on 8-29, was a slightly bullish +0.19% on 8-28, was a modestly bearish -0.25% on 8-27, was a bullish +0.78% on 8-26, was -0.07% on 8-25, was a very bullish +1.87% on 8-22, was an extremely bearish -2.00% on 8-21, was a bearish -0.87% on 8-20, was -0.47% on 8-19, was -0.21% on 8-18, was +0.45% on 8-15, was a very bullish +1.48% on 8-14, was a very bearish -1.62% on 8-13, was a very bearish -1.03% 8-12, was +0.65% on 8-11, +1.90% on 8-8, +1.26% on 8-7, -1.82% on 8-6, -0.15% on 8-5, +2.29% on 8-4, +2.28% on 8-1, +1.08% on 7-31, -0.55% on 7-30, +0.05% on 7-29, -0.42% on 7-28, +0.12% on 7-25, +5.67% on 7-24, +0.83% on 7-23, +2.51% on 7-22, +0.71% on 7-21, +0.62% on 7-18, -1.91% on 7-17, +0.31% on 7-16, +0.52% on 7-15.

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.

The US Dollar entered a Wave 3 Minor Intermediate Term Upcycle on 7-15-08, see http://stockcharts.com/charts/gallery.html?%24usd, and, entered a Cyclical Bull Market within a Secular Bear Market on 3-17-08, after putting in a cycle low at 70.698. Note the very large bullish inverse spike on 3-17-08's and 7-15-08's candle.

GDX created a downside gap at 37.02 on 8-27, HUI did so at 340.48, the XAU did so at 147.49, NEM did so at 44.20. GDX created a downside gap at 36.18 on 8-21, HUI did so at 330.47, the XAU did so at 145.35, GLD did so at 77.63, and, NEM did so at 43.25. GDX created a downside gap at 34.46 on 8-18, HUI did so at 315.50, GLD did so at 77.63. Reliable lead indicator NEM created a bearish breakaway gap at 44.71 on 8-8 (filled), GDX created one at 38.92, HUI created one at 356.72, and, GLD created one at 86.09. Upside gaps were created on 7-23 at 47 for GDX, 432.50 for HUI, 185.04 for the XAU, and, at 93.06 for GLD.

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.

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.

The short term Wave 4 downcycle since 8-11-08 probably bottomed on 8-20-08, see http://stockcharts.com/charts/gallery.html?%24spx, and, 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, so, I might day trade SPX ultra long via SSO on Tuesday, after likely early weakness. SPX is in Wave 4 down of a short term Wave 5 upcycle since 8-20-08.

SPX created a downside gap at 1281.66 on 8-28, that will probably get filled early on Tuesday. Watch WMT's downside gap at 58.10 (filled 8-26) and SPX's at 1249.01. WMT has an upside gap at 60.76 and SPX has one at 1305.31.

The WMT (Walmart) Lead Indicator was a slightly bullish +0.02% versus SPX (S & P 500) today/on 8-29, was a modestly bearish -0.48% on 8-28, was a modestly bearish -0.31% on 8-27, was a modestly bullish +0.40% on 8-26, was a modestly bullish +0.46% on 8-25, was a modestly bullish +0.48% on 8-22, -0.01% on 8-21, -0.34% on 8-20, was a slightly bearish -0.14% on 8-19, was a bullish +0.60% versus SPX (S & P 500) on 8-18, and, was a very bullish +1.78% on 8-15, so, it's bullish short term.

VIX rose an unusually large +6.28% today 8-29 versus SPX falling a significant -1.37%, which is a very sharp +4.91% rise in fear (+6.28% + -1.37% = +4.91% rise in the SPX (S & P 500) wall of worry) that points to some very sharp strength on Tuesday 9-2, after likely early weakness/downside gap filling action.

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. 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 slightly bullish +0.02% versus SPX (S & P 500) today/on 8-29, was a modestly bearish -0.48% on 8-28, was a modestly bearish -0.31% on 8-27, was +0.40% on 8-26, was +0.46% on 8-25, was +0.48% on 8-22, was -0.01% on 8-21, was -0.34% on 8-20, was -0.14% on 8-19, was a bullish +0.60% on 8-18, was a very bullish +1.78% on 8-15, was -0.17% on 8-14, was an extremely bearish -2.02% on 8-13, was an extremely bullish +2.39% on 8-12, was +0.52% on 8-11, -0.81% on 8-8, was an extremely bearish -4.46% on 8-7, +0.36% on 8-6, +0.40% on 8-5, was an extremely bullish +2.08% on 8-4, -0.92% on 8-1, was a very bullish +1.41% on 7-31, +0.26% on 7-30, +0.21% on 7-29, +0.43% on 7-28, -0.67% on 7-25, +0.38% 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, +0.39% on 7-18, +0.06% on 7-17, -0.32% on 7-16, +0.97% on 7-15.

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) 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).

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 1278.60, 1305.31, 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.

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