Brutal On Top Of Brutal For GDX/HUI/XAU And NEM
Brutal on top of brutal describes GDX/HUI/XAU's and NEM's action today 9-9, see http://stockcharts.com/charts/gallery.html?gdx. GDX fell -9.53% today and reliable lead indicator NEM fell -7.76%. HUI and the XAU obviously had similar huge declines.
It looks like there's more downside tomorrow, when Wave A of the Wave 2 Cyclical Bear Market since 3-17-08 for GDX/HUI/XAU (XAU since 3-14-08) might finally bottom. NEM's Cyclical Bear Market since 1-31-06 (discussed later) might bottom tomorrow. Today's close very near or at the session cycle low points to more downside, and, the candles today don't have the bullish large inverse spike that usually marks important cycle lows.
Also, NEM created a large bearish breakaway gap at 39.82 today/on 9-9, GDX did so at 30.94, GLD did so at 78.86, HUI did so at 286.54, and, the XAU did so at 124.29, which points to more downside tomorrow, since they closed very near the session cycle low and only made a feeble attempt at filling today's upside gaps.
Today's extremely high volatility is what tends to/almost always occurs near important cycle lows and cycle highs, so, today 9-9's extremely high volatility indicates that an important cycle low is probably imminent, as does the cycle picture and the Elliott Wave count, see annotated chart two at http://www.joefrocks.com/GoldStockCharts.html.
The sector NEM Lead Indicator was a very bullish +1.67% versus the XAU today/on 9-9, and, the five day (http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=on&z=m&q=l&p=&a=&c=%5Ehui,nem) and the three month (http://finance.yahoo.com/q/ta?s=%5EXAU&t=3m&l=on&z=m&q=l&p=&a=&c=%5Ehui,nem) sector NEM Lead Indicator are extremely bullish, which is another sign that GDX/HUI/XAU/GLD and reliable lead indicator NEM are probably very near an important cycle low.
The five day (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) and the three month (http://finance.yahoo.com/q/ta?s=%5EHUI&t=3m&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC) broad market Walmart (WMT) Lead Indicator, used in concert with the sector NEM Lead Indicator, are extremely bullish, which is another sign that GDX/HUI/XAU/GLD and reliable lead indicator NEM are probably very near an important cycle low.
The sector NEM Lead Indicator was a very bullish +1.67% versus the XAU today/on 9-9, was an extremely bullish +3.11% on 9-8, was a very bullish +1.12% on 9-5, was a modestly bearish -0.28% versus the XAU on 9-4, -0.11% on 9-3, +1.83% on 9-2, +0.90% on 8-29, +0.19% on 8-28.
The broad market Walmart (WMT) Lead Indicator was an extremely bullish
+2.01% versus the S & P 500 (SPX) today/on 9-9, was +0.02% on 9-8, was a very bullish +1.17% on 9-5, was an extremely bullish +2.97% versus the S & P 500 (SPX) on 9-4, +0.44% on 9-3, +1.39% on 9-2, +0.02% on 8-29, -0.48% on 8-28.
Reliable lead indicator NEM took out it's June 2007 cycle low (at 37.84) today, that appeared to be a Cyclical Bear Market (began 1-31-06) cycle low, with a cycle low today at 36.66 (36.58 after hours). NEM has been in a Cyclical Bear Market for about 32 months, which is more than two and a half years.
NEM created a large bearish breakaway gap at 39.82 on 9-9, GDX did so at 30.94, GLD did so at 78.86, HUI did so at 286.54, and, the XAU did so at 124.29.
Upside gaps were created at 9-2's open at 37.64 for GDX, at 45.10 for NEM (also watch 46.12), and, at 81.71 for GLD, see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
I'll be (very carefully) looking to day trade AEM or NEM (maybe NXG or some others, I have to look at them) long on Wednesday. I'll also be looking to trade RUT (Russell 2000) ultra long on Wednesday.
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.
There are a lot of gold/silver stocks that have been crushed (as most of you know) and will probably soon enter a Cyclical Bull Market. A few examples are CDE and NXG. I'll try to remember to point many of them out in the next few days/weeks.
One obviously wants to wait for a strong/major 5% follow through buy signal (Wave 1 monthly upcycle, or, maybe a 5% major buy signal will occur after a Wave 3 short term upcycle, or, maybe after a very strong short term Wave 1 upcycle), then look to go long after a Wave 2 monthly downcycle or maybe after a short term Wave 4 downcycle (of a monthly upcycle), or, even after short term Wave 2 downcycle, if a very strong short term Wave 1 upcycle occurred.
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.
The US Dollar hit a 5% major buy signal! (major breakout), see http://tradethecycles.blogspot.com/2008/08/us-dollar-hit-5-follow-through-major.html.
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.
SPX (S & P 500) (monthly downcycle since 8-11-08, Wave 1 monthly upcycle began on 7-15-08 and obviously peaked on 8-11-08) and RUT (Russell 2000) should test their potential monthly cycle lows (occurred Friday 9-5) tomorrow, 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. NDX took out it's cycle low from 9-5 today. The Lehman Brothers situation (LEH fell more than -40%) was a huge factor today.
I'm not going to trade SPX long, because, it failed to do the usual Elliott Wave 12345 up down up down up pattern in the Wave 1 monthly upcycle, see http://stockcharts.com/charts/gallery.html?%24spx. It has a sickly chart. This obviously means that SPX should be a good short during monthly downcycles.
RUT (Russell 2000, http://stockcharts.com/charts/gallery.html?%24rut) is probably a good long via UWM (not a recommendation, do your own due diligence), since it might have put in a monthly cycle low on 9-5 or might do so tomorrow 9-10. I'll look to trade RUT ultra long via UWM this week. I might hold it overnight.
The Walmart (WMT) Lead Indicator has turned extremely bullish, at
+2.01% versus SPX (S & P 500) today/on 9-9, +0.02% on 9-8, +1.17% on 9-5, +2.97% on 9-4, +0.44% on 9-3, +1.39% on 9-2.
Waiting for a strong short term Wave 1 upcycle, then looking to go long (for holding overnight, one can obviously day trade the short term Wave 1 long) shortly after a short term Wave 2 downcycle (usually lasts about 1.5 to 3 sessions, and, does an Elliott Wave down up down pattern) bottoms is a sound strategy.
My primary (key word) trading focus now, and probably for a while, is the precious metals sector, my favorite trading sector.
Watch WMT's downside gap at 58.10 (filled 8-26) and SPX's at 1249.01 (filled 9-4). WMT has an upside gap at 60.76 (filled 9-2) and SPX has one at 1305.31.
The five day (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) and the three month (http://finance.yahoo.com/q/ta?s=%5EHUI&t=3m&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC) Walmart (WMT) Lead Indicator are extremely bullish, which is a sign that SPX/NDX/RUT are very near an important cycle low.
VIX rose an unusually large +13.16% today 9-9 versus SPX falling a very sharp -3.41%, which is an unusually large +9.75% rise in fear (+13.16% + -3.41%% = +9.75% rise in the SPX (S & P 500) wall of worry) that points to some significant weakness early on Wednesday 9-10.
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.
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
It looks like there's more downside tomorrow, when Wave A of the Wave 2 Cyclical Bear Market since 3-17-08 for GDX/HUI/XAU (XAU since 3-14-08) might finally bottom. NEM's Cyclical Bear Market since 1-31-06 (discussed later) might bottom tomorrow. Today's close very near or at the session cycle low points to more downside, and, the candles today don't have the bullish large inverse spike that usually marks important cycle lows.
Also, NEM created a large bearish breakaway gap at 39.82 today/on 9-9, GDX did so at 30.94, GLD did so at 78.86, HUI did so at 286.54, and, the XAU did so at 124.29, which points to more downside tomorrow, since they closed very near the session cycle low and only made a feeble attempt at filling today's upside gaps.
Today's extremely high volatility is what tends to/almost always occurs near important cycle lows and cycle highs, so, today 9-9's extremely high volatility indicates that an important cycle low is probably imminent, as does the cycle picture and the Elliott Wave count, see annotated chart two at http://www.joefrocks.com/GoldStockCharts.html.
The sector NEM Lead Indicator was a very bullish +1.67% versus the XAU today/on 9-9, and, the five day (http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=on&z=m&q=l&p=&a=&c=%5Ehui,nem) and the three month (http://finance.yahoo.com/q/ta?s=%5EXAU&t=3m&l=on&z=m&q=l&p=&a=&c=%5Ehui,nem) sector NEM Lead Indicator are extremely bullish, which is another sign that GDX/HUI/XAU/GLD and reliable lead indicator NEM are probably very near an important cycle low.
The five day (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) and the three month (http://finance.yahoo.com/q/ta?s=%5EHUI&t=3m&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC) broad market Walmart (WMT) Lead Indicator, used in concert with the sector NEM Lead Indicator, are extremely bullish, which is another sign that GDX/HUI/XAU/GLD and reliable lead indicator NEM are probably very near an important cycle low.
The sector NEM Lead Indicator was a very bullish +1.67% versus the XAU today/on 9-9, was an extremely bullish +3.11% on 9-8, was a very bullish +1.12% on 9-5, was a modestly bearish -0.28% versus the XAU on 9-4, -0.11% on 9-3, +1.83% on 9-2, +0.90% on 8-29, +0.19% on 8-28.
The broad market Walmart (WMT) Lead Indicator was an extremely bullish
+2.01% versus the S & P 500 (SPX) today/on 9-9, was +0.02% on 9-8, was a very bullish +1.17% on 9-5, was an extremely bullish +2.97% versus the S & P 500 (SPX) on 9-4, +0.44% on 9-3, +1.39% on 9-2, +0.02% on 8-29, -0.48% on 8-28.
Reliable lead indicator NEM took out it's June 2007 cycle low (at 37.84) today, that appeared to be a Cyclical Bear Market (began 1-31-06) cycle low, with a cycle low today at 36.66 (36.58 after hours). NEM has been in a Cyclical Bear Market for about 32 months, which is more than two and a half years.
NEM created a large bearish breakaway gap at 39.82 on 9-9, GDX did so at 30.94, GLD did so at 78.86, HUI did so at 286.54, and, the XAU did so at 124.29.
Upside gaps were created at 9-2's open at 37.64 for GDX, at 45.10 for NEM (also watch 46.12), and, at 81.71 for GLD, see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
I'll be (very carefully) looking to day trade AEM or NEM (maybe NXG or some others, I have to look at them) long on Wednesday. I'll also be looking to trade RUT (Russell 2000) ultra long on Wednesday.
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.
There are a lot of gold/silver stocks that have been crushed (as most of you know) and will probably soon enter a Cyclical Bull Market. A few examples are CDE and NXG. I'll try to remember to point many of them out in the next few days/weeks.
One obviously wants to wait for a strong/major 5% follow through buy signal (Wave 1 monthly upcycle, or, maybe a 5% major buy signal will occur after a Wave 3 short term upcycle, or, maybe after a very strong short term Wave 1 upcycle), then look to go long after a Wave 2 monthly downcycle or maybe after a short term Wave 4 downcycle (of a monthly upcycle), or, even after short term Wave 2 downcycle, if a very strong short term Wave 1 upcycle occurred.
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.
The US Dollar hit a 5% major buy signal! (major breakout), see http://tradethecycles.blogspot.com/2008/08/us-dollar-hit-5-follow-through-major.html.
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.
SPX (S & P 500) (monthly downcycle since 8-11-08, Wave 1 monthly upcycle began on 7-15-08 and obviously peaked on 8-11-08) and RUT (Russell 2000) should test their potential monthly cycle lows (occurred Friday 9-5) tomorrow, 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. NDX took out it's cycle low from 9-5 today. The Lehman Brothers situation (LEH fell more than -40%) was a huge factor today.
I'm not going to trade SPX long, because, it failed to do the usual Elliott Wave 12345 up down up down up pattern in the Wave 1 monthly upcycle, see http://stockcharts.com/charts/gallery.html?%24spx. It has a sickly chart. This obviously means that SPX should be a good short during monthly downcycles.
RUT (Russell 2000, http://stockcharts.com/charts/gallery.html?%24rut) is probably a good long via UWM (not a recommendation, do your own due diligence), since it might have put in a monthly cycle low on 9-5 or might do so tomorrow 9-10. I'll look to trade RUT ultra long via UWM this week. I might hold it overnight.
The Walmart (WMT) Lead Indicator has turned extremely bullish, at
+2.01% versus SPX (S & P 500) today/on 9-9, +0.02% on 9-8, +1.17% on 9-5, +2.97% on 9-4, +0.44% on 9-3, +1.39% on 9-2.
Waiting for a strong short term Wave 1 upcycle, then looking to go long (for holding overnight, one can obviously day trade the short term Wave 1 long) shortly after a short term Wave 2 downcycle (usually lasts about 1.5 to 3 sessions, and, does an Elliott Wave down up down pattern) bottoms is a sound strategy.
My primary (key word) trading focus now, and probably for a while, is the precious metals sector, my favorite trading sector.
Watch WMT's downside gap at 58.10 (filled 8-26) and SPX's at 1249.01 (filled 9-4). WMT has an upside gap at 60.76 (filled 9-2) and SPX has one at 1305.31.
The five day (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) and the three month (http://finance.yahoo.com/q/ta?s=%5EHUI&t=3m&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC) Walmart (WMT) Lead Indicator are extremely bullish, which is a sign that SPX/NDX/RUT are very near an important cycle low.
VIX rose an unusually large +13.16% today 9-9 versus SPX falling a very sharp -3.41%, which is an unusually large +9.75% rise in fear (+13.16% + -3.41%% = +9.75% rise in the SPX (S & P 500) wall of worry) that points to some significant weakness early on Wednesday 9-10.
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.
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
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
1:18 PM
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