Gold Put In A Monster Spike Then Crashed Today, And, The Major Averages Appear To Have Finally Bottomed
Gold put in a monster spike then crashed today 9-18, and, the major averages appear to have finally bottomed.
See SPX (S & P 500) at http://stockcharts.com/charts/gallery.html?%24spx)/SPX. An SPX Wave A major intermediate term cycle low appears to have occurred today, barring another major debacle in the next few days. Note the large bullish inverse spike on today 9-18's candle.
See GLD's (gold ETF) daily candlestick chart at http://stockcharts.com/charts/gallery.html?gld, and, see GLD's (gold ETF) five day intraday candlestick chart at http://finance.yahoo.com/q/ta?s=gld&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
Note the huge extremely bearish spike on GLD's daily chart, and, note the very bearish very large spike that occurred on GLD's intraday chart today, shortly before gold crashed and the major averages soared, and, another one occurred shortly before session's end.
After putting in what's probably a countertrend (yes) Wave B short term cycle high today, gold/GLD crashed and did a huge Wave A down type move that probably didn't bottom yet. Note the very large very bearish spike that occurred shortly before session's end, see http://finance.yahoo.com/q/ta?s=gld&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c. When a very short term countertrend Wave B up peaks tomorrow or Monday I'll look to double short gold via DZZ.
Since gold/GLD has experienced extremely high volatility the past two days (which is what occurs at important cycle highs), gold/GLD have a huge extremely bearish spike on their daily candlestick chart (http://stockcharts.com/charts/gallery.html?gld), and, gold/GLD's cycle low on 9-11-08 lacks the usual bullish large inverse spike that tends to mark important cycle lows, plus the fact that gold/GLD tend to lag gold stocks/GDX/HUI/XAU, means that the short term cycle high that occurred today 9-18 for gold/GLD is probably a countertrend Wave B cycle high of Wave C (since 7-15-08) of the Wave A major intermediate term downcycle since 3-17-08. GDX/HUI/XAU probably entered a countertrend Wave B major intermediate term upcycle on 9-11-08.
GDX/HUI/XAU are probably in Wave 4 down of a big short term Wave 1 upcycle since 9-11-08 (or Wave 1 peaked today), see http://stockcharts.com/charts/gallery.html?gdx. There's an up down up down pattern since 9-11-08, with Wave 4 being the downcycle that began after today 9-18's cycle high.
The sector NEM Lead Indicator was an off the charts bearish -7.96% versus the XAU today/on 9-18, and, probably points to continued gut wrenching volatility the next few days at least (probably more than a few days), and, a great shorting opportunity will probably occur in a session or two, but, one obviously has to be even more careful (this sector tends to very volatile anyway) than usual right now, given the off the charts volatility. The broad market Walmart (WMT) Lead Indicator was a very bearish -1.23% versus SPX (S & P 500) today/on 9-18.
Gold/GLD's great shorting opportunity should/might occur before gold stocks/GDX/HUI/XAU, because, gold/GLD probably didn't put in an important cycle low on 9-11-08, and, is probably lagging gold stocks/GDX/HUI/XAU to the downside, which is why Gold/GLD probably peaked today, while GDX/HUI/XAU might not have/probably didn't put in a short term Wave 1 cycle high today.
This huge spiking action has "countertrend" written all over it (from an intermediate term cycle point of view for GDX/HUI/XAU, not short term, though probably short term for gold/GLD). Countertrend action tends to be much more vertical/spiking type action than the action that occurs in normal upcycles.
GDX/HUI/XAU (http://stockcharts.com/charts/gallery.html?gdx) are very likely in a countertrend Wave B major intermediate term upcycle since 9-11-08, which is the Wave B upcycle of the likely Wave 2 Cyclical Bear Market since mid March 2008.
Tomorrow I'll be very carefully looking to day trade short Harmony Gold (HMY, downside gap at 9.17 from today 9-18's open, in Wave C of a Cyclical Bear Market since mid 2002!, see http://finance.yahoo.com/q/ta?s=HMY&t=my&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c) or GDX (Gold Miners ETF), and, I'll be looking to "double short" gold via DZZ (might hold it overnight).
Typically I'll wait for a significant intraday Wave A type plunge, and, I carefully check the Elliott Wave count on the 5 day intraday candlestick charts (GDX/HUI/XAU/NEM and whatever I'm trading), as well as the NEM/WMT Lead Indicators, then I'll go short late in an intraday countertrend Wave B rebound or (probably) early in Wave C down. Large spikes tend to occur at or near important cycles highs on both the intraday and daily candlestick charts, so, I look for that also.
The coal ETF KOL (http://stockcharts.com/charts/gallery.html?kol) appears to have put in a Wave A major intermediate term cycle low on 9-16. It needs to hit a major 5% follow through buy signal however before the Trade the Cycles system indicates that a major cycle low has very likely occurred.
Very strong likely Wave 1 type moves have occurred since 9-11-08. GDX/HUI/XAU (http://stockcharts.com/charts/gallery.html?gdx, gold/GLD lags and silver lags gold) probably finally put in a Wave A major intermediate term (since mid March, Wave A down of the Wave 2 Cyclical Bear Market) cycle low on 9-11-08.
Before holding positions overnight one obviously should 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.
Tuesday 9-9's extremely high GDX/HUI/XAU volatility is what tends to/almost always occurs near important cycle lows and cycle highs, so, 9-9's extremely high volatility indicated that an important cycle low was probably imminent/probably occurred on 9-11, as does the cycle picture and the Elliott Wave count, see annotated chart two at http://www.joefrocks.com/GoldStockCharts.html.
GDX/HUI/XAU and NEM created large bullish breakaway gaps at 9-12's open (downside gaps at 28.20, 262.97, 115.32, 37.28, GLD at 73.08), see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
The three month sector NEM Lead Indicator (http://finance.yahoo.com/q/ta?s=%5EXAU&t=3m&l=on&z=m&q=l&p=&a=&c=%5Ehui,nem) is extremely bullish, which is another sign that GDX/HUI/XAU/GLD and reliable lead indicator NEM were probably very near an important cycle low.
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, is extremely bullish, which is another sign that GDX/HUI/XAU/GLD and reliable lead indicator NEM were probably very near an important cycle low.
Reliable lead indicator NEM has the most bullish/large inverse spike on a bullish white (close above the open) candle on 9-11-08, see http://stockcharts.com/charts/gallery.html?nem. NEM closed at 37.28 on 9-11 (session cycle high at 38), well above the session cycle low and potential Cyclical Bear Market (since 1-31-06) cycle low at 35.79.
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.
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 (or already have) 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.
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 (filled 9-17) for GLD.
SPX (S & P 500) is trying to (probably did on 9-18 barring another major debacle) put in a very important Wave A major intermediate term (since 10-11-07) cycle low, see http://stockcharts.com/charts/gallery.html?%24spx, that's Wave A down of the Cyclical Bear Market since 10-11-07. Obviously, a flood of major bad news has been a huge factor recently. That's all I'm going to say about the major averages today.
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
See SPX (S & P 500) at http://stockcharts.com/charts/gallery.html?%24spx)/SPX. An SPX Wave A major intermediate term cycle low appears to have occurred today, barring another major debacle in the next few days. Note the large bullish inverse spike on today 9-18's candle.
See GLD's (gold ETF) daily candlestick chart at http://stockcharts.com/charts/gallery.html?gld, and, see GLD's (gold ETF) five day intraday candlestick chart at http://finance.yahoo.com/q/ta?s=gld&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
Note the huge extremely bearish spike on GLD's daily chart, and, note the very bearish very large spike that occurred on GLD's intraday chart today, shortly before gold crashed and the major averages soared, and, another one occurred shortly before session's end.
After putting in what's probably a countertrend (yes) Wave B short term cycle high today, gold/GLD crashed and did a huge Wave A down type move that probably didn't bottom yet. Note the very large very bearish spike that occurred shortly before session's end, see http://finance.yahoo.com/q/ta?s=gld&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c. When a very short term countertrend Wave B up peaks tomorrow or Monday I'll look to double short gold via DZZ.
Since gold/GLD has experienced extremely high volatility the past two days (which is what occurs at important cycle highs), gold/GLD have a huge extremely bearish spike on their daily candlestick chart (http://stockcharts.com/charts/gallery.html?gld), and, gold/GLD's cycle low on 9-11-08 lacks the usual bullish large inverse spike that tends to mark important cycle lows, plus the fact that gold/GLD tend to lag gold stocks/GDX/HUI/XAU, means that the short term cycle high that occurred today 9-18 for gold/GLD is probably a countertrend Wave B cycle high of Wave C (since 7-15-08) of the Wave A major intermediate term downcycle since 3-17-08. GDX/HUI/XAU probably entered a countertrend Wave B major intermediate term upcycle on 9-11-08.
GDX/HUI/XAU are probably in Wave 4 down of a big short term Wave 1 upcycle since 9-11-08 (or Wave 1 peaked today), see http://stockcharts.com/charts/gallery.html?gdx. There's an up down up down pattern since 9-11-08, with Wave 4 being the downcycle that began after today 9-18's cycle high.
The sector NEM Lead Indicator was an off the charts bearish -7.96% versus the XAU today/on 9-18, and, probably points to continued gut wrenching volatility the next few days at least (probably more than a few days), and, a great shorting opportunity will probably occur in a session or two, but, one obviously has to be even more careful (this sector tends to very volatile anyway) than usual right now, given the off the charts volatility. The broad market Walmart (WMT) Lead Indicator was a very bearish -1.23% versus SPX (S & P 500) today/on 9-18.
Gold/GLD's great shorting opportunity should/might occur before gold stocks/GDX/HUI/XAU, because, gold/GLD probably didn't put in an important cycle low on 9-11-08, and, is probably lagging gold stocks/GDX/HUI/XAU to the downside, which is why Gold/GLD probably peaked today, while GDX/HUI/XAU might not have/probably didn't put in a short term Wave 1 cycle high today.
This huge spiking action has "countertrend" written all over it (from an intermediate term cycle point of view for GDX/HUI/XAU, not short term, though probably short term for gold/GLD). Countertrend action tends to be much more vertical/spiking type action than the action that occurs in normal upcycles.
GDX/HUI/XAU (http://stockcharts.com/charts/gallery.html?gdx) are very likely in a countertrend Wave B major intermediate term upcycle since 9-11-08, which is the Wave B upcycle of the likely Wave 2 Cyclical Bear Market since mid March 2008.
Tomorrow I'll be very carefully looking to day trade short Harmony Gold (HMY, downside gap at 9.17 from today 9-18's open, in Wave C of a Cyclical Bear Market since mid 2002!, see http://finance.yahoo.com/q/ta?s=HMY&t=my&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c) or GDX (Gold Miners ETF), and, I'll be looking to "double short" gold via DZZ (might hold it overnight).
Typically I'll wait for a significant intraday Wave A type plunge, and, I carefully check the Elliott Wave count on the 5 day intraday candlestick charts (GDX/HUI/XAU/NEM and whatever I'm trading), as well as the NEM/WMT Lead Indicators, then I'll go short late in an intraday countertrend Wave B rebound or (probably) early in Wave C down. Large spikes tend to occur at or near important cycles highs on both the intraday and daily candlestick charts, so, I look for that also.
The coal ETF KOL (http://stockcharts.com/charts/gallery.html?kol) appears to have put in a Wave A major intermediate term cycle low on 9-16. It needs to hit a major 5% follow through buy signal however before the Trade the Cycles system indicates that a major cycle low has very likely occurred.
Very strong likely Wave 1 type moves have occurred since 9-11-08. GDX/HUI/XAU (http://stockcharts.com/charts/gallery.html?gdx, gold/GLD lags and silver lags gold) probably finally put in a Wave A major intermediate term (since mid March, Wave A down of the Wave 2 Cyclical Bear Market) cycle low on 9-11-08.
Before holding positions overnight one obviously should 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.
Tuesday 9-9's extremely high GDX/HUI/XAU volatility is what tends to/almost always occurs near important cycle lows and cycle highs, so, 9-9's extremely high volatility indicated that an important cycle low was probably imminent/probably occurred on 9-11, as does the cycle picture and the Elliott Wave count, see annotated chart two at http://www.joefrocks.com/GoldStockCharts.html.
GDX/HUI/XAU and NEM created large bullish breakaway gaps at 9-12's open (downside gaps at 28.20, 262.97, 115.32, 37.28, GLD at 73.08), see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
The three month sector NEM Lead Indicator (http://finance.yahoo.com/q/ta?s=%5EXAU&t=3m&l=on&z=m&q=l&p=&a=&c=%5Ehui,nem) is extremely bullish, which is another sign that GDX/HUI/XAU/GLD and reliable lead indicator NEM were probably very near an important cycle low.
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, is extremely bullish, which is another sign that GDX/HUI/XAU/GLD and reliable lead indicator NEM were probably very near an important cycle low.
Reliable lead indicator NEM has the most bullish/large inverse spike on a bullish white (close above the open) candle on 9-11-08, see http://stockcharts.com/charts/gallery.html?nem. NEM closed at 37.28 on 9-11 (session cycle high at 38), well above the session cycle low and potential Cyclical Bear Market (since 1-31-06) cycle low at 35.79.
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.
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 (or already have) 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.
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 (filled 9-17) for GLD.
SPX (S & P 500) is trying to (probably did on 9-18 barring another major debacle) put in a very important Wave A major intermediate term (since 10-11-07) cycle low, see http://stockcharts.com/charts/gallery.html?%24spx, that's Wave A down of the Cyclical Bear Market since 10-11-07. Obviously, a flood of major bad news has been a huge factor recently. That's all I'm going to say about the major averages today.
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
12:09 PM
1 Comments:
I'm looking to short Harmony Gold (HMY), but, I don't know if I'll hold it overnight. The NEM Lead Indicator is bullish right now on 9-19, but, was off the charts bearish at -7.96% versus the XAU yesterday/on 9-18.
I'm watching today's upside gap at 9.67. I'll probably go short shortly after 9.67 gets filled, or, clearly doesn't get filled, in which case it'll be a bearish breakaway gap.
By
Joe Ferrazzano, at 8:53 AM
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