The Gold Sector, The Major Averages, and Other Sectors Appear To Have Bottomed Today
The gold sector, the major averages, and other sectors appear to have bottomed today, 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= for HUI (AMEX Gold Bugs Index), 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= for the S & P 500 (SPX), and, see http://finance.yahoo.com/q/ta?s=kol&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c= for the coal ETF. Very strong likely Wave 1 type moves occurred today 9-11-08.
The gold sector (GDX/HUI/XAU, http://stockcharts.com/charts/gallery.html?gdx, gold/GLD lags and silver lags gold) might have finally put in a Wave A major intermediate term (since mid March, Wave A down of the Wave 2 Cyclical Bear Market) cycle low today.
I also might short the coal ETF KOL. Later on I'll look to trade the Russell 2000 ultra long via UWM, and, I'll possibly look to trade the gold sector long via AEM or NXG, if today appears to be the bottom. I might hold modest positions overnight.
The sector NEM Lead Indicator was a bullish approaching very bullish +0.97% versus the XAU today/on 9-11, and, the broad market Walmart (WMT) Lead Indicator, used in concert with the sector NEM Lead Indicator, was a modestly bullish approaching bullish +0.47% versus the S & P 500 (SPX) today/on 9-11.
The sector NEM Lead Indicator 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/were 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/were probably very near an important cycle low.
The sector NEM Lead Indicator was a bullish +0.97% versus the XAU today/on 9-11, was a very bearish -1.99% on 9-10, was a very bullish +1.67% 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 a modestly bullish
+0.47% versus the S & P 500 (SPX) today/on 9-11, was a bullish +0.84% on 9-10, was an extremely bullish +2.01% 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 is the most likely to have bottomed today 9-11-08, because, it has the most bullish/large inverse spike on a bullish white (close above the open) candle, see http://stockcharts.com/charts/gallery.html?nem. NEM closed at 37.28 (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.
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. GLD has an upside gap at 74.22 from 9-11.
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 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 for GLD.
SPX (S & P 500) and RUT (Russell 2000) appear to have put in a monthly cycle low today 9-11-08, see http://stockcharts.com/charts/gallery.html?%24spx and http://stockcharts.com/charts/gallery.html?%24rut. Note the bullish large inverse spike on today's candle. NDX (NASDAQ 100) appears to have put in an intermediate term cycle low today, see http://stockcharts.com/charts/gallery.html?%24ndx.
The S & P 500 (SPX) did a very strong very clearly defined Elliott Wave 12345 up down up down up pattern today, 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, and, finished the session in Wave 5 peaking, so, I'll look to ultra short SPX via SDS early tomorrow. I'll look to trade RUT ultra long via UWM later on.
Due to the nature of cycles, upcycles' rising bottoms trendlines almost always begin relatively flat, so, SPX should put in a cycle low tomorrow or Monday only modestly above today's likely monthly cycle low.
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/probably put in a monthly cycle low on 9-11. 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, it was a modestly bullish +0.47% versus the S & P 500 (SPX) today/on 9-11, it was +0.84% on 9-10, +2.01% 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 61.13 (createded 9-10). 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 near an important cycle low.
VIX fell a slight -0.04% today 9-11 versus SPX rising a significant +1.38%, which is a significant +1.34% rise in fear (-0.04% + +1.38% = +1.34% rise in the SPX (S & P 500) wall of worry) that points to some significant strength early on Friday 9-12.
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, RUT probably put in a Wave 2 minor intermediate term cycle low on 7-15-08/NDX might have done so on 9-11-08, 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
The gold sector (GDX/HUI/XAU, http://stockcharts.com/charts/gallery.html?gdx, gold/GLD lags and silver lags gold) might have finally put in a Wave A major intermediate term (since mid March, Wave A down of the Wave 2 Cyclical Bear Market) cycle low today.
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 volatility is what tends to/almost always occurs near important cycle lows and cycle highs, so, 9-9's extremely high volatility indicates that an important cycle low is probably imminent/might have occurred today 9-11, as does the cycle picture and the Elliott Wave count, see annotated chart two at http://www.joefrocks.com/GoldStockCharts.html.
The S & P 500 (SPX) did a very strong very clearly defined Elliott Wave 12345 up down up down up pattern today, 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, and, finished the session in Wave 5 peaking, so, I'll look to ultra short SPX via SDS early tomorrow.
I also might short the coal ETF KOL. Later on I'll look to trade the Russell 2000 ultra long via UWM, and, I'll possibly look to trade the gold sector long via AEM or NXG, if today appears to be the bottom. I might hold modest positions overnight.
The sector NEM Lead Indicator was a bullish approaching very bullish +0.97% versus the XAU today/on 9-11, and, the broad market Walmart (WMT) Lead Indicator, used in concert with the sector NEM Lead Indicator, was a modestly bullish approaching bullish +0.47% versus the S & P 500 (SPX) today/on 9-11.
The sector NEM Lead Indicator 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/were 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/were probably very near an important cycle low.
The sector NEM Lead Indicator was a bullish +0.97% versus the XAU today/on 9-11, was a very bearish -1.99% on 9-10, was a very bullish +1.67% 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 a modestly bullish
+0.47% versus the S & P 500 (SPX) today/on 9-11, was a bullish +0.84% on 9-10, was an extremely bullish +2.01% 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 is the most likely to have bottomed today 9-11-08, because, it has the most bullish/large inverse spike on a bullish white (close above the open) candle, see http://stockcharts.com/charts/gallery.html?nem. NEM closed at 37.28 (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.
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. GLD has an upside gap at 74.22 from 9-11.
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 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 for GLD.
SPX (S & P 500) and RUT (Russell 2000) appear to have put in a monthly cycle low today 9-11-08, see http://stockcharts.com/charts/gallery.html?%24spx and http://stockcharts.com/charts/gallery.html?%24rut. Note the bullish large inverse spike on today's candle. NDX (NASDAQ 100) appears to have put in an intermediate term cycle low today, see http://stockcharts.com/charts/gallery.html?%24ndx.
The S & P 500 (SPX) did a very strong very clearly defined Elliott Wave 12345 up down up down up pattern today, 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, and, finished the session in Wave 5 peaking, so, I'll look to ultra short SPX via SDS early tomorrow. I'll look to trade RUT ultra long via UWM later on.
Due to the nature of cycles, upcycles' rising bottoms trendlines almost always begin relatively flat, so, SPX should put in a cycle low tomorrow or Monday only modestly above today's likely monthly cycle low.
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/probably put in a monthly cycle low on 9-11. 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, it was a modestly bullish +0.47% versus the S & P 500 (SPX) today/on 9-11, it was +0.84% on 9-10, +2.01% 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 61.13 (createded 9-10). 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 near an important cycle low.
VIX fell a slight -0.04% today 9-11 versus SPX rising a significant +1.38%, which is a significant +1.34% rise in fear (-0.04% + +1.38% = +1.34% rise in the SPX (S & P 500) wall of worry) that points to some significant strength early on Friday 9-12.
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, RUT probably put in a Wave 2 minor intermediate term cycle low on 7-15-08/NDX might have done so on 9-11-08, 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
1:16 PM
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