Today Was Probably Countertrend Action By SPX (S & P 500)/Major Averages
Today 9-30 was probably countertrend action by SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx)/major averages, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=, which means that they probably didn't bottom yesterday 9-29-08.
A major clue is that SPX doesn't have the usual bullish large inverse spike on yesterday's candle, that tends to mark important cycle lows. Also, the broad market Walmart (WMT) Lead Indicator was an extremely bearish -2.81% versus SPX today/on 9-30, which points to severe weakness tomorrow.
Normally an extremely bearish (or bullish) lead indicator is very short term contrarian, and, in this case would point to more strength tomorrow, but, due to the extreme volatility right now, what seems like an extreme level for the Walmart (WMT) Lead Indicator isn't really extreme, because, volatility is obviously extreme now, so, much more extreme readings tend to occur for the Walmart (WMT) Lead Indicator.
Reliable broad market lead indicator Walmart (WMT) has a very large very bullish inverse spike on a bullish white (close above the open) candle today 9-30, see http://stockcharts.com/charts/gallery.html?wmt. Walmart (WMT) appears to have put in a monthly cycle low today.
In the gold sector it's become clear that 9-22-08 was a short term Wave 1 (began 9-11-08) cycle high for GDX/HUI/XAU, see http://stockcharts.com/charts/gallery.html?gdx. So, a big move up is likely for GDX/HUI/XAU once they bottom in the next day or two, but, it'll probably (barring a sector crash) be a short term Wave 3 upcycle, not Wave 5 of a big short term Wave 1 upcycle that was discussed last week.
Also, today's severe weakness made it clear that gold/GLD's (http://stockcharts.com/charts/gallery.html?gld) in a big short term Wave 2 downcycle (lagging GDX/HUI/XAU to the downside), or, the likely countertrend Wave B monthly upcycle that began on 9-11-08 peaked yesterday 9-29.
I'll be looking to trade gold double short via DZZ tomorrow. I'm also be looking to ultra short the XOI via DUG, see http://finance.yahoo.com/q/ta?s=%5Exoi&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, or, I'll be looking to double short oil via DTO, the double short oil ETN (Exchange Traded Note).
Note the oil ETF USO's huge bearish gap down from 86.21 at yesterday 9-29's open, see http://finance.yahoo.com/q/ta?s=uso&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
GLD (gold ETF) probably didn't put in a Wave A major intermediate term cycle low on 9-11-08, whereas, GDX/HUI/XAU probably did. Note that GLD (http://stockcharts.com/charts/gallery.html?gld) has three very large very bearish spikes recently, on 9-18, on 9-26, and, on 9-29.
GLD made a large bearish breakaway gap down from 89.57 today 9-30, see http://finance.yahoo.com/q/ta?s=gld&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c. Also note the huge extremely bearish spike on yesterday 9-29's intraday chart.
The savvy non contrarian gold Commercial Traders nailed last week's and this week's weakness, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm, engaging in massive long liquidation in the 5 day period ending 9-23-08, and, they engaged in aggressive short selling.
From 9-11-08's likely (in a normal market, the sector might crash with the market though) Wave A major intermediate term cycle low to 9-22-08's short term Wave 1 cycle high GDX/HUI/XAU did an Elliott Wave 12345 up down up down up pattern, and, since then have done/are doing an Elliott Wave ABC down up down pattern in the short term Wave 2 downcycle, see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
The GDX/HUI/XAU short term Wave 2 downcycle since 9-22-08 might not have bottomed yet. Today 9-30's sector NEM Lead Indicator was a slightly bearish -0.16% versus the XAU, which might point to more downside, as does the extremely bearish (which is normally very short term bullish, but, probably isn't now due to the extreme volatility) broad market Walmart (WMT) Lead Indicator, at -2.81% versus the S & P 500 (SPX) today/on 9-30.
Reliable lead indicator NEM (http://stockcharts.com/charts/gallery.html?nem) might have bottomed today (doubtful), see http://finance.yahoo.com/q/ta?s=nem&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
The Gold ETF GLD took out it's 9-18-08 cycle high yesterday (cycle high at 92 on 9-29), see http://stockcharts.com/charts/gallery.html?gld, though it doesn't show up on it's intraday chart, see http://finance.yahoo.com/q/ta?s=gld&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c. GLD is in a big short term Wave 2 downcycle, or, it's in a short term Wave A downcycle, if the countertrend monthly upcycle that began on 9-11-08 peaked yesterday 9-29.
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.
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.
A Cyclical Bear Market 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
A major clue is that SPX doesn't have the usual bullish large inverse spike on yesterday's candle, that tends to mark important cycle lows. Also, the broad market Walmart (WMT) Lead Indicator was an extremely bearish -2.81% versus SPX today/on 9-30, which points to severe weakness tomorrow.
Normally an extremely bearish (or bullish) lead indicator is very short term contrarian, and, in this case would point to more strength tomorrow, but, due to the extreme volatility right now, what seems like an extreme level for the Walmart (WMT) Lead Indicator isn't really extreme, because, volatility is obviously extreme now, so, much more extreme readings tend to occur for the Walmart (WMT) Lead Indicator.
Reliable broad market lead indicator Walmart (WMT) has a very large very bullish inverse spike on a bullish white (close above the open) candle today 9-30, see http://stockcharts.com/charts/gallery.html?wmt. Walmart (WMT) appears to have put in a monthly cycle low today.
In the gold sector it's become clear that 9-22-08 was a short term Wave 1 (began 9-11-08) cycle high for GDX/HUI/XAU, see http://stockcharts.com/charts/gallery.html?gdx. So, a big move up is likely for GDX/HUI/XAU once they bottom in the next day or two, but, it'll probably (barring a sector crash) be a short term Wave 3 upcycle, not Wave 5 of a big short term Wave 1 upcycle that was discussed last week.
Also, today's severe weakness made it clear that gold/GLD's (http://stockcharts.com/charts/gallery.html?gld) in a big short term Wave 2 downcycle (lagging GDX/HUI/XAU to the downside), or, the likely countertrend Wave B monthly upcycle that began on 9-11-08 peaked yesterday 9-29.
I'll be looking to trade gold double short via DZZ tomorrow. I'm also be looking to ultra short the XOI via DUG, see http://finance.yahoo.com/q/ta?s=%5Exoi&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, or, I'll be looking to double short oil via DTO, the double short oil ETN (Exchange Traded Note).
Note the oil ETF USO's huge bearish gap down from 86.21 at yesterday 9-29's open, see http://finance.yahoo.com/q/ta?s=uso&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
GLD (gold ETF) probably didn't put in a Wave A major intermediate term cycle low on 9-11-08, whereas, GDX/HUI/XAU probably did. Note that GLD (http://stockcharts.com/charts/gallery.html?gld) has three very large very bearish spikes recently, on 9-18, on 9-26, and, on 9-29.
GLD made a large bearish breakaway gap down from 89.57 today 9-30, see http://finance.yahoo.com/q/ta?s=gld&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c. Also note the huge extremely bearish spike on yesterday 9-29's intraday chart.
The savvy non contrarian gold Commercial Traders nailed last week's and this week's weakness, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm, engaging in massive long liquidation in the 5 day period ending 9-23-08, and, they engaged in aggressive short selling.
From 9-11-08's likely (in a normal market, the sector might crash with the market though) Wave A major intermediate term cycle low to 9-22-08's short term Wave 1 cycle high GDX/HUI/XAU did an Elliott Wave 12345 up down up down up pattern, and, since then have done/are doing an Elliott Wave ABC down up down pattern in the short term Wave 2 downcycle, see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
The GDX/HUI/XAU short term Wave 2 downcycle since 9-22-08 might not have bottomed yet. Today 9-30's sector NEM Lead Indicator was a slightly bearish -0.16% versus the XAU, which might point to more downside, as does the extremely bearish (which is normally very short term bullish, but, probably isn't now due to the extreme volatility) broad market Walmart (WMT) Lead Indicator, at -2.81% versus the S & P 500 (SPX) today/on 9-30.
Reliable lead indicator NEM (http://stockcharts.com/charts/gallery.html?nem) might have bottomed today (doubtful), see http://finance.yahoo.com/q/ta?s=nem&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c.
The Gold ETF GLD took out it's 9-18-08 cycle high yesterday (cycle high at 92 on 9-29), see http://stockcharts.com/charts/gallery.html?gld, though it doesn't show up on it's intraday chart, see http://finance.yahoo.com/q/ta?s=gld&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c. GLD is in a big short term Wave 2 downcycle, or, it's in a short term Wave A downcycle, if the countertrend monthly upcycle that began on 9-11-08 peaked yesterday 9-29.
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.
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.
A Cyclical Bear Market 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
1:17 PM
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