Wave A Down Of The GDX/HUI/XAU/GLD Wave 2 Cyclical Bear Market Since 3-17-08 Might Bottom Tomorrow 9-5
Wave A down (major intermediate term downcycle) of the GDX/HUI/XAU/GLD Wave 2 Cyclical Bear Market since 3-17-08 might bottom tomorrow 9-5, see http://stockcharts.com/charts/gallery.html?gdx. GDX (Gold Miners ETF) filled the last of it's downside gaps at 32.20 today (GLD's at 77.63 did not get filled), which is a sign that an important cycle low is imminent.
GDX/HUI/XAU/GLD probably didn't bottom today 9-4, because, their candles don't have the large bullish inverse spike that tends to mark important cycle lows, see http://stockcharts.com/charts/gallery.html?gdx. Also, they closed very close to their session cycle lows today (GDX (Gold Miners ETF) at 32.18 versus the 32.16 session cycle low), which is a sign that they'll probably make lower cycle lows tomorrow.
Looking at GDX's (Gold Miners ETF) intraday Elliott Wave count for today 9-4, see http://finance.yahoo.com/q/ta?s=GDX&t=5d&l=on&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c, it looks like GDX will do a final Wave C of Wave C plunge at tomorrow 9-5's open, that might be a Wave A major intermediate term cycle low.
After a very brief pop at the open GDX did a Wave A move down followed by a Wave B up and a Wave A of Wave C move down (bottomed at 2:10), then, finished the session in Wave B of Wave C or early (likely from looking at the one day chart, see http://finance.yahoo.com/q/ta?s=gdx&t=1d&l=on&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c) in Wave C of Wave C. So, I'll be looking to possibly day trade GDX, NEM, or most likely AEM long early tomorrow after likely early weakness. I day traded GDX short today, shorting it at 33.27 and covering at 32.60.
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.
GDX/HUI/XAU/GLD entered Wave C of Wave C of the Wave A Major Intermediate Term Downcycle (since mid March) on 8-28-08, see http://finance.yahoo.com/q/ta?s=GDX&t=5d&l=on&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&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.
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.
Reliable lead indicator NEM is trying to put in a likely (if NEM doesn't take out 37.84) Wave 2 major intermediate term cycle low versus a likely Cyclical Bear Market cycle low at 37.84 in June 2007. NEM's cycle low today 9-4 was 39.44. If NEM takes out the cycle low at 37.84 from June 2007 that will obviously be a very bearish sign, and, that'll mean that NEM is still in a Cyclical Bear Market that began on 1-31-06, two years and seven+ months ago.
The cycles for reliable lead indicator NEM and GDX/HUI/XAU/GLD are vastly different, because, NEM obviously leads. NEM is probably 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 2 major intermediate term downcycle since January 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 Wave 1 major intermediate term upcycle peaked in January at 57.44, and, NEM probably entered a Cyclical Bull Market in June 2007 after putting in a Cyclical Bear Market (began 1-31-06) cycle low at 37.84.
GDX/HUI/XAU/GLD and reliable lead indicator NEM are extremely oversold (NEM Williams %R at -98.49 out of -100, RSI is at 24.97), which is another sign that they are probably near an important cycle low.
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 modestly bearish -0.28% versus the XAU today/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 +2.97% versus the S & P 500 (SPX) today/on 9-4, +0.44% on 9-3, +1.39% on 9-2, +0.02% on 8-29, -0.48% on 8-28.
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.
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 (not filled yet), and, NEM did so at 43.25, ALL got filled on 9-2 except GLD, gold tends to lag. 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.
The SPX (S & P 500) "short term Wave 4 downcycle (probably not, see next paragraph)" since 8-11-08 will probably bottom below the Wave 2 cycle low that occurred in late July, 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.
Actually, what's really going on is that the poor pitiful SPX's (S & P 500) monthly upcycle probably peaked on 8-11-08, and, only did an up down up pattern, so, it failed to do the usual Elliott Wave 12345 up down up down up pattern, and, one should obviously avoid trading SPX long via SSO, but, RUT (http://stockcharts.com/charts/gallery.html?%24rut) is probably a good long via UWM (not a recommendation, do your own due diligence), once it puts in a monthly cycle low in the next day or two.
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 +12.13% today 9-4 versus SPX falling a sharp -2.99%, which is an unusually large +9.14% rise in fear (+12.13% + -2.99% = +9.14% rise in the SPX (S & P 500) wall of worry) that points to some weakness on Friday 9-5.
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 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
GDX/HUI/XAU/GLD probably didn't bottom today 9-4, because, their candles don't have the large bullish inverse spike that tends to mark important cycle lows, see http://stockcharts.com/charts/gallery.html?gdx. Also, they closed very close to their session cycle lows today (GDX (Gold Miners ETF) at 32.18 versus the 32.16 session cycle low), which is a sign that they'll probably make lower cycle lows tomorrow.
Looking at GDX's (Gold Miners ETF) intraday Elliott Wave count for today 9-4, see http://finance.yahoo.com/q/ta?s=GDX&t=5d&l=on&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c, it looks like GDX will do a final Wave C of Wave C plunge at tomorrow 9-5's open, that might be a Wave A major intermediate term cycle low.
After a very brief pop at the open GDX did a Wave A move down followed by a Wave B up and a Wave A of Wave C move down (bottomed at 2:10), then, finished the session in Wave B of Wave C or early (likely from looking at the one day chart, see http://finance.yahoo.com/q/ta?s=gdx&t=1d&l=on&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c) in Wave C of Wave C. So, I'll be looking to possibly day trade GDX, NEM, or most likely AEM long early tomorrow after likely early weakness. I day traded GDX short today, shorting it at 33.27 and covering at 32.60.
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.
GDX/HUI/XAU/GLD entered Wave C of Wave C of the Wave A Major Intermediate Term Downcycle (since mid March) on 8-28-08, see http://finance.yahoo.com/q/ta?s=GDX&t=5d&l=on&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&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.
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.
Reliable lead indicator NEM is trying to put in a likely (if NEM doesn't take out 37.84) Wave 2 major intermediate term cycle low versus a likely Cyclical Bear Market cycle low at 37.84 in June 2007. NEM's cycle low today 9-4 was 39.44. If NEM takes out the cycle low at 37.84 from June 2007 that will obviously be a very bearish sign, and, that'll mean that NEM is still in a Cyclical Bear Market that began on 1-31-06, two years and seven+ months ago.
The cycles for reliable lead indicator NEM and GDX/HUI/XAU/GLD are vastly different, because, NEM obviously leads. NEM is probably 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 2 major intermediate term downcycle since January 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 Wave 1 major intermediate term upcycle peaked in January at 57.44, and, NEM probably entered a Cyclical Bull Market in June 2007 after putting in a Cyclical Bear Market (began 1-31-06) cycle low at 37.84.
GDX/HUI/XAU/GLD and reliable lead indicator NEM are extremely oversold (NEM Williams %R at -98.49 out of -100, RSI is at 24.97), which is another sign that they are probably near an important cycle low.
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 modestly bearish -0.28% versus the XAU today/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 +2.97% versus the S & P 500 (SPX) today/on 9-4, +0.44% on 9-3, +1.39% on 9-2, +0.02% on 8-29, -0.48% on 8-28.
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.
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 (not filled yet), and, NEM did so at 43.25, ALL got filled on 9-2 except GLD, gold tends to lag. 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.
The SPX (S & P 500) "short term Wave 4 downcycle (probably not, see next paragraph)" since 8-11-08 will probably bottom below the Wave 2 cycle low that occurred in late July, 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.
Actually, what's really going on is that the poor pitiful SPX's (S & P 500) monthly upcycle probably peaked on 8-11-08, and, only did an up down up pattern, so, it failed to do the usual Elliott Wave 12345 up down up down up pattern, and, one should obviously avoid trading SPX long via SSO, but, RUT (http://stockcharts.com/charts/gallery.html?%24rut) is probably a good long via UWM (not a recommendation, do your own due diligence), once it puts in a monthly cycle low in the next day or two.
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 +12.13% today 9-4 versus SPX falling a sharp -2.99%, which is an unusually large +9.14% rise in fear (+12.13% + -2.99% = +9.14% rise in the SPX (S & P 500) wall of worry) that points to some weakness on Friday 9-5.
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 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
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
1:03 PM
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