A Big Short Term Wave 2 Downcycle Probably Remains In Effect For GDX/HUI/XAU
A big short term Wave 2 downcycle (since 9-22-08) probably remains in effect for GDX/HUI/XAU, see http://stockcharts.com/charts/gallery.html?gdx. One can tell this simply by looking at today 10-1's bearish black (close below the open for GDX, white/close above the open for HUI/XAU) candle with a relatively large bearish spike, and, there isn't the usual large bullish inverse spike that tends to mark important cycle lows (sometimes both a large spike and a large inverse spike occur the same day).
Also, the sector NEM Lead Indicator was a bearish -0.51% versus the XAU today 10-1 (-0.16% on 9-30, -0.18% on 9-29), and, the broad market Walmart (WMT) Lead Indicator was a slightly bearish -0.06% versus the S & P 500 (SPX) today 10-1 (-2.81% on 9-30).
The XAU barely took out yesterday's cycle low today 10-1, see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=on&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, and, was doing a Wave A type crash at session's end today, so, it looks like the XAU and GDX/HUI probably didn't bottom/put in a short term Wave 2 (since 9-22-08) cycle low yet.
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 in the short term Wave 3 (Wave 3s tend to be large anyway) upcycle is likely for GDX/HUI/XAU, once they bottom/put in a short term Wave 2 (since 9-22-08) cycle low in the next day or two.
The GDX/HUI/XAU (http://stockcharts.com/charts/gallery.html?gdx) short term Wave 1 upcycle from 9-11-08 until 9-22-08 was a monster, and, Wave 3s tend to be large anyway. Wave 3 will probably be larger than Wave 1 was, because, a Wave 3 upcycle is usually larger than a Wave 1 upcycle.
Also, yesterday 9-30'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 on 9-29.
I'll be looking to trade gold double short via DZZ early tomorrow. I'm also be looking to ultra short the XOI via DUG (UltraShort Oil & Gas ProShares) tomorrow, 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). Today I did a 7 minute 15 second DUG day trade, buying it at 39.9699 and selling it at 40.6601.
GLD (Gold ETF) looks like it'll try to fill today's downside gap at 85.07 tomorrow, see http://finance.yahoo.com/q/ta?s=gld&t=5d&l=on&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c. I'll look to double short gold via the DZZ ETN (Exchange Traded Note) early tomorrow.
DUG (UltraShort Oil & Gas ProShares) looks like it'll probably fill today's downside gap at 38.85 early tomorrow, see http://finance.yahoo.com/q/ta?s=dug&t=5d&l=on&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, then, watch the downside gap at 35.89 from Monday 9-29's open, and, if 35.89 gets filled, watch the downside gap at 34.67 from 9-26's open.
Note the oil ETF USO's huge bearish gap down from 86.21 at 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. Also, today 10-1's candle has a large bearish spike on a bearish black (close below the open) candle.
GLD made a large bearish breakaway gap down from 89.57 yesterday 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 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.
Reliable lead indicator NEM (http://stockcharts.com/charts/gallery.html?nem) might have bottomed yesterday (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 on 9-29 (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).
Yesterday 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 on 9-29-08.
A major clue is that SPX doesn't have the usual bullish large inverse spike on 9-29'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 yesterday/on 9-30 (-0.06% today), which points to severe weakness.
Normally an extremely bearish (or bullish) lead indicator is very short term contrarian, and, in this case would point to more strength, 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 yesterday 9-30, see http://stockcharts.com/charts/gallery.html?wmt. Walmart (WMT) appears to have put in a monthly cycle low yesterday 9-30.
.......http://www.JoeFRocks.com/
NEM XAU HUI
Also, the sector NEM Lead Indicator was a bearish -0.51% versus the XAU today 10-1 (-0.16% on 9-30, -0.18% on 9-29), and, the broad market Walmart (WMT) Lead Indicator was a slightly bearish -0.06% versus the S & P 500 (SPX) today 10-1 (-2.81% on 9-30).
The XAU barely took out yesterday's cycle low today 10-1, see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=on&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, and, was doing a Wave A type crash at session's end today, so, it looks like the XAU and GDX/HUI probably didn't bottom/put in a short term Wave 2 (since 9-22-08) cycle low yet.
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 in the short term Wave 3 (Wave 3s tend to be large anyway) upcycle is likely for GDX/HUI/XAU, once they bottom/put in a short term Wave 2 (since 9-22-08) cycle low in the next day or two.
The GDX/HUI/XAU (http://stockcharts.com/charts/gallery.html?gdx) short term Wave 1 upcycle from 9-11-08 until 9-22-08 was a monster, and, Wave 3s tend to be large anyway. Wave 3 will probably be larger than Wave 1 was, because, a Wave 3 upcycle is usually larger than a Wave 1 upcycle.
Also, yesterday 9-30'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 on 9-29.
I'll be looking to trade gold double short via DZZ early tomorrow. I'm also be looking to ultra short the XOI via DUG (UltraShort Oil & Gas ProShares) tomorrow, 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). Today I did a 7 minute 15 second DUG day trade, buying it at 39.9699 and selling it at 40.6601.
GLD (Gold ETF) looks like it'll try to fill today's downside gap at 85.07 tomorrow, see http://finance.yahoo.com/q/ta?s=gld&t=5d&l=on&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c. I'll look to double short gold via the DZZ ETN (Exchange Traded Note) early tomorrow.
DUG (UltraShort Oil & Gas ProShares) looks like it'll probably fill today's downside gap at 38.85 early tomorrow, see http://finance.yahoo.com/q/ta?s=dug&t=5d&l=on&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, then, watch the downside gap at 35.89 from Monday 9-29's open, and, if 35.89 gets filled, watch the downside gap at 34.67 from 9-26's open.
Note the oil ETF USO's huge bearish gap down from 86.21 at 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. Also, today 10-1's candle has a large bearish spike on a bearish black (close below the open) candle.
GLD made a large bearish breakaway gap down from 89.57 yesterday 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 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.
Reliable lead indicator NEM (http://stockcharts.com/charts/gallery.html?nem) might have bottomed yesterday (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 on 9-29 (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).
Yesterday 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 on 9-29-08.
A major clue is that SPX doesn't have the usual bullish large inverse spike on 9-29'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 yesterday/on 9-30 (-0.06% today), which points to severe weakness.
Normally an extremely bearish (or bullish) lead indicator is very short term contrarian, and, in this case would point to more strength, 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 yesterday 9-30, see http://stockcharts.com/charts/gallery.html?wmt. Walmart (WMT) appears to have put in a monthly cycle low yesterday 9-30.
.......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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