SPX (S & P 500)/Major Averages, The Gold And Oil Sectors, Plus Many Others, Are Still Heading Down
SPX (S & P 500)/major averages, the gold and oil sectors, plus many others, are still heading down, see SPX (S & P 500) at http://stockcharts.com/charts/gallery.html?%24spx, GDX (Gold Miners ETF) at http://stockcharts.com/charts/gallery.html?gdx, and, see the XOI (AMEX Oil) at http://stockcharts.com/charts/gallery.html?%24xoi. Note the very large very bearish spike on today's candle for SPX, GDX, and XOI.
Both the gold sector NEM Lead Indicator (+3.09% versus the XAU today/on 10-3, +4.06% on 10-2) and the broad market Walmart (WMT) Lead Indicator (+2.85% versus the S & P 500 (SPX) today/on 10-3, +2.67% on 10-2) were extremely bullish again today, which is very short term bearish, indicating that more downside is likely on Monday.
The oil sector Lead Indicator appears to be Exxon (XOM), see the 1 year XOM Lead Indicator chart at http://finance.yahoo.com/q/ta?s=%5EXOI&t=1y&l=on&z=l&q=c&p=&a=p12,p12,fs,p12,fs,w14&c=xom. The XOM Lead Indicator was a modestly bullish +0.44% versus XOI (AMEX Oil) today/on 10-3, and, was an extremely bullish +5.84% on 10-2.
Looking at SPX's (S & P 500) 5 day intraday candlestick chart, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=on&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, SPX entered a Wave C type decline at mid session, that looks like it'll probably bottom early on Monday, so, after likely early weakness on Monday, I'll look to trade the major averages (via SSO, QLD, or UWM), or the gold sector (AEM maybe), or the oil sector (DIG) long on Monday. Early on I'll look for an opportunity to short those sectors via DUG, DZZ, SDS, QID, TWM, etc.
Today I day traded DUG (UltraShort Oil & Gas ProShares), with an entry point at 43.99 and an exit point at 44.4601. DUG filled today's upside gap at 44.97 late today, and, has downside gaps at 39.50, 38.85, 35.89, and 34.67. DUG has a very large very bullish inverse spike on today's candle, see http://stockcharts.com/charts/gallery.html?dug, so, I'll look to trade DUG again on Monday.
Today 10-3's and yesterday 10-2's HUI/GDX/XAU candles don't have the usual large bullish inverse spike that tends to mark important cycle lows, see http://stockcharts.com/charts/gallery.html?%24hui, and, both the sector NEM Lead Indicator and the broad market Walmart (WMT) Lead Indicator were extremely bullish yesterday and today, which is very short term bearish, indicating that more downside is likely on Monday. That's the bad news.
9-11-08's GDX/HUI/XAU cycle low (http://stockcharts.com/charts/gallery.html?gdx) is now an unlikely Wave A major intermediate term cycle low (might occur Monday/next week), which is/will be Wave A down of the likely Wave 2 Cyclical Bear Market since 3-17-08 (3-14-08 for the XAU).
The huge spiking action from 9-11-08 until 9-22-08 for HUI/GDX/XAU (9-11-08 until 9-29-08 for gold/GLD, note that gold lagged as usual) was a sign that that upcycle might be a countertrend Wave B upcycle, because, countertrend action tends to be much more vertical/spiking action than what occurs in normal upcycles.
Here's some great news amidst the incredible gloom for gold bugs. If HUI falls to it's primary multi year (Since November 2000, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html) Secular Bull Market uptrend line at 220ish in the next few days/near future, then, the Wave 2 Cyclical Bear Market since 3-17-08 will probably conclude/end.
Please keep in mind that GDX/HUI/XAU have to hit a 5% follow through (after breaking the downtrend line since 3-17-08) major buy signal before the Trade the Cycles system indicates that GDX/HUI/XAU very likely put in a Wave 2 Cyclical Bear Market cycle low (if HUI falls to 220ish) and entered a multi year (probably 5 to 7 years) Wave 3 Cyclical Bull Market.
"My" downside target (where the primary multi year trendline is, basic stuff) for gold is $500 to $550 (see chart 3 at http://www.joefrocks.com/GoldStockCharts.html), which obviously means that gold probably has a long way to go on the downside (lagging GDX/HUI/XAU).
Reliable lead indicator Newmont Mining (NEM) took out it's cycle low at 35.79 from 9-11-08 yesterday, see http://stockcharts.com/charts/gallery.html?nem, with a cycle low at 34.12 (33.88 today), which is a strong indication that GDX/HUI/XAU will also take out their 9-11-08 cycle low.
This means that 35.79 obviously wasn't an NEM Cyclical Bear Market (since 1-31-06) cycle low, but, that cycle low might be imminent and might occur in the next session or two.
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.
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).
9-30 was likely 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 correctly meant that they (probably) didn't bottom on 9-29-08 (was taken out today 10-3). A major clue was that SPX doesn't have the usual bullish large inverse spike on 9-29's candle, that tends to mark important cycle lows.
Yesterday's and today's extremely bullish WMT Lead Indicator, at +2.67% and +2.85% versus SPX, indicates that SPX might bounce substantially on Monday AT SOME POINT. Cycles (plus Elliott Wave patterns and gaps) are the primary market timing consideration.
Indicators "kick in"/become important/meaningful AFTER a cycle low or a cycle high occurs. For example, a bullish lead indicator isn't meaningful in a Wave C type downcycle. Once a Wave 1 type upcycle begins THEN a bullish lead indicator has meaning and should "kick in."
Also, extremely bullish or bearish lead indicator readings tend to be very short term contrarian, because, the fact that a lead indicator became extremely bullish or bearish means that an index didn't respond as it normally would to a bullish or bearish 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 on 9-30, see http://stockcharts.com/charts/gallery.html?wmt. Walmart (WMT) appears to have put in a monthly cycle low on 9-30.
VIX fell a modest -0.27% today 10-3 versus SPX falling a significant -1.35%, which is a significant +1.62% rise in complacency (-0.27% + -1.35% = -1.62% decline in the SPX (S & P 500) wall of worry) that points to some significant weakness early on Monday 10-6.
Once SPX (S & P 500) bottoms 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 watch upside gaps at (I need to check/update this list) 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.
.......http://www.JoeFRocks.com/
NEM XAU HUI
Both the gold sector NEM Lead Indicator (+3.09% versus the XAU today/on 10-3, +4.06% on 10-2) and the broad market Walmart (WMT) Lead Indicator (+2.85% versus the S & P 500 (SPX) today/on 10-3, +2.67% on 10-2) were extremely bullish again today, which is very short term bearish, indicating that more downside is likely on Monday.
The oil sector Lead Indicator appears to be Exxon (XOM), see the 1 year XOM Lead Indicator chart at http://finance.yahoo.com/q/ta?s=%5EXOI&t=1y&l=on&z=l&q=c&p=&a=p12,p12,fs,p12,fs,w14&c=xom. The XOM Lead Indicator was a modestly bullish +0.44% versus XOI (AMEX Oil) today/on 10-3, and, was an extremely bullish +5.84% on 10-2.
Looking at SPX's (S & P 500) 5 day intraday candlestick chart, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=on&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c, SPX entered a Wave C type decline at mid session, that looks like it'll probably bottom early on Monday, so, after likely early weakness on Monday, I'll look to trade the major averages (via SSO, QLD, or UWM), or the gold sector (AEM maybe), or the oil sector (DIG) long on Monday. Early on I'll look for an opportunity to short those sectors via DUG, DZZ, SDS, QID, TWM, etc.
Today I day traded DUG (UltraShort Oil & Gas ProShares), with an entry point at 43.99 and an exit point at 44.4601. DUG filled today's upside gap at 44.97 late today, and, has downside gaps at 39.50, 38.85, 35.89, and 34.67. DUG has a very large very bullish inverse spike on today's candle, see http://stockcharts.com/charts/gallery.html?dug, so, I'll look to trade DUG again on Monday.
Today 10-3's and yesterday 10-2's HUI/GDX/XAU candles don't have the usual large bullish inverse spike that tends to mark important cycle lows, see http://stockcharts.com/charts/gallery.html?%24hui, and, both the sector NEM Lead Indicator and the broad market Walmart (WMT) Lead Indicator were extremely bullish yesterday and today, which is very short term bearish, indicating that more downside is likely on Monday. That's the bad news.
9-11-08's GDX/HUI/XAU cycle low (http://stockcharts.com/charts/gallery.html?gdx) is now an unlikely Wave A major intermediate term cycle low (might occur Monday/next week), which is/will be Wave A down of the likely Wave 2 Cyclical Bear Market since 3-17-08 (3-14-08 for the XAU).
The huge spiking action from 9-11-08 until 9-22-08 for HUI/GDX/XAU (9-11-08 until 9-29-08 for gold/GLD, note that gold lagged as usual) was a sign that that upcycle might be a countertrend Wave B upcycle, because, countertrend action tends to be much more vertical/spiking action than what occurs in normal upcycles.
Here's some great news amidst the incredible gloom for gold bugs. If HUI falls to it's primary multi year (Since November 2000, see chart 8 at http://www.joefrocks.com/GoldStockCharts.html) Secular Bull Market uptrend line at 220ish in the next few days/near future, then, the Wave 2 Cyclical Bear Market since 3-17-08 will probably conclude/end.
Please keep in mind that GDX/HUI/XAU have to hit a 5% follow through (after breaking the downtrend line since 3-17-08) major buy signal before the Trade the Cycles system indicates that GDX/HUI/XAU very likely put in a Wave 2 Cyclical Bear Market cycle low (if HUI falls to 220ish) and entered a multi year (probably 5 to 7 years) Wave 3 Cyclical Bull Market.
"My" downside target (where the primary multi year trendline is, basic stuff) for gold is $500 to $550 (see chart 3 at http://www.joefrocks.com/GoldStockCharts.html), which obviously means that gold probably has a long way to go on the downside (lagging GDX/HUI/XAU).
Reliable lead indicator Newmont Mining (NEM) took out it's cycle low at 35.79 from 9-11-08 yesterday, see http://stockcharts.com/charts/gallery.html?nem, with a cycle low at 34.12 (33.88 today), which is a strong indication that GDX/HUI/XAU will also take out their 9-11-08 cycle low.
This means that 35.79 obviously wasn't an NEM Cyclical Bear Market (since 1-31-06) cycle low, but, that cycle low might be imminent and might occur in the next session or two.
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.
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).
9-30 was likely 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 correctly meant that they (probably) didn't bottom on 9-29-08 (was taken out today 10-3). A major clue was that SPX doesn't have the usual bullish large inverse spike on 9-29's candle, that tends to mark important cycle lows.
Yesterday's and today's extremely bullish WMT Lead Indicator, at +2.67% and +2.85% versus SPX, indicates that SPX might bounce substantially on Monday AT SOME POINT. Cycles (plus Elliott Wave patterns and gaps) are the primary market timing consideration.
Indicators "kick in"/become important/meaningful AFTER a cycle low or a cycle high occurs. For example, a bullish lead indicator isn't meaningful in a Wave C type downcycle. Once a Wave 1 type upcycle begins THEN a bullish lead indicator has meaning and should "kick in."
Also, extremely bullish or bearish lead indicator readings tend to be very short term contrarian, because, the fact that a lead indicator became extremely bullish or bearish means that an index didn't respond as it normally would to a bullish or bearish 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 on 9-30, see http://stockcharts.com/charts/gallery.html?wmt. Walmart (WMT) appears to have put in a monthly cycle low on 9-30.
VIX fell a modest -0.27% today 10-3 versus SPX falling a significant -1.35%, which is a significant +1.62% rise in complacency (-0.27% + -1.35% = -1.62% decline in the SPX (S & P 500) wall of worry) that points to some significant weakness early on Monday 10-6.
Once SPX (S & P 500) bottoms 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 watch upside gaps at (I need to check/update this list) 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.
.......http://www.JoeFRocks.com/
NEM XAU HUI
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
1:51 PM
0 Comments:
Post a Comment
<< Home