SPX's (S & P 500) Wave 1 Of The Short Term Wave 3 Upcycle Since 10-16-08 Peaked Early Today

SPX's (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) Wave 1 of the Short Term Wave 3 Upcycle since early on 10-16-08 peaked early today (triple top the past 3 days, 985.44 cycle high 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.

Then, SPX did/is doing (probably still in a Wave C type move at session's end/early tomorrow) an Elliott Wave ABC down up down pattern, which is Wave 2 down of the Short Term Wave 3 Upcycle, that will probably bottom early tomorrow. Remember to watch SPX's upside gap at 998.01 from 10-15's open, that should get filled in the next day or two.

Early tomorrow I'll be looking to trade the XOI (AMEX Oil & Gas, http://stockcharts.com/charts/gallery.html?%24xoi) ultra long via DIG (watch the downside gap at 30.08 from yesterday 10-20's open), with backup trades being ultra long SPX/NDX/RUT via SSO/QLD/UWM. Today I "DUG it," with a less than 4 minute day trade, buying DUG at 44.69 and selling it a little above 45.

The XOI (AMEX Oil & Gas, http://stockcharts.com/charts/gallery.html?%24xoi) put in a Wave 1 cycle high late yesterday of the short term Wave 3 upcycle since 10-16-08, see http://finance.yahoo.com/q/ta?s=%5Exoi&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c. It looks like the XOI, like SPX, was doing Wave C late today of Wave 2 down of the short term Wave 3 upcycle since 10-16, and, it looks like it'll bottom early tomorrow, well below today's likely Wave A type cycle low. The ultra long XOI ETF DIG looks good once the XOI bottoms (Wave 2 of a short term Wave 3), probably early tomorrow. Nothing I discuss on this Blog is a recommendation.

The highly useful 5 day intraday XOM (Exxon Mobil) Lead Indicator is extremely bullish (+0.57% versus the XOI today/on 10-21, -1.47% on 10-20, -2.24% on 10-17, +5.22% on 10-16, +0.72% on 10-15), see http://finance.yahoo.com/q/ta?t=5d&s=%5EXOI&l=off&z=l&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=xom.

The broad market WMT (Walmart) Lead Indicator, used in concert with the sector lead indicators, was a very bullish +1.68% versus SPX today/on 10-21.

Concerning the GDX/HUI/XAU/gold sector (gold lags) one has to wait for a 5% major buy signal. HUI (and GDX/XAU) doesn't appear to have bottomed yet, see http://stockcharts.com/charts/gallery.html?%24hui.

As bullish as the NEM Lead Indicator has become, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=on&z=m&q=l&p=&a=&c=%5Ehui,nem, at an extremely bullish (which is very short term bearish) +2.78% versus the XAU today/on 10-21, +2.23% on 10-20, -2.02% on 10-17, +3.23% on 10-16, +5.62% on 10-15, -0.20% on 10-14, +2.42% on 10-13, a very important Wave 2 (since mid March) Cyclical Bear Market cycle low could occur any day now for GDX/HUI/XAU/gold sector (gold lags).

That's the best good news I can provide right now. As spectacular as the gold sector is in a Cyclical Bull Market, it's just as spectacular on the downside, which makes sense. The bigger the party/bubble the bigger the hangover/bust tends to be. That's just the way commodity/stock market/economic cycles work.

The S & P 500 (SPX) and the Russell 2000 (RUT) put in a Short Term Wave 2 cycle low early on 10-16 as expected, see http://stockcharts.com/charts/gallery.html?%24spx. Note the very large very bullish inverse spike on 10-16's candle.

The AMEX Oil & Gas Index (XOI) also put in a Short Term Wave 2 cycle low early on 10-16 as expected, see http://stockcharts.com/charts/gallery.html?%24xoi. Note the very large very bullish inverse spike on 10-16's candle.

The NASDAQ 100 (NDX) put in a slightly lower bullish double bottom cycle low on 10-16, see http://stockcharts.com/charts/gallery.html?%24ndx, that's potentially a Cyclical Bear Market (since late October 2007) cycle low. Note the very large very bullish inverse spike on 10-16's candle. NDX is in a short term Wave 2 downcycle.

Reliable gold sector lead indicator Newmont Mining (NEM) might have (doubtful obviously) put in a Cyclical Bear Market (since 1-31-06) cycle low on 10-17-08 at 26.42, see http://stockcharts.com/charts/gallery.html?nem. Note the large somewhat bullish inverse spike on 10-17's candle, that obviously isn't bullish enough to be a likely Cyclical Bear Market cycle low.

Obviously, the S & P 500 (SPX)/some major averages (NDX on 10-16) appear to have finally bottomed/put in a Cyclical Bear Market cycle low on Friday 10-10-08, see http://stockcharts.com/charts/gallery.html?%24spx. Note SPX's very large very bullish inverse spike on 10-10-08's candle, and, reliable broad market lead indicator Walmart (WMT) also has a very large very bullish inverse spike on 10-10-08's candle, see http://stockcharts.com/charts/gallery.html?wmt.

The broad market WMT (Walmart) Lead Indicator was a very bullish
+1.68% versus SPX today/on 10-21, was an extremely bearish (very short term bullish) -3.54% on 10-20, was a bearish -0.94% on 10-17, was an extremely bullish+4.88% on 10-16, was a nearly very bullish +0.98% on 10-15, was +0.42% on 10-14, was an extremely bearish -4.61% on 10-13, +0.21% on 10-10, +1.83% on 10-9, +0.60% on 10-8, +0.45% on 10-7, +0.79% on 10-6, +2.85% on 10-3, +2.67% on 10-2, -0.06% on 10-1, -2.81% on 9-30, +5.03% on 9-29, +0.64% on 9-26, +0.07% on 9-25, +1.09% on 9-24, +0.73% on 9-23, +2.46% on 9-22.

A now probably defunct 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).

The gold ETF GLD might have completed an Elliott Wave ABC down up down pattern today/on 10-21 (Wave A of Wave C of the Wave 2 Cyclical Bear Market since 3-17-08), since putting in a countertrend Wave B type monthly cycle high at 90.84 on 9-29-08, see http://stockcharts.com/charts/gallery.html?gld.

The AMEX Oil & Gas Index (XOI) appears to have put in a Cyclical Bear Market (since late May) cycle low at 744.56 on 10-10-08, see http://stockcharts.com/charts/gallery.html?%24xoi. Note the very large very bullish inverse spike on 10-10-08's candle.

Also, reliable Oil & Gas sector lead indicator XOM (Exxon Mobil) appears to have put in a Cyclical Bear Market (since May) cycle low at 56.51 on 10-10-08, see http://stockcharts.com/charts/gallery.html?xom. Note the very large very bullish inverse spike on 10-10-08's candle.

The XOM (Exxon Mobil) Lead Indicator was a bullish +0.57% versus the XOI today/on 10-21, was a very bearish -1.47% on 10-20, was an extremely bearish -2.24% on 10-17 (which was correctly very short term bullish, pointing to strength on Monday 10-20), was an extremely bullish +5.22% on 10-16, was a bullish +0.72% on 10-15, was a bearish -0.98% on 10-14, +0.49% on 10-13, -2.60% on 10-10, -0.49% on 10-9, +0.92% on 10-8, +4.50% on 10-7, +2.68% on 10-6, +0.44% on 10-3, +5.84% on 10-2.

Please keep in mind that, after an index puts in a potential major cycle low, it has to hit a 5% follow through (after breaking the major downcycle trendline) major buy signal before the Trade the Cycles system indicates that a major cycle low has very likely occurred.

VIX rose a modest +0.26% today 10-21 versus SPX falling a very sharp -3.08%, which is a sharp +2.82% rise in complacency (+0.26% + -3.08% = -2.82% decline in the SPX (S & P 500) wall of worry) that points to some severe weakness early on Wednesday 10-22.

Since SPX (S & P 500) probably bottomed on 10-10-08 I'll look to trade rockets. It makes a lot of sense to trade with the wind at your back.

Since SPX probably put in a Cyclical Bear Market cycle low watch upside gaps at (I need to check/update this list) 998.01, 1278.60, 1305.31, 1321.97, 1342.83, 1350.93, 1404.05, 1426.63, 1447.16, 1467.95, 1488.41, and, there are 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.

My original Trade the Cycles system uses the reliable Elliott Wave patterns (see the Trade the Cycles charts at http://www.joefrocks.com/GoldStockCharts.html) and maps them to cycles of various timeframes (an Elliott Wave is either an upcycle or a downcycle), from very short term (hours/days), short term (days/weeks), monthly (4-7 weeks), minor intermediate term (2-3 months), major intermediate term (3-12 months), long term (1 to 2 years), Cyclical Bull/Bear Market (6 months to 7 years, yes, a bull/bear can be relatively brief), Secular Bull/Bear Market (8-20+ years).

Gaps are very important also, since most gaps get filled and they often provide insight into when cycle highs/lows will occur.

.......http://www.JoeFRocks.com/

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