GDX/HUI/XAU Put in a Countertrend Wave B Cycle High Early Today

GDX/HUI/XAU put in a countertrend Wave B cycle high early today 11-7-08, of the short term Wave 2 downcycle since early on 11-5-08, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.

Note that HUI has a bearish large spike on today's candle, see http://stockcharts.com/charts/gallery.html?%24hui. Also, both the gold sector NEM Lead Indicator (-1.54% versus the XAU on 11-7) and the broad market Walmart (WMT) Lead Indicator (-1.21% versus SPX (S & P 500) on 11-7) were very bearish today.

Obviously, I'll be looking to day trade GDX (Gold Miners ETF) short on Monday, if I'm not ultra shorting the XOI (AMEX Oil and Gas) via DUG. Nothing I discuss on this Blog is a recommendation.

Today I made 7 cents per share ($70 for each 1000 shares traded) on a DUG (ultra short XOI) trade. Take a look at the XOI's intraday chart today, see http://finance.yahoo.com/q/ta?s=%5Exoi&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, and, you'll see that it wasn't an easy day to day trade. Also, from a one session point of view, I traded countertrend.

SPX's (S & P 500) huge Wave A down of the short term Wave C downcycle since 11-5-08 bottomed late yesterday, see the 5 day intraday candlestick chart at http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=on&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, and, see the daily candlestick chart at http://stockcharts.com/charts/gallery.html?%24spx.

The SPX countertrend Wave B upcycle of the short term Wave C downcycle (since 11-5-08) will probably peak early on Monday, which jives with the very bearish broad market Walmart (WMT) Lead Indicator (-1.21% versus SPX (S & P 500) on 11-7).

The SPX Volatility Index VIX fell an unusually large -11.90% today 11-7 versus a sharp SPX rise of +2.89%, which was an unusually large -9.01% decline in the SPX wall of worry/spike in complacency that points to significant and potentially sharp SPX/market strength early on Monday 11-10-08.

A short term Wave C downcycle began on 11-5-08, see http://stockcharts.com/charts/gallery.html?%24spx, in which SPX (S & P 500) should take out it's cycle low at 839.80 that occurred on 10-10-08, confirming that SPX and most other indexes/sectors remain in a Cyclical Bear Market.

The gold stock sector (GDX/HUI/XAU) is one sector that clearly APPEARS to have bottomed, see http://stockcharts.com/charts/gallery.html?%24hui. HUI has a nice very bullish triple bottom. Reliable lead indicator NEM recently put in a nice bullish double bottom at 21.40/21.47, see http://stockcharts.com/charts/gallery.html?nem. Waiting for a 5% major buy signal makes a lot of sense obviously.

GDX filled it's downside gap at 21.01 late yesterday, but, 20.95 is potentially a bullish breakaway gap (very doubtful). 18.69 is another downside gap. The one day intraday NEM Lead Indicator should have turned clearly bullish today, if GDX/HUI/XAU had entered a short term Wave 3 upcycle, it didn't, see http://finance.yahoo.com/q/ta?s=%5EXAU&t=1d&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem. I'll look to trade AEM or GDX short early on Monday.

The gold sector NEM Lead Indicator the past two weeks+ is super bearish (maybe that's actually a very bullish sign, and, the sector might have finally bottomed and defied gravity), at a very bearish -1.54% versus the XAU today/on 11-7, +0.13% on 11-6, -0.62% on 11-5, -4.40% on 11-4, -0.25% on 11-3, -1.11% on 10-31, +2.34% on 10-30, -12.86% on 10-29, +9.90% on 10-28, -0.40% on 10-27, -2.08% on 10-24, -0.85% on 10-23.

In the next few days to a week, SPX/NDX/RUT and most other indexes/sectors will probably take out their recent lows (10-10-08 for SPX and the XOI). The lead indicators jive with severe weakness (began 11-5-08), for most sectors/indexes.

The 5 day intraday broad market Walmart (WMT) Lead Indicator is bullish (but turned very bearish again today 11-7, -1.21% versus SPX today/on 11-7, +3.85% on 11-6, +1.71% on 11-5, -3.79% on 11-4, +0.54% on 11-3, +0.40% on 10-31, -3.07% on 10-30, +0.84% on 10-29, +0.28% on 10-28, -0.19% on 10-27), see 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.

The 5 day intraday gold sector NEM Lead Indicator is extremely bearish (which is very short term bullish, -1.54% versus the XAU today/on 11-7, +0.13% on 11-6, -0.62% on 11-5, -4.40% on 11-4, -0.25% on 11-3, -1.11% on 10-31, +2.34% on 10-30, -12.86% on 10-29, +9.90% on 10-28, -0.40% on 10-27), see http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=l&p=&a=&c=%5Ehui,nem.

The 5 day intraday oil and gas sector XOM (Exxon Mobil) Lead Indicator is extremely bearish (which is very short term bullish, +0.65% versus the XOI today/on 11-7, +0.44% on 11-6, -0.23% on 11-5, -2.49% on 11-4, +2.41% on 11-3, -3.01% on 10-31, -3.26% on 10-30, -3.62% on 10-29, -0.45% on 10-28, +1.46% on 10-27), 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 GDX/HUI/XAU Wave 2 Cyclical Bear Market since mid March is probably/appears to be over (don't be shocked if it isn't), see http://stockcharts.com/charts/gallery.html?%24xau. GDX/HUI/XAU still need to hit a 5% major buy signal however, before Trade the Cycles indicates that they've very likely bottomed. This still could end up being the mother of all headfakes. Also, gold very likely hasn't bottomed.

Gold (http://stockcharts.com/charts/gallery.html?gld) lags GDX/HUI/XAU, and, will probably bottom at $500ish, maybe $450 or even lower.

Reliable gold sector lead indicator Newmont Mining (NEM) shot up a spectacular +22.89% on 10-28-08, see http://stockcharts.com/charts/gallery.html?nem.

It LOOKS LIKE (it obviously makes a LOT of sense to wait for a 5% follow through major buy signal) NEM PROBABLY put in a Wave 2 Cyclical Bear Market (since 1-31-06) cycle low just before 10-27's close at 21.40, which is a bullish double bottom cycle low with the previous session's cycle low at 21.47.

The GDX/HUI/XAU Wave 3 Cyclical Bull Market (might not have started yet) is likely to be a great one. Wave 3 upcycles tend to be large, relative to Wave 1 upcycles.

SPX (S & P 500) and the XOI (AMEX Oil & Gas) are probably still in a Cyclical Bear Market, see SPX at http://stockcharts.com/charts/gallery.html?%24spx, and, see the XOI at http://stockcharts.com/charts/gallery.html?%24xoi. Since cycle lows keep failing, one has to assume that's the case. SPX put in lower cycle lows in five consecutive sessions recently.

The NASDAQ 100 (NDX) is probably still in a Cyclical Bear Market, see http://stockcharts.com/charts/gallery.html?%24ndx, as are RUT (Russell 2000, might have bottomed, doubtful), see http://stockcharts.com/charts/gallery.html?%24rut, and, GDX/HUI/XAU might still be in a Cyclical Bear Market, see http://stockcharts.com/charts/gallery.html?gdx.

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).

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.

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/

NEM XAU HUI