I Day Traded DUG (UltraShort Oil and Gas) Today

I day traded DUG (UltraShort Oil and Gas, http://stockcharts.com/charts/gallery.html?dug) today (61 seconds, the large 10 minute chart helps a lot), see http://finance.yahoo.com/q/ta?s=dug&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, and, netted a little over 38 cents/share or $380+ for each 1000 shares traded.

Based on today 11-11's very bullish broad market Walmart (WMT) Lead Indicator (+1.42% versus SPX (S & P 500)), see http://finance.yahoo.com/q/ta?s=%5EHUI&t=1d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC, that got more bullish late in the session, early SPX (S & P 500)/market strength is likely tomorrow.

DUG (UltraShort Oil and Gas, http://stockcharts.com/charts/gallery.html?dug) will probably try to fill today's downside gap at 37.07 early tomorrow, see http://finance.yahoo.com/q/ta?s=dug&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, after which I'll look to day trade it again. Nothing I discuss on this Blog is a recommendation.

DUG has an upside gap at 41.50. The XOI (AMEX Oil and Gas) had a downside gap at 900.39 (filled today 11-11), and, has an upside gap at 952.76. XOM (Exxon Mobil) has downside gaps at 69.96 and 66.09, and, has an upside gap at 77.49.

Oil and gas sector lead indicator Exxon Mobil (XOM) put in a large bullish inverse spike shortly before session's end, see http://finance.yahoo.com/q/ta?s=xom&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.

The XOM Lead Indicator was an extremely bullish (which is very short term bearish, though early XOI strength is likely tomorrow, the broad market WMT Lead Indicator was a very bullish +1.42% versus SPX today/on 11-11) +2.23% versus the XOI (AMEX Oil and Gas, http://stockcharts.com/charts/gallery.html?%24xoi) today/on 11-11.

Also, note that DUG has a large bullish inverse spike on 11-5's bullish white (close above the open) candle, see http://stockcharts.com/charts/gallery.html?dug, which is a bullish double bottom with 11-4's cycle low at 33.83, that appears to be a major intermediate term cycle low (see second chart at http://stockcharts.com/charts/gallery.html?dug), because, DUG completed a huge three week+ Elliott Wave ABC down up down downcycle (inverse Elliott Wave 12345 pattern = down up down up down). Nothing I discuss on this Blog is a recommendation.

GDX/HUI/XAU's rebound after an early Wave A of Wave C crash (of the short term Wave 2 downcycle since 11-5-08), see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, is the countertrend Wave B of Wave C, that looks like it will peak and do Wave 5 early tomorrow, so, there should be a good GDX shorting opportunity early tomorrow.

I tried to short GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) today, but, my broker didn't have any available. If I trade this sector tomorrow I might trade the double short gold ETN DZZ, or, I might trade the ultra short Basic Materials ETF SMN instead.

SPX's (S & P 500) early cycle high (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=) yesterday was the countertrend Wave B cycle high of the short term Wave C downcycle since 11-5-08, looking at yesterday's bearish black candle (close below the open) and medium bearish spike, see http://stockcharts.com/charts/gallery.html?%24spx.

The XOI (AMEX Oil and Gas) also put in a countertrend Wave B type cycle high early yesterday, see http://stockcharts.com/charts/gallery.html?%24xoi and 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=.

An SPX 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.

The gold sector NEM Lead Indicator the past three weeks+ is super bearish (maybe that's actually a very bullish sign, and, the sector might have finally bottomed and defied gravity/likely), at a very bullish +1.42% versus the XAU today/on 11-11, a bullish +0.97% on 11-10, -1.54% 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 extremely bullish (which is very short term bearish, +1.42% versus SPX today/on 11-11, +2.72% on 11-10, -1.21% 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 bullish (which is very short term bearish, +1.72% versus the XAU today/on 11-11, +0.97% on 11-10, -1.54% 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 bullish (which is very short term bearish, +2.23% versus the XOI today/on 11-11, -0.53% on 11-10, +0.65% 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