The Fed Sent A Strong Message Today, And, The Market Loved It
The Fed sent a strong message today (see http://www.federalreserve.gov/newsevents/press/monetary/20081216b.htm), and, the market/SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) loved it, 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=. The Fed lowered the Fed Funds target range to 0 to 0.25% from 1.00%.
The gold/silver stock sector/GDX/HUI/XAU continued to soar today 12-16-08, following last week's major breakout/buy signal (the multi month Wave 2 Cyclical Bear Market downtrend line was broken, see chart 1 at http://www.joefrocks.com/GoldStockCharts.html), see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=.
Another large bullish GDX/HUI/XAU breakaway gap was created at yesterday's open, see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=. GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) gapped up from 28.67 to 29.65 at yesterday 12-15-08's open, adding to the two large bullish breakaway gaps from last week, at 25.41 and 23.23.
The gold sector NEM Lead Indicator was a very bearish -1.16% versus the XAU today/on 12-16-08 (+1.14% on 12-15, +0.75% on 12-12), and, the broad market Walmart (WMT) Lead Indicator, used in concert with the sector lead indicator, at a extremely bearish -4.17% versus the S & P 500 (SPX) today/on 12-16-08 (which is a very short term bullish indication, +1.42% on 12-15, -0.99% on 12-12, +2.02% on 12-11), indicates that tomorrow 12-17-08 will probably bring early strength for GDX/HUI/XAU/the gold/silver sector, followed by weakness.
Today was a difficult day to trade long (or short), see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=, because, the Walmart (WMT) Lead Indicator was very bearish much of the session, and, it was a slow funky sideways Fed meeting day (until the decision, then the market went nuts/vertical), they tend to be that way. I day traded GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) twice, and, made about 5.5 cents/share or $55 per each 1000 shares traded.
I'm going to look to (maybe, GDX is extremely overbought) jump in to a GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) day trade tomorrow, see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) was doing what appears to be an intraday/very short term final Wave 5 of Wave 3 type upcycle (the Wave 3 type upcycle lasted most of the session) at session's end, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=.
If I day trade GDX long tomorrow it'll probably be after a sharp Elliott Wave ABC down up down (probably also an inverse Elliott Wave 12345 down up down up down) downcycle (Wave 4 down of the upcycle that began late yesterday 12-15-08, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=).
I also, might day trade the Russell 2000 (RUT, http://stockcharts.com/charts/gallery.html?%24rut) ultra long via UWM tomorrow, see http://finance.yahoo.com/q/ta?s=%5Erut&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, after an intraday Elliott Wave ABC down up down (probably also an inverse Elliott Wave 12345 down up down up down) downcycle.
The Russell 2000 (RUT, http://stockcharts.com/charts/gallery.html?%24rut) has upside gaps at 473.14 (filled 12-8-08), 491.23 (filled 12-9-08), 545.97, 619.40, 671.59, 679.58, 704.79, 705.74, and 753.74. There are probably more upside gaps, but, for now, that's all one needs to be concerned with.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
GDX/HUI/XAU/the gold/silver stock sector were expected to rock this week, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, because, GDX/HUI/XAU put in a Wave 2 cycle low very early on Friday 12-12-08, of the short term Wave 3 upcycle since 12-5-08, see http://stockcharts.com/charts/gallery.html?%24hui. Note HUI's bullish large inverse spike at 12-5-08's short term Wave 2 cycle low at 191.63.
Also, the gold/silver stock sector should rock this week, because, GDX/HUI/XAU experienced a major breakout/hit a 5% follow through major buy signal on Wednesday 12-10-08, see http://tradethecycles.blogspot.com/2008/12/theres-new-annotated-xau-chart-that.html, and, http://tradethecycles.blogspot.com/2008/12/huixau-hit-5-follow-through-major-buy.html, and, see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
For you oil and gas sector aficionados, see the XOI (AMEX Oil and Gas) at http://stockcharts.com/charts/gallery.html?%24xoi, obviously, like the major averages, waiting for a 5% major buy signal is the prudent thing to do.
The XOM (Exxon Mobil) Lead Indicator is extremely bearish recently, at
-1.09% versus the XOI today/on 12-16, -0.54% on 12-15, +1.67% on 12-12, -1.07% on 12-11, -1.61% on 12-10, -1.41% on 12-9, -2.20% on 12-8, -1.47% on 12-5.
SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) put in a Wave 4 (since 12-8-08) cycle low of the short term Wave 3 upcycle (since 12-1-08) very early on Friday 12-12-08, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=. Note the bullish medium inverse spike on Friday's bullish white (close above the open) candle.
SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx)/the market/most sectors/indexes might have bottomed!, and, entered a Cyclical Bull Market, however, the Cyclical Bull Market for the major averages is likely to be a brief six to nine monthish one.
HUI/XAU (http://stockcharts.com/charts/gallery.html?%24xau) hit a 5% follow through major buy signal on Wednesday 12-10-08, breaking the multi month Wave 2 Cyclical Bear Market downtrend line since mid March 2008 by more than 5%, see HUI at http://finance.yahoo.com/q/ta?s=%5EHUI&t=6m&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=, and, see the XAU (the major breakout is more obvious in the XAU's chart) at http://finance.yahoo.com/q/ta?s=%5Exau&t=6m&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, which means that they very likely entered a Wave 3 Cyclical Bull Market in late October 2008. Note that HUI has a very bullish triple bottom in late October 2008. Trade the Cycles is now obviously on a buy signal for HUI/XAU.
Keep in mind/major warning that, not all gold/silver stocks have the same cycles. They can be vastly different. CDE (Coeur D' Alene Mines) has/had a bear market from/since 2004 for example, see http://finance.yahoo.com/q/ta?s=cde&t=my&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. Harmony Gold (HMY) is another stock that's been in a bear market since 2002, see http://finance.yahoo.com/q/ta?s=hmy&t=my&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.
Since this is a Wave 3 HUI/XAU (http://stockcharts.com/charts/gallery.html?%24xau) Cyclical Bull Market, it's likely to be a great one, since Wave 3 upcycles tend to be considerably larger than Wave 1 upcycles. As a matter of fact, the current short term upcycle since Friday 12-5-08, in which the major breakout occurred, see http://finance.yahoo.com/q/ta?s=%5Exau&t=6m&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, is a short term Wave 3 upcycle.
The gold/silver stock apocalypse since May 2006 (reliable gold sector lead indicator NEM since 1-31-06 and GDX/HUI/XAU since mid March 2008) is probably finally over for many/most gold/silver stocks, see the XAU's daily candlestick chart at http://stockcharts.com/charts/gallery.html?%24xau, and, see reliable gold sector lead indicator NEM's daily candlestick chart at http://stockcharts.com/charts/gallery.html?nem. Reliable gold sector lead indicator NEM put in a bullish double bottom in late October/late November 2008 at 21.40/21.17.
It'll take time to inflate the world out of this deflationary mess/credit crisis. Yes, gold might hit $2000+ in about 10 years, but, it might hit $350-$400 next year, when it finally bottoms. Remember that HUI/XAU bottomed in late 2000, whereas, gold bottomed in April 2001 and silver didn't bottom until late 2001. The metals LAG.
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
The gold/silver stock sector/GDX/HUI/XAU continued to soar today 12-16-08, following last week's major breakout/buy signal (the multi month Wave 2 Cyclical Bear Market downtrend line was broken, see chart 1 at http://www.joefrocks.com/GoldStockCharts.html), see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=.
Another large bullish GDX/HUI/XAU breakaway gap was created at yesterday's open, see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=. GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) gapped up from 28.67 to 29.65 at yesterday 12-15-08's open, adding to the two large bullish breakaway gaps from last week, at 25.41 and 23.23.
The gold sector NEM Lead Indicator was a very bearish -1.16% versus the XAU today/on 12-16-08 (+1.14% on 12-15, +0.75% on 12-12), and, the broad market Walmart (WMT) Lead Indicator, used in concert with the sector lead indicator, at a extremely bearish -4.17% versus the S & P 500 (SPX) today/on 12-16-08 (which is a very short term bullish indication, +1.42% on 12-15, -0.99% on 12-12, +2.02% on 12-11), indicates that tomorrow 12-17-08 will probably bring early strength for GDX/HUI/XAU/the gold/silver sector, followed by weakness.
Today was a difficult day to trade long (or short), see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=, because, the Walmart (WMT) Lead Indicator was very bearish much of the session, and, it was a slow funky sideways Fed meeting day (until the decision, then the market went nuts/vertical), they tend to be that way. I day traded GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) twice, and, made about 5.5 cents/share or $55 per each 1000 shares traded.
I'm going to look to (maybe, GDX is extremely overbought) jump in to a GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) day trade tomorrow, see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) was doing what appears to be an intraday/very short term final Wave 5 of Wave 3 type upcycle (the Wave 3 type upcycle lasted most of the session) at session's end, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=.
If I day trade GDX long tomorrow it'll probably be after a sharp Elliott Wave ABC down up down (probably also an inverse Elliott Wave 12345 down up down up down) downcycle (Wave 4 down of the upcycle that began late yesterday 12-15-08, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=).
I also, might day trade the Russell 2000 (RUT, http://stockcharts.com/charts/gallery.html?%24rut) ultra long via UWM tomorrow, see http://finance.yahoo.com/q/ta?s=%5Erut&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, after an intraday Elliott Wave ABC down up down (probably also an inverse Elliott Wave 12345 down up down up down) downcycle.
The Russell 2000 (RUT, http://stockcharts.com/charts/gallery.html?%24rut) has upside gaps at 473.14 (filled 12-8-08), 491.23 (filled 12-9-08), 545.97, 619.40, 671.59, 679.58, 704.79, 705.74, and 753.74. There are probably more upside gaps, but, for now, that's all one needs to be concerned with.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
GDX/HUI/XAU/the gold/silver stock sector were expected to rock this week, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, because, GDX/HUI/XAU put in a Wave 2 cycle low very early on Friday 12-12-08, of the short term Wave 3 upcycle since 12-5-08, see http://stockcharts.com/charts/gallery.html?%24hui. Note HUI's bullish large inverse spike at 12-5-08's short term Wave 2 cycle low at 191.63.
Also, the gold/silver stock sector should rock this week, because, GDX/HUI/XAU experienced a major breakout/hit a 5% follow through major buy signal on Wednesday 12-10-08, see http://tradethecycles.blogspot.com/2008/12/theres-new-annotated-xau-chart-that.html, and, http://tradethecycles.blogspot.com/2008/12/huixau-hit-5-follow-through-major-buy.html, and, see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
For you oil and gas sector aficionados, see the XOI (AMEX Oil and Gas) at http://stockcharts.com/charts/gallery.html?%24xoi, obviously, like the major averages, waiting for a 5% major buy signal is the prudent thing to do.
The XOM (Exxon Mobil) Lead Indicator is extremely bearish recently, at
-1.09% versus the XOI today/on 12-16, -0.54% on 12-15, +1.67% on 12-12, -1.07% on 12-11, -1.61% on 12-10, -1.41% on 12-9, -2.20% on 12-8, -1.47% on 12-5.
SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) put in a Wave 4 (since 12-8-08) cycle low of the short term Wave 3 upcycle (since 12-1-08) very early on Friday 12-12-08, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=. Note the bullish medium inverse spike on Friday's bullish white (close above the open) candle.
SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx)/the market/most sectors/indexes might have bottomed!, and, entered a Cyclical Bull Market, however, the Cyclical Bull Market for the major averages is likely to be a brief six to nine monthish one.
HUI/XAU (http://stockcharts.com/charts/gallery.html?%24xau) hit a 5% follow through major buy signal on Wednesday 12-10-08, breaking the multi month Wave 2 Cyclical Bear Market downtrend line since mid March 2008 by more than 5%, see HUI at http://finance.yahoo.com/q/ta?s=%5EHUI&t=6m&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=, and, see the XAU (the major breakout is more obvious in the XAU's chart) at http://finance.yahoo.com/q/ta?s=%5Exau&t=6m&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, which means that they very likely entered a Wave 3 Cyclical Bull Market in late October 2008. Note that HUI has a very bullish triple bottom in late October 2008. Trade the Cycles is now obviously on a buy signal for HUI/XAU.
Keep in mind/major warning that, not all gold/silver stocks have the same cycles. They can be vastly different. CDE (Coeur D' Alene Mines) has/had a bear market from/since 2004 for example, see http://finance.yahoo.com/q/ta?s=cde&t=my&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. Harmony Gold (HMY) is another stock that's been in a bear market since 2002, see http://finance.yahoo.com/q/ta?s=hmy&t=my&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.
Since this is a Wave 3 HUI/XAU (http://stockcharts.com/charts/gallery.html?%24xau) Cyclical Bull Market, it's likely to be a great one, since Wave 3 upcycles tend to be considerably larger than Wave 1 upcycles. As a matter of fact, the current short term upcycle since Friday 12-5-08, in which the major breakout occurred, see http://finance.yahoo.com/q/ta?s=%5Exau&t=6m&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, is a short term Wave 3 upcycle.
The gold/silver stock apocalypse since May 2006 (reliable gold sector lead indicator NEM since 1-31-06 and GDX/HUI/XAU since mid March 2008) is probably finally over for many/most gold/silver stocks, see the XAU's daily candlestick chart at http://stockcharts.com/charts/gallery.html?%24xau, and, see reliable gold sector lead indicator NEM's daily candlestick chart at http://stockcharts.com/charts/gallery.html?nem. Reliable gold sector lead indicator NEM put in a bullish double bottom in late October/late November 2008 at 21.40/21.17.
It'll take time to inflate the world out of this deflationary mess/credit crisis. Yes, gold might hit $2000+ in about 10 years, but, it might hit $350-$400 next year, when it finally bottoms. Remember that HUI/XAU bottomed in late 2000, whereas, gold bottomed in April 2001 and silver didn't bottom until late 2001. The metals LAG.
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
Labels: DUG, GDX, Gold, Gold Stocks, HUI, NDX, NEM, RUT, Silver, Silver Stocks, SPX, XAU, XOI, XOM
posted by Joe Ferrazzano at
1:22 PM
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