It's Time To Turn Cautious On SPX (S & P 500)/The Market
It's time to turn cautious on SPX (S & P 500)/the market, see http://stockcharts.com/charts/gallery.html?%24spx. SPX (S & P 500) has a short term bearish double top, and, is in an ascending triangle formation the past two weeks. We need to see if SPX's uptrend line of the past few weeks holds, and, if it can break out of the ascending triangle formation.
A bearish sign is that most of SPX's (S & P 500) gains since the November 2008 cycle low at 741.02, see http://stockcharts.com/charts/gallery.html?%24spx, came in the FIRST TWO SESSIONS of the upcycle.
The SPX (S & P 500) upcycle since mid/late November 2008 appears to be rolling over, see http://stockcharts.com/charts/gallery.html?%24spx, with a substantial correction/downcycle possibly about to occur, and, obviously the November 2008 cycle low at 741.02 might be taken out.
Until SPX (S & P 500) can clearly break out of it's anemic ascending triangle formation of the past two weeks, caution is a very good idea.
Also, reliable broad market lead indicator Walmart (WMT) appears to be doing a countertrend move the past week, and, has been putting in medium bearish spikes the past three days, see http://stockcharts.com/charts/gallery.html?wmt.
The Walmart (WMT) Lead Indicator was an extremely bullish +2.52% versus SPX (S & P 500) today/on 12-18-08, which is a very short term bearish indication, and, the Walmart (WMT) Lead Indicator was extremely bearish prior to today, at +0.87% on 12-17, -4.17% on 12-16, +1.42% on 12-15, -0.99% on 12-12, +2.02% on 12-11, -2.19% on 12-10, -0.73% on 12-9, -4.96% on 12-8, +1.98% on 12-5.
Reliable gold sector lead indicator Newmont Mining (NEM) gapped down from 39.17 at today 12-18-08's open, and, it failed to fill that gap, see http://finance.yahoo.com/q/ta?s=nem&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, so, NEM has a bearish breakaway upside gap at 39.17 now. Note also that NEM has a bearish large spike on yesterday 12-17-08's bearish red (close below the open) candle, see http://stockcharts.com/charts/gallery.html?nem.
So, while GDX/HUI/XAU/the gold/silver stock sector (see chart one at http://www.joefrocks.com/GoldStockCharts.html) broke out last week and hit a 5% major buy signal, short term a monthly downcycle/correction might have begun.
Yesterday's GDX/HUI/XAU cycle high appears to be a Wave 3 of a short term Wave 3 cycle high, see http://stockcharts.com/charts/gallery.html?%24xau, but, with the major averages possibly about to break down, one must be cautious.
The gold sector NEM Lead Indicator is bearish recently, at an extremely bullish +2.33% versus the XAU today/on 12-18-08 (very short term bearish indication), -1.14% on 12-17-08, -1.16% on 12-16, +1.14% on 12-15, +0.75% on 12-12, -1.11% on 12-11, -1.03% on 12-10, +1.89% on 12-9, -2.70% on 12-8, -0.30% on 12-5.
Obviously, the Madoff scandal and it's reverberations, the US auto industry uncertainty and layoffs/major plant idling, and, the overall state of the economy/financial institutions, are major negatives for the market.
Tomorrow I'll watch the early action to see if I can determine if the bullish or bearish market scenario is occurring. Obviously, until one knows what's going on cyclewise, it'll be very risky to trade this market.
One needs to see if SPX's (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) uptrend line of the past few weeks holds, and, if it can break out of the ascending triangle formation, as discussed previously.
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 and did rock earlier 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 rocked earlier 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 super bearish recently, at
+0.09% versus the XOI today/on 12-18, -3.00% on 12-17, -1.09% 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)/the market/most sectors/indexes might have bottomed (doubtful obviously, they didn't hit a 5% major buy signal yet), 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/was 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
A bearish sign is that most of SPX's (S & P 500) gains since the November 2008 cycle low at 741.02, see http://stockcharts.com/charts/gallery.html?%24spx, came in the FIRST TWO SESSIONS of the upcycle.
The SPX (S & P 500) upcycle since mid/late November 2008 appears to be rolling over, see http://stockcharts.com/charts/gallery.html?%24spx, with a substantial correction/downcycle possibly about to occur, and, obviously the November 2008 cycle low at 741.02 might be taken out.
Until SPX (S & P 500) can clearly break out of it's anemic ascending triangle formation of the past two weeks, caution is a very good idea.
Also, reliable broad market lead indicator Walmart (WMT) appears to be doing a countertrend move the past week, and, has been putting in medium bearish spikes the past three days, see http://stockcharts.com/charts/gallery.html?wmt.
The Walmart (WMT) Lead Indicator was an extremely bullish +2.52% versus SPX (S & P 500) today/on 12-18-08, which is a very short term bearish indication, and, the Walmart (WMT) Lead Indicator was extremely bearish prior to today, at +0.87% on 12-17, -4.17% on 12-16, +1.42% on 12-15, -0.99% on 12-12, +2.02% on 12-11, -2.19% on 12-10, -0.73% on 12-9, -4.96% on 12-8, +1.98% on 12-5.
Reliable gold sector lead indicator Newmont Mining (NEM) gapped down from 39.17 at today 12-18-08's open, and, it failed to fill that gap, see http://finance.yahoo.com/q/ta?s=nem&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, so, NEM has a bearish breakaway upside gap at 39.17 now. Note also that NEM has a bearish large spike on yesterday 12-17-08's bearish red (close below the open) candle, see http://stockcharts.com/charts/gallery.html?nem.
So, while GDX/HUI/XAU/the gold/silver stock sector (see chart one at http://www.joefrocks.com/GoldStockCharts.html) broke out last week and hit a 5% major buy signal, short term a monthly downcycle/correction might have begun.
Yesterday's GDX/HUI/XAU cycle high appears to be a Wave 3 of a short term Wave 3 cycle high, see http://stockcharts.com/charts/gallery.html?%24xau, but, with the major averages possibly about to break down, one must be cautious.
The gold sector NEM Lead Indicator is bearish recently, at an extremely bullish +2.33% versus the XAU today/on 12-18-08 (very short term bearish indication), -1.14% on 12-17-08, -1.16% on 12-16, +1.14% on 12-15, +0.75% on 12-12, -1.11% on 12-11, -1.03% on 12-10, +1.89% on 12-9, -2.70% on 12-8, -0.30% on 12-5.
Obviously, the Madoff scandal and it's reverberations, the US auto industry uncertainty and layoffs/major plant idling, and, the overall state of the economy/financial institutions, are major negatives for the market.
Tomorrow I'll watch the early action to see if I can determine if the bullish or bearish market scenario is occurring. Obviously, until one knows what's going on cyclewise, it'll be very risky to trade this market.
One needs to see if SPX's (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) uptrend line of the past few weeks holds, and, if it can break out of the ascending triangle formation, as discussed previously.
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 and did rock earlier 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 rocked earlier 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 super bearish recently, at
+0.09% versus the XOI today/on 12-18, -3.00% on 12-17, -1.09% 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)/the market/most sectors/indexes might have bottomed (doubtful obviously, they didn't hit a 5% major buy signal yet), 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/was 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
2:12 PM
0 Comments:
Post a Comment
<< Home