SPX (S & P 500) Filled 12-8-08's Downside Gap at 876.07 Today 12-11-08
SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) filled 12-8-08's downside gap at 876.07 late today 12-11-08, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.
SPX (S & P 500) probably still has significant downside early tomorrow, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, because, the long relatively flat downtrend (Wave 4 down of a short term Wave 3 (since 12-1-08)), that began late on 12-8-08, typically results in a very sharp decline, since it's a large/long downcycle. The longer the relatively flat part of a downcycle is, the more severe the parabolic sharply declining segment tends to be, simply because it's a longer/larger downcycle.
The extremely bullish broad market Walmart (WMT) Lead Indicator, at +2.02% versus the SPX (S & P 500) today/on 12-11-08, jives with the above discussion, since it points to early weakness tomorrow, followed probably by substantial strength.
Also, the SPX (S & P 500) Volatility Index (VIX) rose a meager +0.09% today 12-11, versus an SPX plunge of -2.85%, which is a sharp -2.76% decline in the SPX wall of worry, which is a sharp +2.76% rise in complacency that points to significant and potentially severe weakness early tomorrow 12-12-08.
Early tomorrow I'll look to day trade DUG (UltraShort Oil and Gas ETF, http://stockcharts.com/charts/gallery.html?dug), which appears to have potentially put in a major cycle low today 12-11-08. Note the bullish large inverse spike on today's bullish white (close above the open) candle.
Watch the XOI's (AMEX Oil and Gas, http://stockcharts.com/charts/gallery.html?%24xoi) downside gaps at 909.18 and 859.77 created this week (12-8-08 and 12-10-08), see http://finance.yahoo.com/q/ta?s=%5Exoi&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
The XOI (AMEX Oil and Gas) has a bearish medium spike on today 12-11-08's candle, see http://stockcharts.com/charts/gallery.html?%24xoi.
The XOM (Exxon Mobil) Lead Indicator has turned extremely bearish, at -1.07% versus the XOI (AMEX Oil and Gas) today/on 12-11-08, -1.61% on 12-10, -1.41% on 12-9, -2.20% on 12-8, -1.47% on 12-5.
Later on in the session tomorrow I'll probably look to day trade GDX (Gold Miners ETF) long, or, maybe the major averages ultra long via SSO/QLD/UWM.
Today I made 23 cents per share/$230 per 1000 shares traded on TWM, and, I would have done much better if SPX (S & P 500) hadn't peaked in rollover mode, and, RUT (Russell 2000) hadn't put in a double top.
GDX/HUI/XAU put in a Wave 1 cycle high today, of the short term Wave 3 upcycle since 12-5-08, see http://stockcharts.com/charts/gallery.html?%24hui. HUI has a bearish medium spike on today 12-11-08's bearish red (close below the open) candle.
The gold sector NEM Lead Indicator was a very bearish -1.11% versus the XAU today/on 12-11-08, and, was -1.03% on 12-10.
Watch GDX's (Gold Miners ETF) downside gaps at 25.41 and 23.23 tomorrow, though both are probably bullish breakaway gaps, see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, and, see http://stockcharts.com/charts/gallery.html?gdx, because, they are large gaps.
HUI/XAU (http://stockcharts.com/charts/gallery.html?%24xau) hit a 5% follow through major buy signal yesterday 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
SPX (S & P 500) probably still has significant downside early tomorrow, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, because, the long relatively flat downtrend (Wave 4 down of a short term Wave 3 (since 12-1-08)), that began late on 12-8-08, typically results in a very sharp decline, since it's a large/long downcycle. The longer the relatively flat part of a downcycle is, the more severe the parabolic sharply declining segment tends to be, simply because it's a longer/larger downcycle.
The extremely bullish broad market Walmart (WMT) Lead Indicator, at +2.02% versus the SPX (S & P 500) today/on 12-11-08, jives with the above discussion, since it points to early weakness tomorrow, followed probably by substantial strength.
Also, the SPX (S & P 500) Volatility Index (VIX) rose a meager +0.09% today 12-11, versus an SPX plunge of -2.85%, which is a sharp -2.76% decline in the SPX wall of worry, which is a sharp +2.76% rise in complacency that points to significant and potentially severe weakness early tomorrow 12-12-08.
Early tomorrow I'll look to day trade DUG (UltraShort Oil and Gas ETF, http://stockcharts.com/charts/gallery.html?dug), which appears to have potentially put in a major cycle low today 12-11-08. Note the bullish large inverse spike on today's bullish white (close above the open) candle.
Watch the XOI's (AMEX Oil and Gas, http://stockcharts.com/charts/gallery.html?%24xoi) downside gaps at 909.18 and 859.77 created this week (12-8-08 and 12-10-08), see http://finance.yahoo.com/q/ta?s=%5Exoi&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
The XOI (AMEX Oil and Gas) has a bearish medium spike on today 12-11-08's candle, see http://stockcharts.com/charts/gallery.html?%24xoi.
The XOM (Exxon Mobil) Lead Indicator has turned extremely bearish, at -1.07% versus the XOI (AMEX Oil and Gas) today/on 12-11-08, -1.61% on 12-10, -1.41% on 12-9, -2.20% on 12-8, -1.47% on 12-5.
Later on in the session tomorrow I'll probably look to day trade GDX (Gold Miners ETF) long, or, maybe the major averages ultra long via SSO/QLD/UWM.
Today I made 23 cents per share/$230 per 1000 shares traded on TWM, and, I would have done much better if SPX (S & P 500) hadn't peaked in rollover mode, and, RUT (Russell 2000) hadn't put in a double top.
GDX/HUI/XAU put in a Wave 1 cycle high today, of the short term Wave 3 upcycle since 12-5-08, see http://stockcharts.com/charts/gallery.html?%24hui. HUI has a bearish medium spike on today 12-11-08's bearish red (close below the open) candle.
The gold sector NEM Lead Indicator was a very bearish -1.11% versus the XAU today/on 12-11-08, and, was -1.03% on 12-10.
Watch GDX's (Gold Miners ETF) downside gaps at 25.41 and 23.23 tomorrow, though both are probably bullish breakaway gaps, see http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, and, see http://stockcharts.com/charts/gallery.html?gdx, because, they are large gaps.
HUI/XAU (http://stockcharts.com/charts/gallery.html?%24xau) hit a 5% follow through major buy signal yesterday 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
1:04 PM
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