SPX (S & P 500) Did Wave A of Wave C of Wave 5 Down Early Today And GDX/HUI/XAU Appear To Be Wave 5 Of The Wave 3 Monthly Upcycle Since Late November

SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) plunged/did Wave A of Wave C (since late 12-26-08) of Wave 5 down (since early on 12-23-08) early today as expected (of the short term Wave A downcycle since 12-17-08), and, good news, GDX/HUI/XAU appear to be (very likely) in a short term Wave 5 upcycle (since 12-19 (GDX) and 12-22 for HUI/XAU) of the Wave 3 Monthly Upcycle since late November, not a Wave 2 minor intermediate term downcycle, see SPX at http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=, and, see GDX (Gold Miners ETF) at http://stockcharts.com/charts/gallery.html?gdx.

GDX (Gold Miners ETF)/HUI/XAU did an entire monthly cycle (very short but huge eight session Wave 1 monthly upcycle and a Wave 2 monthly downcycle) from late October until late November 2008, see GDX at http://stockcharts.com/charts/gallery.html?gdx. Now, GDX/HUI/XAU clearly appear to be in a short term Wave 5 upcycle of the Wave 3 monthly upcycle since late November. I should have realized this sooner. Actually, my original analysis I believe was correct, then I changed it.

The NEM Lead Indicator was a very bullish +1.71% versus the XAU today/on 12-29-08, and, GDX (Gold Miners ETF) and reliable gold/silver sector lead indicator NEM created bullish breakaway gaps at today's open at 32.25 and 38.85 respectively. GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has more downside bullish breakaway gaps at 28.67, 25.41, and 23.23.

I'll look to day trade GDX/AEM early tomorrow. Today I day traded SDS (UltraShort S & P 500 ETF), and, made a little over 13 cents/share ($130+ per 1000 shares traded) in a 1 minute 20 second trade.

I'll also look at shorting SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) or NDX/RUT via SDS/QID/TWM early tomorrow, because, SPX was in Wave 5 peaking of the upcycle that began late today 12-29-08, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=, which appears to be the countertrend Wave B up of Wave C down (since late 12-26-08) of Wave 5 down (since early on 12-23-08) of the short term Wave A downcycle since 12-17-08.

Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.

The SPX (S & P 500) Elliott Wave count jives with the bearish broad market Walmart (WMT) Lead Indicator, at -0.04% versus SPX (S & P 500) today/on 12-29, at -0.70% on 12-26-08, +0.19% on 12-24, -0.28% on 12-23.

Reliable broad market lead indicator WMT’s (Walmart) short term likely countertrend Wave B type move peaked five sessions ago, see http://stockcharts.com/charts/gallery.html?wmt. WMT broke down out of it’s short term uptrending channel on Tuesday 12-23-08. A likely Wave A down of Wave C type move appears to have bottomed today 12-29-08. Note WMT's bullish medium inverse spike on today's candle (black/bearish/close below the open).

If SPX (S & P 500)/the market is about to experience (roughly within the next month or so) a substantial decline and take out the November 2008 cycle low at 741.02, see http://stockcharts.com/charts/gallery.html?%24spx, which appears likely, then, this short term Wave A downcycle (since late 12-17-08) is probably part of a larger/longer Wave A downcycle.

Note that, since the November 2008 cycle low at 741.02, SPX (S & P 500) did an Elliott Wave 12345 up down up down up pattern in very anemic rollover mode, with the Wave 5 cycle high being the bearish double top cycle high at 918.85 on 12-17-08, see http://stockcharts.com/charts/gallery.html?%24spx.

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
-0.83% versus the XOI today/on 12-29, +0.28% on 12-26, +1.17% on 12-24, +0.97% on 12-23, +1.65% on 12-22, -2.08% on 12-19, +0.09% 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, because, they didn't hit a 5% major buy signal yet, and, they appear to be breaking down), 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.

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.

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.

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