SPX (S & P 500)/The Market Appears To Be Breaking Down/Rolling Over
It's time to turn cautious on SPX (S & P 500)/the market, as I said on 12-18 and 12-19-08, see http://stockcharts.com/charts/gallery.html?%24spx. SPX (S & P 500) has a short term bearish double top, and, SPX's (S & P 500) uptrend line of the past few weeks broke down today. Note that SPX (S & P 500) has a bearish medium spike on Friday 12-19-08's candle.
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 will probably be taken out.
The broad market Walmart (WMT) Lead Indicator is extremely bullish today, and, recently, at +2.28% versus the S & P 500 (SPX) today/on 12-22, +0.31% on 12-19, +2.52% on 12-18, +0.87% on 12-17, which is a very short term bearish indication.
The intraday Walmart (WMT) Lead Indicator became increasingly bullish as the session progressed, 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, which made day trading difficult, but, I did two SDS (ultra short S & P 500 (SPX) ETF) trades today (2 minutes 18 seconds and 34 seconds), and, made a little over 22 cents per share = $220+ per 1000 shares traded.
SDS, the ultra short S & P 500 (SPX) ETF, appears to have completed an inverse Elliott Wave 12345 down up down up down pattern, that's also an Elliott Wave ABC down up down pattern, since late November 2008's monster spike/cycle high, see http://stockcharts.com/charts/gallery.html?sds, and, note the bullish medium/large inverse spike at the potential major cycle low at 79.12 on 12-17-08.
Since bottoming at 79.12 SDS has done an up down up on the daily chart, see http://stockcharts.com/charts/gallery.html?sds, and, was doing Wave 4 down at session's end today 12-22-08, so, tomorrow I'll look to day trade an SDS very short term Wave 5 upcycle.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
SRS (ultra short real estate ETF) appears to have completed an inverse Elliott Wave 12345 down up down up down pattern, that's also an Elliott Wave ABC down up down pattern, since late November 2008's monster spike/cycle high, see http://stockcharts.com/charts/gallery.html?srs, and, note the bullish large inverse spike at the potential major cycle low at 52.10 on Wednesday 12-17-08. SRS should bottom at 53ish in the next day or two, based on the nature of cycles (upcycle starting out relatively flat), if it bottomed at 52.10 last week.
DUG (ultra short Oil and Gas ETF, potential major cycle low at 27.79) appears to have completed an inverse Elliott Wave 12345 down up down up down pattern, that's also an Elliott Wave ABC down up down pattern, since early October 2008's monster spike/cycle high at 86.50, see http://stockcharts.com/charts/gallery.html?dug.
Reliable gold sector lead indicator Newmont Mining (NEM) gapped down from 39.17 at Thursday 12-18-08's open, and, it filled that gap today, 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 no longer has a bearish breakaway upside gap at 39.17.
Note that NEM has a bearish large spike on 12-17-08's bearish red (close below the open) candle, see http://stockcharts.com/charts/gallery.html?nem, and, NEM has a bearish medium spike on today's candle, and, the NEM Lead Indicator was bearish today, at -0.95% versus the XAU on 12-22-08.
So, while GDX/HUI/XAU/the gold/silver stock sector (see chart one at http://www.joefrocks.com/GoldStockCharts.html) broke out the week before last and hit a 5% major buy signal, short term a Wave 2 minor intermediate term downcycle/correction has probably begun. See Friday's first post at http://tradethecycles.blogspot.com/2008/12/reliable-gold-sector-lead-indicator.html for more details.
The gold sector NEM Lead Indicator is bearish recently,
at a bearish -0.95% versus the XAU today/on 12-22, at a bullish +0.75% on 12-19-08, at an extremely bullish +2.33% on 12-18-08 (correctly was a 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.
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
+1.65% versus the XOI today/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.
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
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 will probably be taken out.
The broad market Walmart (WMT) Lead Indicator is extremely bullish today, and, recently, at +2.28% versus the S & P 500 (SPX) today/on 12-22, +0.31% on 12-19, +2.52% on 12-18, +0.87% on 12-17, which is a very short term bearish indication.
The intraday Walmart (WMT) Lead Indicator became increasingly bullish as the session progressed, 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, which made day trading difficult, but, I did two SDS (ultra short S & P 500 (SPX) ETF) trades today (2 minutes 18 seconds and 34 seconds), and, made a little over 22 cents per share = $220+ per 1000 shares traded.
SDS, the ultra short S & P 500 (SPX) ETF, appears to have completed an inverse Elliott Wave 12345 down up down up down pattern, that's also an Elliott Wave ABC down up down pattern, since late November 2008's monster spike/cycle high, see http://stockcharts.com/charts/gallery.html?sds, and, note the bullish medium/large inverse spike at the potential major cycle low at 79.12 on 12-17-08.
Since bottoming at 79.12 SDS has done an up down up on the daily chart, see http://stockcharts.com/charts/gallery.html?sds, and, was doing Wave 4 down at session's end today 12-22-08, so, tomorrow I'll look to day trade an SDS very short term Wave 5 upcycle.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
SRS (ultra short real estate ETF) appears to have completed an inverse Elliott Wave 12345 down up down up down pattern, that's also an Elliott Wave ABC down up down pattern, since late November 2008's monster spike/cycle high, see http://stockcharts.com/charts/gallery.html?srs, and, note the bullish large inverse spike at the potential major cycle low at 52.10 on Wednesday 12-17-08. SRS should bottom at 53ish in the next day or two, based on the nature of cycles (upcycle starting out relatively flat), if it bottomed at 52.10 last week.
DUG (ultra short Oil and Gas ETF, potential major cycle low at 27.79) appears to have completed an inverse Elliott Wave 12345 down up down up down pattern, that's also an Elliott Wave ABC down up down pattern, since early October 2008's monster spike/cycle high at 86.50, see http://stockcharts.com/charts/gallery.html?dug.
Reliable gold sector lead indicator Newmont Mining (NEM) gapped down from 39.17 at Thursday 12-18-08's open, and, it filled that gap today, 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 no longer has a bearish breakaway upside gap at 39.17.
Note that NEM has a bearish large spike on 12-17-08's bearish red (close below the open) candle, see http://stockcharts.com/charts/gallery.html?nem, and, NEM has a bearish medium spike on today's candle, and, the NEM Lead Indicator was bearish today, at -0.95% versus the XAU on 12-22-08.
So, while GDX/HUI/XAU/the gold/silver stock sector (see chart one at http://www.joefrocks.com/GoldStockCharts.html) broke out the week before last and hit a 5% major buy signal, short term a Wave 2 minor intermediate term downcycle/correction has probably begun. See Friday's first post at http://tradethecycles.blogspot.com/2008/12/reliable-gold-sector-lead-indicator.html for more details.
The gold sector NEM Lead Indicator is bearish recently,
at a bearish -0.95% versus the XAU today/on 12-22, at a bullish +0.75% on 12-19-08, at an extremely bullish +2.33% on 12-18-08 (correctly was a 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.
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
+1.65% versus the XOI today/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.
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
Labels: DUG, GDX, Gold, Gold Stocks, HUI, NDX, NEM, RUT, Silver, Silver Stocks, SPX, XAU, XOI, XOM
posted by Joe Ferrazzano at
1:23 PM
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