Yes, SPX (S & P 500) Is Probably Doing An Inverse Elliott Wave 12345 Down Up Down Up Down Pattern Since Late On 12-17-08
Yes, SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) is probably doing an inverse Elliott Wave 12345 down up down up down pattern since late on 12-17-08, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.
Note that SPX's (S & P 500) upcycle since late on Tuesday 12-23-08 is anemic, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=, and, is probably a countertrend Wave B up of Wave 5 down (Wave 5 down began early on 12-23-08), of the short term Wave A downcycle since late on 12-17-08 (cycle high at 918.85, see http://stockcharts.com/charts/gallery.html?%24spx).
SPX's (S & P 500) Wave 4 up peaked early on 12-23-08, then, Wave A down of Wave 5 down bottomed late on 12-23-08. It looks like Wave B up of Wave 5 down peaked shortly before session's end today 12-26-08 in rollover mode, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=, which means that Wave C down of Wave 5 down probably began very late today 12-26-08.
The SPX (S & P 500) Elliott Wave count jives with the bearish broad market Walmart (WMT) Lead Indicator, at -0.70% versus SPX (S & P 500) today/on 12-26-08, +0.19% on 12-24, -0.28% on 12-23.
I'll be looking to day trade SDS (UltraShort SPX (S & P 500) ETF) or some other ultra short ETF on Monday (TWM/QID or DUG/SRS/SMN). Today I made a little over 6 cents/share ($60+ per 1000 shares traded) on a brief TWM day trade.
Reliable broad market lead indicator WMT’s (Walmart) short term likely countertrend Wave B type move appears to have peaked four sessions ago, see http://stockcharts.com/charts/gallery.html?wmt. WMT broke down out of it’s short term uptrending channel on Tuesday.
If SPX (S & P 500)/the market is about to experience 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 GDX/HUI/XAU (http://stockcharts.com/charts/gallery.html?%24xau)/the gold/silver stock sector this strength is probably a countertrend Wave B up of a big short term Wave A downcycle, of the Wave 2 minor intermediate term downcycle since 12-17-08.
Since GDX/HUI/XAU (http://stockcharts.com/charts/gallery.html?%24xau) broke out and hit a 5% major buy signal (see chart one at http://www.joefrocks.com/GoldStockCharts.html) a few weeks ago, there's a significant but probably small chance of an upside surprise.
Looking at the gold sector NEM Lead Indicator (-0.57% versus the XAU today/on 12-26, +0.16% on 12-24, -1.60% on 12-23, -0.95% on 12-22) and the broad market Walmart (WMT) Lead Indicator (at -0.70% versus SPX (S & P 500) today/on 12-26-08, +0.19% on 12-24, -0.28% on 12-23) the past few days, an upside surprise appears unlikely.
Watch GDX's (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) downside gaps at 28.67, 25.41, and 23.23, some or all of which will probably get filled in this Wave 2 minor intermediate term downcycle since 12-17-08.
Note that reliable gold sector lead indicator 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, the NEM Lead Indicator was bearish today, at -0.57% versus the XAU on 12-26, was +0.16% on 12-24, was a very bearish -1.60% on 12-23-08, and, was a bearish -0.95% 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 begun. See Friday 12-19-08's first post at http://tradethecycles.blogspot.com/2008/12/reliable-gold-sector-lead-indicator.html for more details.
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 extremely bearish recently, at
+0.28% versus the XOI today/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.
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
Note that SPX's (S & P 500) upcycle since late on Tuesday 12-23-08 is anemic, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=, and, is probably a countertrend Wave B up of Wave 5 down (Wave 5 down began early on 12-23-08), of the short term Wave A downcycle since late on 12-17-08 (cycle high at 918.85, see http://stockcharts.com/charts/gallery.html?%24spx).
SPX's (S & P 500) Wave 4 up peaked early on 12-23-08, then, Wave A down of Wave 5 down bottomed late on 12-23-08. It looks like Wave B up of Wave 5 down peaked shortly before session's end today 12-26-08 in rollover mode, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=, which means that Wave C down of Wave 5 down probably began very late today 12-26-08.
The SPX (S & P 500) Elliott Wave count jives with the bearish broad market Walmart (WMT) Lead Indicator, at -0.70% versus SPX (S & P 500) today/on 12-26-08, +0.19% on 12-24, -0.28% on 12-23.
I'll be looking to day trade SDS (UltraShort SPX (S & P 500) ETF) or some other ultra short ETF on Monday (TWM/QID or DUG/SRS/SMN). Today I made a little over 6 cents/share ($60+ per 1000 shares traded) on a brief TWM day trade.
Reliable broad market lead indicator WMT’s (Walmart) short term likely countertrend Wave B type move appears to have peaked four sessions ago, see http://stockcharts.com/charts/gallery.html?wmt. WMT broke down out of it’s short term uptrending channel on Tuesday.
If SPX (S & P 500)/the market is about to experience 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 GDX/HUI/XAU (http://stockcharts.com/charts/gallery.html?%24xau)/the gold/silver stock sector this strength is probably a countertrend Wave B up of a big short term Wave A downcycle, of the Wave 2 minor intermediate term downcycle since 12-17-08.
Since GDX/HUI/XAU (http://stockcharts.com/charts/gallery.html?%24xau) broke out and hit a 5% major buy signal (see chart one at http://www.joefrocks.com/GoldStockCharts.html) a few weeks ago, there's a significant but probably small chance of an upside surprise.
Looking at the gold sector NEM Lead Indicator (-0.57% versus the XAU today/on 12-26, +0.16% on 12-24, -1.60% on 12-23, -0.95% on 12-22) and the broad market Walmart (WMT) Lead Indicator (at -0.70% versus SPX (S & P 500) today/on 12-26-08, +0.19% on 12-24, -0.28% on 12-23) the past few days, an upside surprise appears unlikely.
Watch GDX's (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) downside gaps at 28.67, 25.41, and 23.23, some or all of which will probably get filled in this Wave 2 minor intermediate term downcycle since 12-17-08.
Note that reliable gold sector lead indicator 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, the NEM Lead Indicator was bearish today, at -0.57% versus the XAU on 12-26, was +0.16% on 12-24, was a very bearish -1.60% on 12-23-08, and, was a bearish -0.95% 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 begun. See Friday 12-19-08's first post at http://tradethecycles.blogspot.com/2008/12/reliable-gold-sector-lead-indicator.html for more details.
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 extremely bearish recently, at
+0.28% versus the XOI today/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.
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
1:26 PM
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