SPX (S & P 500) Probably Didn't Peak Yet, But, GDX/HUI/NEM/XAU Did/Put In A Bearish Double Top
SPX (S & P 500) probably didn't peak yet, but, GDX/HUI/NEM/XAU did/put in a bearish double top on 12-17-08/1-2-09, see SPX at http://stockcharts.com/charts/gallery.html?%24spx, and, see the XAU at http://stockcharts.com/charts/gallery.html?%24xau.
The fact that SPX (S & P 500) is defying gravity in recent sessions, in the face of a very bearish broad market Walmart (WMT) Lead Indicator (very bearish today, and, is extremely bearish recently, at -1.67% versus SPX (S & P 500) today/on 1-6-09, -0.68% on 1-5, -1.16% on 1-2, +0.42% on 12-31, -2.55% on 12-30, -0.04% on 12-29, -0.70% on 12-26, +0.19% on 12-24, -0.28% on 12-23), jives with yesterday's analysis, much of which is in today's update.
Near important cycle highs the market (or a stock, commodity, etc) can keep rising for a few sessions or more, even when the reliable Walmart (WMT) Lead Indicator turns extremely bearish. The reason is that, the longer the upcycle (or downcycle), the longer the lag time for the reliable Walmart (WMT) Lead Indicator's indication, severe weakness in this case, to "kick in." But, once the expected weakness does kick in, it's likely to be severe.
Both SPX's (S & P 500) short term rollover Wave 5 upcycle since 12-29-08 is rolling over, 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=, and, SPX's (S & P 500) countertrend Wave B minor intermediate term upcycle since late November 2008 is rolling over, see http://stockcharts.com/charts/gallery.html?%24spx.
SPX's (S & P 500) Wave B minor intermediate term upcycle since late November 2008 began rolling over after the SECOND SESSION of the upcycle, see http://stockcharts.com/charts/gallery.html?%24spx. The long rollover action, and, the anemic strength of the Wave B minor intermediate term upcycle since late November 2008 (most/nearly all sectors should get hit hard), are major negatives that point to a relatively large percentage decline in the near future.
The fact that SPX (S & P 500) doesn't have a large bearish spike on today 1-6-09's candle, see http://stockcharts.com/charts/gallery.html?%24spx, is one sign that it probably didn't (might not have) peak yet. Normally, large spikes tend to mark important cycle highs. SPX (S & P 500) looks like it might peak early tomorrow, 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=.
On Wednesday I'll look to day trade the major averages ultra short via SDS/TWM/QID, or, I might day trade SRS (UltraShort Real Estate ETF) or DUG (UltraShort Oil and Gas ETF), once I'm convinced that SPX (S & P 500)/the market has peaked.
I did it again today, and, I traded TWM (UltraShort Russell 2000 (RUT) ETF), making 21 cents/share/$210 per 1000 shares traded, in less than eight minutes.
If my broker has some GDX (Gold Miners ETF) available to short, I might day trade GDX short tomorrow. A few times I've tried to short GDX in recent months and it wasn't available. At least one time was due to the credit crisis.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
Now for my favorite gold/silver stock sector, GDX/HUI/NEM/XAU (http://stockcharts.com/charts/gallery.html?%24xau) put in a bearish double top on 12-17-08/1-2-09, and, are now declining/in a Wave 4 monthly downcycle, NEM is in a Wave 2 monthly downcycle. HUI peaked on 12-17-08, while GDX/NEM/XAU peaked on 1-2-09. HUI is in Wave C of a Wave 4 monthly downcycle since 12-17-08, GDX/XAU are in Wave A of a Wave 4 monthly downcycle since 1-2-09, and, reliable gold/silver sector lead indicator NEM is in Wave A of a Wave 2 monthly downcycle since 1-2-09.
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.
Today's action was countertrend Wave B action, see GDX (Gold Miners ETF) at http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.
It looks like, based on the intraday Elliott Wave count (Wave 5 spike appears likely early on), and, expected early SPX (S & P 500) strength tomorrow (results in program buying, that boosts nearly all sectors), GDX and NEM will probably fill their upside gaps at 33.32 and 40.33, created at yesterday's open, early tomorrow. Shortly after that gap filling action is completed, severe weakness and a very short term Wave C type move should begin.
NEM created a bearish breakaway upside gap at 40.33 at yesterday's open, and, I'll have to see what NEM's downside gaps are. NEM failed to fill 40.33 today, so, it's still a bearish breakaway upside gap.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 28.67, 25.41, and 23.23, some or all of which should get filled in the next week or two. GDX created an upside gap at 33.32 at yesterday's open, that's still a bearish breakaway upside gap.
GDX's (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) Wave 4 monthly downcycle since 1-2-09 might bottom at 22 to 23 (widened the target, because, volatility has been off the charts), shortly after filling the downside gap at 23.23, see http://stockcharts.com/charts/gallery.html?gdx. Often important cycle highs/lows occur shortly after gap filling action has been completed.
The gold/silver sector NEM Lead Indicator was modestly bearish today, and, is extremely bearish recently, at -0.37% versus the XAU today/on 1-6-09, +0.03% on 1-5, -0.57% on 1-2-09, -0.53% on 12-31, -1.01% on 12-30, +1.71% on 12-29, -0.57% on 12-26, +0.16% on 12-24, -1.60% on 12-23, -0.95% on 12-22.
The oil and gas sector XOM (Exxon Mobil) Lead Indicator was very bearish today, and, is extremely bearish recently, at -1.66% versus the XOI (AMEX Oil and Gas) today/on 1-6-09, -0.66% on 1-5, -1.83% on 1-2-09, +0.55% on 12-31, -1.66% on 12-30, -0.83% on 12-29.
GDX/HUI/XAU (http://stockcharts.com/charts/gallery.html?%24xau) hit a 5% follow through major buy signal on Wednesday 12-10-08 (see annotated chart one at http://www.joefrocks.com/GoldStockCharts.html), 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 GDX/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
The fact that SPX (S & P 500) is defying gravity in recent sessions, in the face of a very bearish broad market Walmart (WMT) Lead Indicator (very bearish today, and, is extremely bearish recently, at -1.67% versus SPX (S & P 500) today/on 1-6-09, -0.68% on 1-5, -1.16% on 1-2, +0.42% on 12-31, -2.55% on 12-30, -0.04% on 12-29, -0.70% on 12-26, +0.19% on 12-24, -0.28% on 12-23), jives with yesterday's analysis, much of which is in today's update.
Near important cycle highs the market (or a stock, commodity, etc) can keep rising for a few sessions or more, even when the reliable Walmart (WMT) Lead Indicator turns extremely bearish. The reason is that, the longer the upcycle (or downcycle), the longer the lag time for the reliable Walmart (WMT) Lead Indicator's indication, severe weakness in this case, to "kick in." But, once the expected weakness does kick in, it's likely to be severe.
Both SPX's (S & P 500) short term rollover Wave 5 upcycle since 12-29-08 is rolling over, 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=, and, SPX's (S & P 500) countertrend Wave B minor intermediate term upcycle since late November 2008 is rolling over, see http://stockcharts.com/charts/gallery.html?%24spx.
SPX's (S & P 500) Wave B minor intermediate term upcycle since late November 2008 began rolling over after the SECOND SESSION of the upcycle, see http://stockcharts.com/charts/gallery.html?%24spx. The long rollover action, and, the anemic strength of the Wave B minor intermediate term upcycle since late November 2008 (most/nearly all sectors should get hit hard), are major negatives that point to a relatively large percentage decline in the near future.
The fact that SPX (S & P 500) doesn't have a large bearish spike on today 1-6-09's candle, see http://stockcharts.com/charts/gallery.html?%24spx, is one sign that it probably didn't (might not have) peak yet. Normally, large spikes tend to mark important cycle highs. SPX (S & P 500) looks like it might peak early tomorrow, 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=.
On Wednesday I'll look to day trade the major averages ultra short via SDS/TWM/QID, or, I might day trade SRS (UltraShort Real Estate ETF) or DUG (UltraShort Oil and Gas ETF), once I'm convinced that SPX (S & P 500)/the market has peaked.
I did it again today, and, I traded TWM (UltraShort Russell 2000 (RUT) ETF), making 21 cents/share/$210 per 1000 shares traded, in less than eight minutes.
If my broker has some GDX (Gold Miners ETF) available to short, I might day trade GDX short tomorrow. A few times I've tried to short GDX in recent months and it wasn't available. At least one time was due to the credit crisis.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
Now for my favorite gold/silver stock sector, GDX/HUI/NEM/XAU (http://stockcharts.com/charts/gallery.html?%24xau) put in a bearish double top on 12-17-08/1-2-09, and, are now declining/in a Wave 4 monthly downcycle, NEM is in a Wave 2 monthly downcycle. HUI peaked on 12-17-08, while GDX/NEM/XAU peaked on 1-2-09. HUI is in Wave C of a Wave 4 monthly downcycle since 12-17-08, GDX/XAU are in Wave A of a Wave 4 monthly downcycle since 1-2-09, and, reliable gold/silver sector lead indicator NEM is in Wave A of a Wave 2 monthly downcycle since 1-2-09.
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.
Today's action was countertrend Wave B action, see GDX (Gold Miners ETF) at http://finance.yahoo.com/q/ta?s=gdx&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.
It looks like, based on the intraday Elliott Wave count (Wave 5 spike appears likely early on), and, expected early SPX (S & P 500) strength tomorrow (results in program buying, that boosts nearly all sectors), GDX and NEM will probably fill their upside gaps at 33.32 and 40.33, created at yesterday's open, early tomorrow. Shortly after that gap filling action is completed, severe weakness and a very short term Wave C type move should begin.
NEM created a bearish breakaway upside gap at 40.33 at yesterday's open, and, I'll have to see what NEM's downside gaps are. NEM failed to fill 40.33 today, so, it's still a bearish breakaway upside gap.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 28.67, 25.41, and 23.23, some or all of which should get filled in the next week or two. GDX created an upside gap at 33.32 at yesterday's open, that's still a bearish breakaway upside gap.
GDX's (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) Wave 4 monthly downcycle since 1-2-09 might bottom at 22 to 23 (widened the target, because, volatility has been off the charts), shortly after filling the downside gap at 23.23, see http://stockcharts.com/charts/gallery.html?gdx. Often important cycle highs/lows occur shortly after gap filling action has been completed.
The gold/silver sector NEM Lead Indicator was modestly bearish today, and, is extremely bearish recently, at -0.37% versus the XAU today/on 1-6-09, +0.03% on 1-5, -0.57% on 1-2-09, -0.53% on 12-31, -1.01% on 12-30, +1.71% on 12-29, -0.57% on 12-26, +0.16% on 12-24, -1.60% on 12-23, -0.95% on 12-22.
The oil and gas sector XOM (Exxon Mobil) Lead Indicator was very bearish today, and, is extremely bearish recently, at -1.66% versus the XOI (AMEX Oil and Gas) today/on 1-6-09, -0.66% on 1-5, -1.83% on 1-2-09, +0.55% on 12-31, -1.66% on 12-30, -0.83% on 12-29.
GDX/HUI/XAU (http://stockcharts.com/charts/gallery.html?%24xau) hit a 5% follow through major buy signal on Wednesday 12-10-08 (see annotated chart one at http://www.joefrocks.com/GoldStockCharts.html), 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 GDX/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, TAN, XAU, XOI, XOM
posted by Joe Ferrazzano at
2:10 PM
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