SPX's (S & P 500) Short Term Countertrend Wave B Upcycle Might Not Have Peaked Yet
SPX's (S & P 500) Short Term Countertrend Wave B Upcycle (began last week) might not have peaked yet (Wave A Monthly Downcycle since 1-6-09), see http://stockcharts.com/charts/gallery.html?%24spx.
SPX (S & P 500) has done an up down up down pattern on the daily chart since last week, see http://stockcharts.com/charts/gallery.html?%24spx, so, 1-28's cycle high normally would be a Wave 3 cycle high (of the Short Term Countertrend Wave B Upcycle), not a third/final Wave 5 cycle high. Also, note that 1-28's candle isn't bearish, there's a small spike on a bullish white (close above the open) candle. 1-28's candle would be unusual/atypical for an important cycle high.
Another bullish factor is that the broad market Walmart (WMT) Lead Indicator has turned extremely bullish (+0.73% versus SPX (S & P 500) today/on 1-30, +1.52% on 1-29) the past two days.
Also, Walmart (WMT, http://stockcharts.com/charts/gallery.html?wmt) is extremely oversold now, with RSI at 16.51 and the Stochastics below 10, which is unusually oversold. Rarely will a stock's (index, commodity, etc) RSI fall below 20 or Stochastics fall below 10.
Lastly, the SPX (S & P 500) Volatility Index VIX rose +5.18% today 1-30 and +7.49% yesterday 1-29, so, substantial strength is likely to begin/occur at some point on Monday, due to the substantial rise in fear/the SPX (S & P 500) wall of worry.
So, there's a definite chance that SPX (S & P 500) might show surprising strength next week, and, it might do a very large Wave 5 spike move and try to fill it's upside gap at 934.70. Wave 3 (might be Wave 5) peaked on 1-28 shortly after filling the upside gap at 871.74. Often important or even semi important cycle highs/lows occur shortly after gap filling action has been completed.
On Walmart's (WMT) intraday chart it looks like might have bottomed late today 1-30, see http://finance.yahoo.com/q/ta?s=wmt&t=1d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
On Monday I might day trade SPX (S & P 500) ultra long via SSO, or, I might day trade ultra long via UWM (RUT), QLD (NDX), or DIG (Oil and Gas). I might also day trade GDX (Gold Miners ETF) short.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
The SPX (S & P 500) Volatility Index VIX (+5.18%) reveals a sharp rise in fear today, since SPX fell a sharp -2.28%, which is a sharp +2.90% rise in fear/+2.90% rise in the SPX wall of worry, that points to substantial SPX strength on Monday, after potential early weakness.
SPX (S & P 500) has bearish breakaway upside gaps at 874.09 and 934.70, see http://stockcharts.com/charts/gallery.html?%24spx. Reliable broad market lead indicator Walmart (WMT) has bearish breakaway upside gaps at 50.56, 52.12, and 55.54.
SPX (S & P 500) has been in a Cyclical Bear Market since 10-11-07, NDX (NASDAQ 100) has been in a Cyclical Bear Market since very late October 2007, and, RUT (Russell 2000) has been in a Cyclical Bear Market since July 2007.
Reliable broad market Lead Indicator Walmart's (WMT) huge very bearish breakaway type gap down on 1-8-09 from 55.54, see http://stockcharts.com/charts/gallery.html?wmt, portended the recent substantial weakness/short term Wave A downcycle for WMT/SPX and the market/most indexes/sectors.
There's a good chance that SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) will take out it's November 2008 cycle low (the 1-6-09 cycle high is a likely countertrend Wave B cycle high), and, that reliable broad market Lead Indicator Walmart (WMT) will take out it's October 2008 cycle low in the next few weeks (the early December 2008 cycle high is a likely countertrend Wave B cycle high).
Today 1-30-09's GDX/HUI/XAU and NEM cycle high was probably the countertrend Wave B up of the big short term Wave A downcycle since 1-26-09 (Wave 2 minor intermediate term downcycle since 1-26-09), see http://stockcharts.com/charts/gallery.html?nem and http://stockcharts.com/charts/gallery.html?%24hui.
Reliable gold/silver sector lead indicator NEM didn't make a serious attempt at filling 1-28's very large very bearish breakaway upside gap at 41.71, see http://finance.yahoo.com/q/ta?s=NEM&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=, which jives with GDX/HUI/XAU and NEM probably entering entering Wave C today, of the big short term Wave A downcycle since 1-26-09.
GDX/HUI/XAU (and NEM) peaked right after the open today, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, then, they quickly did an intraday Wave A down type crash, followed by an intraday countertrend Wave B upcycle, note the Elliott Wave 12345 up down up down up pattern, and, they very likely ended today 1-30's session in a Wave C down type move.
From the mid/late November 2008 (late October 2008 for GDX/HUI/XAU) likely Wave 2 Cyclical Bear Market cycle low at 21.10 to the 1-26-09 cycle high at 45.45 NEM did an Elliott Wave 12345 up down up down up Wave 1 minor intermediate term upcycle (http://stockcharts.com/charts/gallery.html?nem), peaking in rollover mode, and, NEM created a very large very bearish breakaway type upside gap at 41.71 at 1-28's open, see http://finance.yahoo.com/q/ta?s=NEM&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.
The reliable gold/silver sector NEM Lead Indicator was an extremely bullish +2.04% versus the XAU today/on 1-30, which is a very short term bearish indication, and, it was super bearish prior to today, at -1.97% on 1-29, -5.87% on 1-28, -2.09% on 1-27, -1.35% on 1-26, -0.32% on 1-23.
Gold's near/might have hit a 5% follow through major buy signal, see http://stockcharts.com/charts/gallery.html?%24gold, and, it might soon clearly do so. Gold appears to have broken out on Friday 1-23-09, and, followed through to the upside on 1-26 and today 1-30, which is a good sign. Gold tends to lag GDX/HUI/XAU and NEM (today's another example), so, it didn't peak on 1-26-09, when GDX/HUI/XAU and NEM did.
Note that gold did an inverse Elliott Wave 12345 down up down up down pattern, from the 3-17-08 Wave 1 Cyclical Bull Market cycle high at $1033.90, to the potential/likely Wave 2 Cyclical Bear Market cycle low at $681 in late October 2008, see the second weekly view chart at http://stockcharts.com/charts/gallery.html?%24gold. Note also, that in both the first daily view chart and the second weekly view chart, that gold has a very large bullish inverse spike at the $681 cycle low in late October 2008.
The savvy non contrarian gold Commercial Traders expect gold to soon peak/put in a Wave 1 minor intermediate term cycle high, lagging GDX/HUI/XAU and NEM, which did so on 1-26-09 (see http://stockcharts.com/charts/gallery.html?nem and http://stockcharts.com/charts/gallery.html?%24hui), since they traded aggressively short in the five day period ending 1-27-09, see the third/last data at
http://www.cftc.gov/dea/options/deacmxsof.htm.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 31.46, 29.13, 25.41, and 23.23.
The XOM (Exxon Mobil) Lead Indicator was a bullish +0.92% versus the XOI (AMEX Oil and Gas) today/on 1-30, it was +0.80% on 1-29, but, is extremely bearish recently, at -2.15% on 1-28, +0.37% on 1-27, -2.11% on 1-26, -2.41% on 1-23, +1.36% on 1-22, -1.43% on 1-21.
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 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.
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) has done an up down up down pattern on the daily chart since last week, see http://stockcharts.com/charts/gallery.html?%24spx, so, 1-28's cycle high normally would be a Wave 3 cycle high (of the Short Term Countertrend Wave B Upcycle), not a third/final Wave 5 cycle high. Also, note that 1-28's candle isn't bearish, there's a small spike on a bullish white (close above the open) candle. 1-28's candle would be unusual/atypical for an important cycle high.
Another bullish factor is that the broad market Walmart (WMT) Lead Indicator has turned extremely bullish (+0.73% versus SPX (S & P 500) today/on 1-30, +1.52% on 1-29) the past two days.
Also, Walmart (WMT, http://stockcharts.com/charts/gallery.html?wmt) is extremely oversold now, with RSI at 16.51 and the Stochastics below 10, which is unusually oversold. Rarely will a stock's (index, commodity, etc) RSI fall below 20 or Stochastics fall below 10.
Lastly, the SPX (S & P 500) Volatility Index VIX rose +5.18% today 1-30 and +7.49% yesterday 1-29, so, substantial strength is likely to begin/occur at some point on Monday, due to the substantial rise in fear/the SPX (S & P 500) wall of worry.
So, there's a definite chance that SPX (S & P 500) might show surprising strength next week, and, it might do a very large Wave 5 spike move and try to fill it's upside gap at 934.70. Wave 3 (might be Wave 5) peaked on 1-28 shortly after filling the upside gap at 871.74. Often important or even semi important cycle highs/lows occur shortly after gap filling action has been completed.
On Walmart's (WMT) intraday chart it looks like might have bottomed late today 1-30, see http://finance.yahoo.com/q/ta?s=wmt&t=1d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
On Monday I might day trade SPX (S & P 500) ultra long via SSO, or, I might day trade ultra long via UWM (RUT), QLD (NDX), or DIG (Oil and Gas). I might also day trade GDX (Gold Miners ETF) short.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
The SPX (S & P 500) Volatility Index VIX (+5.18%) reveals a sharp rise in fear today, since SPX fell a sharp -2.28%, which is a sharp +2.90% rise in fear/+2.90% rise in the SPX wall of worry, that points to substantial SPX strength on Monday, after potential early weakness.
SPX (S & P 500) has bearish breakaway upside gaps at 874.09 and 934.70, see http://stockcharts.com/charts/gallery.html?%24spx. Reliable broad market lead indicator Walmart (WMT) has bearish breakaway upside gaps at 50.56, 52.12, and 55.54.
SPX (S & P 500) has been in a Cyclical Bear Market since 10-11-07, NDX (NASDAQ 100) has been in a Cyclical Bear Market since very late October 2007, and, RUT (Russell 2000) has been in a Cyclical Bear Market since July 2007.
Reliable broad market Lead Indicator Walmart's (WMT) huge very bearish breakaway type gap down on 1-8-09 from 55.54, see http://stockcharts.com/charts/gallery.html?wmt, portended the recent substantial weakness/short term Wave A downcycle for WMT/SPX and the market/most indexes/sectors.
There's a good chance that SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) will take out it's November 2008 cycle low (the 1-6-09 cycle high is a likely countertrend Wave B cycle high), and, that reliable broad market Lead Indicator Walmart (WMT) will take out it's October 2008 cycle low in the next few weeks (the early December 2008 cycle high is a likely countertrend Wave B cycle high).
Today 1-30-09's GDX/HUI/XAU and NEM cycle high was probably the countertrend Wave B up of the big short term Wave A downcycle since 1-26-09 (Wave 2 minor intermediate term downcycle since 1-26-09), see http://stockcharts.com/charts/gallery.html?nem and http://stockcharts.com/charts/gallery.html?%24hui.
Reliable gold/silver sector lead indicator NEM didn't make a serious attempt at filling 1-28's very large very bearish breakaway upside gap at 41.71, see http://finance.yahoo.com/q/ta?s=NEM&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=, which jives with GDX/HUI/XAU and NEM probably entering entering Wave C today, of the big short term Wave A downcycle since 1-26-09.
GDX/HUI/XAU (and NEM) peaked right after the open today, see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, then, they quickly did an intraday Wave A down type crash, followed by an intraday countertrend Wave B upcycle, note the Elliott Wave 12345 up down up down up pattern, and, they very likely ended today 1-30's session in a Wave C down type move.
From the mid/late November 2008 (late October 2008 for GDX/HUI/XAU) likely Wave 2 Cyclical Bear Market cycle low at 21.10 to the 1-26-09 cycle high at 45.45 NEM did an Elliott Wave 12345 up down up down up Wave 1 minor intermediate term upcycle (http://stockcharts.com/charts/gallery.html?nem), peaking in rollover mode, and, NEM created a very large very bearish breakaway type upside gap at 41.71 at 1-28's open, see http://finance.yahoo.com/q/ta?s=NEM&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.
The reliable gold/silver sector NEM Lead Indicator was an extremely bullish +2.04% versus the XAU today/on 1-30, which is a very short term bearish indication, and, it was super bearish prior to today, at -1.97% on 1-29, -5.87% on 1-28, -2.09% on 1-27, -1.35% on 1-26, -0.32% on 1-23.
Gold's near/might have hit a 5% follow through major buy signal, see http://stockcharts.com/charts/gallery.html?%24gold, and, it might soon clearly do so. Gold appears to have broken out on Friday 1-23-09, and, followed through to the upside on 1-26 and today 1-30, which is a good sign. Gold tends to lag GDX/HUI/XAU and NEM (today's another example), so, it didn't peak on 1-26-09, when GDX/HUI/XAU and NEM did.
Note that gold did an inverse Elliott Wave 12345 down up down up down pattern, from the 3-17-08 Wave 1 Cyclical Bull Market cycle high at $1033.90, to the potential/likely Wave 2 Cyclical Bear Market cycle low at $681 in late October 2008, see the second weekly view chart at http://stockcharts.com/charts/gallery.html?%24gold. Note also, that in both the first daily view chart and the second weekly view chart, that gold has a very large bullish inverse spike at the $681 cycle low in late October 2008.
The savvy non contrarian gold Commercial Traders expect gold to soon peak/put in a Wave 1 minor intermediate term cycle high, lagging GDX/HUI/XAU and NEM, which did so on 1-26-09 (see http://stockcharts.com/charts/gallery.html?nem and http://stockcharts.com/charts/gallery.html?%24hui), since they traded aggressively short in the five day period ending 1-27-09, see the third/last data at
http://www.cftc.gov/dea/options/deacmxsof.htm.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 31.46, 29.13, 25.41, and 23.23.
The XOM (Exxon Mobil) Lead Indicator was a bullish +0.92% versus the XOI (AMEX Oil and Gas) today/on 1-30, it was +0.80% on 1-29, but, is extremely bearish recently, at -2.15% on 1-28, +0.37% on 1-27, -2.11% on 1-26, -2.41% on 1-23, +1.36% on 1-22, -1.43% on 1-21.
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 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.
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
1:46 PM
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