SPX (S & P 500) Filled The Upside Gap At 778.94 and Peaked Shortly Thereafter
SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) filled the upside gap at 778.94 from 2-20-09's open, and, the Short Term Wave 4 Upcycle (since very late on 2-23-09) peaked shortly thereafter, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, which was a likely scenario discussed yesterday. Often important cycle highs/lows occur shortly after gap filling action has been completed.
SPX (S & P 500) is probably in a Short Term Wave 5 Downcycle (since very late today 2-25-09) of the Wave C Monthly Downcycle since 1-28-09 (Wave A Minor Intermediate Term Downcycle since 1-6-09), see http://stockcharts.com/charts/gallery.html?%24spx. Since 1-28-09 there's a down up down up pattern, with Wave 4 up peaking very late today.
A Short Term Wave 5 Downcycle (since very late today 2-25-09) jives with today 2-25's bearish broad market Walmart (WMT) Lead Indicator, at -0.53% versus SPX (S & P 500), and, it was a very bearish -1.70% versus SPX (S & P 500) on 2-24. The WMT Lead Indicator was a very bullish +1.19% versus SPX (S & P 500) on 2-23, +0.29% on 2-20, +2.10 on 2-19, +3.75% on 2-18, +8.24% on 2-17.
Also, SPX (S & P 500) experienced a sharp +2.87% rise in complacency/-2.87% decline in the wall of worry today 2-25, since SPX (S & P 500) fell -1.07% versus the SPX Volatility Index VIX falling -1.80%, which points to likely early severe SPX (S & P 500)/market weakness on Thursday 2-26-09.
The five day intraday broad market Walmart (WMT) Lead Indicator is near/bordering on extremely bullish at today 2-25-09's close, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC, which is a very short term bearish indication.
Broad market Lead Indicator Walmart (WMT) has a large bearish spike on today 2-25-09's candle, see http://stockcharts.com/charts/gallery.html?wmt, which is another factor pointing to weakness tomorrow.
The very large SPX (S & P 500) spike move/Short Term Wave 4 Upcycle, from very late 2-23-09 until very late today 2-25-09 (SPX was up +4.01% yesterday 2-24-09), see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, jived with peaking action, and, also jived with countertrend Wave B action. When an upcycle begins with a huge spike move, it's likely to be countertrend Wave B peaking type action.
Early tomorrow I'll be looking to day trade ultra short using probably SRS (UltraShort Real Estate ETF), or, maybe DUG (UltraShort Oil and Gas ETF), FAZ (3x Finance Bear ETF). I'm going to probably hold on for a much longer time than the usual 1 to 10 minute day trades I've typically been doing, unless a large gain occurs very quickly. I might end up doing 2 or 3 day trades tomorrow.
SPX (S & P 500) created a downside gap at 743.33 at yesterday 2-24's open, so, watch that gap this week. If you're in a day trade or even maybe an overnight trade, you might want to exit after SPX (S & P 500) fills the downside gap at 743.33.
The Dow Jones U.S. Real Estate Index appears to be headed for a test of the late November 2008 cycle low at 90.30 this week, in the Short Term Wave 5 Downcycle that began very late today 2-25-09, see http://finance.yahoo.com/q/ta?s=%5Edjusre&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, and, see http://stockcharts.com/charts/gallery.html?%24djusre.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
A good short now appears to be the NASDAQ 100 (NDX), see http://stockcharts.com/charts/gallery.html?%24ndx, which put in a slightly higher bearish double top on 2-10-09 at 1286.90 (countertrend Wave B minor intermediate term cycle high), versus early January 2009's cycle high at 1286.08. 2-10-09's cycle high was the countertrend Wave B minor intermediate term upcycle peaking in dramatic rollover mode at 1286.90 (similar to countertrend Wave B action, but, surprising modestly to the upside), versus the early January 2009 cycle high at 1286.08.
I'll probably wait for the NASDAQ 100 (NDX) to do a short term countertrend Wave B upcycle, before trading/holding a QID position overnight.
WMT has bearish breakaway upside gaps at 50.56 (filled), 52.12, and 55.54, and, has a downside bullish breakaway gap at 46.53 (created 2-17-09). SPX (S & P 500) has bearish breakaway upside gaps at 778.94 (filled 2-25), 826.84, 869.89, and 934.70, see http://stockcharts.com/charts/gallery.html?%24spx.
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/current substantial weakness for WMT/SPX and the market/most indexes/sectors. WMT's been trying to fill that upside gap recently.
Note that the XAU's peaks rolled over/flattened out dramatically since mid December 2008's cycle high, see http://stockcharts.com/charts/gallery.html?%24xau. The XAU has a downtrend going back to Tuesday 2-17-09's cycle high at 135.29, that very likely (after today 2-25-09's action and the large bearish spikes on the daily candles today) is the start of a large downcycle/the Wave 2 Minor Intermediate Term Downcycle. Note that the XAU (and GDX/HUI) has a large bearish spike on today 2-25's candle, and, reliable gold/silver sector lead indicator NEM has a very large bearish spike on today 2-25's candle, see http://stockcharts.com/charts/gallery.html?NEM.
Reliable gold/silver sector lead indicator NEM's cycle high at 45.45/candle on 1-26-09, see http://stockcharts.com/charts/gallery.html?NEM, very likely is a Wave 1 minor intermediate term cycle high (cycle began in late November 2008), and, the short term countertrend Wave B upcycle peaked at 45 on 2-20-09.
One needs to wait for a 3 to 6 week GDX/HUI/XAU Wave 2 minor intermediate term downcycle to occur, before a good entry point will arise for long term investors.
The NEM Lead Indicator was a bullish +0.64% versus the XAU today/on 2-25, it was +1.98% on 2-24, it was +0.19% on 2-23, +3.48% on 2-20, which correctly was a very short term bearish indication (the XAU was down -3.25% on 2-23-09), +0.01% on 2-19, -1.55% on 2-18, +1.95% on 2-17, -1.20% on 2-13, +0.34% on 2-12, +0.61% on 2-11.
The gold ETF GLD (http://stockcharts.com/charts/gallery.html?gld) and gold also took out their recent cycle highs that occurred on 2-2-09 and 1-30-09, that appeared to be a Wave 1 minor intermediate term cycle high.
The bearish short term and minor intermediate term scenario jives with the bearish gold COT (Commitments Of Traders) data the past four weeks. The savvy non contrarian gold Commercial Traders traded aggressively short for the fourth straight week, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm. Note that they also took advantage of the recent strength, trading a significant long position in the five day period ending 2-17-09, as they did the week before.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 35.68 (filled 2-19), 31.46, 29.13, 25.41, and 23.23. NEM has downside gaps at 40.79 (filled 2-24) and 39.35.
Gold hit a 5% major buy signal four weeks ago, see annotated chart two at http://www.joefrocks.com/GoldStockCharts.html, which indicates that gold very likely entered a Wave 3 Cyclical Bull Market in late October 2008.
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 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 XOM (Exxon Mobil) Lead Indicator was a bullish +0.65% versus the XOI (AMEX Oil and Gas) today/on 2-25, it was -0.64% on 2-24, +1.04% on 2-23, +1.43% on 2-20, -0.02% on 2-19, +1.94% on 2-18, +2.00% on 2-17, -1.14% on 2-13, +0.44% on 2-12, -1.99% on 2-11, +0.77% on 2-10, -1.43% on 2-9, -1.06% on 2-6, +1.50% on 2-5, -1.06% on 2-4, -0.49% on 2-3, +1.86% on 2-2, +0.92% on 1-30, +0.80% on 1-29, -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) is probably in a Short Term Wave 5 Downcycle (since very late today 2-25-09) of the Wave C Monthly Downcycle since 1-28-09 (Wave A Minor Intermediate Term Downcycle since 1-6-09), see http://stockcharts.com/charts/gallery.html?%24spx. Since 1-28-09 there's a down up down up pattern, with Wave 4 up peaking very late today.
A Short Term Wave 5 Downcycle (since very late today 2-25-09) jives with today 2-25's bearish broad market Walmart (WMT) Lead Indicator, at -0.53% versus SPX (S & P 500), and, it was a very bearish -1.70% versus SPX (S & P 500) on 2-24. The WMT Lead Indicator was a very bullish +1.19% versus SPX (S & P 500) on 2-23, +0.29% on 2-20, +2.10 on 2-19, +3.75% on 2-18, +8.24% on 2-17.
Also, SPX (S & P 500) experienced a sharp +2.87% rise in complacency/-2.87% decline in the wall of worry today 2-25, since SPX (S & P 500) fell -1.07% versus the SPX Volatility Index VIX falling -1.80%, which points to likely early severe SPX (S & P 500)/market weakness on Thursday 2-26-09.
The five day intraday broad market Walmart (WMT) Lead Indicator is near/bordering on extremely bullish at today 2-25-09's close, see http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,%5EGSPC, which is a very short term bearish indication.
Broad market Lead Indicator Walmart (WMT) has a large bearish spike on today 2-25-09's candle, see http://stockcharts.com/charts/gallery.html?wmt, which is another factor pointing to weakness tomorrow.
The very large SPX (S & P 500) spike move/Short Term Wave 4 Upcycle, from very late 2-23-09 until very late today 2-25-09 (SPX was up +4.01% yesterday 2-24-09), see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, jived with peaking action, and, also jived with countertrend Wave B action. When an upcycle begins with a huge spike move, it's likely to be countertrend Wave B peaking type action.
Early tomorrow I'll be looking to day trade ultra short using probably SRS (UltraShort Real Estate ETF), or, maybe DUG (UltraShort Oil and Gas ETF), FAZ (3x Finance Bear ETF). I'm going to probably hold on for a much longer time than the usual 1 to 10 minute day trades I've typically been doing, unless a large gain occurs very quickly. I might end up doing 2 or 3 day trades tomorrow.
SPX (S & P 500) created a downside gap at 743.33 at yesterday 2-24's open, so, watch that gap this week. If you're in a day trade or even maybe an overnight trade, you might want to exit after SPX (S & P 500) fills the downside gap at 743.33.
The Dow Jones U.S. Real Estate Index appears to be headed for a test of the late November 2008 cycle low at 90.30 this week, in the Short Term Wave 5 Downcycle that began very late today 2-25-09, see http://finance.yahoo.com/q/ta?s=%5Edjusre&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, and, see http://stockcharts.com/charts/gallery.html?%24djusre.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
A good short now appears to be the NASDAQ 100 (NDX), see http://stockcharts.com/charts/gallery.html?%24ndx, which put in a slightly higher bearish double top on 2-10-09 at 1286.90 (countertrend Wave B minor intermediate term cycle high), versus early January 2009's cycle high at 1286.08. 2-10-09's cycle high was the countertrend Wave B minor intermediate term upcycle peaking in dramatic rollover mode at 1286.90 (similar to countertrend Wave B action, but, surprising modestly to the upside), versus the early January 2009 cycle high at 1286.08.
I'll probably wait for the NASDAQ 100 (NDX) to do a short term countertrend Wave B upcycle, before trading/holding a QID position overnight.
WMT has bearish breakaway upside gaps at 50.56 (filled), 52.12, and 55.54, and, has a downside bullish breakaway gap at 46.53 (created 2-17-09). SPX (S & P 500) has bearish breakaway upside gaps at 778.94 (filled 2-25), 826.84, 869.89, and 934.70, see http://stockcharts.com/charts/gallery.html?%24spx.
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/current substantial weakness for WMT/SPX and the market/most indexes/sectors. WMT's been trying to fill that upside gap recently.
Note that the XAU's peaks rolled over/flattened out dramatically since mid December 2008's cycle high, see http://stockcharts.com/charts/gallery.html?%24xau. The XAU has a downtrend going back to Tuesday 2-17-09's cycle high at 135.29, that very likely (after today 2-25-09's action and the large bearish spikes on the daily candles today) is the start of a large downcycle/the Wave 2 Minor Intermediate Term Downcycle. Note that the XAU (and GDX/HUI) has a large bearish spike on today 2-25's candle, and, reliable gold/silver sector lead indicator NEM has a very large bearish spike on today 2-25's candle, see http://stockcharts.com/charts/gallery.html?NEM.
Reliable gold/silver sector lead indicator NEM's cycle high at 45.45/candle on 1-26-09, see http://stockcharts.com/charts/gallery.html?NEM, very likely is a Wave 1 minor intermediate term cycle high (cycle began in late November 2008), and, the short term countertrend Wave B upcycle peaked at 45 on 2-20-09.
One needs to wait for a 3 to 6 week GDX/HUI/XAU Wave 2 minor intermediate term downcycle to occur, before a good entry point will arise for long term investors.
The NEM Lead Indicator was a bullish +0.64% versus the XAU today/on 2-25, it was +1.98% on 2-24, it was +0.19% on 2-23, +3.48% on 2-20, which correctly was a very short term bearish indication (the XAU was down -3.25% on 2-23-09), +0.01% on 2-19, -1.55% on 2-18, +1.95% on 2-17, -1.20% on 2-13, +0.34% on 2-12, +0.61% on 2-11.
The gold ETF GLD (http://stockcharts.com/charts/gallery.html?gld) and gold also took out their recent cycle highs that occurred on 2-2-09 and 1-30-09, that appeared to be a Wave 1 minor intermediate term cycle high.
The bearish short term and minor intermediate term scenario jives with the bearish gold COT (Commitments Of Traders) data the past four weeks. The savvy non contrarian gold Commercial Traders traded aggressively short for the fourth straight week, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm. Note that they also took advantage of the recent strength, trading a significant long position in the five day period ending 2-17-09, as they did the week before.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 35.68 (filled 2-19), 31.46, 29.13, 25.41, and 23.23. NEM has downside gaps at 40.79 (filled 2-24) and 39.35.
Gold hit a 5% major buy signal four weeks ago, see annotated chart two at http://www.joefrocks.com/GoldStockCharts.html, which indicates that gold very likely entered a Wave 3 Cyclical Bull Market in late October 2008.
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 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 XOM (Exxon Mobil) Lead Indicator was a bullish +0.65% versus the XOI (AMEX Oil and Gas) today/on 2-25, it was -0.64% on 2-24, +1.04% on 2-23, +1.43% on 2-20, -0.02% on 2-19, +1.94% on 2-18, +2.00% on 2-17, -1.14% on 2-13, +0.44% on 2-12, -1.99% on 2-11, +0.77% on 2-10, -1.43% on 2-9, -1.06% on 2-6, +1.50% on 2-5, -1.06% on 2-4, -0.49% on 2-3, +1.86% on 2-2, +0.92% on 1-30, +0.80% on 1-29, -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, SRS, XAU, XOI, XOM
posted by Joe Ferrazzano at
1:06 PM
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