SPX (S & P 500) is in a Short Term Wave 3 Downcycle Since Early February
SPX (S & P 500) is in a Short Term Wave 3 Downcycle (since early February) 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.
It looks like SPX (S & P 500) will be weak early tomorrow, because, SPX (S & P 500) has a bearish spike on today 2-19's candle, see http://stockcharts.com/charts/gallery.html?%24spx.
Also, Today 2-19-09 SPX (S & P 500) experienced a very sharp rise in complacency/-4.05% decline in the wall of worry, since SPX (S & P 500) fell -1.20% versus the SPX Volatility Index VIX falling -2.85%, which is a very sharp +4.05% rise in complacency today, that points to likely early severe SPX (S & P 500)/market weakness on Friday 2-20-09, followed by likely strength.
Also, the broad market Walmart (WMT) Lead Indicator was an extremely bullish +2.10 versus SPX (S & P 500) today/on 2-19 (+3.75% on 2-18, +8.24% on 2-17), which is a very short term bearish indication.
So, it looks like early tomorrow will probably bring a good shorting opportunity.
The five day intraday broad market Walmart (WMT) Lead Indicator is super bullish right now, 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. A short term Wave 4 upcycle might begin tomorrow for SPX (S & P 500).
I'll be looking to day trade (probably FAZ) ultra short via SDS (UltraShort S & P 500 (SPX) ETF), TWM (UltraShort Russell 2000 (RUT) ETF), QID (UltraShort NASDAQ 100 (NDX) ETF), DUG (UltraShort Oil and Gas ETF), SRS (UltraShort Real Estate ETF), FAZ (3 times Finance Bear, a lot of daredevils are trading the relatively new 3 times ETFs), etc.
Today I day traded FAZ (3x Finance Bear ETF) and made nearly 35 cents/share = nearly $350 for each 1000 shares traded, in a one minute 20 second trade.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
The best 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 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 now trying to fill that upside gap.
Note that the XAU's peaks have rolled over/flattened out dramatically since mid December 2008's cycle high, see http://stockcharts.com/charts/gallery.html?%24xau. It's still possible however that a surprisingly large Wave 5 type blowoff spike move will occur. Note that the XAU (and GDX/HUI) doesn't have the usual large bearish spike on a recent candle, that usually would mark an important cycle high. In this case it would be a Wave 1 Minor Intermediate Term cycle high, for the cycle since late October 2008.
Note that 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, that appears to be/probably is (very likely now) a Wave 1 minor intermediate term cycle high (cycle began in late November 2008), doesn't have a large bearish spike, so, it would be atypical for an important cycle high.
The NEM Lead Indicator was +0.01% versus the XAU today/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.
Reliable gold/silver sector lead indicator NEM's short term upcycle of the past two+ weeks, see http://stockcharts.com/charts/gallery.html?NEM, might (very doubtful now) end up taking out the 1-26-09 cycle high at 45.45, that appears to be/very likely is a Wave 1 minor intermediate term cycle high, for the cycle since late November 2008 (GDX/HUI/XAU since late October 2008), in which case it'll be a short term rollover upcycle, that's similar to a countertrend Wave B upcycle, but, it surprises modestly to the upside.
GDX/HUI/XAU are/were doing Wave 5 up of the Wave 5 Monthly Upcycle since mid January 2009, see http://stockcharts.com/charts/gallery.html?gdx.
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 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 three weeks. The savvy non contrarian gold Commercial Traders traded aggressively short for the third 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 2-10-09.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 35.68 (filled today 2-19), 31.46, 29.13, 25.41, and 23.23. NEM has downside gaps at 41.58 (filled 2-18) and 39.35.
Gold hit a 5% major buy signal three 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 slightly bearish -0.02% versus the XOI (AMEX Oil and Gas) today/on 2-19, it was +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
It looks like SPX (S & P 500) will be weak early tomorrow, because, SPX (S & P 500) has a bearish spike on today 2-19's candle, see http://stockcharts.com/charts/gallery.html?%24spx.
Also, Today 2-19-09 SPX (S & P 500) experienced a very sharp rise in complacency/-4.05% decline in the wall of worry, since SPX (S & P 500) fell -1.20% versus the SPX Volatility Index VIX falling -2.85%, which is a very sharp +4.05% rise in complacency today, that points to likely early severe SPX (S & P 500)/market weakness on Friday 2-20-09, followed by likely strength.
Also, the broad market Walmart (WMT) Lead Indicator was an extremely bullish +2.10 versus SPX (S & P 500) today/on 2-19 (+3.75% on 2-18, +8.24% on 2-17), which is a very short term bearish indication.
So, it looks like early tomorrow will probably bring a good shorting opportunity.
The five day intraday broad market Walmart (WMT) Lead Indicator is super bullish right now, 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. A short term Wave 4 upcycle might begin tomorrow for SPX (S & P 500).
I'll be looking to day trade (probably FAZ) ultra short via SDS (UltraShort S & P 500 (SPX) ETF), TWM (UltraShort Russell 2000 (RUT) ETF), QID (UltraShort NASDAQ 100 (NDX) ETF), DUG (UltraShort Oil and Gas ETF), SRS (UltraShort Real Estate ETF), FAZ (3 times Finance Bear, a lot of daredevils are trading the relatively new 3 times ETFs), etc.
Today I day traded FAZ (3x Finance Bear ETF) and made nearly 35 cents/share = nearly $350 for each 1000 shares traded, in a one minute 20 second trade.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
The best 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 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 now trying to fill that upside gap.
Note that the XAU's peaks have rolled over/flattened out dramatically since mid December 2008's cycle high, see http://stockcharts.com/charts/gallery.html?%24xau. It's still possible however that a surprisingly large Wave 5 type blowoff spike move will occur. Note that the XAU (and GDX/HUI) doesn't have the usual large bearish spike on a recent candle, that usually would mark an important cycle high. In this case it would be a Wave 1 Minor Intermediate Term cycle high, for the cycle since late October 2008.
Note that 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, that appears to be/probably is (very likely now) a Wave 1 minor intermediate term cycle high (cycle began in late November 2008), doesn't have a large bearish spike, so, it would be atypical for an important cycle high.
The NEM Lead Indicator was +0.01% versus the XAU today/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.
Reliable gold/silver sector lead indicator NEM's short term upcycle of the past two+ weeks, see http://stockcharts.com/charts/gallery.html?NEM, might (very doubtful now) end up taking out the 1-26-09 cycle high at 45.45, that appears to be/very likely is a Wave 1 minor intermediate term cycle high, for the cycle since late November 2008 (GDX/HUI/XAU since late October 2008), in which case it'll be a short term rollover upcycle, that's similar to a countertrend Wave B upcycle, but, it surprises modestly to the upside.
GDX/HUI/XAU are/were doing Wave 5 up of the Wave 5 Monthly Upcycle since mid January 2009, see http://stockcharts.com/charts/gallery.html?gdx.
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 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 three weeks. The savvy non contrarian gold Commercial Traders traded aggressively short for the third 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 2-10-09.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 35.68 (filled today 2-19), 31.46, 29.13, 25.41, and 23.23. NEM has downside gaps at 41.58 (filled 2-18) and 39.35.
Gold hit a 5% major buy signal three 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 slightly bearish -0.02% versus the XOI (AMEX Oil and Gas) today/on 2-19, it was +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, XAU, XOI, XOM
posted by Joe Ferrazzano at
2:15 PM
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