SPX (S & P 500) is in Wave 3 Down of the Wave C Monthly Downcycle Since 1-28-09
SPX (S & P 500) is in Wave 3 Down 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.
SPX (S & P 500) gapped down from 826.84 at today 2-17's open, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=, then plunged substantially, and, experienced relatively slow sideways action most of the remainder of the session. Toward session's end, SPX (S & P 500) appears to have entered a Wave 5 downcycle, of the very short term Wave A downcycle that began early on Friday 2-13-09.
Early tomorrow I'll look to day trade ultra short via SDS (UltraShort S & P 500 (SPX) ETF), QID (UltraShort NDX (NASDAQ 100) ETF), TWM (UltraShort Russell 2000 (RUT) ETF), SRS (UltraShort Real Estate ETF), FAZ (3x Finance Bear ETF), SMN (UltraShort Basic Materials ETF), etc.
I'll look to enter an ultra short NDX (NASDAQ 100) position (QID) for an overnight trade, after a very short term countertrend Wave 4 up type move occurs, see http://stockcharts.com/charts/gallery.html?%24ndx. NDX is currently in a Wave 3 type move down.
I'll watch today 2-17-09's NDX (NASDAQ 100) upside likely bearish breakaway gap at 1236.85, see http://finance.yahoo.com/q/ta?s=%5Endx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, and, I'll look to buy QID after NDX (NASDAQ 100) probably fails to fill 1236.85, in a Wave 4 up type move, that'll probably begin early tomorrow, after likely early weakness.
Today 2-17-09 SPX (S & P 500) experienced an unusually large rise in fear/the wall of worry, since SPX (S & P 500) fell -4.56% versus the SPX Volatility Index VIX rising +13.35%, which is an unusually large +8.79% rise in fear today, that points to likely early significant weakness on Wednesday 2-18-09, followed by likely strength.
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.
The broad market Walmart (WMT) Lead Indicator was a super bullish +8.24% versus SPX (S & P 500) today/on 2-17, it was -2.32% on 2-13, -0.38% on 2-12, +0.27% on 2-11, +1.74% on 2-10, -0.86% on 2-9, -0.49% on 2-6, +2.97% on 2-5, -2.16% on 2-4, +1.08% on 2-3, -1.12% on 2-2, +0.73% on 1-30, +1.52% on 1-29, -3.48% on 1-28, -0.70% on 1-27, -0.04% on 1-26, -1.60% on 1-23, +0.97% on 1-22, -7.16% on 1-21, +3.34% on 1-20, -0.35% on 1-16, -0.54% on 1-15, +2.28% on 1-14, +1.24% on 1-13, +1.89% on 1-12, +2.52% on 1-9, -7.15% on 1-8, +2.14% on 1-7, -1.67% on 1-6, -0.68% on 1-5, -1.16% on 1-2.
WMT has bearish breakaway upside gaps at 49.28, 49.63, 50.56, 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.
The GDX/HUI/XAU/NEM/gold/silver sector's upside surprise continued today, see http://stockcharts.com/charts/gallery.html?gdx, with GDX (Gold Miners ETF) creating a large downside bullish breakaway gap at 35.68 today, and, NEM did so at 41.58.
Since the reliable gold/silver sector NEM Lead Indicator was a very bullish +1.95% versus the XAU today 2-17-09, tomorrow 2-18-09 could bring very sharp gains for the gold/silver sector.
Also, factoring in (as one must do to accurately assess the gold/silver sector's prospects) the super bullish broad market Walmart (WMT) Lead Indicator, which was a "sensational" (LOL!) +8.24% versus SPX (S & P 500) today/on 2-17, and, tomorrow 2-18-09 could be very interesting. Please don't buzz the Space Shuttle, whatever you do! Be nice. I'm looking to exit an NEM position I hold in an IRA.
NEM's short term upcycle of the past two+ weeks, see http://stockcharts.com/charts/gallery.html?NEM, might end up taking out the 1-26-09 cycle high at 45.45, that appears to be 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 doing Wave 5 up of the Wave 5 Monthly Upcycle since mid January 2009, in deceptive rollover mode, see http://stockcharts.com/charts/gallery.html?gdx. Note that both the Wave 5 Monthly Upcycle's peaks and the Wave 1 minor intermediate term upcycle's (began in late October 2008) peaks have been rolling over/flattening out, indicating that GDX/HUI/XAU are running out of gas/weakening.
Sometimes, even when a lot of rollover action occurs, an index/stock/commodity etc can still put in a very large final blowoff (short covering a major factor typically) type Wave 5 spike move for a few days, in order to punctuate an upcycle. Very large Wave 5 type spike moves tend to mark important cycle highs, so, the current GDX/HUI/XAU action really isn't too surprising, once one considers the nature of cycles.
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, 31.46, 29.13, 25.41, and 23.23. NEM has downside gaps at 41.58 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 an extremely bullish +2.00% versus the XOI (AMEX Oil and Gas) today/on 2-17, which is a very short term bearish indication, it was -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) gapped down from 826.84 at today 2-17's open, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=, then plunged substantially, and, experienced relatively slow sideways action most of the remainder of the session. Toward session's end, SPX (S & P 500) appears to have entered a Wave 5 downcycle, of the very short term Wave A downcycle that began early on Friday 2-13-09.
Early tomorrow I'll look to day trade ultra short via SDS (UltraShort S & P 500 (SPX) ETF), QID (UltraShort NDX (NASDAQ 100) ETF), TWM (UltraShort Russell 2000 (RUT) ETF), SRS (UltraShort Real Estate ETF), FAZ (3x Finance Bear ETF), SMN (UltraShort Basic Materials ETF), etc.
I'll look to enter an ultra short NDX (NASDAQ 100) position (QID) for an overnight trade, after a very short term countertrend Wave 4 up type move occurs, see http://stockcharts.com/charts/gallery.html?%24ndx. NDX is currently in a Wave 3 type move down.
I'll watch today 2-17-09's NDX (NASDAQ 100) upside likely bearish breakaway gap at 1236.85, see http://finance.yahoo.com/q/ta?s=%5Endx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, and, I'll look to buy QID after NDX (NASDAQ 100) probably fails to fill 1236.85, in a Wave 4 up type move, that'll probably begin early tomorrow, after likely early weakness.
Today 2-17-09 SPX (S & P 500) experienced an unusually large rise in fear/the wall of worry, since SPX (S & P 500) fell -4.56% versus the SPX Volatility Index VIX rising +13.35%, which is an unusually large +8.79% rise in fear today, that points to likely early significant weakness on Wednesday 2-18-09, followed by likely strength.
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.
The broad market Walmart (WMT) Lead Indicator was a super bullish +8.24% versus SPX (S & P 500) today/on 2-17, it was -2.32% on 2-13, -0.38% on 2-12, +0.27% on 2-11, +1.74% on 2-10, -0.86% on 2-9, -0.49% on 2-6, +2.97% on 2-5, -2.16% on 2-4, +1.08% on 2-3, -1.12% on 2-2, +0.73% on 1-30, +1.52% on 1-29, -3.48% on 1-28, -0.70% on 1-27, -0.04% on 1-26, -1.60% on 1-23, +0.97% on 1-22, -7.16% on 1-21, +3.34% on 1-20, -0.35% on 1-16, -0.54% on 1-15, +2.28% on 1-14, +1.24% on 1-13, +1.89% on 1-12, +2.52% on 1-9, -7.15% on 1-8, +2.14% on 1-7, -1.67% on 1-6, -0.68% on 1-5, -1.16% on 1-2.
WMT has bearish breakaway upside gaps at 49.28, 49.63, 50.56, 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.
The GDX/HUI/XAU/NEM/gold/silver sector's upside surprise continued today, see http://stockcharts.com/charts/gallery.html?gdx, with GDX (Gold Miners ETF) creating a large downside bullish breakaway gap at 35.68 today, and, NEM did so at 41.58.
Since the reliable gold/silver sector NEM Lead Indicator was a very bullish +1.95% versus the XAU today 2-17-09, tomorrow 2-18-09 could bring very sharp gains for the gold/silver sector.
Also, factoring in (as one must do to accurately assess the gold/silver sector's prospects) the super bullish broad market Walmart (WMT) Lead Indicator, which was a "sensational" (LOL!) +8.24% versus SPX (S & P 500) today/on 2-17, and, tomorrow 2-18-09 could be very interesting. Please don't buzz the Space Shuttle, whatever you do! Be nice. I'm looking to exit an NEM position I hold in an IRA.
NEM's short term upcycle of the past two+ weeks, see http://stockcharts.com/charts/gallery.html?NEM, might end up taking out the 1-26-09 cycle high at 45.45, that appears to be 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 doing Wave 5 up of the Wave 5 Monthly Upcycle since mid January 2009, in deceptive rollover mode, see http://stockcharts.com/charts/gallery.html?gdx. Note that both the Wave 5 Monthly Upcycle's peaks and the Wave 1 minor intermediate term upcycle's (began in late October 2008) peaks have been rolling over/flattening out, indicating that GDX/HUI/XAU are running out of gas/weakening.
Sometimes, even when a lot of rollover action occurs, an index/stock/commodity etc can still put in a very large final blowoff (short covering a major factor typically) type Wave 5 spike move for a few days, in order to punctuate an upcycle. Very large Wave 5 type spike moves tend to mark important cycle highs, so, the current GDX/HUI/XAU action really isn't too surprising, once one considers the nature of cycles.
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, 31.46, 29.13, 25.41, and 23.23. NEM has downside gaps at 41.58 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 an extremely bullish +2.00% versus the XOI (AMEX Oil and Gas) today/on 2-17, which is a very short term bearish indication, it was -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
1:47 PM
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