SPX (S & P 500) is Trying to Do Wave 5 Up of the Short Term Countertrend Wave B Upcycle Since Mid January
SPX (S & P 500) is trying to do Wave 5 up of the short term countertrend Wave B upcycle since mid January, see http://stockcharts.com/charts/gallery.html?%24spx.
SPX (S & P 500) is also trying to fill it's upside gap at 874.09 (approached it today 2-6), and, might also try to fill it's upside gap at 934.70, if it's really in a Wave 5 type move.
From SPX's (S & P 500) one day intraday candlestick chart, and, the fact that VIX fell much less (-0.82%) than SPX rose today (+2.69%), which is a significant +1.87% rise in fear/SPX wall of worry, it looks like SPX will probably fill 874.09 early on Monday, see http://finance.yahoo.com/q/ta?s=%5Espx&t=1d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, shortly after which there will probably be an opportunity to day trade short.
I'll probably day trade SDS (UltraShort SPX ETF, WMT Lead Indicator was -0.49% versus SPX today/on 2-6) or DUG (UltraShort Oil and Gas ETF, XOM Lead Indicator was -1.06% versus the XOI today/on 2-6) early on Monday, and, maybe also SRS (UltraShort Real Estate ETF).
I'm looking to start trading ultra short overnight, once SPX's (S & P 500) cycle picture clears up.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
It's possible (appears to have begun obviously) that broad market lead indicator Walmart (WMT, http://stockcharts.com/charts/gallery.html?wmt) might shoot up and try (probably will fail) to fill it's huge upside very bearish breakaway gap from 1-8-09 at 55.54, in a big oversold bounce (WMT was extremely oversold recently, as I discussed in previous updates), and, SPX (S & P 500) might try (probably will fail) to fill it's upside gap at 934.70, in a big Wave 5 of Wave B type move, see http://stockcharts.com/charts/gallery.html?%24spx. WMT created a bullish breakaway downside gap at 46.42 at yesterday 2-5's open.
On 1-6-09 SPX (S & P 500) entered a Wave A minor intermediate term downcycle after peaking at 943.85 (was calling it a monthly downcycle), see http://stockcharts.com/charts/gallery.html?%24spx. Then, SPX (S & P 500) did a big short term Wave A downcycle, that bottomed at 804.30 in mid January. SPX (S & P 500) then entered a short term countertrend Wave B upcycle, that might have peaked on 1-28-09, but, it's trying to complete a Wave 5 upcycle now, in which it might try to fill the upside gap at 934.70.
The short term situation regarding the gold/silver sector is cleared up by looking at NEM's short term Elliott Wave count (really just NEM's daily chart clears up the sector's short term outlook for me), the reliable gold/silver sector NEM Lead Indicator, and, the gold COT (Commitments Of Traders) data the past two weeks.
Since peaking/putting in a Wave 1 minor intermediate term cycle high on 1-26-09, see http://stockcharts.com/charts/gallery.html?nem, NEM has done a short term Wave A downcycle, followed by a short term countertrend Wave B upcycle, that might have peaked today at 41.75, shortly after filling the 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=.
Often important or even semi important cycle highs/lows occur shortly after gap filling action has been completed. Gaps kind of provide a trading roadmap, when used in concert with cycles and the Elliott Wave count.
So, it looks like reliable gold/silver sector lead indicator NEM might have entered a short term Wave C downcycle today 2-6, or, soon probably will, which jives with the gold/silver stock sector NEM Lead Indicator, that has turned extremely bearish again, at -0.76% versus the XAU today/on 2-6, -0.45% on 2-5, -0.12% on 2-4, -1.14% on 2-3, +2.43% on 2-2, +2.04% on 1-30, -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.
The bearish short term and minor intermediate term scenario jives with the bearish gold COT (Commitments Of Traders) data the past two weeks. The savvy non contrarian gold Commercial Traders traded aggressively short for the second straight week, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm.
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. WMT created a bullish breakaway downside gap at 46.42 at 2-5's open.
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/months (the early December 2008 cycle high is a likely countertrend Wave B cycle high).
GDX/HUI are probably in Wave C down of the big short term Wave A downcycle since 1-26-09, see http://stockcharts.com/charts/gallery.html?gdx. The XAU and NEM are in a short term countertrend Wave B upcycle (of the big short term Wave A downcycle since 1-26-09), or, are early in Wave C down.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 31.46, 29.13, 25.41, and 23.23. NEM has a downside gap at 39.99 from 2-5's open, that almost got filled today 2-6 (40 cycle low).
The gold ETF GLD put in a likely Wave 1 minor intermediate term cycle high on 2-2-09 (gold did so on 1-30-09), for the upcycle that began in late October 2008, see http://stockcharts.com/charts/gallery.html?gld, versus GDX/HUI/XAU/NEM doing so on 1-26-09, see http://stockcharts.com/charts/gallery.html?gdx, lagging GDX/HUI/XAU/NEM as it tends to do. Note the very large very bearish spike on 2-2's candle.
Gold hit a 5% major buy signal last week, 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 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.
Gold tends to lag GDX/HUI/XAU and NEM, so, it didn't peak on 1-26-09, when GDX/HUI/XAU and NEM did (Wave 1 minor intermediate term cycle high). Also, gold didn't hit a 5% major buy signal until last week, versus GDX/HUI/XAU doing so on 12-10-08, see annotated chart one at http://www.joefrocks.com/GoldStockCharts.html.
The savvy non contrarian gold Commercial Traders expected 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.
The XOM (Exxon Mobil) Lead Indicator was a very bearish -1.06% versus the XOI (AMEX Oil and Gas) today/on 2-6, it was +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 also trying to fill it's upside gap at 874.09 (approached it today 2-6), and, might also try to fill it's upside gap at 934.70, if it's really in a Wave 5 type move.
From SPX's (S & P 500) one day intraday candlestick chart, and, the fact that VIX fell much less (-0.82%) than SPX rose today (+2.69%), which is a significant +1.87% rise in fear/SPX wall of worry, it looks like SPX will probably fill 874.09 early on Monday, see http://finance.yahoo.com/q/ta?s=%5Espx&t=1d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, shortly after which there will probably be an opportunity to day trade short.
I'll probably day trade SDS (UltraShort SPX ETF, WMT Lead Indicator was -0.49% versus SPX today/on 2-6) or DUG (UltraShort Oil and Gas ETF, XOM Lead Indicator was -1.06% versus the XOI today/on 2-6) early on Monday, and, maybe also SRS (UltraShort Real Estate ETF).
I'm looking to start trading ultra short overnight, once SPX's (S & P 500) cycle picture clears up.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
It's possible (appears to have begun obviously) that broad market lead indicator Walmart (WMT, http://stockcharts.com/charts/gallery.html?wmt) might shoot up and try (probably will fail) to fill it's huge upside very bearish breakaway gap from 1-8-09 at 55.54, in a big oversold bounce (WMT was extremely oversold recently, as I discussed in previous updates), and, SPX (S & P 500) might try (probably will fail) to fill it's upside gap at 934.70, in a big Wave 5 of Wave B type move, see http://stockcharts.com/charts/gallery.html?%24spx. WMT created a bullish breakaway downside gap at 46.42 at yesterday 2-5's open.
On 1-6-09 SPX (S & P 500) entered a Wave A minor intermediate term downcycle after peaking at 943.85 (was calling it a monthly downcycle), see http://stockcharts.com/charts/gallery.html?%24spx. Then, SPX (S & P 500) did a big short term Wave A downcycle, that bottomed at 804.30 in mid January. SPX (S & P 500) then entered a short term countertrend Wave B upcycle, that might have peaked on 1-28-09, but, it's trying to complete a Wave 5 upcycle now, in which it might try to fill the upside gap at 934.70.
The short term situation regarding the gold/silver sector is cleared up by looking at NEM's short term Elliott Wave count (really just NEM's daily chart clears up the sector's short term outlook for me), the reliable gold/silver sector NEM Lead Indicator, and, the gold COT (Commitments Of Traders) data the past two weeks.
Since peaking/putting in a Wave 1 minor intermediate term cycle high on 1-26-09, see http://stockcharts.com/charts/gallery.html?nem, NEM has done a short term Wave A downcycle, followed by a short term countertrend Wave B upcycle, that might have peaked today at 41.75, shortly after filling the 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=.
Often important or even semi important cycle highs/lows occur shortly after gap filling action has been completed. Gaps kind of provide a trading roadmap, when used in concert with cycles and the Elliott Wave count.
So, it looks like reliable gold/silver sector lead indicator NEM might have entered a short term Wave C downcycle today 2-6, or, soon probably will, which jives with the gold/silver stock sector NEM Lead Indicator, that has turned extremely bearish again, at -0.76% versus the XAU today/on 2-6, -0.45% on 2-5, -0.12% on 2-4, -1.14% on 2-3, +2.43% on 2-2, +2.04% on 1-30, -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.
The bearish short term and minor intermediate term scenario jives with the bearish gold COT (Commitments Of Traders) data the past two weeks. The savvy non contrarian gold Commercial Traders traded aggressively short for the second straight week, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm.
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. WMT created a bullish breakaway downside gap at 46.42 at 2-5's open.
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/months (the early December 2008 cycle high is a likely countertrend Wave B cycle high).
GDX/HUI are probably in Wave C down of the big short term Wave A downcycle since 1-26-09, see http://stockcharts.com/charts/gallery.html?gdx. The XAU and NEM are in a short term countertrend Wave B upcycle (of the big short term Wave A downcycle since 1-26-09), or, are early in Wave C down.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 31.46, 29.13, 25.41, and 23.23. NEM has a downside gap at 39.99 from 2-5's open, that almost got filled today 2-6 (40 cycle low).
The gold ETF GLD put in a likely Wave 1 minor intermediate term cycle high on 2-2-09 (gold did so on 1-30-09), for the upcycle that began in late October 2008, see http://stockcharts.com/charts/gallery.html?gld, versus GDX/HUI/XAU/NEM doing so on 1-26-09, see http://stockcharts.com/charts/gallery.html?gdx, lagging GDX/HUI/XAU/NEM as it tends to do. Note the very large very bearish spike on 2-2's candle.
Gold hit a 5% major buy signal last week, 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 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.
Gold tends to lag GDX/HUI/XAU and NEM, so, it didn't peak on 1-26-09, when GDX/HUI/XAU and NEM did (Wave 1 minor intermediate term cycle high). Also, gold didn't hit a 5% major buy signal until last week, versus GDX/HUI/XAU doing so on 12-10-08, see annotated chart one at http://www.joefrocks.com/GoldStockCharts.html.
The savvy non contrarian gold Commercial Traders expected 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.
The XOM (Exxon Mobil) Lead Indicator was a very bearish -1.06% versus the XOI (AMEX Oil and Gas) today/on 2-6, it was +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
1:20 PM
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