SPX (S & P 500) Put in a Wave A of Wave C Cycle Low Today
SPX (S & P 500) put in a short term Wave A of Wave C (monthly downcycle since 1-28-09) cycle low today, see the daily chart at http://stockcharts.com/charts/gallery.html?%24spx, and, see the five day intraday chart at http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=. Note the bullish large inverse spike on today 2-12's bullish white (close above the open) candle. The very large countertrend Wave B upcycle that started late today 2-12-09 looks like it'll peak early tomorrow however.
SPX's (S & P 500) vertical very large spike move that began late today 2-12, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=, has countertrend Wave B action written all over it. Countertrend Wave B action tends to be more more vertical/rapid than regular upcycle's action, because, it's peaking action. Also, note that the intraday candle at today's cycle low has a tiny bearish inverse spike.
Broad market lead indicator Walmart (WMT) put in a Wave 4 cycle low today 2-12, of the countertrend Wave B short term upcycle since 2-2's cycle low at 46.25, see http://stockcharts.com/charts/gallery.html?wmt. Note that WMT has taken out it's October 2008 cycle low.
It looks like the very large SPX (S & P 500) countertrend Wave B of Wave C (monthly downcycle since 1-28-09) spike move will peak early tomorrow 2-13-09, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=, after which I'll look to enter an ultra short NDX position (QID) for an overnight trade, and, I'll look to day trade some other index ultra short via SDS (UltraShort S & P 500 ETF), TWM (UltraShort Russell 2000 ETF), SRS (UltraShort Real Estate ETF), FAZ (3x Finance Bear ETF), SMN (UltraShort Basic Materials ETF), etc.
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 should turn very bearish tomorrow 2-13-09. It was -0.38% versus SPX (S & P 500) today/on 2-12, +0.27% on 2-11, +1.74% on 2-10, -0.86% on 2-9, -0.49% on 2-6.
Complacency rose an unusually large +7.20%/the SPX wall of worry fell -7.20% today 2-12-09, because, VIX (SPX Volatility Index) fell -7.37% versus SPX (S & P 500) rising only +0.17%, which points to early strength followed by likely severe weakness tomorrow 2-13-09.
The five day intraday broad market WMT Lead Indicator closed at/near neutral today (near +0.00%), which is obviously a neutral indication, 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.
GDX/HUI/XAU will experience a vicious correction (Wave 2 minor intermediate term downcycle) in the near future, along with most of the market. GDX/HUI/XAU will probably have a high correlation with SPX (S & P 500) over the next 3 to 6 weeks, if not longer.
WMT has bearish breakaway upside gaps at 49.28, 49.63, 50.56, 52.12, and 55.54, and, has downside gaps at 47.72 (filled today 2-12) and 46.42. SPX (S & P 500) has bearish breakaway upside gaps at 869.89 (created on 2-10) 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/short term Wave A and Wave C downcycles 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) in the near future.
GDX/HUI/XAU are doing Wave 5 of the Wave 5 Monthly Upcycle since mid January 2009, in deceptive rollover mode, see http://stockcharts.com/charts/gallery.html?gdx.
In previous updates I discussed the possibility of this upside surprise (from mid January 2009 until 1-26-09 GDX/HUI/XAU did an up down up pattern, so, the usual third Wave 5 upcycle was a definite possibility), and, the fact that GDX/HUI/XAU's Wave 5 upcycle (began in mid January 2009) hadn't done the usual third Wave 5 upcycle as of 1-26-09, when the Wave 5 upcycle and therefore the Wave 1 minor intermediate term upcycle (since late October 2008) appeared to peak. The power of Elliott Wave patterns is again illustrated.
This is a good sign from a big picture point of view for GDX/HUI/XAU and the gold/silver sector in general, that they are completing the usual Wave 5 of Wave 5 upcycle. It's obviously a bearish sign when an index's upcycle fails to do the usual Elliott Wave 12345 up down up down up pattern.
Note that reliable gold/silver sector lead indicator NEM is doing a short term countertrend Wave B upcycle, see http://stockcharts.com/charts/gallery.html?nem, and, did put in a Wave 1 minor intermediate term cycle high on 1-26-09, reliably leading the sector to the downside, so, chasing the current strength is risky, from a minor intermediate term cycle point of view.
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.
The gold ETF GLD (http://stockcharts.com/charts/gallery.html?gld) and I assume gold also took out (yesterday 2-11-09) 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 reliable gold/silver sector NEM Lead Indicator is super bearish, at
+0.34% versus the XAU today/on 2-12, +0.61% on 2-11, -0.43% on 2-10, -0.03% on 2-9, -0.76% 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.
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 created a downside gap at 39.35 at 2-11's open.
Gold hit a 5% major buy signal the week before last, 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 modestly bullish +0.44% versus the XOI (AMEX Oil and Gas) today/on 2-12, it was -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 (S & P 500) vertical very large spike move that began late today 2-12, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=, has countertrend Wave B action written all over it. Countertrend Wave B action tends to be more more vertical/rapid than regular upcycle's action, because, it's peaking action. Also, note that the intraday candle at today's cycle low has a tiny bearish inverse spike.
Broad market lead indicator Walmart (WMT) put in a Wave 4 cycle low today 2-12, of the countertrend Wave B short term upcycle since 2-2's cycle low at 46.25, see http://stockcharts.com/charts/gallery.html?wmt. Note that WMT has taken out it's October 2008 cycle low.
It looks like the very large SPX (S & P 500) countertrend Wave B of Wave C (monthly downcycle since 1-28-09) spike move will peak early tomorrow 2-13-09, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c=, after which I'll look to enter an ultra short NDX position (QID) for an overnight trade, and, I'll look to day trade some other index ultra short via SDS (UltraShort S & P 500 ETF), TWM (UltraShort Russell 2000 ETF), SRS (UltraShort Real Estate ETF), FAZ (3x Finance Bear ETF), SMN (UltraShort Basic Materials ETF), etc.
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 should turn very bearish tomorrow 2-13-09. It was -0.38% versus SPX (S & P 500) today/on 2-12, +0.27% on 2-11, +1.74% on 2-10, -0.86% on 2-9, -0.49% on 2-6.
Complacency rose an unusually large +7.20%/the SPX wall of worry fell -7.20% today 2-12-09, because, VIX (SPX Volatility Index) fell -7.37% versus SPX (S & P 500) rising only +0.17%, which points to early strength followed by likely severe weakness tomorrow 2-13-09.
The five day intraday broad market WMT Lead Indicator closed at/near neutral today (near +0.00%), which is obviously a neutral indication, 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.
GDX/HUI/XAU will experience a vicious correction (Wave 2 minor intermediate term downcycle) in the near future, along with most of the market. GDX/HUI/XAU will probably have a high correlation with SPX (S & P 500) over the next 3 to 6 weeks, if not longer.
WMT has bearish breakaway upside gaps at 49.28, 49.63, 50.56, 52.12, and 55.54, and, has downside gaps at 47.72 (filled today 2-12) and 46.42. SPX (S & P 500) has bearish breakaway upside gaps at 869.89 (created on 2-10) 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/short term Wave A and Wave C downcycles 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) in the near future.
GDX/HUI/XAU are doing Wave 5 of the Wave 5 Monthly Upcycle since mid January 2009, in deceptive rollover mode, see http://stockcharts.com/charts/gallery.html?gdx.
In previous updates I discussed the possibility of this upside surprise (from mid January 2009 until 1-26-09 GDX/HUI/XAU did an up down up pattern, so, the usual third Wave 5 upcycle was a definite possibility), and, the fact that GDX/HUI/XAU's Wave 5 upcycle (began in mid January 2009) hadn't done the usual third Wave 5 upcycle as of 1-26-09, when the Wave 5 upcycle and therefore the Wave 1 minor intermediate term upcycle (since late October 2008) appeared to peak. The power of Elliott Wave patterns is again illustrated.
This is a good sign from a big picture point of view for GDX/HUI/XAU and the gold/silver sector in general, that they are completing the usual Wave 5 of Wave 5 upcycle. It's obviously a bearish sign when an index's upcycle fails to do the usual Elliott Wave 12345 up down up down up pattern.
Note that reliable gold/silver sector lead indicator NEM is doing a short term countertrend Wave B upcycle, see http://stockcharts.com/charts/gallery.html?nem, and, did put in a Wave 1 minor intermediate term cycle high on 1-26-09, reliably leading the sector to the downside, so, chasing the current strength is risky, from a minor intermediate term cycle point of view.
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.
The gold ETF GLD (http://stockcharts.com/charts/gallery.html?gld) and I assume gold also took out (yesterday 2-11-09) 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 reliable gold/silver sector NEM Lead Indicator is super bearish, at
+0.34% versus the XAU today/on 2-12, +0.61% on 2-11, -0.43% on 2-10, -0.03% on 2-9, -0.76% 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.
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 created a downside gap at 39.35 at 2-11's open.
Gold hit a 5% major buy signal the week before last, 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 modestly bullish +0.44% versus the XOI (AMEX Oil and Gas) today/on 2-12, it was -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
3:38 PM
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