Today's SPX (S & P 500) Cycle High Was Probably Wave 1 of the Countertrend Wave B Upcycle That Began Yesterday 2-12-09
Today's SPX (S & P 500) cycle high was probably a Wave 1 cycle high of the countertrend Wave B upcycle (Wave B up of the Wave C monthly downcycle since 1-28-09) that began late yesterday 2-12-09, see the daily candlestick chart at http://stockcharts.com/charts/gallery.html?%24spx, and, see the five day intraday candlestick chart at http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.
One can tell by looking at the daily SPX (S & P 500) candlestick chart that the countertrend Wave B upcycle (Wave B up of the Wave C monthly downcycle since 1-28-09) that began late yesterday 2-12-09 probably didn't peak yet, see http://stockcharts.com/charts/gallery.html?%24spx. Yesterday 2-12's candle is a clearly bullish one, with a bullish large inverse spike on a bullish white (close above the open) candle. Today 2-13's candle is only modestly bearish, with a very small spike.
Look at SPX's (S & P 500) five day intraday candlestick chart, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, and, one can see that SPX (S & P 500) was doing Wave C down of a very short term Wave 2 downcycle at session's end today 2-13, so, SPX (S & P 500) should bottom early on Tuesday (Monday is President's Day in the US, for my many non US readers), and, will probably do Wave 3 up most of the session (of the countertrend Wave B upcycle (Wave B up of the Wave C monthly downcycle since 1-28-09) that began late yesterday 2-12-09).
Another factor pointing to SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx)/market strength on Tuesday 2-17 is the extremely bearish broad market Walmart (WMT) Lead Indicator today 2-13-09, at -2.32% versus SPX (S & P 500), which is a very short term bullish indication, and, it obviously jives with the great shorting opportunity that should arise next week, when the countertrend Wave B upcycle (Wave B up of the Wave C monthly downcycle since 1-28-09) that began late yesterday 2-12-09 peaks.
Also, today 2-13-09 SPX (S & P 500) experienced a very sharp rise in fear/the wall of worry, since SPX (S & P 500) fell -1.00% versus the SPX Volatility Index VIX rising +4.07%, which is a very sharp +3.07% rise in fear today, that points to likely very sharp strength on Tuesday 2-17-09, after likely early weakness.
Broad market Lead Indicator Walmart's (WMT) short term countertrend Wave B upcycle that began on 2-2-09 after the 46.25 cycle low, see http://stockcharts.com/charts/gallery.html?wmt, peaked last Friday 2-6-09, so, WMT is reliably leading the market to the downside as usual.
The XOI (AMEX Oil and Gas Index, http://stockcharts.com/charts/gallery.html?%24xoi), see http://finance.yahoo.com/q/ta?s=%5Exoi&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, looks like a good short (day trade, I'll probably day trade ultra short via DUG) on Tuesday 2-17-09, though one will probably have to wait for an intraday countertrend Wave B upcycle before doing so. Note that the XOI did an Elliott Wave 12345 up down up down up upcycle from early yesterday/Thursday 2-12-09 until late today 2-13-09.
The extremely bearish five day intraday XOM (Exxon Mobil) Lead Indicator jives with day trading short on Tuesday 2-17-09, see
http://finance.yahoo.com/q/ta?t=5d&s=%5EXOI&l=off&z=l&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=xom. The XOM Lead Indicator was a very bearish -1.14% versus the XOI (AMEX Oil and Gas Index) today/on 2-13, it was +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.
Today I did a 5 minute 31 second QID (UltraShort NDX (NASDAQ 100) ETF) trade and made 14.30 cents/share = $143 for each 1000 shares traded.
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 an extremely bearish -2.32% versus SPX (S & P 500) today/on 2-13, which is a very short term bullish indication, it was -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.
The five day intraday broad market WMT Lead Indicator closed at bearish today (From -0.50% to -0.99%), which jives with the expected early SPX (S & P 500) weakness on Tuesday 2-17-09, 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 (probably began on 2-11-09), 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 2-12) and 46.42 (filled today 2-13). 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/were 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 were running out of gas/weakening.
It looks like GDX/HUI/XAU's Wave 5 of the Wave 5 Monthly Upcycle since mid January 2009 peaked mid session on 2-11-09 (Wave 1 minor intermediate term upcycle since late October 2008 therefore probably peaked), see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.
The long relatively flat GDX/HUI/XAU downtrend the past 2.5 sessions is probably the flat segment of a large downcycle (the start of the Wave 2 minor intermediate term downcycle), so, it appears that GDX/HUI/XAU will experience severe weakness next week, which jives with the super bearish gold/silver sector NEM Lead Indicator, at -1.20% versus the XAU today/on 2-13, +0.34% 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.
Note that reliable gold/silver sector Lead Indicator NEM's short term countertrend Wave B upcycle of the past two+ weeks appears to have peaked, see http://stockcharts.com/charts/gallery.html?nem, and, NEM 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 recent strength was risky, from a minor intermediate term cycle point of view.
In previous updates I discussed the possibility of 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 was 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 completed 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.
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 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 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 very bearish -1.14% versus the XOI (AMEX Oil and Gas) today/on 2-13, it was +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
One can tell by looking at the daily SPX (S & P 500) candlestick chart that the countertrend Wave B upcycle (Wave B up of the Wave C monthly downcycle since 1-28-09) that began late yesterday 2-12-09 probably didn't peak yet, see http://stockcharts.com/charts/gallery.html?%24spx. Yesterday 2-12's candle is a clearly bullish one, with a bullish large inverse spike on a bullish white (close above the open) candle. Today 2-13's candle is only modestly bearish, with a very small spike.
Look at SPX's (S & P 500) five day intraday candlestick chart, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, and, one can see that SPX (S & P 500) was doing Wave C down of a very short term Wave 2 downcycle at session's end today 2-13, so, SPX (S & P 500) should bottom early on Tuesday (Monday is President's Day in the US, for my many non US readers), and, will probably do Wave 3 up most of the session (of the countertrend Wave B upcycle (Wave B up of the Wave C monthly downcycle since 1-28-09) that began late yesterday 2-12-09).
Another factor pointing to SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx)/market strength on Tuesday 2-17 is the extremely bearish broad market Walmart (WMT) Lead Indicator today 2-13-09, at -2.32% versus SPX (S & P 500), which is a very short term bullish indication, and, it obviously jives with the great shorting opportunity that should arise next week, when the countertrend Wave B upcycle (Wave B up of the Wave C monthly downcycle since 1-28-09) that began late yesterday 2-12-09 peaks.
Also, today 2-13-09 SPX (S & P 500) experienced a very sharp rise in fear/the wall of worry, since SPX (S & P 500) fell -1.00% versus the SPX Volatility Index VIX rising +4.07%, which is a very sharp +3.07% rise in fear today, that points to likely very sharp strength on Tuesday 2-17-09, after likely early weakness.
Broad market Lead Indicator Walmart's (WMT) short term countertrend Wave B upcycle that began on 2-2-09 after the 46.25 cycle low, see http://stockcharts.com/charts/gallery.html?wmt, peaked last Friday 2-6-09, so, WMT is reliably leading the market to the downside as usual.
The XOI (AMEX Oil and Gas Index, http://stockcharts.com/charts/gallery.html?%24xoi), see http://finance.yahoo.com/q/ta?s=%5Exoi&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=, looks like a good short (day trade, I'll probably day trade ultra short via DUG) on Tuesday 2-17-09, though one will probably have to wait for an intraday countertrend Wave B upcycle before doing so. Note that the XOI did an Elliott Wave 12345 up down up down up upcycle from early yesterday/Thursday 2-12-09 until late today 2-13-09.
The extremely bearish five day intraday XOM (Exxon Mobil) Lead Indicator jives with day trading short on Tuesday 2-17-09, see
http://finance.yahoo.com/q/ta?t=5d&s=%5EXOI&l=off&z=l&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=xom. The XOM Lead Indicator was a very bearish -1.14% versus the XOI (AMEX Oil and Gas Index) today/on 2-13, it was +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.
Today I did a 5 minute 31 second QID (UltraShort NDX (NASDAQ 100) ETF) trade and made 14.30 cents/share = $143 for each 1000 shares traded.
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 an extremely bearish -2.32% versus SPX (S & P 500) today/on 2-13, which is a very short term bullish indication, it was -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.
The five day intraday broad market WMT Lead Indicator closed at bearish today (From -0.50% to -0.99%), which jives with the expected early SPX (S & P 500) weakness on Tuesday 2-17-09, 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 (probably began on 2-11-09), 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 2-12) and 46.42 (filled today 2-13). 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/were 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 were running out of gas/weakening.
It looks like GDX/HUI/XAU's Wave 5 of the Wave 5 Monthly Upcycle since mid January 2009 peaked mid session on 2-11-09 (Wave 1 minor intermediate term upcycle since late October 2008 therefore probably peaked), see http://finance.yahoo.com/q/ta?s=%5Ehui&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=.
The long relatively flat GDX/HUI/XAU downtrend the past 2.5 sessions is probably the flat segment of a large downcycle (the start of the Wave 2 minor intermediate term downcycle), so, it appears that GDX/HUI/XAU will experience severe weakness next week, which jives with the super bearish gold/silver sector NEM Lead Indicator, at -1.20% versus the XAU today/on 2-13, +0.34% 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.
Note that reliable gold/silver sector Lead Indicator NEM's short term countertrend Wave B upcycle of the past two+ weeks appears to have peaked, see http://stockcharts.com/charts/gallery.html?nem, and, NEM 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 recent strength was risky, from a minor intermediate term cycle point of view.
In previous updates I discussed the possibility of 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 was 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 completed 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.
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 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 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 very bearish -1.14% versus the XOI (AMEX Oil and Gas) today/on 2-13, it was +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
1:59 PM
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