Today's SPX (S & P 500) Strength Appears To Be Wave 3 Up of the Upcycle Since Early Yesterday 2-2-09
Today's SPX (S & P 500) strength appears to be Wave 3 up of the upcycle since early yesterday 2-2-09, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=on&z=l&q=c&p=&a=p12,fs,w14&c=, because, yesterday 2-2-09 SPX did an up down, then, appears to have entered the Wave 3 up late yesterday, and, might have entered Wave 4 down late today.
The very sharp decline in the SPX (S & P 500) Volatility Index VIX today, at -5.40%, versus a significant rise in SPX (+1.58%), is a very sharp +3.82% rise in complacency/-3.82% decline in the SPX wall of worry, that points to likely severe SPX (S & P 500) weakness early tomorrow (likely Wave 4 down type move), which jives with the above Elliott Wave count.
The very bullish broad market Walmart (WMT) Lead Indicator today 2-3-09, at
+1.08% versus SPX (S & P 500), points to substantial strength tomorrow (likely Wave 5 up type move), following likely early weakness (likely Wave 4 down type move).
Also important to consider is the five day INTRADAY broad market Walmart (WMT) Lead Indicator, which closed at bearish today 2-3-09, 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. So, even though the daily broad market Walmart (WMT) Lead Indicator was very bullish today (+1.08% versus SPX (S & P 500)), the five day intraday broad market Walmart (WMT) Lead Indicator points to early weakness tomorrow, which supports the likely Wave 4 down scenario early tomorrow (+1.08% versus SPX (S & P 500) today/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).
SPX's (S & P 500) cycle low yesterday 2-2-09, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=on&z=l&q=c&p=&a=p12,fs,w14&c=, is either Wave 4 down of the Short Term Countertrend Wave B Upcycle that began the week before last (Wave A Monthly Downcycle since 1-6-09), see http://stockcharts.com/charts/gallery.html?%24spx, or, it's Wave A down of a Short Term Wave C downcycle since 1-28-09. It just isn't clear right now, but, I suspect that it's Wave A down of a Short Term Wave C downcycle since 1-28-09.
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 47.12 (filled today 2-3), 50.56, 52.12, and 55.54.
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 (the early December 2008 cycle high is a likely countertrend Wave B cycle high).
Early on tomorrow I'll probably look to day trade SPX ultra short via SDS, then, after the market/SPX bottom, I'll probably day trade ultra long via SSO (SPX ETF) or DIG (Oil and Gas ETF, XOM Lead Indicator was -0.49% versus the XOI today/on 2-3, +1.86% on 2-2, +0.92% on 1-30, +0.80% on 1-29). I also might day trade PFF (iShares S&P US PR ETF).
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
GDX/HUI/XAU/NEM are 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 gold/silver sector NEM Lead Indicator was a very bearish -1.14% versus the XAU today/on 2-3, it was an extremely bullish +2.43% on 2-2, which correctly was a very short term bearish indication (a sharp intraday decline occurred), it was +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.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 31.46, 29.13, 25.41, and 23.23. GDX has an upside bearish breakaway gap at 34.23.
The gold ETF GLD put in a likely Wave 1 minor intermediate term cycle high yesterday 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 yesterday 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 modestly bearish -0.49% versus the XOI (AMEX Oil and Gas) today/on 2-3, it was +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
The very sharp decline in the SPX (S & P 500) Volatility Index VIX today, at -5.40%, versus a significant rise in SPX (+1.58%), is a very sharp +3.82% rise in complacency/-3.82% decline in the SPX wall of worry, that points to likely severe SPX (S & P 500) weakness early tomorrow (likely Wave 4 down type move), which jives with the above Elliott Wave count.
The very bullish broad market Walmart (WMT) Lead Indicator today 2-3-09, at
+1.08% versus SPX (S & P 500), points to substantial strength tomorrow (likely Wave 5 up type move), following likely early weakness (likely Wave 4 down type move).
Also important to consider is the five day INTRADAY broad market Walmart (WMT) Lead Indicator, which closed at bearish today 2-3-09, 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. So, even though the daily broad market Walmart (WMT) Lead Indicator was very bullish today (+1.08% versus SPX (S & P 500)), the five day intraday broad market Walmart (WMT) Lead Indicator points to early weakness tomorrow, which supports the likely Wave 4 down scenario early tomorrow (+1.08% versus SPX (S & P 500) today/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).
SPX's (S & P 500) cycle low yesterday 2-2-09, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=on&z=l&q=c&p=&a=p12,fs,w14&c=, is either Wave 4 down of the Short Term Countertrend Wave B Upcycle that began the week before last (Wave A Monthly Downcycle since 1-6-09), see http://stockcharts.com/charts/gallery.html?%24spx, or, it's Wave A down of a Short Term Wave C downcycle since 1-28-09. It just isn't clear right now, but, I suspect that it's Wave A down of a Short Term Wave C downcycle since 1-28-09.
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 47.12 (filled today 2-3), 50.56, 52.12, and 55.54.
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 (the early December 2008 cycle high is a likely countertrend Wave B cycle high).
Early on tomorrow I'll probably look to day trade SPX ultra short via SDS, then, after the market/SPX bottom, I'll probably day trade ultra long via SSO (SPX ETF) or DIG (Oil and Gas ETF, XOM Lead Indicator was -0.49% versus the XOI today/on 2-3, +1.86% on 2-2, +0.92% on 1-30, +0.80% on 1-29). I also might day trade PFF (iShares S&P US PR ETF).
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
GDX/HUI/XAU/NEM are 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 gold/silver sector NEM Lead Indicator was a very bearish -1.14% versus the XAU today/on 2-3, it was an extremely bullish +2.43% on 2-2, which correctly was a very short term bearish indication (a sharp intraday decline occurred), it was +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.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 31.46, 29.13, 25.41, and 23.23. GDX has an upside bearish breakaway gap at 34.23.
The gold ETF GLD put in a likely Wave 1 minor intermediate term cycle high yesterday 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 yesterday 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 modestly bearish -0.49% versus the XOI (AMEX Oil and Gas) today/on 2-3, it was +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
1:58 PM
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