I Got The SPX (S & P 500) Countertrend Wave 4 Upcycle's Elliott Wave Count Wrong
I got the SPX (S & P 500, http://stockcharts.com/h-sc/ui?s=%24spx) countertrend Wave 4 upcycle's (since 3-6-09) Elliott Wave count wrong, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=. Yesterday 3-11's very early cycle high was Wave 3 up of the countertrend Wave 4 upcycle since 3-6-09.
Yesterday 3-11's SPX (S & P 500, http://stockcharts.com/h-sc/ui?s=%24spx) decline for most of the session was Wave 4 down of Wave 4. Note that it was similar in terms of time and price action to the Wave 2 of Wave 4 decline that occurred during most of Monday 3-9's session, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.
In the daily SPX (S & P 500) chart one can see that SPX has done an Elliott Wave 12345 up down up down up pattern since 3-6-09, see http://stockcharts.com/charts/gallery.html?%24spx, with spikes on 3-9's and 3-11's candles corresponding to Wave 1 and Wave 3 cycle highs, of the countertrend Wave 4 upcycle since 3-6-09.
Tuesday 3-10's huge +6.37% SPX (S & P 500, http://stockcharts.com/h-sc/ui?s=%24spx) rise was so large that it helped to convince me (colored/clouded my judgement) that it was a final Wave 5 type cycle high. There's always room for improvement.
The extremely bearish broad market Walmart (WMT) Lead Indicator yesterday 3-11, at -2.73% versus SPX (S & P 500), was a very short term bullish indication, that correctly pointed to strength today 3-12.
The approaching very bearish broad market Walmart (WMT) Lead Indicator today 3-12-09, at -0.95% versus SPX (S & P 500), points to some significant/severe weakness tomorrow 3-13-09.
SPX's (S & P 500) large bullish breakaway type gap up from 676.53 (3-9's close) at 3-10-09's open pointed to substantial strength, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.
The SPX (S & P 500, http://stockcharts.com/h-sc/ui?s=%24spx) countertrend Wave 4 upcycle since 3-6-09 might have peaked shortly before session's end, see the one day intraday chart at http://finance.yahoo.com/q/ta?s=%5EGSPC&t=1d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.
The size of the SPX (S & P 500, http://stockcharts.com/h-sc/ui?s=%24spx) (countertrend Wave 4) upcycle since 3-6-09 is a clear sign that it's probably a countertrend upcycle and not a Wave 1 type upcycle/start of an important upcycle. This type of huge rise in less than a week's time is the type of huge spiking action that occurs near important cycle highs, not very early in important upcycles.
SPX's (S & P 500) Elliott Wave count is that SPX (S & P 500) is in a Wave C Monthly Downcycle since late January, of the Wave A Minor Intermediate Term Downcycle since 1-6-09, see http://stockcharts.com/charts/gallery.html?%24spx. Wave C down, since late January, has a down up down up pattern on the daily chart, with Wave 4 up in a peaking mode today 3-12-09.
If one looks at the second weekly view chart (at http://stockcharts.com/charts/gallery.html?%24spx) one can see that SPX (S & P 500) probably didn't bottom yet/on 3-6-09 (the current huge spike move since 3-6-09 is probably a countertrend Wave 4 upcycle), because, the inverse spike is too small/not bullish enough, and, the candle is red/bearish, indicating a weekly close below the weekly open.
The broad market Walmart (WMT) Lead Indicator has turned super bearish, at
-0.95% versus SPX (S & P 500) today/on 3-12, at -2.73% on 3-11, -3.93% on 3-10, -1.86% on 3-9, and, -1.81% on 3-6, which jives with a very large Wave 5 type downcycle occurring the next few days (Wave 5 down of the Wave C monthly downcycle since late January).
The super bullish broad market Walmart (WMT) Lead Indicator on Thursday 3-5-09, at +6.85% versus SPX (S & P 500), correctly pointed to a very large countertrend Wave 4 upcycle.
SPX (S & P 500) experienced a significant +1.50% rise in complacency/-1.50% decline in the wall of worry today 3-12, since SPX (S & P 500) rose +4.07% versus the SPX Volatility Index VIX falling -5.57%, which points to likely significant SPX (S & P 500)/market weakness early on Friday 3-13-09.
For the stem cell stocks (potential (appear likely to be) rockets) STEM (http://stockcharts.com/charts/gallery.html?stem) and GERN (http://stockcharts.com/charts/gallery.html?gern), see STEM http://finance.yahoo.com/q/ta?s=stem&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, I'm watching to see if 3-9's huge downside gaps are bullish breakaway gaps/don't get filled. It looks like those gaps might get filled.
Also, one wants to trade with the wind/market at one's back. SPX (S & P 500) should be in an upcycle when trading long. Also, the sector being traded should be in an upcycle.
The five day intraday broad market Walmart (WMT) Lead Indicator is super bearish at today 3-12-09's close, 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, which jives with severe weakness tomorrow 3-13-09.
Broad market Lead Indicator WMT is doing a short term countertrend Wave B upcycle since 3-11-09, see http://finance.yahoo.com/q/ta?s=wmt&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
SPX (S & P 500) has a downside gap at 676.53 from 3-10-09's open, which one should watch this week and next week, because, one will probably want to exit a (day trade and maybe also overnight timeframe short positions) short position shortly after that downside gap gets filled.
I'll be looking to day trade ultra short early on Friday via probably DUG (UltraShort Oil and Gas ETF, the XOM (Exxon Mobil) Lead Indicator was a bearish -0.78% versus the XOI (AMEX Oil and Gas) today/on 3-12, it was -1.90% on 3-11, it was -1.22% on 3-10), or, SRS (UltraShort Real Estate ETF), FAZ (3x Finance Bear ETF), QID (UltraShort NASDAQ 100 (NDX) ETF), SMN (UltraShort Basic Materials ETF) etc. I also might look at the UltraShort Gold ProShares (GLL) ETF.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
A good 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.
I'll probably wait for the NASDAQ 100 (NDX) to do/complete a short term Wave B type upcycle, before trading/holding a QID position overnight. It looks like I might enter an overnight trade tomorrow 3-13.
WMT has bearish breakaway upside gaps at 52.12, and 55.54, and, has a downside bullish breakaway gap at 48.49 (filled 3-9-09), 46.53 (created 2-17-09). SPX (S & P 500) has bearish breakaway upside gaps at 712.87 (filled 3-10-09), 735.09, 752.83, 826.84, 869.89, and 934.70, see http://stockcharts.com/charts/gallery.html?%24spx. SPX (S & P 500) has a downside gap at 676.53 from 3-10-09'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 for WMT/SPX and the market/most indexes/sectors.
GDX/HUI/XAU are in Wave B up of Wave A down of a Short Term Wave C Downcycle since 3-6-09, of the Wave 2 Minor Intermediate Term Downcycle since 2-17-09, see http://stockcharts.com/charts/gallery.html?gdx.
The gold ETF GLD (http://stockcharts.com/charts/gallery.html?gld) and gold put in a Wave 1 Minor Intermediate Term cycle high on 2-20-09, lagging GDX/HUI/XAU (peaked 2-17-09) and NEM (peaked 1-26-09, reliably leading GDX/HUI/XAU and GLD/gold as usual) as they tend to do.
Reliable gold/silver sector lead indicator NEM's cycle high at 45.45/candle on 1-26-09, see http://stockcharts.com/charts/gallery.html?NEM, is a Wave 1 minor intermediate term cycle high (cycle began in late November 2008), and, the short term countertrend Wave B upcycle peaked at 45 on 2-20-09.
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 NEM Lead Indicator was a very bearish -1.43% versus the XAU today/on 3-12, it was -0.78% on 3-11, it was an extremely bearish -2.51% on 3-10, which correctly was a very short term bullish indication, it was +0.55% on 3-9, it was a super bearish -4.07% on 3-6, it was -0.84% on 3-5, it was +0.21% on 3-4, it was -0.95% on 3-3, it was a very bearish -1.38% on 3-2, it was an extremely bullish +2.97% on 2-27, which correctly was a very short term bearish indication, it was -0.07% on 2-26, +0.64% on 2-25, +1.98% on 2-24, +0.19% on 2-23, +3.48% on 2-20, which correctly was a very short term bearish indication (the XAU was down -3.25% on 2-23-09), +0.01% on 2-19, -1.55% on 2-18, +1.95% on 2-17, -1.20% on 2-13, +0.34% on 2-12, +0.61% on 2-11.
The bearish short term and minor intermediate term scenario jives with the bearish gold COT (Commitments Of Traders) data the past six weeks. The savvy non contrarian gold Commercial Traders traded aggressively short for four straight weeks prior to the last two weeks, when they traded significantly net long, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm, but, they engaged in significant long liquidation in the latest report dated 3-3-09.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 31.40 (filled 3-9), 31.34, 29.67, 29.13, 25.41, and 23.23. GDX has bearish breakaway upside gaps at 31.55 (filled), 32.88. NEM has downside gaps at 36.66 and TBD.
Gold hit a 5% major buy signal six 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 a bearish -0.78% versus the XOI (AMEX Oil and Gas) today/on 3-12, it was -1.90% on 3-11, it was -1.22% on 3-10, it was +0.66% on 3-9, +1.10% on 3-6, -0.63% on 3-5, -2.98% on 3-4, -0.38% on 3-3, +2.68% on 3-2, -1.89% on 2-27, -1.51% on 2-26, +0.65% on 2-25, -0.64% on 2-24, +1.04% on 2-23, +1.43% on 2-20, -0.02% on 2-19, +1.94% on 2-18, +2.00% on 2-17, -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 Cyclical Bear Market from/since 2004 for example (has been in a multi decade Secular Bear Market also), 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
Yesterday 3-11's SPX (S & P 500, http://stockcharts.com/h-sc/ui?s=%24spx) decline for most of the session was Wave 4 down of Wave 4. Note that it was similar in terms of time and price action to the Wave 2 of Wave 4 decline that occurred during most of Monday 3-9's session, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.
In the daily SPX (S & P 500) chart one can see that SPX has done an Elliott Wave 12345 up down up down up pattern since 3-6-09, see http://stockcharts.com/charts/gallery.html?%24spx, with spikes on 3-9's and 3-11's candles corresponding to Wave 1 and Wave 3 cycle highs, of the countertrend Wave 4 upcycle since 3-6-09.
Tuesday 3-10's huge +6.37% SPX (S & P 500, http://stockcharts.com/h-sc/ui?s=%24spx) rise was so large that it helped to convince me (colored/clouded my judgement) that it was a final Wave 5 type cycle high. There's always room for improvement.
The extremely bearish broad market Walmart (WMT) Lead Indicator yesterday 3-11, at -2.73% versus SPX (S & P 500), was a very short term bullish indication, that correctly pointed to strength today 3-12.
The approaching very bearish broad market Walmart (WMT) Lead Indicator today 3-12-09, at -0.95% versus SPX (S & P 500), points to some significant/severe weakness tomorrow 3-13-09.
SPX's (S & P 500) large bullish breakaway type gap up from 676.53 (3-9's close) at 3-10-09's open pointed to substantial strength, see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.
The SPX (S & P 500, http://stockcharts.com/h-sc/ui?s=%24spx) countertrend Wave 4 upcycle since 3-6-09 might have peaked shortly before session's end, see the one day intraday chart at http://finance.yahoo.com/q/ta?s=%5EGSPC&t=1d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.
The size of the SPX (S & P 500, http://stockcharts.com/h-sc/ui?s=%24spx) (countertrend Wave 4) upcycle since 3-6-09 is a clear sign that it's probably a countertrend upcycle and not a Wave 1 type upcycle/start of an important upcycle. This type of huge rise in less than a week's time is the type of huge spiking action that occurs near important cycle highs, not very early in important upcycles.
SPX's (S & P 500) Elliott Wave count is that SPX (S & P 500) is in a Wave C Monthly Downcycle since late January, of the Wave A Minor Intermediate Term Downcycle since 1-6-09, see http://stockcharts.com/charts/gallery.html?%24spx. Wave C down, since late January, has a down up down up pattern on the daily chart, with Wave 4 up in a peaking mode today 3-12-09.
If one looks at the second weekly view chart (at http://stockcharts.com/charts/gallery.html?%24spx) one can see that SPX (S & P 500) probably didn't bottom yet/on 3-6-09 (the current huge spike move since 3-6-09 is probably a countertrend Wave 4 upcycle), because, the inverse spike is too small/not bullish enough, and, the candle is red/bearish, indicating a weekly close below the weekly open.
The broad market Walmart (WMT) Lead Indicator has turned super bearish, at
-0.95% versus SPX (S & P 500) today/on 3-12, at -2.73% on 3-11, -3.93% on 3-10, -1.86% on 3-9, and, -1.81% on 3-6, which jives with a very large Wave 5 type downcycle occurring the next few days (Wave 5 down of the Wave C monthly downcycle since late January).
The super bullish broad market Walmart (WMT) Lead Indicator on Thursday 3-5-09, at +6.85% versus SPX (S & P 500), correctly pointed to a very large countertrend Wave 4 upcycle.
SPX (S & P 500) experienced a significant +1.50% rise in complacency/-1.50% decline in the wall of worry today 3-12, since SPX (S & P 500) rose +4.07% versus the SPX Volatility Index VIX falling -5.57%, which points to likely significant SPX (S & P 500)/market weakness early on Friday 3-13-09.
For the stem cell stocks (potential (appear likely to be) rockets) STEM (http://stockcharts.com/charts/gallery.html?stem) and GERN (http://stockcharts.com/charts/gallery.html?gern), see STEM http://finance.yahoo.com/q/ta?s=stem&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=, I'm watching to see if 3-9's huge downside gaps are bullish breakaway gaps/don't get filled. It looks like those gaps might get filled.
Also, one wants to trade with the wind/market at one's back. SPX (S & P 500) should be in an upcycle when trading long. Also, the sector being traded should be in an upcycle.
The five day intraday broad market Walmart (WMT) Lead Indicator is super bearish at today 3-12-09's close, 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, which jives with severe weakness tomorrow 3-13-09.
Broad market Lead Indicator WMT is doing a short term countertrend Wave B upcycle since 3-11-09, see http://finance.yahoo.com/q/ta?s=wmt&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
SPX (S & P 500) has a downside gap at 676.53 from 3-10-09's open, which one should watch this week and next week, because, one will probably want to exit a (day trade and maybe also overnight timeframe short positions) short position shortly after that downside gap gets filled.
I'll be looking to day trade ultra short early on Friday via probably DUG (UltraShort Oil and Gas ETF, the XOM (Exxon Mobil) Lead Indicator was a bearish -0.78% versus the XOI (AMEX Oil and Gas) today/on 3-12, it was -1.90% on 3-11, it was -1.22% on 3-10), or, SRS (UltraShort Real Estate ETF), FAZ (3x Finance Bear ETF), QID (UltraShort NASDAQ 100 (NDX) ETF), SMN (UltraShort Basic Materials ETF) etc. I also might look at the UltraShort Gold ProShares (GLL) ETF.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
A good 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.
I'll probably wait for the NASDAQ 100 (NDX) to do/complete a short term Wave B type upcycle, before trading/holding a QID position overnight. It looks like I might enter an overnight trade tomorrow 3-13.
WMT has bearish breakaway upside gaps at 52.12, and 55.54, and, has a downside bullish breakaway gap at 48.49 (filled 3-9-09), 46.53 (created 2-17-09). SPX (S & P 500) has bearish breakaway upside gaps at 712.87 (filled 3-10-09), 735.09, 752.83, 826.84, 869.89, and 934.70, see http://stockcharts.com/charts/gallery.html?%24spx. SPX (S & P 500) has a downside gap at 676.53 from 3-10-09'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 for WMT/SPX and the market/most indexes/sectors.
GDX/HUI/XAU are in Wave B up of Wave A down of a Short Term Wave C Downcycle since 3-6-09, of the Wave 2 Minor Intermediate Term Downcycle since 2-17-09, see http://stockcharts.com/charts/gallery.html?gdx.
The gold ETF GLD (http://stockcharts.com/charts/gallery.html?gld) and gold put in a Wave 1 Minor Intermediate Term cycle high on 2-20-09, lagging GDX/HUI/XAU (peaked 2-17-09) and NEM (peaked 1-26-09, reliably leading GDX/HUI/XAU and GLD/gold as usual) as they tend to do.
Reliable gold/silver sector lead indicator NEM's cycle high at 45.45/candle on 1-26-09, see http://stockcharts.com/charts/gallery.html?NEM, is a Wave 1 minor intermediate term cycle high (cycle began in late November 2008), and, the short term countertrend Wave B upcycle peaked at 45 on 2-20-09.
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 NEM Lead Indicator was a very bearish -1.43% versus the XAU today/on 3-12, it was -0.78% on 3-11, it was an extremely bearish -2.51% on 3-10, which correctly was a very short term bullish indication, it was +0.55% on 3-9, it was a super bearish -4.07% on 3-6, it was -0.84% on 3-5, it was +0.21% on 3-4, it was -0.95% on 3-3, it was a very bearish -1.38% on 3-2, it was an extremely bullish +2.97% on 2-27, which correctly was a very short term bearish indication, it was -0.07% on 2-26, +0.64% on 2-25, +1.98% on 2-24, +0.19% on 2-23, +3.48% on 2-20, which correctly was a very short term bearish indication (the XAU was down -3.25% on 2-23-09), +0.01% on 2-19, -1.55% on 2-18, +1.95% on 2-17, -1.20% on 2-13, +0.34% on 2-12, +0.61% on 2-11.
The bearish short term and minor intermediate term scenario jives with the bearish gold COT (Commitments Of Traders) data the past six weeks. The savvy non contrarian gold Commercial Traders traded aggressively short for four straight weeks prior to the last two weeks, when they traded significantly net long, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm, but, they engaged in significant long liquidation in the latest report dated 3-3-09.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 31.40 (filled 3-9), 31.34, 29.67, 29.13, 25.41, and 23.23. GDX has bearish breakaway upside gaps at 31.55 (filled), 32.88. NEM has downside gaps at 36.66 and TBD.
Gold hit a 5% major buy signal six 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 a bearish -0.78% versus the XOI (AMEX Oil and Gas) today/on 3-12, it was -1.90% on 3-11, it was -1.22% on 3-10, it was +0.66% on 3-9, +1.10% on 3-6, -0.63% on 3-5, -2.98% on 3-4, -0.38% on 3-3, +2.68% on 3-2, -1.89% on 2-27, -1.51% on 2-26, +0.65% on 2-25, -0.64% on 2-24, +1.04% on 2-23, +1.43% on 2-20, -0.02% on 2-19, +1.94% on 2-18, +2.00% on 2-17, -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 Cyclical Bear Market from/since 2004 for example (has been in a multi decade Secular Bear Market also), 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, SRS, XAU, XOI, XOM
posted by Joe Ferrazzano at
9:22 AM
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