Severe S & P 500 (SPX)/Market Weakness Has Set In
Severe S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx)/market weakness has set in, 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=. From yesterday 3-19's likely countertrend Wave B (began 3-6-09) cycle high at 803.24 (bearish double top with 803.04 on 3-18) to today's cycle low at 766.20 SPX fell -4.61%.
SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) is doing an inverse Elliott Wave 12345 down up down up down Wave A type downcycle since just after yesterday 3-19's open (SPX peaked on 3-19, not 3-18, the chart is wrong) on the five day intraday 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, SPX (S & P 500) ended today's session in Wave 5 down, so, significant early weakness is likely on Monday, followed probably by a sharp countertrend Wave B type rebound for much or all of the session.
The broad market Walmart (WMT) Lead Indicator closed at a very bullish +1.26% versus SPX (S & P 500) today/on 3-20, which jives with a sharp countertrend Wave B type SPX (S & P 500) rebound for much or all of the session on Monday, after likely early weakness.
Also, SPX (S & P 500) experienced a very sharp +3.08% rise in fear/+3.08% rise in the wall of worry today 3-20, since SPX (S & P 500) fell -1.98% versus the SPX Volatility Index VIX rising +5.06%, which points to likely substantial SPX (S & P 500)/market strength on Monday 3-23-09, after likely early weakness.
SPX's (S & P 500) Elliott Wave count is that SPX (S & P 500) is probably in a Wave C Minor Intermediate Term Downcycle since 3-19-09 (probably peaked early yesterday 3-19-09), of the Intermediate Term Downcycle since 1-6-09, see http://stockcharts.com/charts/gallery.html?%24spx.
The recent S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) COT (Commitments Of Traders) data jives with a very large move down occurring in the near future. See the SPX COT data about two thirds of the way down (or do edit find S & P 500 in your browser) at http://www.cftc.gov/dea/futures/deacmelf.htm.
The savvy non contrarian S & P 500 (SPX) Commercial Traders anticipated the recent countertrend Wave B monster rise (appears to have peaked on 3-19-09), adding a massive 26,118 long futures contracts in the five day period ending 3-17-09, and, they added 31,172 long futures contracts in the five day period ending 3-10-09.
But, they added a massive 35,332 short futures contracts in the five day period ending 3-10-09, and, they added 3,696 short futures contracts in the five day period ending 3-17-09, in anticipation of a very large downcycle.
3-18's first post discusses the new Elliott Wave count, see http://tradethecycles.blogspot.com/2009/03/different-but-equivalent-spx-s-p-500.html.
One can basically prove that SPX's (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) upcycle from 3-6-09 to 3-19-09 was very likely countertrend action, from WMT's chart, see http://stockcharts.com/charts/gallery.html?wmt, since WMT is putting in an important countertrend Wave B type cycle high now (probably peaked on 3-18).
Another very strong sign that SPX's (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) upcycle from 3-6-09 to 3-19-09 was very likely countertrend action is that NDX's (NASDAQ 100) upcycle from 3-9-09 to 3-18-09 was clearly countertrend action, see http://stockcharts.com/charts/gallery.html?%24ndx, since NDX (NASDAQ 100) did a huge Wave A down move until 3-9-09, after peaking and putting in a slightly higher near perfect bearish double top in February 2009 versus early January 2009's cycle high.
Also, SPX's action from 3-6-09 to 3-19-09 has countertrend (and important peaking action) written all over it, due to a great deal of very large spiking action. In one session SPX (S & P 500) rose more than 6%.
The broad market Walmart (WMT) Lead Indicator is extremely bearish recently, at +1.26% versus SPX (S & P 500) today/on 3-20, +0.33% on 3-19, -1.21% on 3-18, -0.75% on 3-17, -0.44% on 3-16, -0.26% on 3-13, -0.95% on 3-12, -2.73% on 3-11, -3.93% on 3-10, -1.86% on 3-9, -1.81% on 3-6, which jives with a very large downcycle occurring soon.
The super bullish broad market Walmart (WMT) Lead Indicator on Thursday 3-5-09, at +6.85% versus SPX (S & P 500) (also, -0.04% on 3-4, -0.73% on 3-3, +2.22% on 3-2, +4.41% on 2-27), correctly pointed to a very large countertrend Wave B upcycle from 3-6-09 to 3-19-09.
The five day intraday broad market Walmart (WMT) Lead Indicator is near neutral at today 3-20-09'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 SPX (S & P 500)/market weakness early on Monday, followed by strength, since it'll probably turn briefly bullish after early market weakness on Monday.
My strategy next week will be to day trade DUG (UltraShort Oil and Gas ETF) or some other ultra short ETF (like FAZ maybe), overnight trade a substantial QID (UltraShort QQQ (NDX basically) ProShares) position, and, I'll also overnight trade a tiny FAZ (3x Finance Bear ETF) position in an IRA. For the overnight trades I'll be careful to wait for a very large Wave A down type move to occur first (in progress now, should bottom probably early on Monday), then I'll look to go long QID/FAZ shortly after a countertrend Wave B type upcycle peaks.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
In the daily SPX (S & P 500) chart one can see that SPX did an Elliott Wave 12345 up down up down up pattern from 3-6-09 to 3-19-09 (countertrend Wave B upcycle), see http://stockcharts.com/charts/gallery.html?%24spx, with bearish spikes on 3-9's and 3-16's candles, corresponding to Wave 1 and Wave 3 cycle highs, of the countertrend Wave B upcycle from 3-6-09 to 3-19-09. Wave 5 probably peaked early yesterday 3-19-09.
SPX (S & P 500) filled the last of a series of upside gaps on Friday 3-13-09 (712.87 (filled 3-10-09), 735.09 (filled 3-12-09), 752.83 (filled 3-13-09)), which was another sign that SPX (S & P 500) was probably peaking, because, often important cycle highs/lows occur shortly after gap filling action has been completed.
The size of the SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) upcycle from 3-6-09 to 3-19-09 was a clear sign that it was probably a countertrend upcycle and not a Wave 1 type upcycle/start of an important upcycle. That type of huge short term rise is the kind of substantial spiking action that occurs near important cycle highs, not very early in important upcycles.
SPX (S & P 500) has a downside gap at 676.53 from 3-10-09's open, which one should watch, 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.
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 huge spike move from 3-6-09 to 3-19-09 was probably a countertrend Wave B upcycle), because, the inverse spike the week before last is too small/not bullish enough, and, the candle is red/bearish, indicating a weekly close below the weekly open.
***** (Added this later) Note that this week's candle at the second Weekly View chart (at http://stockcharts.com/charts/gallery.html?%24spx) has a large bearish spike, which jives with the huge countertrend Wave B upcycle peaking on 3-19-09/yesterday.
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.
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 (filled 3-12-09), 752.83 (filled 3-13-09), 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's Wave 1 Minor Intermediate Term Upcycle since late October 2008 is peaking in dramatic rollover mode versus the 2-17-09 cycle high, see http://stockcharts.com/charts/gallery.html?gdx, due to the Fed's huge additional action announced this week, that led to an enormous spike/short term breakout on 3-18-09, right after the announcement was made, 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=.
A good entry point for long term investors will arise AFTER a 3 to 6 week Wave 2 Minor Intermediate Term Downcycle/correction occurs. Be patient and wise, and, ignore the noise! Cycles rule.
The gold ETF GLD (http://stockcharts.com/charts/gallery.html?gld) and gold (probably not now, GLD will probably peak in dramatic rollover mode, along with GDX/HUI/XAU) put in a Wave 1 Minor Intermediate Term cycle high on 2-20-09, lagging GDX/HUI/XAU and NEM 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 (probably not now, NEM will probably peak in dramatic rollover mode, along with GDX/HUI/XAU) 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.
The NEM Lead Indicator was an extremely bullish +3.26% versus the XAU today/on 3-20, it was a very bullish +1.39% on 3-19, it was +0.89% on 3-18, -0.77% on 3-17, it was -1.76% on 3-16, it was +1.13% on 3-13, -1.43% on 3-12, -0.78% on 3-11, it was an extremely bearish -2.51% on 3-10, which correctly was a very short term bullish indication, +0.55% on 3-9, it was a super bearish -4.07% on 3-6, -0.84% on 3-5, +0.21% on 3-4, -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, -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.
The bullish short term and bearish minor intermediate term scenario jives with the gold COT (Commitments Of Traders) data the past eight weeks. The savvy non contrarian gold Commercial Traders traded aggressively short for four straight weeks prior to the last four weeks, when they traded a significant long position, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm. The past four weeks the savvy gold Commercial Traders took some profits on their huge short trade, and, they traded a significant long position. These guys know what they're doing.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 31.34 (filled 3-18), 29.67, 29.13, 25.41, and 23.23. GDX has a very bullish breakaway downside gap at 35.07. NEM has downside gaps at 36.66 (filled 3-17) and TBD, and, has a downside bullish breakaway gap at 40.14 from 3-19's open.
Gold hit a 5% major buy signal seven 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 slightly bullish +0.13% versus the XOI (AMEX Oil and Gas) today/on 3-20, it was -3.32% on 3-19, it was -0.46% on 3-18, it was +0.00% on 3-17, -0.58% on 3-16, +1.09% on 3-13, -0.78% on 3-12, -1.90% on 3-11, -1.22% on 3-10, +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
SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) is doing an inverse Elliott Wave 12345 down up down up down Wave A type downcycle since just after yesterday 3-19's open (SPX peaked on 3-19, not 3-18, the chart is wrong) on the five day intraday 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, SPX (S & P 500) ended today's session in Wave 5 down, so, significant early weakness is likely on Monday, followed probably by a sharp countertrend Wave B type rebound for much or all of the session.
The broad market Walmart (WMT) Lead Indicator closed at a very bullish +1.26% versus SPX (S & P 500) today/on 3-20, which jives with a sharp countertrend Wave B type SPX (S & P 500) rebound for much or all of the session on Monday, after likely early weakness.
Also, SPX (S & P 500) experienced a very sharp +3.08% rise in fear/+3.08% rise in the wall of worry today 3-20, since SPX (S & P 500) fell -1.98% versus the SPX Volatility Index VIX rising +5.06%, which points to likely substantial SPX (S & P 500)/market strength on Monday 3-23-09, after likely early weakness.
SPX's (S & P 500) Elliott Wave count is that SPX (S & P 500) is probably in a Wave C Minor Intermediate Term Downcycle since 3-19-09 (probably peaked early yesterday 3-19-09), of the Intermediate Term Downcycle since 1-6-09, see http://stockcharts.com/charts/gallery.html?%24spx.
The recent S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) COT (Commitments Of Traders) data jives with a very large move down occurring in the near future. See the SPX COT data about two thirds of the way down (or do edit find S & P 500 in your browser) at http://www.cftc.gov/dea/futures/deacmelf.htm.
The savvy non contrarian S & P 500 (SPX) Commercial Traders anticipated the recent countertrend Wave B monster rise (appears to have peaked on 3-19-09), adding a massive 26,118 long futures contracts in the five day period ending 3-17-09, and, they added 31,172 long futures contracts in the five day period ending 3-10-09.
But, they added a massive 35,332 short futures contracts in the five day period ending 3-10-09, and, they added 3,696 short futures contracts in the five day period ending 3-17-09, in anticipation of a very large downcycle.
3-18's first post discusses the new Elliott Wave count, see http://tradethecycles.blogspot.com/2009/03/different-but-equivalent-spx-s-p-500.html.
One can basically prove that SPX's (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) upcycle from 3-6-09 to 3-19-09 was very likely countertrend action, from WMT's chart, see http://stockcharts.com/charts/gallery.html?wmt, since WMT is putting in an important countertrend Wave B type cycle high now (probably peaked on 3-18).
Another very strong sign that SPX's (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) upcycle from 3-6-09 to 3-19-09 was very likely countertrend action is that NDX's (NASDAQ 100) upcycle from 3-9-09 to 3-18-09 was clearly countertrend action, see http://stockcharts.com/charts/gallery.html?%24ndx, since NDX (NASDAQ 100) did a huge Wave A down move until 3-9-09, after peaking and putting in a slightly higher near perfect bearish double top in February 2009 versus early January 2009's cycle high.
Also, SPX's action from 3-6-09 to 3-19-09 has countertrend (and important peaking action) written all over it, due to a great deal of very large spiking action. In one session SPX (S & P 500) rose more than 6%.
The broad market Walmart (WMT) Lead Indicator is extremely bearish recently, at +1.26% versus SPX (S & P 500) today/on 3-20, +0.33% on 3-19, -1.21% on 3-18, -0.75% on 3-17, -0.44% on 3-16, -0.26% on 3-13, -0.95% on 3-12, -2.73% on 3-11, -3.93% on 3-10, -1.86% on 3-9, -1.81% on 3-6, which jives with a very large downcycle occurring soon.
The super bullish broad market Walmart (WMT) Lead Indicator on Thursday 3-5-09, at +6.85% versus SPX (S & P 500) (also, -0.04% on 3-4, -0.73% on 3-3, +2.22% on 3-2, +4.41% on 2-27), correctly pointed to a very large countertrend Wave B upcycle from 3-6-09 to 3-19-09.
The five day intraday broad market Walmart (WMT) Lead Indicator is near neutral at today 3-20-09'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 SPX (S & P 500)/market weakness early on Monday, followed by strength, since it'll probably turn briefly bullish after early market weakness on Monday.
My strategy next week will be to day trade DUG (UltraShort Oil and Gas ETF) or some other ultra short ETF (like FAZ maybe), overnight trade a substantial QID (UltraShort QQQ (NDX basically) ProShares) position, and, I'll also overnight trade a tiny FAZ (3x Finance Bear ETF) position in an IRA. For the overnight trades I'll be careful to wait for a very large Wave A down type move to occur first (in progress now, should bottom probably early on Monday), then I'll look to go long QID/FAZ shortly after a countertrend Wave B type upcycle peaks.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
In the daily SPX (S & P 500) chart one can see that SPX did an Elliott Wave 12345 up down up down up pattern from 3-6-09 to 3-19-09 (countertrend Wave B upcycle), see http://stockcharts.com/charts/gallery.html?%24spx, with bearish spikes on 3-9's and 3-16's candles, corresponding to Wave 1 and Wave 3 cycle highs, of the countertrend Wave B upcycle from 3-6-09 to 3-19-09. Wave 5 probably peaked early yesterday 3-19-09.
SPX (S & P 500) filled the last of a series of upside gaps on Friday 3-13-09 (712.87 (filled 3-10-09), 735.09 (filled 3-12-09), 752.83 (filled 3-13-09)), which was another sign that SPX (S & P 500) was probably peaking, because, often important cycle highs/lows occur shortly after gap filling action has been completed.
The size of the SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) upcycle from 3-6-09 to 3-19-09 was a clear sign that it was probably a countertrend upcycle and not a Wave 1 type upcycle/start of an important upcycle. That type of huge short term rise is the kind of substantial spiking action that occurs near important cycle highs, not very early in important upcycles.
SPX (S & P 500) has a downside gap at 676.53 from 3-10-09's open, which one should watch, 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.
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 huge spike move from 3-6-09 to 3-19-09 was probably a countertrend Wave B upcycle), because, the inverse spike the week before last is too small/not bullish enough, and, the candle is red/bearish, indicating a weekly close below the weekly open.
***** (Added this later) Note that this week's candle at the second Weekly View chart (at http://stockcharts.com/charts/gallery.html?%24spx) has a large bearish spike, which jives with the huge countertrend Wave B upcycle peaking on 3-19-09/yesterday.
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.
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 (filled 3-12-09), 752.83 (filled 3-13-09), 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's Wave 1 Minor Intermediate Term Upcycle since late October 2008 is peaking in dramatic rollover mode versus the 2-17-09 cycle high, see http://stockcharts.com/charts/gallery.html?gdx, due to the Fed's huge additional action announced this week, that led to an enormous spike/short term breakout on 3-18-09, right after the announcement was made, 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=.
A good entry point for long term investors will arise AFTER a 3 to 6 week Wave 2 Minor Intermediate Term Downcycle/correction occurs. Be patient and wise, and, ignore the noise! Cycles rule.
The gold ETF GLD (http://stockcharts.com/charts/gallery.html?gld) and gold (probably not now, GLD will probably peak in dramatic rollover mode, along with GDX/HUI/XAU) put in a Wave 1 Minor Intermediate Term cycle high on 2-20-09, lagging GDX/HUI/XAU and NEM 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 (probably not now, NEM will probably peak in dramatic rollover mode, along with GDX/HUI/XAU) 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.
The NEM Lead Indicator was an extremely bullish +3.26% versus the XAU today/on 3-20, it was a very bullish +1.39% on 3-19, it was +0.89% on 3-18, -0.77% on 3-17, it was -1.76% on 3-16, it was +1.13% on 3-13, -1.43% on 3-12, -0.78% on 3-11, it was an extremely bearish -2.51% on 3-10, which correctly was a very short term bullish indication, +0.55% on 3-9, it was a super bearish -4.07% on 3-6, -0.84% on 3-5, +0.21% on 3-4, -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, -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.
The bullish short term and bearish minor intermediate term scenario jives with the gold COT (Commitments Of Traders) data the past eight weeks. The savvy non contrarian gold Commercial Traders traded aggressively short for four straight weeks prior to the last four weeks, when they traded a significant long position, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm. The past four weeks the savvy gold Commercial Traders took some profits on their huge short trade, and, they traded a significant long position. These guys know what they're doing.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 31.34 (filled 3-18), 29.67, 29.13, 25.41, and 23.23. GDX has a very bullish breakaway downside gap at 35.07. NEM has downside gaps at 36.66 (filled 3-17) and TBD, and, has a downside bullish breakaway gap at 40.14 from 3-19's open.
Gold hit a 5% major buy signal seven 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 slightly bullish +0.13% versus the XOI (AMEX Oil and Gas) today/on 3-20, it was -3.32% on 3-19, it was -0.46% on 3-18, it was +0.00% on 3-17, -0.58% on 3-16, +1.09% on 3-13, -0.78% on 3-12, -1.90% on 3-11, -1.22% on 3-10, +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
1:45 PM
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