The S & P 500's (SPX) Action This Week Was Either Countertrend Wave B Or Rollover Action
The S & P 500's (SPX) action this week was either countertrend Wave B or rollover action, relative to last Friday 4-17-09's cycle high at 875.63 (itself a likely Wave B cycle high, for the Monthly Upcycle since 3-6-09, within a downtrend/Cyclical Bear Market since 10-11-07), see http://stockcharts.com/charts/gallery.html?%24spx.
Traders didn't want to be short ahead of the stress test news today (http://finance.yahoo.com/news/Wall-Street-finds-little-apf-15029489.html), and, Ford (F) had good news also (better-than-expected quarterly results), so, today was definitely a news driven session.
Looking at the 1 day SPX (S & P 500) intraday candlestick chart, see http://finance.yahoo.com/q/ta?s=^GSPC&t=1d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=, SPX (S & P 500) appears to have ended the session in Wave 4 up of an inverse Elliott Wave 12345 down up down up down downcycle, which would mean that a significant and potentially sharp decline/Wave 5 down move is likely early on Monday.
If the downside gap at 851.92 (created at Friday 4-24's open) gets filled, then, the SPX (S & P 500) countertrend Wave B Monthly Upcycle (since 3-6-09) has probably peaked. If the downside gap at 825.16 gets filled, then SPX (S & P 500) has very likely peaked.
One can see in the 1 day SPX (S & P 500) intraday candlestick chart, see http://finance.yahoo.com/q/ta?s=^GSPC&t=1d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=, that SPX's (S & P 500) upcycle rolled over, appears to have peaked after 3 pm, then plunged significantly at session's end, with the Wave 4 up move making it seem less significant at session's end.
Today's cycle high at 871.53 might be an SPX (S & P 500) short term countertrend Wave B cycle high, see the 5 day intraday candlestick chart at http://finance.yahoo.com/q/ta?s=^spx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
I won't say that SPX's (S & P 500) countertrend Wave B Monthly Upcycle (since 3-6-09) has very likely peaked until downside gap filling action begins, but, I have been saying that it's likely that SPX has peaked, because of the indicators, the five day intraday candlestick chart (at http://finance.yahoo.com/q/ta?s=^spx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=), and, the DJUSFN bearish triple top last week ending 4-17-09, see http://stockcharts.com/charts/gallery.html?%24djusfn.
Either way this SPX (S & P 500)/most indexes strength is likely to be countertrend Wave B noise, or, rollover peaking action, which is still basically noise. Every indicator, the COT data, my analysis, the candlestick charts (Broad market Lead Indicator Walmart (WMT) put in a bearish candle/large spike today, see http://stockcharts.com/charts/gallery.html?wmt), the cycles, the Elliott Wave count/picture, the huge spiking action since 3-6-09, the poor economic outlook, the banking system crisis, the bleak auto companies outlook, earnings reporting/warning season, etc jives with an important countertrend Wave B cycle high either occurring last Friday 4-17-09, or, next week in rollover mode, for the SPX (S & P 500) Wave B Monthly Upcycle since 3-6-09.
The broad market Walmart (WMT) Lead Indicator was an extremely bearish -3.71% versus the S & P 500 today/on 4-24, -1.19% on 4-23, -0.98% on 4-22, -0.99% on 4-21, +2.43% on 4-20.
The extremely bearish five day intraday broad market Walmart (WMT) Lead Indicator at session's end today 4-24-09, 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, jives with (probably brief) early strength on Monday, followed by likely severe weakness, because, it's a very short term bullish indication.
The savvy non contrarian S & P 500 (SPX) Commercial Traders traded significantly net short, adding 7241 long futures contracts and 16,096 short futures contracts in the five day period ending 4-21-09, see 2/3 of the way down at http://www.cftc.gov/dea/futures/deacmelf.htm, which jives with an important SPX (S & P 500) countertrend Wave B monthly cycle high occurring on 4-17-09, or, occurring next week in rollover mode.
The savvy non contrarian S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) Commercial Traders correctly anticipated this week's strength, but, they are also anticipating a sharp decline next week. If the data had been the reverse, then, substantial rollover action next week would be likely. Obviously, modest or significant rollover action next week won't be a major surprise, but, it'll probably be short lived.
The S & P 500 (SPX) filled the upside gap at 869.60 from Monday 4-20's open today. Often important cycle highs/lows occur shortly after gap filling action has been completed.
SPX (S & P 500) experienced a significant +0.79% rise in fear/+0.79% rise in the wall of worry today 4-24, since SPX (S & P 500) rose +1.68% versus the SPX Volatility Index VIX falling -0.89%, which points to likely significant SPX (S & P 500)/market strength early on Monday 4-27-09.
Friday 4-17's S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) cycle high is probably the end of the countertrend Wave B Monthly Upcycle (Wave B up of the Intermediate Term Downcycle since 1-6-09) since 3-6-09, see the five day intraday candlestick chart at http://finance.yahoo.com/q/ta?s=^spx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
The Dow Jones U.S. Financials Index (DJUSFN) put in a bearish triple top last week ending 4-17-09, see http://stockcharts.com/charts/gallery.html?%24djusfn, so, the DJUSFN countertrend Wave B Monthly Upcycle since 3-6-09 has probably peaked.
I'm long FAZ (3x Finance Bear ETF) overnight, purchased on 4-22 at 8.85.
Please see my Twitter site for the "play by play." Don't be shy about joining, it's quick and easy to join, and, Twitter is very fun and highly useful, or, you can simply follow my Twitter site.
One way to check for a possible market surprise, on a day like today was, or for whatever timeframe one's trading, is to check the S & P 500 (SPX) wall of worry, by comparing SPX to the SPX Volatility Index VIX , see today's comparison at http://finance.yahoo.com/q/ta?s=^GSPC&t=1d&l=off&z=l&q=c&p=&a=fs,p12,fs,w14&c=^vix. VIX works similarly to a lead indicator.
What one needs to do is to compare SPX to VIX, by simply adding them, as I do every day on this Blog after the close. A significant/substantially positive number points to strength (significant/substantial rise in fear) and a significant/substantially negative number points to weakness (significant/substantial rise in complacency), BUT, ANY indicator/tool is secondary to cycles, Elliott Wave patterns, and, gaps.
For an unusually large number, as regular readers know, greater than or equal to + or - 6%, only for a SINGLE SESSION, an unusually large rise in fear points to significant/potentially severe weakness in the next session (maybe the same session if it occurs early enough), and, an unusually large rise in complacency points to significant/potentially substantial strength in the next session (maybe the same session if it occurs early enough).
The collapse in the S & P 500 wall of worry (SPX versus VIX) recently, see http://finance.yahoo.com/q/ta?s=^GSPC&t=3m&l=off&z=l&q=c&p=&a=p12,p12,fs,p12,fs,w14&c=^vix, points to a collapse in SPX soon. Note that when VIX substantially outperforms SPX for a while, substantial SPX strength tends to occur shortly thereafter (from 3-6-09 to 4-17-09 in this case), and, vice versa.
When the S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) countertrend Wave B Monthly Upcycle since 3-6-09 peaks, it'll probably be obvious (yup!, probably did on 4-17-09). There will probably be a very large -3% to -5%+ decline in a session or two, and, maybe a large bearish breakaway gap will occur and/or a large bearish spike on the daily candle. Also, once downside gap filling action begins (825.16, 811.08, 768.54, etc), then, it's very likely that SPX (S & P 500) has peaked.
The broad market Walmart (WMT) Lead Indicator is super bearish since 3-6-09 (countertrend Wave B Monthly Upcycle began), at -3.71% versus the S & P 500 today/on 4-24, -1.19% on 4-23, -0.98% on 4-22, -0.99% on 4-21, +2.43% on 4-20, -1.64% on 4-17, -2.54% on 4-16, -0.92% on 4-15, +1.21% on 4-14, +1.47% on 4-13, -7.52% on 4-9, -0.76% on 4-8, +0.44% on 4-7, +0.14% on 4-6, -0.67% on 4-3, -1.32% on 4-2, -0.28% on 4-1, -0.65% on 3-31, +1.94% on 3-30, +1.67% on 3-27, -0.24% on 3-26, +0.22% on 3-25, +1.23% on 3-24, -3.27% on 3-23, +1.26% 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.
The XOM (Exxon Mobil) Lead Indicator was a very bearish -1.72% versus the XOI (AMEX Oil and Gas) today/on 4-24, -1.57% on 4-23, -0.98% on 4-22, -0.23% on 4-21, +2.60% on 4-20, -1.00% on 4-17, -1.62% on 4-16, +0.95% on 4-15, +0.96% on 4-14, -1.90% on 4-13, -0.66% on 4-9, -0.47% on 4-8, +0.61% on 4-7, +1.71% on 4-6, -0.57% on 4-3, -2.70% on 4-2, -0.27% on 4-1, -1.04% on 3-31, +1.96% on 3-30, +1.27% on 3-27, +0.70% on 3-26, +0.04% on 3-25, +0.82% on 3-24, -0.15% on 3-23, +0.13% on 3-20, -3.32% on 3-19, -0.46% on 3-18, +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.
Note that reliable broad market Lead Indicator Walmart (WMT) put in a countertrend Wave B Minor Intermediate Term Cycle High in very early April, see http://stockcharts.com/charts/gallery.html?wmt.
Based on the S & P 500 (SPX) intraday chart's cycles, Elliott Wave count, and, the indicators, weakness/Wave 5 down move is likely early on Monday, see http://finance.yahoo.com/q/ta?s=^spx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
Also, broad market Lead Indicator Walmart (WMT) is (bearish dark candle/spike near session's end) in a Wave 3 downcycle, of the downcycle that began early on 4-22, see http://finance.yahoo.com/q/ta?s=wmt&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
The S & P 500 (SPX) countertrend Wave B Monthly Upcycle since 3-6-09 Elliott Wave count is: A Wave 1 cycle high/red spike occurred on 3-9, a Wave 3 cycle high/red spike occurred on 3-16, then, a deceptive huge Wave 5 Elliott Wave up down up down up rollover upcycle began on 3-17-09, which probably peaked very late on Friday 4-17-09, see http://finance.yahoo.com/q/ta?s=^GSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.
SPX's (S & P 500) countertrend Wave B Monthly Upcycle, that began on 3-6-09 and probably peaked on 4-17-09, was Wave B up of the Intermediate Term Downcycle since 1-6-09, see http://stockcharts.com/charts/gallery.html?%24spx.
The S & P 500's (SPX, http://stockcharts.com/charts/gallery.html?%24spx) huge spike move/monster rollover Wave 5 upcycle that began 3-30-09 jives with important peaking action, see http://finance.yahoo.com/q/ta?s=^GSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.
WMT has bearish breakaway upside gaps at 51.53, 52.61, 53.43, 53.80 and 55.54, and, filled the downside gap at 52.82.
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 (filled 3-26-09), 815.94 (filled 4-2-09), 832.86 (filled 4-2-09), has upside gaps at 835.48 (filled), 842.50 (filled), 858.73 (filled), 869.89 (filled), 869.60 (filled), and 934.70, see http://stockcharts.com/charts/gallery.html?%24spx.
SPX (S & P 500) has downside gaps at 851.92, 825.16, 811.08, 768.54, and, one at 676.53.
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.
FAZ (3x Finance Bear ETF) is a great opportunity to probably make a lot of money now (probably for the next few weeks/months), which is why so many are trading it. Not a recommendation.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
Follow my live updates at Twitter!, at http://twitter.com/tradethecycles. Highly recommended. I'm having fun and networking, in addition to microblogging my Trade the Cycles work/system and opining about a variety of subjects. I'm tradethecycles at Twitter. Joining is easy, then you follow me by clicking follow after doing a search for tradethecycles. Or, you can simply follow my Twitter web site at http://twitter.com/tradethecycles. I just started using Twitter recently. I'm going to try to make timely live updates at Twitter and make it a real time extension of this Blog. Also, I opine about other subjects.
Great news, GDX/HUI/XAU ARE doing a substantial short term countertrend Wave B upcycle after all (since 4-17-09), see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart. The strength since 4-17-09 is Wave B up (and Wave 4 up) of the Wave 2 Intermediate Term Downcycle since 3-26-09 for the XAU (very early April for GDX/HUI). So, this is an opportunity to exit longs, if that's what you're looking to do. I don't make trade recommendations.
The five day intraday NEM Lead Indicator closed at very bearish, see http://finance.yahoo.com/q/ta?t=5d&s=NEM&l=off&z=l&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=^xau.
GDX/HUI/XAU are doing a substantial Wave 4/Wave B up since 4-17-09 (the NEM Lead Indicator closed at +1.22% versus the XAU today/on 4-24, -1.75% on 4-23, -1.37% on 4-22, +0.95% on 4-21, -0.02% on 4-20, -0.93% on 4-17, -0.89% on 4-16, -0.03% on 4-15, +0.23% on 4-14, -0.88% on 4-13, +0.18% on 4-9, -1.21% on 4-8, -0.96% on 4-7) of Wave A down (Inverse Elliott Wave 12345 down up down up down pattern), of the Wave 2 Intermediate Term Downcycle since 3-26-09 for the XAU (very early April for GDX/HUI), see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart.
The GDX/HUI/XAU Wave 1 Intermediate Term Upcycle since late October 2008 peaked on 3-26-09 for the XAU, and, peaked in very early April for GDX/HUI, see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see their daily chart.
The NEM Lead Indicator was extremely bearish the past thirteen sessions, at +1.22% versus the XAU today/on 4-24, -1.75% on 4-23, -1.37% on 4-22, +0.95% on 4-21, -0.02% on 4-20, -0.93% on 4-17, -0.89% on 4-16, -0.03% on 4-15, +0.23% on 4-14, -0.88% on 4-13, +0.18% on 4-9, -1.21% on 4-8, -0.96% on 4-7.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 33.04 (filled), 29.67, 29.13, 25.41, and 23.23. GDX has a very bearish breakaway upside gap at 34.87 (34.86 cycle high today 4-24), and, NEM has one at 43.89. NEM has downside gaps at 36.66 (filled 3-17) and TBD, and, has a downside bullish breakaway gap at 40.14 (filled) from 3-19's open.
Gold hit a 5% major buy signal twelve 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.
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
Traders didn't want to be short ahead of the stress test news today (http://finance.yahoo.com/news/Wall-Street-finds-little-apf-15029489.html), and, Ford (F) had good news also (better-than-expected quarterly results), so, today was definitely a news driven session.
Looking at the 1 day SPX (S & P 500) intraday candlestick chart, see http://finance.yahoo.com/q/ta?s=^GSPC&t=1d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=, SPX (S & P 500) appears to have ended the session in Wave 4 up of an inverse Elliott Wave 12345 down up down up down downcycle, which would mean that a significant and potentially sharp decline/Wave 5 down move is likely early on Monday.
If the downside gap at 851.92 (created at Friday 4-24's open) gets filled, then, the SPX (S & P 500) countertrend Wave B Monthly Upcycle (since 3-6-09) has probably peaked. If the downside gap at 825.16 gets filled, then SPX (S & P 500) has very likely peaked.
One can see in the 1 day SPX (S & P 500) intraday candlestick chart, see http://finance.yahoo.com/q/ta?s=^GSPC&t=1d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=, that SPX's (S & P 500) upcycle rolled over, appears to have peaked after 3 pm, then plunged significantly at session's end, with the Wave 4 up move making it seem less significant at session's end.
Today's cycle high at 871.53 might be an SPX (S & P 500) short term countertrend Wave B cycle high, see the 5 day intraday candlestick chart at http://finance.yahoo.com/q/ta?s=^spx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
I won't say that SPX's (S & P 500) countertrend Wave B Monthly Upcycle (since 3-6-09) has very likely peaked until downside gap filling action begins, but, I have been saying that it's likely that SPX has peaked, because of the indicators, the five day intraday candlestick chart (at http://finance.yahoo.com/q/ta?s=^spx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=), and, the DJUSFN bearish triple top last week ending 4-17-09, see http://stockcharts.com/charts/gallery.html?%24djusfn.
Either way this SPX (S & P 500)/most indexes strength is likely to be countertrend Wave B noise, or, rollover peaking action, which is still basically noise. Every indicator, the COT data, my analysis, the candlestick charts (Broad market Lead Indicator Walmart (WMT) put in a bearish candle/large spike today, see http://stockcharts.com/charts/gallery.html?wmt), the cycles, the Elliott Wave count/picture, the huge spiking action since 3-6-09, the poor economic outlook, the banking system crisis, the bleak auto companies outlook, earnings reporting/warning season, etc jives with an important countertrend Wave B cycle high either occurring last Friday 4-17-09, or, next week in rollover mode, for the SPX (S & P 500) Wave B Monthly Upcycle since 3-6-09.
The broad market Walmart (WMT) Lead Indicator was an extremely bearish -3.71% versus the S & P 500 today/on 4-24, -1.19% on 4-23, -0.98% on 4-22, -0.99% on 4-21, +2.43% on 4-20.
The extremely bearish five day intraday broad market Walmart (WMT) Lead Indicator at session's end today 4-24-09, 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, jives with (probably brief) early strength on Monday, followed by likely severe weakness, because, it's a very short term bullish indication.
The savvy non contrarian S & P 500 (SPX) Commercial Traders traded significantly net short, adding 7241 long futures contracts and 16,096 short futures contracts in the five day period ending 4-21-09, see 2/3 of the way down at http://www.cftc.gov/dea/futures/deacmelf.htm, which jives with an important SPX (S & P 500) countertrend Wave B monthly cycle high occurring on 4-17-09, or, occurring next week in rollover mode.
The savvy non contrarian S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) Commercial Traders correctly anticipated this week's strength, but, they are also anticipating a sharp decline next week. If the data had been the reverse, then, substantial rollover action next week would be likely. Obviously, modest or significant rollover action next week won't be a major surprise, but, it'll probably be short lived.
The S & P 500 (SPX) filled the upside gap at 869.60 from Monday 4-20's open today. Often important cycle highs/lows occur shortly after gap filling action has been completed.
SPX (S & P 500) experienced a significant +0.79% rise in fear/+0.79% rise in the wall of worry today 4-24, since SPX (S & P 500) rose +1.68% versus the SPX Volatility Index VIX falling -0.89%, which points to likely significant SPX (S & P 500)/market strength early on Monday 4-27-09.
Friday 4-17's S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) cycle high is probably the end of the countertrend Wave B Monthly Upcycle (Wave B up of the Intermediate Term Downcycle since 1-6-09) since 3-6-09, see the five day intraday candlestick chart at http://finance.yahoo.com/q/ta?s=^spx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
The Dow Jones U.S. Financials Index (DJUSFN) put in a bearish triple top last week ending 4-17-09, see http://stockcharts.com/charts/gallery.html?%24djusfn, so, the DJUSFN countertrend Wave B Monthly Upcycle since 3-6-09 has probably peaked.
I'm long FAZ (3x Finance Bear ETF) overnight, purchased on 4-22 at 8.85.
Please see my Twitter site for the "play by play." Don't be shy about joining, it's quick and easy to join, and, Twitter is very fun and highly useful, or, you can simply follow my Twitter site.
One way to check for a possible market surprise, on a day like today was, or for whatever timeframe one's trading, is to check the S & P 500 (SPX) wall of worry, by comparing SPX to the SPX Volatility Index VIX , see today's comparison at http://finance.yahoo.com/q/ta?s=^GSPC&t=1d&l=off&z=l&q=c&p=&a=fs,p12,fs,w14&c=^vix. VIX works similarly to a lead indicator.
What one needs to do is to compare SPX to VIX, by simply adding them, as I do every day on this Blog after the close. A significant/substantially positive number points to strength (significant/substantial rise in fear) and a significant/substantially negative number points to weakness (significant/substantial rise in complacency), BUT, ANY indicator/tool is secondary to cycles, Elliott Wave patterns, and, gaps.
For an unusually large number, as regular readers know, greater than or equal to + or - 6%, only for a SINGLE SESSION, an unusually large rise in fear points to significant/potentially severe weakness in the next session (maybe the same session if it occurs early enough), and, an unusually large rise in complacency points to significant/potentially substantial strength in the next session (maybe the same session if it occurs early enough).
The collapse in the S & P 500 wall of worry (SPX versus VIX) recently, see http://finance.yahoo.com/q/ta?s=^GSPC&t=3m&l=off&z=l&q=c&p=&a=p12,p12,fs,p12,fs,w14&c=^vix, points to a collapse in SPX soon. Note that when VIX substantially outperforms SPX for a while, substantial SPX strength tends to occur shortly thereafter (from 3-6-09 to 4-17-09 in this case), and, vice versa.
When the S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) countertrend Wave B Monthly Upcycle since 3-6-09 peaks, it'll probably be obvious (yup!, probably did on 4-17-09). There will probably be a very large -3% to -5%+ decline in a session or two, and, maybe a large bearish breakaway gap will occur and/or a large bearish spike on the daily candle. Also, once downside gap filling action begins (825.16, 811.08, 768.54, etc), then, it's very likely that SPX (S & P 500) has peaked.
The broad market Walmart (WMT) Lead Indicator is super bearish since 3-6-09 (countertrend Wave B Monthly Upcycle began), at -3.71% versus the S & P 500 today/on 4-24, -1.19% on 4-23, -0.98% on 4-22, -0.99% on 4-21, +2.43% on 4-20, -1.64% on 4-17, -2.54% on 4-16, -0.92% on 4-15, +1.21% on 4-14, +1.47% on 4-13, -7.52% on 4-9, -0.76% on 4-8, +0.44% on 4-7, +0.14% on 4-6, -0.67% on 4-3, -1.32% on 4-2, -0.28% on 4-1, -0.65% on 3-31, +1.94% on 3-30, +1.67% on 3-27, -0.24% on 3-26, +0.22% on 3-25, +1.23% on 3-24, -3.27% on 3-23, +1.26% 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.
The XOM (Exxon Mobil) Lead Indicator was a very bearish -1.72% versus the XOI (AMEX Oil and Gas) today/on 4-24, -1.57% on 4-23, -0.98% on 4-22, -0.23% on 4-21, +2.60% on 4-20, -1.00% on 4-17, -1.62% on 4-16, +0.95% on 4-15, +0.96% on 4-14, -1.90% on 4-13, -0.66% on 4-9, -0.47% on 4-8, +0.61% on 4-7, +1.71% on 4-6, -0.57% on 4-3, -2.70% on 4-2, -0.27% on 4-1, -1.04% on 3-31, +1.96% on 3-30, +1.27% on 3-27, +0.70% on 3-26, +0.04% on 3-25, +0.82% on 3-24, -0.15% on 3-23, +0.13% on 3-20, -3.32% on 3-19, -0.46% on 3-18, +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.
Note that reliable broad market Lead Indicator Walmart (WMT) put in a countertrend Wave B Minor Intermediate Term Cycle High in very early April, see http://stockcharts.com/charts/gallery.html?wmt.
Based on the S & P 500 (SPX) intraday chart's cycles, Elliott Wave count, and, the indicators, weakness/Wave 5 down move is likely early on Monday, see http://finance.yahoo.com/q/ta?s=^spx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
Also, broad market Lead Indicator Walmart (WMT) is (bearish dark candle/spike near session's end) in a Wave 3 downcycle, of the downcycle that began early on 4-22, see http://finance.yahoo.com/q/ta?s=wmt&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
The S & P 500 (SPX) countertrend Wave B Monthly Upcycle since 3-6-09 Elliott Wave count is: A Wave 1 cycle high/red spike occurred on 3-9, a Wave 3 cycle high/red spike occurred on 3-16, then, a deceptive huge Wave 5 Elliott Wave up down up down up rollover upcycle began on 3-17-09, which probably peaked very late on Friday 4-17-09, see http://finance.yahoo.com/q/ta?s=^GSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.
SPX's (S & P 500) countertrend Wave B Monthly Upcycle, that began on 3-6-09 and probably peaked on 4-17-09, was Wave B up of the Intermediate Term Downcycle since 1-6-09, see http://stockcharts.com/charts/gallery.html?%24spx.
The S & P 500's (SPX, http://stockcharts.com/charts/gallery.html?%24spx) huge spike move/monster rollover Wave 5 upcycle that began 3-30-09 jives with important peaking action, see http://finance.yahoo.com/q/ta?s=^GSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.
WMT has bearish breakaway upside gaps at 51.53, 52.61, 53.43, 53.80 and 55.54, and, filled the downside gap at 52.82.
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 (filled 3-26-09), 815.94 (filled 4-2-09), 832.86 (filled 4-2-09), has upside gaps at 835.48 (filled), 842.50 (filled), 858.73 (filled), 869.89 (filled), 869.60 (filled), and 934.70, see http://stockcharts.com/charts/gallery.html?%24spx.
SPX (S & P 500) has downside gaps at 851.92, 825.16, 811.08, 768.54, and, one at 676.53.
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.
FAZ (3x Finance Bear ETF) is a great opportunity to probably make a lot of money now (probably for the next few weeks/months), which is why so many are trading it. Not a recommendation.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
Follow my live updates at Twitter!, at http://twitter.com/tradethecycles. Highly recommended. I'm having fun and networking, in addition to microblogging my Trade the Cycles work/system and opining about a variety of subjects. I'm tradethecycles at Twitter. Joining is easy, then you follow me by clicking follow after doing a search for tradethecycles. Or, you can simply follow my Twitter web site at http://twitter.com/tradethecycles. I just started using Twitter recently. I'm going to try to make timely live updates at Twitter and make it a real time extension of this Blog. Also, I opine about other subjects.
Great news, GDX/HUI/XAU ARE doing a substantial short term countertrend Wave B upcycle after all (since 4-17-09), see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart. The strength since 4-17-09 is Wave B up (and Wave 4 up) of the Wave 2 Intermediate Term Downcycle since 3-26-09 for the XAU (very early April for GDX/HUI). So, this is an opportunity to exit longs, if that's what you're looking to do. I don't make trade recommendations.
The five day intraday NEM Lead Indicator closed at very bearish, see http://finance.yahoo.com/q/ta?t=5d&s=NEM&l=off&z=l&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=^xau.
GDX/HUI/XAU are doing a substantial Wave 4/Wave B up since 4-17-09 (the NEM Lead Indicator closed at +1.22% versus the XAU today/on 4-24, -1.75% on 4-23, -1.37% on 4-22, +0.95% on 4-21, -0.02% on 4-20, -0.93% on 4-17, -0.89% on 4-16, -0.03% on 4-15, +0.23% on 4-14, -0.88% on 4-13, +0.18% on 4-9, -1.21% on 4-8, -0.96% on 4-7) of Wave A down (Inverse Elliott Wave 12345 down up down up down pattern), of the Wave 2 Intermediate Term Downcycle since 3-26-09 for the XAU (very early April for GDX/HUI), see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart.
The GDX/HUI/XAU Wave 1 Intermediate Term Upcycle since late October 2008 peaked on 3-26-09 for the XAU, and, peaked in very early April for GDX/HUI, see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see their daily chart.
The NEM Lead Indicator was extremely bearish the past thirteen sessions, at +1.22% versus the XAU today/on 4-24, -1.75% on 4-23, -1.37% on 4-22, +0.95% on 4-21, -0.02% on 4-20, -0.93% on 4-17, -0.89% on 4-16, -0.03% on 4-15, +0.23% on 4-14, -0.88% on 4-13, +0.18% on 4-9, -1.21% on 4-8, -0.96% on 4-7.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 33.04 (filled), 29.67, 29.13, 25.41, and 23.23. GDX has a very bearish breakaway upside gap at 34.87 (34.86 cycle high today 4-24), and, NEM has one at 43.89. NEM has downside gaps at 36.66 (filled 3-17) and TBD, and, has a downside bullish breakaway gap at 40.14 (filled) from 3-19's open.
Gold hit a 5% major buy signal twelve 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.
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, TAN, XAU, XOI, XOM
posted by Joe Ferrazzano at
2:08 PM
0 Comments:
Post a Comment
<< Home