SPX's (S & P 500) Countertrend Wave B Monthly Upcycle Probably Peaked On 4-2-09
SPX's (S & P 500) countertrend Wave B Monthly Upcycle since 3-6-09 probably peaked on 4-2-09 (Wave B up of the Intermediate Term Downcycle since 1-6-09), see http://stockcharts.com/charts/gallery.html?%24spx.
The S & P 500 (SPX) countertrend Wave B Monthly Upcycle 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 occurred (began 3-17-09), probably peaking on 4-2-09, but, read on.
However, the huge Wave 5 of Wave 5 rollover upcycle since 3-30-09 has done an up down up down pattern, see http://stockcharts.com/charts/gallery.html?%24spx, so, a huge final Wave 5 spike move is still a possibility, but, the broad market Walmart (WMT) Lead Indicator (+0.44% versus S & P 500 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) suggests it's unlikely.
The fact that SPX (S & P 500) experienced a very sharp +3.71% rise in complacency/-3.71% decline in the wall of worry today 4-7, since SPX (S & P 500) fell -2.39% versus the SPX Volatility Index VIX falling -1.32%, points to likely severe SPX (S & P 500)/market weakness early on Wednesday 4-8-09, and, it means that SPX (S & P 500) should easily fill it's downside gap at 811.08 early tomorrow, then watch 768.54. Also, it means that there's a good chance that the countertrend Wave B Monthly Upcycle since 3-6-09 probably peaked on 4-2-09.
The very bearish five day intraday broad market Walmart (WMT) Lead Indicator at session's end today 4-7-09, 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, points to likely early potentially severe weakness on Wednesday.
SPX's (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) relatively flat downcycle (prior to today 4-7) since 4-2-09 pointed to a very large decline, see the five day intraday chart. SPX (S & P 500) is doing an inverse Elliott Wave 12345 down up down up down downcycle since 4-2-09, with Wave 5 down probably bottoming early tomorrow 4-8-09.
SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) created an upside bearish breakaway gap at 835.48 (842.50 yesterday) at today 4-7-09's open, see the five day intraday chart. Also, broad market Lead Indicator Walmart (WMT) has an upside bearish breakaway gap at 53.43 (53.80 yesterday) from today 4-7-09's open.
The broad market Walmart (WMT) Lead Indicator is extremely bearish since 3-6-09 (countertrend Wave B Monthly Upcycle began), at +0.44% versus SPX (S & P 500) today/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.
Lastly, the S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) COT (Commitments Of Traders) data jives with the countertrend Wave B Monthly Upcycle since 3-6-09 possibly peaking on 4-2-09 (countertrend Wave B up of the intermediate term downcycle since 1-6-09), see the major averages COT data that starts about two thirds of the way down (S & P 500 is the first set of data) at http://www.cftc.gov/dea/futures/deacmelf.htm, since the savvy non contrarian S & P 500 Commercial Traders traded significantly net short again last week, adding a relatively aggressive 11,152 short futures contracts versus adding 1192 long futures contracts.
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=.
FAZ (3x Finance Bear ETF) is an opportunity to make a lot of money now (probably for the next few weeks/months), which is why so many are trading it (nearly 68 million shares traded today). Not a recommendation.
Follow my live updates at Twitter! 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, and, I like it. I'm going to try to make timely live updates at Twitter and make it a real time extension of this Blog. Also, I'll opine about other subjects.
The S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) COT (Commitments Of Traders) data reeks of countertrend Wave B Monthly Upcycle since 3-6-09 (countertrend Wave B up of the intermediate term downcycle since 1-6-09), see the major averages COT data that starts about two thirds of the way down (S & P 500 is the first set of data) at http://www.cftc.gov/dea/futures/deacmelf.htm.
The savvy non contrarian S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) and other major averages Commercial Traders experienced a gigantic short squeeze, since they covered a massive amount of short futures in the previous report, but, they also liquidated a massive amount of their long futures position in the previous report, which strongly jives with the monthly upcycle since 3-6-09 being countertrend action. Why would they liquidate a massive amount of their long futures position, if they believed that a new bull market had begun?
Given that it's very unlikely that the S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) Cyclical Bear Market since 10-11-07 bottomed on 3-6-09, then, the upcycle since 3-6-09 basically HAS to be countertrend action.
My strategy this 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 ultra short 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 (probably in progress), 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.
WMT has bearish breakaway upside gaps at 53.43, 53.80 and 55.54, and, filled the downside gap at 52.82 today.
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, 842.50, 869.89, and 934.70, see http://stockcharts.com/charts/gallery.html?%24spx.
SPX (S & P 500) has a downside gap at 811.08 from 4-2's open, one at 768.54 from 3-23-09's open, and, one 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.
Follow my live updates at Twitter! 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'll opine about other subjects.
Now a cautionary note about the short term prospects for GDX/HUI/XAU, see GDX's five day intraday chart, and, note the very large very bearish (confirmed to be a) breakaway upside gap at 34.87 from yesterday 4-6-09's open. Reliable gold/silver sector Lead Indicator NEM created one at 43.89. GDX has a downside gap at 33.20 from today 4-7's open, that it should fill early tomorrow.
The GDX/HUI/XAU Wave 1 Intermediate Term Upcycle since late October 2008 probably peaked on 3-26-09 for the XAU, and, probably 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.
Given how bullish the NEM Lead Indicator is now a deceptive humongous rollover Wave 5 spike move is possible, in which the GDX/HUI/XAU Wave 1 Intermediate Term Upcycle since late October 2008 will peak, but, the cycle high appears to be in.
GDX/HUI/XAU are probably doing 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), so, there should be a good opportunity to take profits (or exit if you're under water) once a short term countertrend Wave B upcycle (or spectacular final Wave 5 upcycle) occurs in the near future/some time in the next few weeks.
Given how bullish the NEM Lead Indicator is now, there's no reason to sweat at all, and, since GDX/HUI/XAU broke out/hit a major 5% buy signal on 12-10-08, there's no reason to sweat, as long as whatever you're trading has also broken out.
The NEM Lead Indicator is extremely bullish since 3-18-09, at -0.96% versus the XAU today/on 4-7, +0.88% on 4-6, +0.02% on 4-3, +1.95% on 4-2, +1.36% on 4-1, -1.62% on 3-31, +0.87% on 3-30, +0.38% on 3-27, +1.54% on 3-26, +1.43% on 3-25, +0.07% on 3-24, +0.00% on 3-23, +3.26% on 3-20, +1.39% on 3-19, +0.89% on 3-18, offset some by the broad market WMT Lead Indicator, at +0.44% versus SPX (S & P 500) today/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.
The gold COT (Commitments Of Traders) data jives with an intermediate term bearish scenario, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm, since the savvy non contrarian gold Commercial Traders traded a respectable long gold futures and options position in the five day period ending 3-24-09, while adding even more short gold futures and options, in anticipation of a substantial correction/intermediate term downcycle. In the latest five day period ending 3-31-09, the savvy non contrarian gold Commercial Traders engaged in both massive short covering and massive long liquidation, which doesn't change the assessment.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 33.20, 29.67, 29.13, 25.41, and 23.23. GDX has a very bullish breakaway downside gap at 35.07 (filled). GDX has a very bearish breakaway upside gap at 34.87, 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 from 3-19's open.
Gold hit a 5% major buy signal ten 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 bullish +0.61% versus the XOI (AMEX Oil and Gas) today/on 4-7, it was +1.71% on 4-6, it was -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, -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
The S & P 500 (SPX) countertrend Wave B Monthly Upcycle 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 occurred (began 3-17-09), probably peaking on 4-2-09, but, read on.
However, the huge Wave 5 of Wave 5 rollover upcycle since 3-30-09 has done an up down up down pattern, see http://stockcharts.com/charts/gallery.html?%24spx, so, a huge final Wave 5 spike move is still a possibility, but, the broad market Walmart (WMT) Lead Indicator (+0.44% versus S & P 500 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) suggests it's unlikely.
The fact that SPX (S & P 500) experienced a very sharp +3.71% rise in complacency/-3.71% decline in the wall of worry today 4-7, since SPX (S & P 500) fell -2.39% versus the SPX Volatility Index VIX falling -1.32%, points to likely severe SPX (S & P 500)/market weakness early on Wednesday 4-8-09, and, it means that SPX (S & P 500) should easily fill it's downside gap at 811.08 early tomorrow, then watch 768.54. Also, it means that there's a good chance that the countertrend Wave B Monthly Upcycle since 3-6-09 probably peaked on 4-2-09.
The very bearish five day intraday broad market Walmart (WMT) Lead Indicator at session's end today 4-7-09, 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, points to likely early potentially severe weakness on Wednesday.
SPX's (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) relatively flat downcycle (prior to today 4-7) since 4-2-09 pointed to a very large decline, see the five day intraday chart. SPX (S & P 500) is doing an inverse Elliott Wave 12345 down up down up down downcycle since 4-2-09, with Wave 5 down probably bottoming early tomorrow 4-8-09.
SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) created an upside bearish breakaway gap at 835.48 (842.50 yesterday) at today 4-7-09's open, see the five day intraday chart. Also, broad market Lead Indicator Walmart (WMT) has an upside bearish breakaway gap at 53.43 (53.80 yesterday) from today 4-7-09's open.
The broad market Walmart (WMT) Lead Indicator is extremely bearish since 3-6-09 (countertrend Wave B Monthly Upcycle began), at +0.44% versus SPX (S & P 500) today/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.
Lastly, the S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) COT (Commitments Of Traders) data jives with the countertrend Wave B Monthly Upcycle since 3-6-09 possibly peaking on 4-2-09 (countertrend Wave B up of the intermediate term downcycle since 1-6-09), see the major averages COT data that starts about two thirds of the way down (S & P 500 is the first set of data) at http://www.cftc.gov/dea/futures/deacmelf.htm, since the savvy non contrarian S & P 500 Commercial Traders traded significantly net short again last week, adding a relatively aggressive 11,152 short futures contracts versus adding 1192 long futures contracts.
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=.
FAZ (3x Finance Bear ETF) is an opportunity to make a lot of money now (probably for the next few weeks/months), which is why so many are trading it (nearly 68 million shares traded today). Not a recommendation.
Follow my live updates at Twitter! 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, and, I like it. I'm going to try to make timely live updates at Twitter and make it a real time extension of this Blog. Also, I'll opine about other subjects.
The S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) COT (Commitments Of Traders) data reeks of countertrend Wave B Monthly Upcycle since 3-6-09 (countertrend Wave B up of the intermediate term downcycle since 1-6-09), see the major averages COT data that starts about two thirds of the way down (S & P 500 is the first set of data) at http://www.cftc.gov/dea/futures/deacmelf.htm.
The savvy non contrarian S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) and other major averages Commercial Traders experienced a gigantic short squeeze, since they covered a massive amount of short futures in the previous report, but, they also liquidated a massive amount of their long futures position in the previous report, which strongly jives with the monthly upcycle since 3-6-09 being countertrend action. Why would they liquidate a massive amount of their long futures position, if they believed that a new bull market had begun?
Given that it's very unlikely that the S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) Cyclical Bear Market since 10-11-07 bottomed on 3-6-09, then, the upcycle since 3-6-09 basically HAS to be countertrend action.
My strategy this 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 ultra short 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 (probably in progress), 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.
WMT has bearish breakaway upside gaps at 53.43, 53.80 and 55.54, and, filled the downside gap at 52.82 today.
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, 842.50, 869.89, and 934.70, see http://stockcharts.com/charts/gallery.html?%24spx.
SPX (S & P 500) has a downside gap at 811.08 from 4-2's open, one at 768.54 from 3-23-09's open, and, one 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.
Follow my live updates at Twitter! 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'll opine about other subjects.
Now a cautionary note about the short term prospects for GDX/HUI/XAU, see GDX's five day intraday chart, and, note the very large very bearish (confirmed to be a) breakaway upside gap at 34.87 from yesterday 4-6-09's open. Reliable gold/silver sector Lead Indicator NEM created one at 43.89. GDX has a downside gap at 33.20 from today 4-7's open, that it should fill early tomorrow.
The GDX/HUI/XAU Wave 1 Intermediate Term Upcycle since late October 2008 probably peaked on 3-26-09 for the XAU, and, probably 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.
Given how bullish the NEM Lead Indicator is now a deceptive humongous rollover Wave 5 spike move is possible, in which the GDX/HUI/XAU Wave 1 Intermediate Term Upcycle since late October 2008 will peak, but, the cycle high appears to be in.
GDX/HUI/XAU are probably doing 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), so, there should be a good opportunity to take profits (or exit if you're under water) once a short term countertrend Wave B upcycle (or spectacular final Wave 5 upcycle) occurs in the near future/some time in the next few weeks.
Given how bullish the NEM Lead Indicator is now, there's no reason to sweat at all, and, since GDX/HUI/XAU broke out/hit a major 5% buy signal on 12-10-08, there's no reason to sweat, as long as whatever you're trading has also broken out.
The NEM Lead Indicator is extremely bullish since 3-18-09, at -0.96% versus the XAU today/on 4-7, +0.88% on 4-6, +0.02% on 4-3, +1.95% on 4-2, +1.36% on 4-1, -1.62% on 3-31, +0.87% on 3-30, +0.38% on 3-27, +1.54% on 3-26, +1.43% on 3-25, +0.07% on 3-24, +0.00% on 3-23, +3.26% on 3-20, +1.39% on 3-19, +0.89% on 3-18, offset some by the broad market WMT Lead Indicator, at +0.44% versus SPX (S & P 500) today/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.
The gold COT (Commitments Of Traders) data jives with an intermediate term bearish scenario, see the third/last data at http://www.cftc.gov/dea/options/deacmxsof.htm, since the savvy non contrarian gold Commercial Traders traded a respectable long gold futures and options position in the five day period ending 3-24-09, while adding even more short gold futures and options, in anticipation of a substantial correction/intermediate term downcycle. In the latest five day period ending 3-31-09, the savvy non contrarian gold Commercial Traders engaged in both massive short covering and massive long liquidation, which doesn't change the assessment.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 33.20, 29.67, 29.13, 25.41, and 23.23. GDX has a very bullish breakaway downside gap at 35.07 (filled). GDX has a very bearish breakaway upside gap at 34.87, 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 from 3-19's open.
Gold hit a 5% major buy signal ten 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 bullish +0.61% versus the XOI (AMEX Oil and Gas) today/on 4-7, it was +1.71% on 4-6, it was -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, -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
1:22 PM
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