The S & P 500 (SPX) Will Probably Try To Fill The Downside Gap At 907.39 Very Early On Tuesday
The S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) will probably try to fill the downside gap at 907.39 (from Friday's open) very early on Tuesday, see the five day intraday candlestick chart at see http://finance.yahoo.com/q/ta?s=^GSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=. Note the bearish spike on a bearish dark candle late in the session.
The S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) has what appear to be bearish breakaway upside gaps at 929.23 (from today's open) and 934.70, just in case additional upside surprise occurs in the near future.
The S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) likely countertrend Wave B Minor Intermediate Term Upcycle since 3-6-09 might have peaked at 930.17 very late on Friday 5-8 (probably also Wave B up of the Cyclical Bear Market since 10-11-07), putting in a near perfect bearish double top with Thursday 5-7-09's cycle high at 929.58.
Watch the SPX (S & P 500) downside gap from Friday's open at 907.39 on Tuesday, with more at 877.52, 855.16, 825.16, 811.08, 768.54, and, at 676.53.
When SPX (S & P 500) fills the downside gap at 855.16 (and hits 850ish shortly thereafter), then, it'll be very likely that the countertrend Wave B Minor Intermediate Term Upcycle since 3-6-09 has peaked, because, the uptrend line/channel since mid/late March will have clearly/decisively broken down, see http://stockcharts.com/charts/gallery.html?%24spx, triggering an important sell signal/technical breakdown.
The NASDAQ 100 (NDX, http://stockcharts.com/charts/gallery.html?%24ndx) might have peaked on Wednesday 5-6-09 just after the open, see http://finance.yahoo.com/q/ta?s=^ndx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
The broad market Walmart (WMT) Lead Indicator was an extremely bullish +3.13% versus SPX (S & P 500) today/on 5-11, which jives with early significant weakness/downside gap filling action tomorrow, because, it's a very short term bearish indication.
The five day intraday broad market Walmart (WMT) Lead Indicator closed at bearish today 5-11-09, 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.
SPX (S & P 500) experienced a modest +0.41% rise in fear/+0.41% rise in the wall of worry today 5-11, since SPX (S & P 500) fell -2.15% versus the SPX Volatility Index VIX rising +2.56%, which points to likely modest SPX (S & P 500)/market strength early on Tuesday 5-12-09, after likely very early weakness/downside gap filling action (907.39).
The S & P 500 (SPX) stochastics were extremely overbought on Friday 5-8-09, at 92.23 and 93.64, and, Williams %R was at -0.91, very close to the overbought maximum extreme at 0 (-100 is an oversold extreme).
The US Dollar's crash recently is a major negative for US equities this week, see http://stockcharts.com/charts/gallery.html?%24usd.
The huge S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) Wave 5 (of Wave 5 really) type blowoff spike move of the prior eight sessions jives well with important peaking action.
Also, the broad market Walmart (WMT) Lead Indicator (data since 3-6-09, when a likely countertrend Wave B Minor Intermediate Term Upcycle began) is super bearish since 3-6-09, at +3.13% versus the S & P 500 today/on 5-11, -1.91% on 5-8, +2.09% on 5-7, -3.62% on 5-6, -0.37% on 5-5, -1.81% on 5-4, -1.23% on 5-1, +0.00% on 4-30, +1.92% on 4-29, +0.19% on 4-28, +2.35% on 4-27, -3.71% 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.
Additionally, the collapse of 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 (since 3-6-09 in this case), and, vice versa.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
From the 1576.09 S & P 500 (SPX) Cyclical Bull Market cycle high on 10-11-07 to the cycle low at 666.79 on 3-6-09 the S & P 500 (SPX) did an inverse Elliott Wave 12345 pattern, with 1256.98 being the Wave 1 down cycle low (inverse Elliott Wave 12345 pattern), 1440.24 being the Wave 2 up cycle high, 741.02 being the Wave 3 down cycle low (inverse Elliott Wave 12345 pattern), 943.85 being the Wave 4 up cycle high, and, with 666.79 being the Wave 5 down cycle low, see chart two/Weekly View http://stockcharts.com/charts/gallery.html?%24spx, which is probably Wave A down of the Cyclical Bear Market since 10-11-07.
The likely countertrend Wave B Minor Intermediate Term Upcycle since 3-6-09 is/was probably Wave B up of the Cyclical Bear Market since 10-11-07. It's the first meaningful S & P 500 (SPX) rally of the Cyclical Bear Market since 10-11-07, see chart two/Weekly View http://stockcharts.com/charts/gallery.html?%24spx, which is a sign that it's Wave B up of the Cyclical Bear Market since 10-11-07. The unusual amount of very large spiking action since 3-6-09, even very early on, also jives well with countertrend and important peaking action.
One of today's Tweets: "The S & P 500 failed for a second time to fill the upside gap at 934.70, which could be a sign that the rally's over."
Follow my live updates (the "play by play") 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. Or, you can simply follow my Twitter web site at http://twitter.com/tradethecycles.
As long as SPX (S & P 500) peaks below the 1-6-09 943.85 cycle high, see chart two at http://stockcharts.com/charts/gallery.html?%24spx, then, the upcoming cycle high (maybe at 930.17 on Friday 5-8-09) will probably be, until proven otherwise, a countertrend Wave B type cycle high, that's probably Wave B up of the Intermediate Term Downcycle since 1-6-09, to be precise, and, is probably also Wave B up of the Cyclical Bear Market since 10-11-07.
The Trade the Cycles system doesn't flash an important sell signal until the S & P 500 (SPX) uptrend line/channel since mid/late March clearly/decisively breaks down, see http://stockcharts.com/charts/gallery.html?%24spx. However, given the extremely overbought condition on Friday/recently, the huge Wave 5 spike move recently, the other factors discussed above, and, caution is obviously in order.
The longer the lag time between when the super bearish broad market Walmart (WMT) Lead Indicator (data beginning on 3-6-09) "kicks in," from when it originally became extremely bearish, the more important the upcoming cycle high will tend to be, because, the larger, longer, more important the upcycle or downcycle, the longer the lag time tends to be before an important indicator "kicks in," and, the expected action (severe weakness in this case) begins.
Therefore, the long lag time recently (recent weeks) points to an important cycle high occurring soon (maybe at 930.17 on Friday 5-8-09), and, jives with it being a likely countertrend Wave B type cycle high, probably Wave B up of the intermediate term downcycle since 1-6-09, see http://stockcharts.com/charts/gallery.html?%24spx.
I'm long FAZ (3x Finance Bear ETF) overnight, purchased on 4-22 at 8.85 (in an IRA, smaller than normal position, I knew that I might have been early).
The XOM (Exxon Mobil) Lead Indicator was a very bullish +1.01% versus the XOI today/on 5-11, -1.79% on 5-8, +1.48% on 5-7, -2.03% on 5-6, +0.33% on 5-5, -2.76% on 5-4, -1.30% on 5-1, -0.45% on 4-30, -0.35% on 4-29, +0.92% on 4-28, +1.44% on 4-27, -1.72% 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.
SPX's (S & P 500) countertrend Wave B Minor Intermediate Term Upcycle, that began on 3-6-09, is probably Wave B up of the Intermediate Term Downcycle since 1-6-09, see http://stockcharts.com/charts/gallery.html?%24spx.
WMT has bearish breakaway upside gaps at 51.53, 52.61, 53.43, 53.80 and 55.54, and, has downside gaps at 49.51, 48.47.
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), 929.23, and 934.70, see http://stockcharts.com/charts/gallery.html?%24spx.
SPX (S & P 500) has downside gaps at 907.39, 903.80 (filled 5-7), 877.52, 855.16, 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/soon (probably for the next few weeks/months), which is why so many are trading it. Not a recommendation.
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.
GDX/HUI/XAU's short term countertrend Wave B upcycle since 4-17-09 is peaking, 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 of the Wave 2 Intermediate Term Downcycle since 3-26-09 for the XAU (very early April for GDX/HUI).
The five day intraday NEM Lead Indicator closed at extremely 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, which is a very short term bullish indication.
GDX/HUI/XAU are doing a countertrend Wave B upcycle since 4-17-09 (the NEM Lead Indicator closed at -1.41% versus the XAU today/on 5-11, -1.04% on 5-8, +1.53% on 5-7, -1.70% on 5-6, -0.03% on 5-5, -0.46% on 5-4, -4.10% on 5-1, +1.00% on 4-30, -1.03% on 4-29, -0.56% on 4-28, +2.63% on 4-27, +1.22% 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 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.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 33.11 (filled), 29.67, 29.13, 25.41, and 23.23. GDX has very bearish breakaway upside gaps at 34.87 and 34.37 (both filled 5-4), and, NEM has one at 43.89 (filled 5-7) and one at 41.68 (filled 5-5). 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 15 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
The S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) has what appear to be bearish breakaway upside gaps at 929.23 (from today's open) and 934.70, just in case additional upside surprise occurs in the near future.
The S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) likely countertrend Wave B Minor Intermediate Term Upcycle since 3-6-09 might have peaked at 930.17 very late on Friday 5-8 (probably also Wave B up of the Cyclical Bear Market since 10-11-07), putting in a near perfect bearish double top with Thursday 5-7-09's cycle high at 929.58.
Watch the SPX (S & P 500) downside gap from Friday's open at 907.39 on Tuesday, with more at 877.52, 855.16, 825.16, 811.08, 768.54, and, at 676.53.
When SPX (S & P 500) fills the downside gap at 855.16 (and hits 850ish shortly thereafter), then, it'll be very likely that the countertrend Wave B Minor Intermediate Term Upcycle since 3-6-09 has peaked, because, the uptrend line/channel since mid/late March will have clearly/decisively broken down, see http://stockcharts.com/charts/gallery.html?%24spx, triggering an important sell signal/technical breakdown.
The NASDAQ 100 (NDX, http://stockcharts.com/charts/gallery.html?%24ndx) might have peaked on Wednesday 5-6-09 just after the open, see http://finance.yahoo.com/q/ta?s=^ndx&t=5d&l=off&z=l&q=c&p=&a=p12%2Cfs%2Cw14&c=.
The broad market Walmart (WMT) Lead Indicator was an extremely bullish +3.13% versus SPX (S & P 500) today/on 5-11, which jives with early significant weakness/downside gap filling action tomorrow, because, it's a very short term bearish indication.
The five day intraday broad market Walmart (WMT) Lead Indicator closed at bearish today 5-11-09, 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.
SPX (S & P 500) experienced a modest +0.41% rise in fear/+0.41% rise in the wall of worry today 5-11, since SPX (S & P 500) fell -2.15% versus the SPX Volatility Index VIX rising +2.56%, which points to likely modest SPX (S & P 500)/market strength early on Tuesday 5-12-09, after likely very early weakness/downside gap filling action (907.39).
The S & P 500 (SPX) stochastics were extremely overbought on Friday 5-8-09, at 92.23 and 93.64, and, Williams %R was at -0.91, very close to the overbought maximum extreme at 0 (-100 is an oversold extreme).
The US Dollar's crash recently is a major negative for US equities this week, see http://stockcharts.com/charts/gallery.html?%24usd.
The huge S & P 500 (SPX, http://stockcharts.com/charts/gallery.html?%24spx) Wave 5 (of Wave 5 really) type blowoff spike move of the prior eight sessions jives well with important peaking action.
Also, the broad market Walmart (WMT) Lead Indicator (data since 3-6-09, when a likely countertrend Wave B Minor Intermediate Term Upcycle began) is super bearish since 3-6-09, at +3.13% versus the S & P 500 today/on 5-11, -1.91% on 5-8, +2.09% on 5-7, -3.62% on 5-6, -0.37% on 5-5, -1.81% on 5-4, -1.23% on 5-1, +0.00% on 4-30, +1.92% on 4-29, +0.19% on 4-28, +2.35% on 4-27, -3.71% 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.
Additionally, the collapse of 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 (since 3-6-09 in this case), and, vice versa.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
From the 1576.09 S & P 500 (SPX) Cyclical Bull Market cycle high on 10-11-07 to the cycle low at 666.79 on 3-6-09 the S & P 500 (SPX) did an inverse Elliott Wave 12345 pattern, with 1256.98 being the Wave 1 down cycle low (inverse Elliott Wave 12345 pattern), 1440.24 being the Wave 2 up cycle high, 741.02 being the Wave 3 down cycle low (inverse Elliott Wave 12345 pattern), 943.85 being the Wave 4 up cycle high, and, with 666.79 being the Wave 5 down cycle low, see chart two/Weekly View http://stockcharts.com/charts/gallery.html?%24spx, which is probably Wave A down of the Cyclical Bear Market since 10-11-07.
The likely countertrend Wave B Minor Intermediate Term Upcycle since 3-6-09 is/was probably Wave B up of the Cyclical Bear Market since 10-11-07. It's the first meaningful S & P 500 (SPX) rally of the Cyclical Bear Market since 10-11-07, see chart two/Weekly View http://stockcharts.com/charts/gallery.html?%24spx, which is a sign that it's Wave B up of the Cyclical Bear Market since 10-11-07. The unusual amount of very large spiking action since 3-6-09, even very early on, also jives well with countertrend and important peaking action.
One of today's Tweets: "The S & P 500 failed for a second time to fill the upside gap at 934.70, which could be a sign that the rally's over."
Follow my live updates (the "play by play") 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. Or, you can simply follow my Twitter web site at http://twitter.com/tradethecycles.
As long as SPX (S & P 500) peaks below the 1-6-09 943.85 cycle high, see chart two at http://stockcharts.com/charts/gallery.html?%24spx, then, the upcoming cycle high (maybe at 930.17 on Friday 5-8-09) will probably be, until proven otherwise, a countertrend Wave B type cycle high, that's probably Wave B up of the Intermediate Term Downcycle since 1-6-09, to be precise, and, is probably also Wave B up of the Cyclical Bear Market since 10-11-07.
The Trade the Cycles system doesn't flash an important sell signal until the S & P 500 (SPX) uptrend line/channel since mid/late March clearly/decisively breaks down, see http://stockcharts.com/charts/gallery.html?%24spx. However, given the extremely overbought condition on Friday/recently, the huge Wave 5 spike move recently, the other factors discussed above, and, caution is obviously in order.
The longer the lag time between when the super bearish broad market Walmart (WMT) Lead Indicator (data beginning on 3-6-09) "kicks in," from when it originally became extremely bearish, the more important the upcoming cycle high will tend to be, because, the larger, longer, more important the upcycle or downcycle, the longer the lag time tends to be before an important indicator "kicks in," and, the expected action (severe weakness in this case) begins.
Therefore, the long lag time recently (recent weeks) points to an important cycle high occurring soon (maybe at 930.17 on Friday 5-8-09), and, jives with it being a likely countertrend Wave B type cycle high, probably Wave B up of the intermediate term downcycle since 1-6-09, see http://stockcharts.com/charts/gallery.html?%24spx.
I'm long FAZ (3x Finance Bear ETF) overnight, purchased on 4-22 at 8.85 (in an IRA, smaller than normal position, I knew that I might have been early).
The XOM (Exxon Mobil) Lead Indicator was a very bullish +1.01% versus the XOI today/on 5-11, -1.79% on 5-8, +1.48% on 5-7, -2.03% on 5-6, +0.33% on 5-5, -2.76% on 5-4, -1.30% on 5-1, -0.45% on 4-30, -0.35% on 4-29, +0.92% on 4-28, +1.44% on 4-27, -1.72% 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.
SPX's (S & P 500) countertrend Wave B Minor Intermediate Term Upcycle, that began on 3-6-09, is probably Wave B up of the Intermediate Term Downcycle since 1-6-09, see http://stockcharts.com/charts/gallery.html?%24spx.
WMT has bearish breakaway upside gaps at 51.53, 52.61, 53.43, 53.80 and 55.54, and, has downside gaps at 49.51, 48.47.
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), 929.23, and 934.70, see http://stockcharts.com/charts/gallery.html?%24spx.
SPX (S & P 500) has downside gaps at 907.39, 903.80 (filled 5-7), 877.52, 855.16, 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/soon (probably for the next few weeks/months), which is why so many are trading it. Not a recommendation.
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.
GDX/HUI/XAU's short term countertrend Wave B upcycle since 4-17-09 is peaking, 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 of the Wave 2 Intermediate Term Downcycle since 3-26-09 for the XAU (very early April for GDX/HUI).
The five day intraday NEM Lead Indicator closed at extremely 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, which is a very short term bullish indication.
GDX/HUI/XAU are doing a countertrend Wave B upcycle since 4-17-09 (the NEM Lead Indicator closed at -1.41% versus the XAU today/on 5-11, -1.04% on 5-8, +1.53% on 5-7, -1.70% on 5-6, -0.03% on 5-5, -0.46% on 5-4, -4.10% on 5-1, +1.00% on 4-30, -1.03% on 4-29, -0.56% on 4-28, +2.63% on 4-27, +1.22% 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 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.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 33.11 (filled), 29.67, 29.13, 25.41, and 23.23. GDX has very bearish breakaway upside gaps at 34.87 and 34.37 (both filled 5-4), and, NEM has one at 43.89 (filled 5-7) and one at 41.68 (filled 5-5). 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 15 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
2:17 PM
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