SPX's (S & P 500) Wave B Up Of The Cyclical Bear Market Since 10-11-07 Might Have Peaked Very Early Yesterday At 949.38
SPX's (S & P 500) Wave B up (since 3-6-09) of the Cyclical Bear Market since 10-11-07 might have peaked very early yesterday at 949.38, which is a bearish double top with 6-1's cycle high at 947.77, see http://bit.ly/i0nsT. Note also that the rate of ascent (see peaks) of the countertrend Wave B Intermediate Term Upcycle since 3-6-09 rolled over significantly in May, from the rate of ascent during April.
SPX (S & P 500) volume was very light today, at 4.214 billion shares versus the EMA (60) at 5.274 billion shares, so, the big money didn't buy today's sharp decline in a meaningful way, see http://bit.ly/i0nsT (volume bar at bottom of chart and volume data at top left hand side). One can also conclude that the big money didn't sell in a meaningful way either.
SPX (S & P 500, http://bit.ly/i0nsT) flat peaking action occurred the prior two days, see the five day intraday candlestick chart at http://finance.yahoo.com/q/ta?s=^GSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.
Note how financials dramatically underperformed SPX (S & P 500, http://bit.ly/i0nsT) recently, see http://bit.ly/2Fsn9.
Most of the strength the prior few days was due to index fund buying as a result of CSCO/TRV being added to the Dow Jones 30 Industrials Average. CSCO was up +5.62% on 6-1, TRV was up 10%+ from Thursday until yesterday.
SPX's (S & P 500) rollover upcycle the prior seven days might be the likely countertrend Intermediate Term Upcycle since 3-6-09 peaking in rollover mode (probably Wave B up of the bear market since 10-11-07) versus the 5-8-09 cycle high at 930.17, see http://bit.ly/i0nsT.
Federal Reserve bank credit collapsed a humongous -$90.672 Billion in the week/five day period ending 5-27, which is probably an indication of an imminent very large stock market decline, see http://www.federalreserve.gov/releases/h41/Current/. The fact that the Fed pumped massive liquidity into the credit markets during the week ending 5-20, Reserve Bank credit grew +$48.6 billion, explains much of the stock market's strength the past seven sessions. I'm going to get back to watching weekly (daily maybe also) Fed Credit data like a hawk, like I used to do.
Weekly Fed Credit data is very important, because, it provides a good idea of how much ammo the large and small program traders have.
SPX (S & P 500) will probably try (and probably fail) to fill today's upside gap at 944.74 early tomorrow, VIX was up +4.69% today, see http://finance.yahoo.com/q/ta?s=^GSPC&t=1d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.
The 5 day intraday broad market Walmart (WMT) Lead Indicator closed at very bearish (-1.00%+ vs SPX) today 6-3-09, see http://bit.ly/5zScR. Watch 6-1's downside gap at 919.14 from the open.
Most of the huge SPX (S & P 500) spike move from late Friday 5-29 to early 6-1 occurred in about an hour's time or less, then, it rolled over dramatically, see the five day intraday candlestick chart at http://finance.yahoo.com/q/ta?s=^GSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.
The indicators are off the charts bearish, as I've discussed in prior updates.
Check out the super bearish three month broad market Walmart (WMT) Lead Indicator, see http://finance.yahoo.com/q/ta?s=^HUI&t=3m&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,^GSPC.
Also, the three month SPX (S & P 500) Wall of Worry chart is off the charts bearish, 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, as is the five day chart, see http://finance.yahoo.com/q/ta?s=^GSPC&t=5d&l=off&z=l&q=c&p=&a=fs,p12,fs,w14&c=^vix.
The broad market Walmart (WMT) Lead Indicator closed at extremely bullish, at +3.27% versus SPX (S & P 500) today 6-3, which is a very short term bearish indication, because, SPX's inability to rally allowed it to become extremely bullish.
The five day intraday broad market Walmart (WMT) Lead Indicator closed at very bearish (-1.00%+ versus SPX) today 6-3-09, 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 very sharp +3.32% rise in fear/+3.32% rise in the wall of worry today 6-3, since SPX (S & P 500) fell -1.37% versus the SPX Volatility Index VIX rising +4.69%, which usually points to some very sharp SPX (S & P 500)/market strength early on Thursday 6-4-09, but, in this case the strength will probably be modest, based on the very bearish (-1.00%+ versus SPX) five day intraday broad market Walmart (WMT) Lead Indicator, and, the fact that SPX appears to have peaked very early yesterday 6-2/is probably in a Short Term Wave 1 Downcycle.
I'll be looking to trade ultra short via TZA, SRS, FAZ etc on Thursday.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
See the Trade the Cycles system and tools/indicators rigorously applied at Twitter, see http://twitter.com/tradethecycles. It's easy to join, then all you have to do is click follow, or, you can simply follow my Twitter web site at http://twitter.com/tradethecycles.
Today's SPX (S & P 500) volume was well below average (Yahoo's chart is a day behind right now, weird), which supports the bearish case, see http://finance.yahoo.com/q/ta?s=^GSPC&t=3m&l=off&z=l&q=c&p=v&a=p12,fs,w14&c=, because, the big money didn't buy today's sharp pullback in a meaningful way. See the volume bars at the bottom of http://stockcharts.com/charts/gallery.html?%24spx.
There's a good chance that the 919.14, 877.52 and 855.16 SPX (S & P 500) downside gaps will get filled soon. There are more downside gaps at 825.16, 811.08, 768.54, and, at 676.53.
Let me dispel the utter nonsense about a low VIX being bullish for stocks. The fact that VIX has dramatically collapsed RELATIVE to SPX (S & P 500) in recent months (SPX versus VIX is the Wall of Worry), fallen much more in % terms than SPX has risen, see http://finance.yahoo.com/q/ta?s=^GSPC&t=6m&l=off&z=l&q=c&p=&a=fs,p12,fs,w14&c=^vix, points to a likely dramatic SPX decline in the coming months.
If VIX had held up well compared to SPX (S & P 500), then, a low VIX WOULD be bullish. It's the Wall of Worry, how well VIX holds up relative to SPX, that matters. Actually, very low VIX extremes/cycle lows tend to mark important SPX cycle highs, and, very high VIX extremes/cycle highs tend to mark important SPX cycle lows.
As I said at Twitter "If the S & P 500 (SPX) fills downside gap at 877.52, 75%+ chance rally ended, if 855.16 gets filled, then a 90%+ chance the rally's over." Still true.
Watch the SPX (S & P 500) downside gaps at 919.14, 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 US Dollar's crash recently is a major negative for US equities near term, see http://stockcharts.com/charts/gallery.html?%24usd.
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 +3.27% versus the S & P 500 today/on 6-3, -1.50% on 6-2, -0.87% on 6-1, -0.98% on 5-29, -1.07% on 5-28, +0.54% on 5-27, -1.11% on 5-26, +0.44% on 5-22, +2.03% on 5-21, -0.34% on 5-20, -0.95% on 5-19, +0.64% on 5-18, -0.79% on 5-15, -2.90% on 5-14, +0.98% on 5-13, +0.63% on 5-12, +3.13% 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.
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 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: "SPX bearish double top in March 2000/October 2007 at 1552.87/1576.09 was the superbull since 1932 peaking. Main problem US/world faces."
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.
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 very overbought condition, 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, 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.
The XOM (Exxon Mobil) Lead Indicator was an extremely bullish +3.51% versus the XOI today/on 6-3, +2.44% on 6-2, +0.17% on 6-1, -1.65% on 5-29, -1.79% on 5-28, -1.27% on 5-27, -0.45% on 5-26, +0.67% on 5-22, +0.48% on 5-21, -1.97% on 5-20, -0.49% on 5-19, -1.02% on 5-18, +1.06% on 5-15, +0.11% on 5-14, +1.45% on 5-13, +1.65% on 5-12, +1.01% 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.
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 50.62 (filled), 51.53, 52.61, 53.43, 53.80 and 55.54, and, has downside gaps at 50.63 (filled), 49.51 (filled), 48.47 (filled), 48.15.
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), 908.35 (filled), 903.47 (filled), 929.23 (filled), and 934.70 (filled), 944.74, see http://stockcharts.com/charts/gallery.html?%24spx.
SPX (S & P 500) has downside gaps at 919.14, 907.39 (filled 5-12), 903.80 (filled 5-7), 882.88 (filled 5-21), 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 rollover upcycle since 4-17-09 is peaking/appears to have peaked (GDX very bearish breakaway upside gap at 44.55, great opportunity to take profits, if that's your intention, I'm not suggesting what anyone should do), 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 peaking in rollover mode/upside surprise, of the Wave 1 Intermediate Term Upcycle since late October 2008 for the XAU.
The five day intraday NEM Lead Indicator closed at 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/were doing a rollover upcycle since 4-17-09 (the NEM Lead Indicator closed at +1.05% versus the XAU today/on 6-3, -1.07% on 6-2, -0.59% on 6-1, +0.11% on 5-29, -1.01% on 5-28, -1.17% on 5-27, +0.26% on 5-26, -0.11% on 5-22, +0.96% on 5-21, -0.61% on 5-20, +0.37% on 5-19, -0.94% on 5-18, -0.98% on 5-15, +0.92% on 5-14, -0.21% on 5-13, +0.20% on 5-12, -1.41% 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 1 Intermediate Term Upcycle since late October 2008 for the XAU, 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 is peaking, 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 43.41 (filled), 43.01 (filled), 41.22, 38.43, 33.11 (filled), 29.67, 29.13, 25.41, and 23.23. GDX has very bearish breakaway upside gaps at 44.55, 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 47.35 (filled), 45.87 (filled), 43.57, 36.66 (filled 3-17) and TBD.
Gold hit a 5% major buy signal 18 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
SPX (S & P 500) volume was very light today, at 4.214 billion shares versus the EMA (60) at 5.274 billion shares, so, the big money didn't buy today's sharp decline in a meaningful way, see http://bit.ly/i0nsT (volume bar at bottom of chart and volume data at top left hand side). One can also conclude that the big money didn't sell in a meaningful way either.
SPX (S & P 500, http://bit.ly/i0nsT) flat peaking action occurred the prior two days, see the five day intraday candlestick chart at http://finance.yahoo.com/q/ta?s=^GSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.
Note how financials dramatically underperformed SPX (S & P 500, http://bit.ly/i0nsT) recently, see http://bit.ly/2Fsn9.
Most of the strength the prior few days was due to index fund buying as a result of CSCO/TRV being added to the Dow Jones 30 Industrials Average. CSCO was up +5.62% on 6-1, TRV was up 10%+ from Thursday until yesterday.
SPX's (S & P 500) rollover upcycle the prior seven days might be the likely countertrend Intermediate Term Upcycle since 3-6-09 peaking in rollover mode (probably Wave B up of the bear market since 10-11-07) versus the 5-8-09 cycle high at 930.17, see http://bit.ly/i0nsT.
Federal Reserve bank credit collapsed a humongous -$90.672 Billion in the week/five day period ending 5-27, which is probably an indication of an imminent very large stock market decline, see http://www.federalreserve.gov/releases/h41/Current/. The fact that the Fed pumped massive liquidity into the credit markets during the week ending 5-20, Reserve Bank credit grew +$48.6 billion, explains much of the stock market's strength the past seven sessions. I'm going to get back to watching weekly (daily maybe also) Fed Credit data like a hawk, like I used to do.
Weekly Fed Credit data is very important, because, it provides a good idea of how much ammo the large and small program traders have.
SPX (S & P 500) will probably try (and probably fail) to fill today's upside gap at 944.74 early tomorrow, VIX was up +4.69% today, see http://finance.yahoo.com/q/ta?s=^GSPC&t=1d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.
The 5 day intraday broad market Walmart (WMT) Lead Indicator closed at very bearish (-1.00%+ vs SPX) today 6-3-09, see http://bit.ly/5zScR. Watch 6-1's downside gap at 919.14 from the open.
Most of the huge SPX (S & P 500) spike move from late Friday 5-29 to early 6-1 occurred in about an hour's time or less, then, it rolled over dramatically, see the five day intraday candlestick chart at http://finance.yahoo.com/q/ta?s=^GSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=.
The indicators are off the charts bearish, as I've discussed in prior updates.
Check out the super bearish three month broad market Walmart (WMT) Lead Indicator, see http://finance.yahoo.com/q/ta?s=^HUI&t=3m&l=off&z=l&q=l&p=&a=m26-12-9,p12,fs,w14&c=wmt,^GSPC.
Also, the three month SPX (S & P 500) Wall of Worry chart is off the charts bearish, 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, as is the five day chart, see http://finance.yahoo.com/q/ta?s=^GSPC&t=5d&l=off&z=l&q=c&p=&a=fs,p12,fs,w14&c=^vix.
The broad market Walmart (WMT) Lead Indicator closed at extremely bullish, at +3.27% versus SPX (S & P 500) today 6-3, which is a very short term bearish indication, because, SPX's inability to rally allowed it to become extremely bullish.
The five day intraday broad market Walmart (WMT) Lead Indicator closed at very bearish (-1.00%+ versus SPX) today 6-3-09, 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 very sharp +3.32% rise in fear/+3.32% rise in the wall of worry today 6-3, since SPX (S & P 500) fell -1.37% versus the SPX Volatility Index VIX rising +4.69%, which usually points to some very sharp SPX (S & P 500)/market strength early on Thursday 6-4-09, but, in this case the strength will probably be modest, based on the very bearish (-1.00%+ versus SPX) five day intraday broad market Walmart (WMT) Lead Indicator, and, the fact that SPX appears to have peaked very early yesterday 6-2/is probably in a Short Term Wave 1 Downcycle.
I'll be looking to trade ultra short via TZA, SRS, FAZ etc on Thursday.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
See the Trade the Cycles system and tools/indicators rigorously applied at Twitter, see http://twitter.com/tradethecycles. It's easy to join, then all you have to do is click follow, or, you can simply follow my Twitter web site at http://twitter.com/tradethecycles.
Today's SPX (S & P 500) volume was well below average (Yahoo's chart is a day behind right now, weird), which supports the bearish case, see http://finance.yahoo.com/q/ta?s=^GSPC&t=3m&l=off&z=l&q=c&p=v&a=p12,fs,w14&c=, because, the big money didn't buy today's sharp pullback in a meaningful way. See the volume bars at the bottom of http://stockcharts.com/charts/gallery.html?%24spx.
There's a good chance that the 919.14, 877.52 and 855.16 SPX (S & P 500) downside gaps will get filled soon. There are more downside gaps at 825.16, 811.08, 768.54, and, at 676.53.
Let me dispel the utter nonsense about a low VIX being bullish for stocks. The fact that VIX has dramatically collapsed RELATIVE to SPX (S & P 500) in recent months (SPX versus VIX is the Wall of Worry), fallen much more in % terms than SPX has risen, see http://finance.yahoo.com/q/ta?s=^GSPC&t=6m&l=off&z=l&q=c&p=&a=fs,p12,fs,w14&c=^vix, points to a likely dramatic SPX decline in the coming months.
If VIX had held up well compared to SPX (S & P 500), then, a low VIX WOULD be bullish. It's the Wall of Worry, how well VIX holds up relative to SPX, that matters. Actually, very low VIX extremes/cycle lows tend to mark important SPX cycle highs, and, very high VIX extremes/cycle highs tend to mark important SPX cycle lows.
As I said at Twitter "If the S & P 500 (SPX) fills downside gap at 877.52, 75%+ chance rally ended, if 855.16 gets filled, then a 90%+ chance the rally's over." Still true.
Watch the SPX (S & P 500) downside gaps at 919.14, 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 US Dollar's crash recently is a major negative for US equities near term, see http://stockcharts.com/charts/gallery.html?%24usd.
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 +3.27% versus the S & P 500 today/on 6-3, -1.50% on 6-2, -0.87% on 6-1, -0.98% on 5-29, -1.07% on 5-28, +0.54% on 5-27, -1.11% on 5-26, +0.44% on 5-22, +2.03% on 5-21, -0.34% on 5-20, -0.95% on 5-19, +0.64% on 5-18, -0.79% on 5-15, -2.90% on 5-14, +0.98% on 5-13, +0.63% on 5-12, +3.13% 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.
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 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: "SPX bearish double top in March 2000/October 2007 at 1552.87/1576.09 was the superbull since 1932 peaking. Main problem US/world faces."
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.
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 very overbought condition, 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, 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.
The XOM (Exxon Mobil) Lead Indicator was an extremely bullish +3.51% versus the XOI today/on 6-3, +2.44% on 6-2, +0.17% on 6-1, -1.65% on 5-29, -1.79% on 5-28, -1.27% on 5-27, -0.45% on 5-26, +0.67% on 5-22, +0.48% on 5-21, -1.97% on 5-20, -0.49% on 5-19, -1.02% on 5-18, +1.06% on 5-15, +0.11% on 5-14, +1.45% on 5-13, +1.65% on 5-12, +1.01% 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.
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 50.62 (filled), 51.53, 52.61, 53.43, 53.80 and 55.54, and, has downside gaps at 50.63 (filled), 49.51 (filled), 48.47 (filled), 48.15.
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), 908.35 (filled), 903.47 (filled), 929.23 (filled), and 934.70 (filled), 944.74, see http://stockcharts.com/charts/gallery.html?%24spx.
SPX (S & P 500) has downside gaps at 919.14, 907.39 (filled 5-12), 903.80 (filled 5-7), 882.88 (filled 5-21), 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 rollover upcycle since 4-17-09 is peaking/appears to have peaked (GDX very bearish breakaway upside gap at 44.55, great opportunity to take profits, if that's your intention, I'm not suggesting what anyone should do), 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 peaking in rollover mode/upside surprise, of the Wave 1 Intermediate Term Upcycle since late October 2008 for the XAU.
The five day intraday NEM Lead Indicator closed at 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/were doing a rollover upcycle since 4-17-09 (the NEM Lead Indicator closed at +1.05% versus the XAU today/on 6-3, -1.07% on 6-2, -0.59% on 6-1, +0.11% on 5-29, -1.01% on 5-28, -1.17% on 5-27, +0.26% on 5-26, -0.11% on 5-22, +0.96% on 5-21, -0.61% on 5-20, +0.37% on 5-19, -0.94% on 5-18, -0.98% on 5-15, +0.92% on 5-14, -0.21% on 5-13, +0.20% on 5-12, -1.41% 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 1 Intermediate Term Upcycle since late October 2008 for the XAU, 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 is peaking, 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 43.41 (filled), 43.01 (filled), 41.22, 38.43, 33.11 (filled), 29.67, 29.13, 25.41, and 23.23. GDX has very bearish breakaway upside gaps at 44.55, 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 47.35 (filled), 45.87 (filled), 43.57, 36.66 (filled 3-17) and TBD.
Gold hit a 5% major buy signal 18 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
1:38 PM
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