Wave 4 Up Of SPX's (S & P 500) Short Term Wave 1 Downcycle Since 6-11-09 Peaked Very Early Today
Wave 4 up of SPX's (S & P 500) large Short Term Wave 1 Downcycle since 6-11-09 peaked very early today, 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=.
An SPX (S & P 500, http://bit.ly/i0nsT) Short Term Wave 1 Downcycle since 6-11-09 probably remains in effect, see http://bit.ly/i0nsT. SPX's daily candle wasn't bullish on Wednesday 6-17, it doesn't look like a short term cycle low. Also, as you'll see, the indicators are very bearish on a very short term basis.
Today's SPX (S & P 500, http://bit.ly/i0nsT) strength/sucker's spike at the open was rollover action versus yesterday's cycle high, 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 SPX (S & P 500, http://bit.ly/i0nsT) strength since early Wednesday 6-17 is probably Wave 4 up of a large Short Term Wave 1 Downcycle since 6-11-09. Watch the SPX (S & P 500, http://bit.ly/i0nsT) 877.52 downside gap, which will trigger a major SPX sell signal if filled. It looks like SPX (S & P 500, http://bit.ly/i0nsT) will try to fill the 877.52 downside gap in the next session or two, also watch the 855.16 downside gap.
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The five day intraday broad market Walmart (WMT) Lead Indicator closed at slightly bullish (0.00% to +0.24% vs SPX) today 6-19-09, see http://bit.ly/5zScR.
The five day intraday SPX (S & P 500, http://bit.ly/i0nsT) Wall of Worry chart (SPX vs VIX) points to possibly brief very early strength, followed by early potentially severe weakness on Monday, 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, because, the unusually large rise in complacency the past few days correctly pointed to some significant strength in recent days, that's likely to be followed by severe weakness.
The broad market Walmart (WMT) Lead Indicator closed at very bearish, at -1.36% versus SPX (S & P 500) today 6-19.
SPX (S & P 500) experienced an unusually large +6.48% rise in complacency/-6.48% decline in the Wall of Worry today 6-19, since SPX (S & P 500) rose +0.31% versus the SPX Volatility Index VIX falling -6.79%, which points to potentially severe SPX (S & P 500)/market weakness early on Monday 6-22-09, after probably brief very early strength.
Normally an unusually large rise complacency points to significant strength (is the non contrarian case, since complacency usually points to weakness, is normally contrarian), while an unusually large rise in fear points to weakness (fear normally points to strength). In this case the strength will probably be brief and very anemic, if it occurs at all.
SPX (S & P 500) is a GREAT example of rollover peaking action, see http://bit.ly/i0nsT. SPX's (S & P 500) Wave B up (since 3-6-09) of the Cyclical Bear Market since 10-11-07 might have peaked on Friday 6-11 at 956.23 (SPX only rose +0.48% since Friday 6-5's cycle high at 951.69), see http://bit.ly/i0nsT. Note that the rate of ascent (see peaks) of the countertrend Wave B Intermediate Term Upcycle since 3-6-09 rolled over significantly in May and again/dramatically in June, from the rate of ascent during April.
SPX (S & P 500) volume was above average and picked up dramatically today 6-19-09, at 5.140 billion shares (only 3.883 billion shares yesterday) versus the EMA (60) at 4.918 billion shares, so, the big money appears to have exited today's choppy bearish action in a meaningful way, see http://bit.ly/i0nsT (volume bar at bottom of chart and volume data at top left hand side).
If the S & P 500 (SPX) fills the downside gap at 877.52 there's a 75%+ chance that the upcycle since 3-6-09 has ended. If 855.16 gets filled, then, there's a 90%+ chance that the rally's over.
Note how financials dramatically underperformed SPX (S & P 500, http://bit.ly/i0nsT) recently, see http://bit.ly/2Fsn9.
I have to point out that normally an important cycle high will be marked by a bearish dark candle with a large bearish spike, and, 6-11's SPX (S & P 500, http://bit.ly/i0nsT) cycle high at 956.23 is white with a relatively small spike, see http://bit.ly/i0nsT.
However, the 5-7/5-8-09 bearish SPX (S & P 500, http://bit.ly/i0nsT) double top does look like an important cycle high, see http://bit.ly/i0nsT, and, volume spiked dramatically on those days. The upside since then has been largely due to massive CSCO/TRV index fund buying. This is probably a deceptive situation requiring street smarts.
The effective major cycle high and time to turn bearish was probably after the 5-7/5-8-09 bearish SPX (S & P 500, http://bit.ly/i0nsT) double top (929.58/930.17), we'll see.
SPX (S & P 500, http://bit.ly/i0nsT) volume has declined dramatically since 5-8-09, especially when one factors out the massive CSCO/TRV index fund buying, which added 50 to 60+ million shares to SPX volume in some sessions. We need to see the downside gap at 877.52 get filled for a major sell signal to occur.
Keep in mind that cycles plus the Elliott Wave count and gaps are the primary market timing consideration. They are the basis/crux of the Trade the Cycles market timing system. Indicators, data, tools, etc are used/evaluated after knowing what the cycles, Elliott Wave count, and gaps are.
However, an exception to the above is that candlestick charts help to determine or finetune what the cycles and Elliott Wave count are.
Most of the strength and volume recently 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 5-28 until 6-2.
SPX's (S & P 500) rollover upcycle of the past few weeks (until 6-11-09) 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 rose a massive +$29.406 Billion in the week/five day period ending 6-17, but, it collapsed a massive -$40.529 Billion in the week/five day period ending 6-10, after falling -$8.213 Billion in the week/five day period ending 6-3, and, after collapsing 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/. I'm 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.
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.
I'll be looking to trade ultra short via TZA, SRS, FAZ etc tomorrow.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
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There's a good chance that the 919.14 (filled), 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.
When SPX (S & P 500) fills the downside gap at 877.52, then, it'll be likely (75%+ probability) 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 -1.36% versus the S & P 500 today/on 6-19, -0.59% on 6-18, +0.78% on 6-17, +0.84% on 6-16, -0.39% on 6-15, +0.91% on 6-12, -2.09% on 6-11, -0.74% on 6-10, -0.74% on 6-9, -0.41% on 6-8, +0.64% on 6-5, -1.17% on 6-4, +3.27% 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.
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.
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 a modestly bearish -0.40% versus the XOI today/on 6-19, +0.10% on 6-18, +1.47% on 6-17, -0.25% on 6-16, +1.45% on 6-15, +0.93% on 6-12, -0.53% on 6-11, +0.39% on 6-10, -0.90% on 6-9, +0.37% on 6-8, +0.64% on 6-5, -0.59% on 6-4, +3.51% 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.
WMT has bearish breakaway upside gaps at 49.84, 51.07 (filled), 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 (filled).
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 (filled), 946.21, see http://stockcharts.com/charts/gallery.html?%24spx.
SPX (S & P 500) has downside gaps at 919.14 (filled), 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 peaked on 6-1-09 (GDX very bearish breakaway upside gaps at 44.55, 40.92, 39.54), see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart.
A huge Short Term/Monthly Wave A Downcycle is trying to find a bottom. The strength from 4-17-09 to 6-1-09 was 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 slightly bullish, 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 were doing a rollover upcycle since 4-17-09 (the NEM Lead Indicator closed at -1.85% versus the XAU today/on 6-19, +0.24% on 6-18, +0.80% on 6-17, +0.25% on 6-16, +0.95% on 6-15, -0.12% on 6-12, -0.48% on 6-11, -0.30% on 6-10, +0.49% on 6-9, -0.67% on 6-8, -1.19% on 6-5, -1.02% on 6-4, +1.05% 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 peaked on 6-1-09, 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), 42.16 (filled), 41.22 (filled), 38.43 (filled), 37.20, 33.11 (filled), 29.67, 29.13, 25.41, and 23.23. GDX has very bearish breakaway upside gaps at 44.55, 43.51, 41.33 (filled), 40.92, 39.54, and, NEM has ones at 47.44, 44.11, 42.71 (filled). NEM has downside gaps at 47.35 (filled), 45.87 (filled), 46.42 (filled), 43.57 (filled), 36.66 (filled 3-17) and TBD.
Gold hit a 5% major buy signal 20 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
An SPX (S & P 500, http://bit.ly/i0nsT) Short Term Wave 1 Downcycle since 6-11-09 probably remains in effect, see http://bit.ly/i0nsT. SPX's daily candle wasn't bullish on Wednesday 6-17, it doesn't look like a short term cycle low. Also, as you'll see, the indicators are very bearish on a very short term basis.
Today's SPX (S & P 500, http://bit.ly/i0nsT) strength/sucker's spike at the open was rollover action versus yesterday's cycle high, 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 SPX (S & P 500, http://bit.ly/i0nsT) strength since early Wednesday 6-17 is probably Wave 4 up of a large Short Term Wave 1 Downcycle since 6-11-09. Watch the SPX (S & P 500, http://bit.ly/i0nsT) 877.52 downside gap, which will trigger a major SPX sell signal if filled. It looks like SPX (S & P 500, http://bit.ly/i0nsT) will try to fill the 877.52 downside gap in the next session or two, also watch the 855.16 downside gap.
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 five day intraday broad market Walmart (WMT) Lead Indicator closed at slightly bullish (0.00% to +0.24% vs SPX) today 6-19-09, see http://bit.ly/5zScR.
The five day intraday SPX (S & P 500, http://bit.ly/i0nsT) Wall of Worry chart (SPX vs VIX) points to possibly brief very early strength, followed by early potentially severe weakness on Monday, 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, because, the unusually large rise in complacency the past few days correctly pointed to some significant strength in recent days, that's likely to be followed by severe weakness.
The broad market Walmart (WMT) Lead Indicator closed at very bearish, at -1.36% versus SPX (S & P 500) today 6-19.
SPX (S & P 500) experienced an unusually large +6.48% rise in complacency/-6.48% decline in the Wall of Worry today 6-19, since SPX (S & P 500) rose +0.31% versus the SPX Volatility Index VIX falling -6.79%, which points to potentially severe SPX (S & P 500)/market weakness early on Monday 6-22-09, after probably brief very early strength.
Normally an unusually large rise complacency points to significant strength (is the non contrarian case, since complacency usually points to weakness, is normally contrarian), while an unusually large rise in fear points to weakness (fear normally points to strength). In this case the strength will probably be brief and very anemic, if it occurs at all.
SPX (S & P 500) is a GREAT example of rollover peaking action, see http://bit.ly/i0nsT. SPX's (S & P 500) Wave B up (since 3-6-09) of the Cyclical Bear Market since 10-11-07 might have peaked on Friday 6-11 at 956.23 (SPX only rose +0.48% since Friday 6-5's cycle high at 951.69), see http://bit.ly/i0nsT. Note that the rate of ascent (see peaks) of the countertrend Wave B Intermediate Term Upcycle since 3-6-09 rolled over significantly in May and again/dramatically in June, from the rate of ascent during April.
SPX (S & P 500) volume was above average and picked up dramatically today 6-19-09, at 5.140 billion shares (only 3.883 billion shares yesterday) versus the EMA (60) at 4.918 billion shares, so, the big money appears to have exited today's choppy bearish action in a meaningful way, see http://bit.ly/i0nsT (volume bar at bottom of chart and volume data at top left hand side).
If the S & P 500 (SPX) fills the downside gap at 877.52 there's a 75%+ chance that the upcycle since 3-6-09 has ended. If 855.16 gets filled, then, there's a 90%+ chance that the rally's over.
Note how financials dramatically underperformed SPX (S & P 500, http://bit.ly/i0nsT) recently, see http://bit.ly/2Fsn9.
I have to point out that normally an important cycle high will be marked by a bearish dark candle with a large bearish spike, and, 6-11's SPX (S & P 500, http://bit.ly/i0nsT) cycle high at 956.23 is white with a relatively small spike, see http://bit.ly/i0nsT.
However, the 5-7/5-8-09 bearish SPX (S & P 500, http://bit.ly/i0nsT) double top does look like an important cycle high, see http://bit.ly/i0nsT, and, volume spiked dramatically on those days. The upside since then has been largely due to massive CSCO/TRV index fund buying. This is probably a deceptive situation requiring street smarts.
The effective major cycle high and time to turn bearish was probably after the 5-7/5-8-09 bearish SPX (S & P 500, http://bit.ly/i0nsT) double top (929.58/930.17), we'll see.
SPX (S & P 500, http://bit.ly/i0nsT) volume has declined dramatically since 5-8-09, especially when one factors out the massive CSCO/TRV index fund buying, which added 50 to 60+ million shares to SPX volume in some sessions. We need to see the downside gap at 877.52 get filled for a major sell signal to occur.
Keep in mind that cycles plus the Elliott Wave count and gaps are the primary market timing consideration. They are the basis/crux of the Trade the Cycles market timing system. Indicators, data, tools, etc are used/evaluated after knowing what the cycles, Elliott Wave count, and gaps are.
However, an exception to the above is that candlestick charts help to determine or finetune what the cycles and Elliott Wave count are.
Most of the strength and volume recently 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 5-28 until 6-2.
SPX's (S & P 500) rollover upcycle of the past few weeks (until 6-11-09) 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 rose a massive +$29.406 Billion in the week/five day period ending 6-17, but, it collapsed a massive -$40.529 Billion in the week/five day period ending 6-10, after falling -$8.213 Billion in the week/five day period ending 6-3, and, after collapsing 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/. I'm 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.
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.
I'll be looking to trade ultra short via TZA, SRS, FAZ etc tomorrow.
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.
There's a good chance that the 919.14 (filled), 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.
When SPX (S & P 500) fills the downside gap at 877.52, then, it'll be likely (75%+ probability) 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 -1.36% versus the S & P 500 today/on 6-19, -0.59% on 6-18, +0.78% on 6-17, +0.84% on 6-16, -0.39% on 6-15, +0.91% on 6-12, -2.09% on 6-11, -0.74% on 6-10, -0.74% on 6-9, -0.41% on 6-8, +0.64% on 6-5, -1.17% on 6-4, +3.27% 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.
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.
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 a modestly bearish -0.40% versus the XOI today/on 6-19, +0.10% on 6-18, +1.47% on 6-17, -0.25% on 6-16, +1.45% on 6-15, +0.93% on 6-12, -0.53% on 6-11, +0.39% on 6-10, -0.90% on 6-9, +0.37% on 6-8, +0.64% on 6-5, -0.59% on 6-4, +3.51% 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.
WMT has bearish breakaway upside gaps at 49.84, 51.07 (filled), 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 (filled).
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 (filled), 946.21, see http://stockcharts.com/charts/gallery.html?%24spx.
SPX (S & P 500) has downside gaps at 919.14 (filled), 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 peaked on 6-1-09 (GDX very bearish breakaway upside gaps at 44.55, 40.92, 39.54), see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart.
A huge Short Term/Monthly Wave A Downcycle is trying to find a bottom. The strength from 4-17-09 to 6-1-09 was 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 slightly bullish, 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 were doing a rollover upcycle since 4-17-09 (the NEM Lead Indicator closed at -1.85% versus the XAU today/on 6-19, +0.24% on 6-18, +0.80% on 6-17, +0.25% on 6-16, +0.95% on 6-15, -0.12% on 6-12, -0.48% on 6-11, -0.30% on 6-10, +0.49% on 6-9, -0.67% on 6-8, -1.19% on 6-5, -1.02% on 6-4, +1.05% 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 peaked on 6-1-09, 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), 42.16 (filled), 41.22 (filled), 38.43 (filled), 37.20, 33.11 (filled), 29.67, 29.13, 25.41, and 23.23. GDX has very bearish breakaway upside gaps at 44.55, 43.51, 41.33 (filled), 40.92, 39.54, and, NEM has ones at 47.44, 44.11, 42.71 (filled). NEM has downside gaps at 47.35 (filled), 45.87 (filled), 46.42 (filled), 43.57 (filled), 36.66 (filled 3-17) and TBD.
Gold hit a 5% major buy signal 20 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
2:13 PM
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