Since SPX (S & P 500) Took Out 931.92 The Elliott Wave Count Becomes A Short Term Wave 2 Upcycle Vs Wave 2 Up Of A Short Term Wave 3 Downcycle
Since SPX (S & P 500, http://bit.ly/i0nsT) took out 931.92 (7-1-09 cycle high) the Elliott Wave count becomes a Short Term Wave 2 Upcycle vs Wave 2 up of Short Term Wave 3 Downcycle, see http://bit.ly/i0nsT.
Also, on the daily chart SPX (S & P 500, http://bit.ly/i0nsT) has done an up down up pattern since the Short Term Wave 2 Upcycle began on 7-8-09, so, this strength appears to be Wave 3 up of the Short Term Wave 2 Upcycle, which means that the peak/Short Term Wave 2 cycle high might not be imminent, and, might not occur until next week. This also means that SPX (S & P 500, http://bit.ly/i0nsT) may test the 6-11-09 cycle high at 956.23.
SPX (S & P 500, http://bit.ly/i0nsT) filled the upside gap at 923.33 today. Often important cycle highs/lows occur shortly after gap filling action has been completed. SPX created a downside gap at 905.84 at today 7-15's open.
Keep in mind that much of today 7-15's strength was simply one large cap stock (Intel (INTC)) spiking dramatically, up +7.25% today. Intel's (INTC) huge spike move led to massive index fund buying, short covering, etc, mechanical automatic buying.
The five day intraday broad market Walmart (WMT) Lead Indicator closed at super bearish (-4.00%+ vs SPX) today 7-15-09, 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 potentially severe weakness early on Thursday, 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, VIX collapsed dramatically since mid session on 7-8, which is an unusually large rise in complacency, that correctly pointed to strength since 7-8 (Short Term Wave 2 Upcycle), but, it points to severe weakness in the near future/this week/next week, because, it's a dramatic collapse of the SPX wall of worry.
SPX (S & P 500) experienced an unusually large +6.44% rise in fear/+6.44% rise in the Wall of Worry today 7-15, since SPX (S & P 500) rose +2.96% versus the SPX Volatility Index VIX rising +3.48%, which points to potentially severe SPX (S & P 500)/market weakness early on Thursday 7-16-09.
Normally (I'm leaving this in for reference purposes) 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).
Gaps tend to provide a roadmap for where an index/stock/commodity will go, when used in concert with cycles and Elliott Wave patterns (basis/crux of Trade the Cycles). In the Short Term Wave 3 Downcycle SPX (S & P 500, http://bit.ly/i0nsT) will probably fill some or all of the 855.16, 825.16, and 811.08 downside gaps.
The broad market Walmart Lead Indicator closed at extremely bearish, -2.09% vs SPX (S & P 500) today 7-15-09.
The three month indicators are off the charts bearish.
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.
SPX (S & P 500) volume was above average today 7-15-09, and, picked up dramatically from yesterday, at 4.829 billion shares versus at 3.662 billion shares versus the EMA (60) at 4.524 billion shares, which is probably a sign of important peaking action, see http://bit.ly/i0nsT (volume bar at bottom of chart and volume data at top left hand side). Index fund buying and short covering due to Intel's huge spike move today was obviously a huge factor.
I'll be looking to trade ultra short via ERY, TZA, SRS, FAZ etc this week.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
A very large SPX (S & P 500) Short Term Wave 3 Downcycle should soon begin. Since Short Term Wave 1s (up or down) normally only last 1 to 3 days, and, the one from 6-11-09 to 6-23-09 lasted well over a week, this means that Wave 3 down should be very large, since Wave 3s tend to be considerably larger in magnitude and longer in duration than Wave 1s. The power of cycles.
On the daily candlestick chart (at http://bit.ly/i0nsT) one can see that SPX (S & P 500) did an inverse Elliott Wave 12345 down up down up down large Short Term Wave 1 Downcycle from the 6-11-09 cycle high at 956.23 to the 6-23-09 cycle low at 888.86.
Fed Credit continues to collapse, which is a very bearish short term indication, see http://www.federalreserve.gov/releases/h41/Current/. It collapsed by -$9.453 Billion in the W/E 7-8-09 (Following the money, Fed and Consumer Credit data, and, insider trading activity, is obviously very important).
Federal Reserve bank credit fell by -$9.453 Billion in the week/five day period ending 7-8-09, it fell by -$9.645 Billion in the week/five day period ending 7-1-09, it collapsed a massive -$58.524 Billion in the week/five day period ending 6-24, it 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.
SPX (S & P 500) will probably try to fill downside gaps at 905.84, 919.32 (filled), 895.10 (filled), 877.52 (filled), 855.16, 825.16, and 811.08 in the near future. There are more downside gaps at 768.54, and, at 676.53.
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"The SPX (S & P 500) Cyclical Bear Market (Since 10-11-07) Elliott Wave Count," see http://bit.ly/1036Td (The Bear lives).
SPX's (S & P 500) bearish double top in March 2000/October 2007 is the bull market since 1932 peaking, which is the main problem that the US and the world faces, see http://bit.ly/FypjN.
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 prior to 6-11-09's cycle high at 956.23 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 until 6-11-09 might be the likely countertrend Intermediate Term Upcycle since 3-6-09 peaking in rollover mode (probably Wave B/4 up of the bear market since 10-11-07) versus the 5-8-09 cycle high at 930.17, see http://bit.ly/i0nsT.
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Since SPX (S & P 500) filled the downside gap at 877.52 it's 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 has 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 was 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 -2.09% versus the S & P 500 today/on 7-15, +0.10% on 7-14, -1.94% on 7-13, -0.66% on 7-10, -0.95% on 7-9, +1.28% on 7-8, +2.20% on 7-7, -0.39% on 7-6, +1.76% on 7-2, -0.58% on 7-1, +0.19% on 6-30, -0.64% on 6-29, -0.91% on 6-26, -0.82% on 6-25, -0.32% on 6-24, -0.72% on 6-23, +3.93% on 6-22, -1.36% 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.
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, correctly pointed to a collapse in SPX soon. Note that when VIX substantially outperforms SPX for a while, substantial SPX strength tends to occur shortly thereafter (3-6-09 to 6-11-09 for example), and, vice versa.
The likely countertrend Wave B Minor Intermediate Term Upcycle since 3-6-09 is probably Wave B/Wave 4 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/Wave 4 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 longer the lag time between when the super bearish broad market Walmart (WMT) Lead Indicator "kicks in," from when it originally became extremely bearish, the more important the cycle high tends 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.
I'm long FAZ (3x Finance Bear ETF) overnight, purchased on 4-22 at 88.50 (1:10 stock split on 7-9).
The XOM (Exxon Mobil) Lead Indicator was a slightly bearish -0.09% versus the XOI today/on 7-15, -0.19% on 7-14, -1.21% on 7-13, +0.01% on 7-10, -1.56% on 7-9, -0.07% on 7-8, -0.24% on 7-7, +0.96% on 7-6, +0.74% on 7-2, +0.55% on 7-1, -0.21% on 6-30, +0.71% on 6-29, -0.54% on 6-26, +0.33% on 6-25, -0.90% on 6-24, -1.22% on 6-23, +1.36% on 6-22, -0.40% 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.
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 49.15, 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 898.72 (filled), 923.33, and 946.21, see http://stockcharts.com/charts/gallery.html?%24spx.
SPX (S & P 500) has downside gaps at 905.84, 919.32 (filled), 895.10 (filled), 877.52 (filled), 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.
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/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, 39.41, 38.31 (filled)), see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart.
Good news! Wave 5/Wave C down of the huge GDX/HUI/XAU Monthly Wave A Downcycle since 6-1-09 BOTTOMED on 7-13-09 (GDX 36.76, 35.93 downside bullish breakaway gaps), see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart. The current Monthly/Short Term (countertrend) Wave B/Wave 2 Upcycle is an opportunity to take profits/exit, if you're looking to do so.
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 very bordering on 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.
GDX/HUI/XAU are in a Monthly Wave B/Wave 2 Upcycle since 7-13-09 (the NEM Lead Indicator closed at -1.20% versus the XAU today/on 7-15, -0.27% on 7-14, -0.26% on 7-13, -0.16% on 7-10, -0.53% on 7-9, -0.46% on 7-8, +0.30% on 7-7, +2.14% on 7-6, -1.30% on 7-2, -0.61% on 7-1, -0.23% on 6-30, -0.29% on 6-29, +0.24% on 6-26, -1.58% on 6-25, -1.24% on 6-24, -0.42% on 6-23, +2.67% on 6-22, -1.85% 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) 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.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 36.76, 35.93, 29.67, 29.13, 25.41, and 23.23. NEM has downside gaps at 39.11, 38.45, and TBD.
GDX has very bearish breakaway upside gaps at 44.55, 43.51, 40.92, 39.41, 38.31 (filled), and, NEM has ones at 47.44, 44.11, 42.18, 40.26 (filled).
Gold hit a 5% major buy signal 24 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
Also, on the daily chart SPX (S & P 500, http://bit.ly/i0nsT) has done an up down up pattern since the Short Term Wave 2 Upcycle began on 7-8-09, so, this strength appears to be Wave 3 up of the Short Term Wave 2 Upcycle, which means that the peak/Short Term Wave 2 cycle high might not be imminent, and, might not occur until next week. This also means that SPX (S & P 500, http://bit.ly/i0nsT) may test the 6-11-09 cycle high at 956.23.
SPX (S & P 500, http://bit.ly/i0nsT) filled the upside gap at 923.33 today. Often important cycle highs/lows occur shortly after gap filling action has been completed. SPX created a downside gap at 905.84 at today 7-15's open.
Keep in mind that much of today 7-15's strength was simply one large cap stock (Intel (INTC)) spiking dramatically, up +7.25% today. Intel's (INTC) huge spike move led to massive index fund buying, short covering, etc, mechanical automatic buying.
The five day intraday broad market Walmart (WMT) Lead Indicator closed at super bearish (-4.00%+ vs SPX) today 7-15-09, 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 potentially severe weakness early on Thursday, 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, VIX collapsed dramatically since mid session on 7-8, which is an unusually large rise in complacency, that correctly pointed to strength since 7-8 (Short Term Wave 2 Upcycle), but, it points to severe weakness in the near future/this week/next week, because, it's a dramatic collapse of the SPX wall of worry.
SPX (S & P 500) experienced an unusually large +6.44% rise in fear/+6.44% rise in the Wall of Worry today 7-15, since SPX (S & P 500) rose +2.96% versus the SPX Volatility Index VIX rising +3.48%, which points to potentially severe SPX (S & P 500)/market weakness early on Thursday 7-16-09.
Normally (I'm leaving this in for reference purposes) 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).
Gaps tend to provide a roadmap for where an index/stock/commodity will go, when used in concert with cycles and Elliott Wave patterns (basis/crux of Trade the Cycles). In the Short Term Wave 3 Downcycle SPX (S & P 500, http://bit.ly/i0nsT) will probably fill some or all of the 855.16, 825.16, and 811.08 downside gaps.
The broad market Walmart Lead Indicator closed at extremely bearish, -2.09% vs SPX (S & P 500) today 7-15-09.
The three month indicators are off the charts bearish.
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.
SPX (S & P 500) volume was above average today 7-15-09, and, picked up dramatically from yesterday, at 4.829 billion shares versus at 3.662 billion shares versus the EMA (60) at 4.524 billion shares, which is probably a sign of important peaking action, see http://bit.ly/i0nsT (volume bar at bottom of chart and volume data at top left hand side). Index fund buying and short covering due to Intel's huge spike move today was obviously a huge factor.
I'll be looking to trade ultra short via ERY, TZA, SRS, FAZ etc this week.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
A very large SPX (S & P 500) Short Term Wave 3 Downcycle should soon begin. Since Short Term Wave 1s (up or down) normally only last 1 to 3 days, and, the one from 6-11-09 to 6-23-09 lasted well over a week, this means that Wave 3 down should be very large, since Wave 3s tend to be considerably larger in magnitude and longer in duration than Wave 1s. The power of cycles.
On the daily candlestick chart (at http://bit.ly/i0nsT) one can see that SPX (S & P 500) did an inverse Elliott Wave 12345 down up down up down large Short Term Wave 1 Downcycle from the 6-11-09 cycle high at 956.23 to the 6-23-09 cycle low at 888.86.
Fed Credit continues to collapse, which is a very bearish short term indication, see http://www.federalreserve.gov/releases/h41/Current/. It collapsed by -$9.453 Billion in the W/E 7-8-09 (Following the money, Fed and Consumer Credit data, and, insider trading activity, is obviously very important).
Federal Reserve bank credit fell by -$9.453 Billion in the week/five day period ending 7-8-09, it fell by -$9.645 Billion in the week/five day period ending 7-1-09, it collapsed a massive -$58.524 Billion in the week/five day period ending 6-24, it 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.
SPX (S & P 500) will probably try to fill downside gaps at 905.84, 919.32 (filled), 895.10 (filled), 877.52 (filled), 855.16, 825.16, and 811.08 in the near future. There are more downside gaps at 768.54, and, at 676.53.
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 SPX (S & P 500) Cyclical Bear Market (Since 10-11-07) Elliott Wave Count," see http://bit.ly/1036Td (The Bear lives).
SPX's (S & P 500) bearish double top in March 2000/October 2007 is the bull market since 1932 peaking, which is the main problem that the US and the world faces, see http://bit.ly/FypjN.
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 prior to 6-11-09's cycle high at 956.23 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 until 6-11-09 might be the likely countertrend Intermediate Term Upcycle since 3-6-09 peaking in rollover mode (probably Wave B/4 up of the bear market since 10-11-07) versus the 5-8-09 cycle high at 930.17, see http://bit.ly/i0nsT.
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.
Since SPX (S & P 500) filled the downside gap at 877.52 it's 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 has 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 was 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 -2.09% versus the S & P 500 today/on 7-15, +0.10% on 7-14, -1.94% on 7-13, -0.66% on 7-10, -0.95% on 7-9, +1.28% on 7-8, +2.20% on 7-7, -0.39% on 7-6, +1.76% on 7-2, -0.58% on 7-1, +0.19% on 6-30, -0.64% on 6-29, -0.91% on 6-26, -0.82% on 6-25, -0.32% on 6-24, -0.72% on 6-23, +3.93% on 6-22, -1.36% 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.
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, correctly pointed to a collapse in SPX soon. Note that when VIX substantially outperforms SPX for a while, substantial SPX strength tends to occur shortly thereafter (3-6-09 to 6-11-09 for example), and, vice versa.
The likely countertrend Wave B Minor Intermediate Term Upcycle since 3-6-09 is probably Wave B/Wave 4 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/Wave 4 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 longer the lag time between when the super bearish broad market Walmart (WMT) Lead Indicator "kicks in," from when it originally became extremely bearish, the more important the cycle high tends 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.
I'm long FAZ (3x Finance Bear ETF) overnight, purchased on 4-22 at 88.50 (1:10 stock split on 7-9).
The XOM (Exxon Mobil) Lead Indicator was a slightly bearish -0.09% versus the XOI today/on 7-15, -0.19% on 7-14, -1.21% on 7-13, +0.01% on 7-10, -1.56% on 7-9, -0.07% on 7-8, -0.24% on 7-7, +0.96% on 7-6, +0.74% on 7-2, +0.55% on 7-1, -0.21% on 6-30, +0.71% on 6-29, -0.54% on 6-26, +0.33% on 6-25, -0.90% on 6-24, -1.22% on 6-23, +1.36% on 6-22, -0.40% 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.
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 49.15, 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 898.72 (filled), 923.33, and 946.21, see http://stockcharts.com/charts/gallery.html?%24spx.
SPX (S & P 500) has downside gaps at 905.84, 919.32 (filled), 895.10 (filled), 877.52 (filled), 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.
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/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, 39.41, 38.31 (filled)), see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart.
Good news! Wave 5/Wave C down of the huge GDX/HUI/XAU Monthly Wave A Downcycle since 6-1-09 BOTTOMED on 7-13-09 (GDX 36.76, 35.93 downside bullish breakaway gaps), see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart. The current Monthly/Short Term (countertrend) Wave B/Wave 2 Upcycle is an opportunity to take profits/exit, if you're looking to do so.
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 very bordering on 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.
GDX/HUI/XAU are in a Monthly Wave B/Wave 2 Upcycle since 7-13-09 (the NEM Lead Indicator closed at -1.20% versus the XAU today/on 7-15, -0.27% on 7-14, -0.26% on 7-13, -0.16% on 7-10, -0.53% on 7-9, -0.46% on 7-8, +0.30% on 7-7, +2.14% on 7-6, -1.30% on 7-2, -0.61% on 7-1, -0.23% on 6-30, -0.29% on 6-29, +0.24% on 6-26, -1.58% on 6-25, -1.24% on 6-24, -0.42% on 6-23, +2.67% on 6-22, -1.85% 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) 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.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 36.76, 35.93, 29.67, 29.13, 25.41, and 23.23. NEM has downside gaps at 39.11, 38.45, and TBD.
GDX has very bearish breakaway upside gaps at 44.55, 43.51, 40.92, 39.41, 38.31 (filled), and, NEM has ones at 47.44, 44.11, 42.18, 40.26 (filled).
Gold hit a 5% major buy signal 24 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
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