Wave 1 Down Of SPX Short Term Wave 3 Downcycle Since 7-1 Is Bottoming
Today's SPX (S & P 500, http://bit.ly/i0nsT) weakness was probably still (Wave 5 down) Wave 1 Down of the Short Term Wave 3 Downcycle since 7-1-09, see http://bit.ly/65kRT, and, might fill the 877.52 downside gap early tomorrow, which would trigger a major SPX (S & P 500, http://bit.ly/i0nsT) sell signal.
Yesterday's SPX (S & P 500, http://bit.ly/i0nsT) strength was the first significant strength of the Short Term Wave 3 Downcycle since 7-1-09, see http://bit.ly/65kRT, which means that it's probably Wave B/Wave 4 up of Wave 1 Down of the Short Term Wave 3 Downcycle since 7-1-09, which jives with the extremely bullish broad market Walmart (WMT) Lead Indicator since 7-1-09, at +2.20% versus SPX today/on 7-7, -0.39% on 7-6, +1.76% on 7-2, and -0.58% on 7-1.
The SPX (S & P 500, http://bit.ly/i0nsT) wall of worry (SPX vs VIX) experienced a very sharp rise in fear today 7-7 (SPX fell -1.97% vs VIX rising +6.38%), which points to early substantial SPX strength tomorrow, probably after very early weakness, that will fill the 877.52 downside gap.
The SPX (S & P 500, http://bit.ly/i0nsT) Short Term Wave 3 Downcycle Fibonacci cycle low Target: Short Term Wave 1 Downcycle = 67.37 points x 2.618 = 176.37 points; Wave 2 top = 931.92 - 176.37 = 755.55 Short Term Wave 3 Downcycle Fibonacci cycle low Target (768.54 downside gap).
Wave 1 down of the SPX (S & P 500, http://bit.ly/i0nsT) Short Term Wave 3 Downcycle will probably bottom early tomorrow, shortly after filling the 877.52 downside gap.
Wave 3 down of the SPX (S & P 500, http://bit.ly/i0nsT) Short Term Wave 3 Downcycle will probably bottom shortly after filling the 811.08 downside gap (also fill the 855.16 and 825.16 downside gaps).
Wave 5 down of the SPX (S & P 500, http://bit.ly/i0nsT) Short Term Wave 3 Downcycle will probably bottom shortly after filling the 768.54 downside gap. The 676.53 downside gap should get filled in the Short Term Wave 5 Downcycle in that case.
The likely scenario discussed in the paragraphs above was discussed yesterday, except for the 877.52 downside gap probably getting filled in the Very Short Term Wave 1 Downcycle.
SPX's (S & P 500, http://bit.ly/i0nsT) Short Term Wave 2 Upcycle that began early on 6-23 peaked Thursday 7-1-09 at 931.92, see the five day intraday candlestick chart at http://bit.ly/ggZoR, and, see the daily candlestick chart at http://bit.ly/i0nsT.
The Short Term Wave 2 Upcycle Fibonacci Target: Wave 1 down 956.23-888.86 = 67.37 x 0.618 = 41.63 + 888.86 = 930.49 vs 931.92 cycle high on Thursday 7-1-09, very close.
It looks like I'll be doing Fibonacci targets from now on, not because they're some magical easy to use panacea that works well every time, but, because they're probably another highly useful tool to add to the arsenal.
SPX (S & P 500) volume was well below average today 7-7-09, at 3.887 billion shares versus the EMA (60) at 4.610 billion shares, so, the big money didn't buy today's severe weakness in a meaningful way, see http://bit.ly/i0nsT (volume bar at bottom of chart and volume data at top left hand side).
SPX (S & P 500) is in Wave 1 down of a very large Short Term Wave 3 Downcycle since early Thursday 7-1, see http://bit.ly/ggZoR. Watch the downside gaps at 877.52, 855.16, 825.16, and, 811.08 this week (more at 768.54 and 676.53).
SPX (S & P 500, http://bit.ly/i0nsT) is doing a large very short term Wave 1 down move since 7-1, see the five day candlestick chart see http://finance.yahoo.com/q/ta?s=^GSPC&t=1d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=, and, it should/probably will try to fill the 877.52 downside gap very early on Wednesday, then, a very short term Wave 2 up move should begin shortly thereafter, which should be a great opportunity to trade short (as it peaks or early in a very short term Wave 3 down move), if you're looking to do so.
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.
Watch (in the very short term Wave 2 up) the SPX (S & P 500) likely bearish breakaway upside gap at 923.33 from 7-2's open (or upside gap(s) for whatever index/commodity/stock you're trading, assuming one was created recently). Once SPX (S & P 500) clearly fails to fill that upside gap at 923.33, OR, shortly after it fills that upside gap, that'll be a sign to look to go short, if you're looking to do so.
The broad market Walmart (WMT) Lead Indicator closed at extremely bullish, at +2.20% versus SPX (S & P 500) today 7-7.
The five day intraday broad market Walmart (WMT) Lead Indicator closed at extremely bullish (+2.00% to +3.99% vs SPX) today 7-7-09, 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 early potentially severe weakness on Wednesday, 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 rose dramatically relative to SPX since early on 7-1, so, the SPX Wall of Worry/fear has soared, which is a bearish unusually large rise in fear, which correctly pointed to severe weakness today.
SPX (S & P 500) experienced a very sharp +4.41% rise in fear/+4.41% rise in the Wall of Worry today 7-7, since SPX (S & P 500) fell -1.97% versus the SPX Volatility Index VIX rising +6.38%, which points to substantial SPX (S & P 500)/market strength early on Wednesday 7-8-09, after likely very early weakness.
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).
A very large SPX (S & P 500) Short Term Wave 3 Downcycle has begun. 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. The Short Term Wave 2 (Elliott Wave 12345 up down up down up) Upcycle since 6-23-09 peaked on 7-1 at 931.92.
Fed Credit continues to collapse, which is a very bearish short term indication, see http://www.federalreserve.gov/releases/h41/Current/. It collapsed by -$9.645 Billion in the W/E 7-1-09 (Following the money, Fed and Consumer Credit data, and, insider trading activity, is obviously very important).
Federal Reserve bank credit 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 919.32 (filled), 895.10 (filled), 877.52, and 855.16 in the near future.
Watch the SPX (S & P 500, http://bit.ly/i0nsT) 877.52 downside gap, which will trigger a major SPX sell signal if filled.
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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 & P 500) is a GREAT example of rollover peaking action, see http://bit.ly/i0nsT. SPX's (S & P 500) Wave B/Wave 4 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 (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.
SPX (S & P 500) volume was above average and picked up dramatically on Friday 6-19-09, at 5.140 billion shares (only 3.883 billion shares on 6-18/Thursday) versus the EMA (60) at 4.918 billion shares, so, the big money appears to have exited Friday 6-19'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).
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.
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 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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There's a good chance that the 919.32 (filled), 895.10 (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 +2.20% versus the S & P 500 today/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.
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.
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 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 slightly bearish -0.24% versus the XOI today/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, -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 49.15, 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 923.33, and 946.21, see http://stockcharts.com/charts/gallery.html?%24spx.
SPX (S & P 500) has downside gaps at 919.32 (filled), 895.10 (filled), 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.
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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), see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart.
Elliott Wave Count Revision: The current downcycle appears to be Wave 5 down of the huge GDX/HUI/XAU Monthly Wave A/Wave 1 Downcycle since 6-1-09 (37.815 (filled), 37.33 (filled) GDX downside gaps), see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart. The upcoming Monthly/Short Term (countertrend) Wave B/Wave 2 Upcycle will be 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 modestly 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 are still doing a Monthly Wave A/Wave 1 Downcycle since 6-1-09 (the NEM Lead Indicator closed at +0.30% versus the XAU today/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, +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.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 37.815 (filled), 37.33 (filled), 29.67, 29.13, 25.41, and 23.23. NEM has downside gaps at 41.32 (filled), 40.87 (filled), and TBD.
GDX has very bearish breakaway upside gaps at 44.55, 43.51, 40.92, 39.41, 38.31, and, NEM has ones at 47.44, 44.11, 42.18, 40.26 (filled).
Gold hit a 5% major buy signal 23 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
Yesterday's SPX (S & P 500, http://bit.ly/i0nsT) strength was the first significant strength of the Short Term Wave 3 Downcycle since 7-1-09, see http://bit.ly/65kRT, which means that it's probably Wave B/Wave 4 up of Wave 1 Down of the Short Term Wave 3 Downcycle since 7-1-09, which jives with the extremely bullish broad market Walmart (WMT) Lead Indicator since 7-1-09, at +2.20% versus SPX today/on 7-7, -0.39% on 7-6, +1.76% on 7-2, and -0.58% on 7-1.
The SPX (S & P 500, http://bit.ly/i0nsT) wall of worry (SPX vs VIX) experienced a very sharp rise in fear today 7-7 (SPX fell -1.97% vs VIX rising +6.38%), which points to early substantial SPX strength tomorrow, probably after very early weakness, that will fill the 877.52 downside gap.
The SPX (S & P 500, http://bit.ly/i0nsT) Short Term Wave 3 Downcycle Fibonacci cycle low Target: Short Term Wave 1 Downcycle = 67.37 points x 2.618 = 176.37 points; Wave 2 top = 931.92 - 176.37 = 755.55 Short Term Wave 3 Downcycle Fibonacci cycle low Target (768.54 downside gap).
Wave 1 down of the SPX (S & P 500, http://bit.ly/i0nsT) Short Term Wave 3 Downcycle will probably bottom early tomorrow, shortly after filling the 877.52 downside gap.
Wave 3 down of the SPX (S & P 500, http://bit.ly/i0nsT) Short Term Wave 3 Downcycle will probably bottom shortly after filling the 811.08 downside gap (also fill the 855.16 and 825.16 downside gaps).
Wave 5 down of the SPX (S & P 500, http://bit.ly/i0nsT) Short Term Wave 3 Downcycle will probably bottom shortly after filling the 768.54 downside gap. The 676.53 downside gap should get filled in the Short Term Wave 5 Downcycle in that case.
The likely scenario discussed in the paragraphs above was discussed yesterday, except for the 877.52 downside gap probably getting filled in the Very Short Term Wave 1 Downcycle.
SPX's (S & P 500, http://bit.ly/i0nsT) Short Term Wave 2 Upcycle that began early on 6-23 peaked Thursday 7-1-09 at 931.92, see the five day intraday candlestick chart at http://bit.ly/ggZoR, and, see the daily candlestick chart at http://bit.ly/i0nsT.
The Short Term Wave 2 Upcycle Fibonacci Target: Wave 1 down 956.23-888.86 = 67.37 x 0.618 = 41.63 + 888.86 = 930.49 vs 931.92 cycle high on Thursday 7-1-09, very close.
It looks like I'll be doing Fibonacci targets from now on, not because they're some magical easy to use panacea that works well every time, but, because they're probably another highly useful tool to add to the arsenal.
SPX (S & P 500) volume was well below average today 7-7-09, at 3.887 billion shares versus the EMA (60) at 4.610 billion shares, so, the big money didn't buy today's severe weakness in a meaningful way, see http://bit.ly/i0nsT (volume bar at bottom of chart and volume data at top left hand side).
SPX (S & P 500) is in Wave 1 down of a very large Short Term Wave 3 Downcycle since early Thursday 7-1, see http://bit.ly/ggZoR. Watch the downside gaps at 877.52, 855.16, 825.16, and, 811.08 this week (more at 768.54 and 676.53).
SPX (S & P 500, http://bit.ly/i0nsT) is doing a large very short term Wave 1 down move since 7-1, see the five day candlestick chart see http://finance.yahoo.com/q/ta?s=^GSPC&t=1d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=, and, it should/probably will try to fill the 877.52 downside gap very early on Wednesday, then, a very short term Wave 2 up move should begin shortly thereafter, which should be a great opportunity to trade short (as it peaks or early in a very short term Wave 3 down move), if you're looking to do so.
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.
Watch (in the very short term Wave 2 up) the SPX (S & P 500) likely bearish breakaway upside gap at 923.33 from 7-2's open (or upside gap(s) for whatever index/commodity/stock you're trading, assuming one was created recently). Once SPX (S & P 500) clearly fails to fill that upside gap at 923.33, OR, shortly after it fills that upside gap, that'll be a sign to look to go short, if you're looking to do so.
The broad market Walmart (WMT) Lead Indicator closed at extremely bullish, at +2.20% versus SPX (S & P 500) today 7-7.
The five day intraday broad market Walmart (WMT) Lead Indicator closed at extremely bullish (+2.00% to +3.99% vs SPX) today 7-7-09, 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 early potentially severe weakness on Wednesday, 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 rose dramatically relative to SPX since early on 7-1, so, the SPX Wall of Worry/fear has soared, which is a bearish unusually large rise in fear, which correctly pointed to severe weakness today.
SPX (S & P 500) experienced a very sharp +4.41% rise in fear/+4.41% rise in the Wall of Worry today 7-7, since SPX (S & P 500) fell -1.97% versus the SPX Volatility Index VIX rising +6.38%, which points to substantial SPX (S & P 500)/market strength early on Wednesday 7-8-09, after likely very early weakness.
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).
A very large SPX (S & P 500) Short Term Wave 3 Downcycle has begun. 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. The Short Term Wave 2 (Elliott Wave 12345 up down up down up) Upcycle since 6-23-09 peaked on 7-1 at 931.92.
Fed Credit continues to collapse, which is a very bearish short term indication, see http://www.federalreserve.gov/releases/h41/Current/. It collapsed by -$9.645 Billion in the W/E 7-1-09 (Following the money, Fed and Consumer Credit data, and, insider trading activity, is obviously very important).
Federal Reserve bank credit 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 919.32 (filled), 895.10 (filled), 877.52, and 855.16 in the near future.
Watch the SPX (S & P 500, http://bit.ly/i0nsT) 877.52 downside gap, which will trigger a major SPX sell signal if filled.
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 & P 500) is a GREAT example of rollover peaking action, see http://bit.ly/i0nsT. SPX's (S & P 500) Wave B/Wave 4 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 (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.
SPX (S & P 500) volume was above average and picked up dramatically on Friday 6-19-09, at 5.140 billion shares (only 3.883 billion shares on 6-18/Thursday) versus the EMA (60) at 4.918 billion shares, so, the big money appears to have exited Friday 6-19'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).
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.
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 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.
There's a good chance that the 919.32 (filled), 895.10 (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 +2.20% versus the S & P 500 today/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.
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.
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 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 slightly bearish -0.24% versus the XOI today/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, -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 49.15, 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 923.33, and 946.21, see http://stockcharts.com/charts/gallery.html?%24spx.
SPX (S & P 500) has downside gaps at 919.32 (filled), 895.10 (filled), 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.
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), see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart.
Elliott Wave Count Revision: The current downcycle appears to be Wave 5 down of the huge GDX/HUI/XAU Monthly Wave A/Wave 1 Downcycle since 6-1-09 (37.815 (filled), 37.33 (filled) GDX downside gaps), see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart. The upcoming Monthly/Short Term (countertrend) Wave B/Wave 2 Upcycle will be 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 modestly 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 are still doing a Monthly Wave A/Wave 1 Downcycle since 6-1-09 (the NEM Lead Indicator closed at +0.30% versus the XAU today/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, +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.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 37.815 (filled), 37.33 (filled), 29.67, 29.13, 25.41, and 23.23. NEM has downside gaps at 41.32 (filled), 40.87 (filled), and TBD.
GDX has very bearish breakaway upside gaps at 44.55, 43.51, 40.92, 39.41, 38.31, and, NEM has ones at 47.44, 44.11, 42.18, 40.26 (filled).
Gold hit a 5% major buy signal 23 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
1:56 PM
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