SPX's Upside Gap At 1004.09 From Yesterday's Open Is A Large Likely Bearish Breakaway Gap
SPX's (S & P 500, http://bit.ly/i0nsT) upside gap at 1004.09 from yesterday's open is a large likely bearish breakaway gap, see http://bit.ly/ggZoR. Note that the upcycle that began very late yesterday 8-17-09 rolled over dramatically in the second half of the session, which is obviously a bearish sign, and, it might have peaked very late today, or, will probably do so early tomorrow.
Looking at SPX's (S & P 500, http://bit.ly/i0nsT) daily candlestick chart, see http://bit.ly/i0nsT, the upcycle since very late yesterday appears to be Wave 2 up of the Short Term Wave 3 Downcycle that began on Thursday 8-13-09.
SPX's (S & P 500, http://bit.ly/i0nsT) downside gap at 975.15 (987.48 got filled yesterday) will probably get filled in the next day or two. 940.38 and 905.84 are the next downside gaps after that.
Broad market Lead Indicator Walmart (WMT) put in a bearish dark/red candle (close below the open) with a bearish small spike today, see http://stockcharts.com/charts/gallery.html?wmt.
Today 8-18's broad market Walmart (WMT) Lead Indicator closed at very bearish, -1.42% vs SPX (S & P 500, http://bit.ly/i0nsT).
However, the market had clearly positive breadth today 8-18-09, see http://finance.yahoo.com/advances, which is obviously a bullish (but, breadth has generally been deteriorating in recent sessions/weeks) indication, but, since SPX (S & P 500, http://bit.ly/i0nsT) is in a Short Term Wave 3 Downcycle since Thursday 8-13-09, that's the primary consideration, along with the downside gaps at 975.15, 940.38, 905.84, etc. Obviously, a bullish indication in a downcycle is much less bullish than in an upcycle.
SPX's (S & P 500, http://bit.ly/i0nsT) likely countertrend Wave B/Wave 4 Intermediate Term Upcycle since 3-6-09 (see http://tradethecycles.blogspot.com/2009/08/spx-s-p-500-cyclical-bear-market-since.html, The SPX Cyclical Bear Market Elliott Wave Count) might have peaked in rollover mode on 8-7-09, versus the 6-11-09 cycle high at 956.23, see http://bit.ly/i0nsT, when volume spiked dramatically (highest volume since early May, on 8-7-09).
SPX's (S & P 500, http://bit.ly/i0nsT) Fibonacci downside targets are 884 (38.2%, 0.382 x 351.21 pt rally since 3-6-09 666.79 cycle low/1018 cycle high on 8-7-09, 905.84 downside gap), 843 (50%, 855.16 downside gap), 801 (61.8%, 811.08 gap). The Fibonacci downside targets jive reasonably well with a semi important cycle low occurring shortly after a downside gap gets filled.
Also, SPX's (S & P 500, http://bit.ly/i0nsT) Wave 5 Monthly Rollover Upcycle since 7-8-09 peaked on 8-7-09 at 1018.00, see http://bit.ly/ggZoR, rolling over since early Thursday 7-30-09's spike move.
Since Friday 8-7-09 SPX (S & P 500, http://bit.ly/i0nsT) did an inverse Elliott Wave 12345 Short Term Wave A/Wave 1 Downcycle (Wave A/Wave 1 down if SPX peaked on 8-7), that bottomed early on 8-11, see http://bit.ly/ggZoR. Then, an Elliott Wave 12345 countertrend Short Term Wave B/Wave 2 Upcycle peaked at mid session on Thursday 8-13-09.
So, a large SPX (S & P 500, http://bit.ly/i0nsT) Short Term Wave 3/Wave A down of Wave C Downcycle began on Thursday 8-13, and, Friday 8-14's upside gap from the open at 1012.73 is a bearish breakaway gap (as is yesterday's at 1004.09), see http://bit.ly/ggZoR. SPX's downside gap at 987.48 got filled yesterday. 975.15 is the next downside gap.
The way SPX (S & P 500, http://bit.ly/i0nsT) defied gravity in the Wave 5 Monthly Rollover Upcycle that began on 7-8-09 and peaked on 8-7-09 (compare the declines in July/August (until 8-7-09) to those that occurred in March, April, May, and June), see http://bit.ly/ggZoR, jives with it being a final Wave 5 type of blowoff spike move, of the likely countertrend Wave B/Wave 4 Intermediate Term Upcycle since 3-6-09.
The way SPX (S & P 500, http://bit.ly/i0nsT) volume spiked dramatically for well over a week, until 8-7-09, when SPX's likely countertrend Wave B/Wave 4 Intermediate Term Upcycle since 3-6-09 might have peaked, supports the important peaking action scenario.
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SPX's (S & P 500) volume was MEASLY (LOL) today 8-18-09, at 3.448 billion shares versus 5.872 billion shares on 8-7-09 (SPX might have peaked on 8-7-09) versus 5.460 billion shares on 8-6-09, versus 5.368 billion shares on Thursday 7-30-09 (5.008 billion shares on 7-31) versus the EMA (60) at 4.560 billion shares, which is bearish, see http://bit.ly/i0nsT (volume bar at bottom of chart and volume data at top left hand side), because, the big and smart money appears to have used recent strength to exit, and, didn't use today's strength to buy in a meaningful way. Volume was above average nearly every day for over a week, until Friday 8-7-09.
Today 8-18's broad market Walmart (WMT) Lead Indicator closed at very bearish, -1.42% vs SPX (S & P 500, http://bit.ly/i0nsT).
The five day intraday broad market Walmart (WMT) Lead Indicator closed at extremely bullish (+2.00% to +3.99% vs SPX) today 8-18-09, see http://bit.ly/5zScR, which is usually a very short term bearish indication.
The intraday SPX (S & P 500, http://bit.ly/i0nsT) Wall of Worry (SPX vs VIX) collapsed (both in absolute terms and relative to SPX, but, the relative aspect is what's important) substantially since the open, which is a very bearish indication, see http://bit.ly/UTZwc, as is the fact that a bearish unusually large rise in fear occurred yesterday (VIX spiked +14.92% yesterday 8-17). Some early weakness/downside gap filling action (watch the 975.15 downside gap) is likely.
The five day intraday SPX (S & P 500, http://bit.ly/i0nsT) Wall of Worry chart (SPX vs VIX) points to some potentially severe weakness early on Wednesday (watch 975.15 downside gap), 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 of the substantial collapse of VIX relative to SPX's price action (collapse of the SPX Wall of Worry) since very early yesterday 8-17-09.
SPX (S & P 500) experienced a very sharp +5.12% rise in complacency/-5.12% decline in the Wall of Worry today 8-18, since SPX (S & P 500) rose +1.01% versus the SPX Volatility Index VIX falling -6.13%, which points to significant/potentially severe SPX (S & P 500)/market weakness early on Wednesday 8-19-09.
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).
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Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
Keep in mind that the market tends to fall faster than it rises, larger % declines than % gains tend to occur, and, some of those declines will probably be from high levels.
Recent SPX (S & P 500, http://bit.ly/i0nsT) strength (Friday 8-7-09 cycle high) looks like rollover peaking action vs Thursday 7-30-09's cycle high, see http://bit.ly/ggZoR.
SPX's (S & P 500, http://bit.ly/i0nsT) huge spike move of the four weeks ending on 8-7-09 looks like/jives with important peaking action, see http://bit.ly/i0nsT.
Normally/often, when an important cycle high occurs, a bearish large spike on a bearish dark candle (close below the open) will mark the cycle high on the daily candle, and, Friday 8-7-09's candle isn't bearish, it's white (close above the open) with a tiny/small spike, see http://bit.ly/i0nsT. It's doesn't look like an important cycle high, but, it might be, because, the volume spike on Friday 8-7-09 was the largest since early May 2009.
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.
Looking at SPX's (S & P 500, http://bit.ly/i0nsT) five day intraday candlestick chart, see http://finance.yahoo.com/q/ta?s=^GSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=, the substantial strength from 7-30-09 until 8-7-09 looks like a final Wave 5 type of blowoff spike move, that was confirmed by well above average volume.
Since 7-8-09, when the current Short Term/Monthly Upcycle began, SPX (S & P 500, http://bit.ly/i0nsT) has done an extremely parabolic Elliott Wave 12345 up down up down up pattern (could also still be Wave 3 up of the Short Term Upcycle since 7-8-09, but, it appears to be Wave 5 peaking), with Wave 5 up in progress since very early on Friday 7-17-09 (peaked 8-7-09), see http://bit.ly/i0nsT. The Wave 2 and Wave 4 down corrections were very shallow and very brief.
There may be clear signs after an important SPX (S & P 500, http://bit.ly/i0nsT) cycle high occurs, such as a very sharp decline shortly after SPX (S & P 500, http://bit.ly/i0nsT) peaks, that may leave a very bearish spike/candle, and, a large bearish breakaway upside gap may occur (one did occur yesterday 8-17-09 at 1004.09).
Fed Credit spiked a massive +$34.247 Billion in the W/E 7-15 and the market spikes big time, coincidence? NO. See http://www.federalreserve.gov/releases/h41/Current/. Also, it's easier to spike the market near an important cycle high, when a cycle's strength is near a maximum point.
Data and indicators can only be evaluated after (are secondary to) understanding SPX's (or whatever index, stock or commodity you're trading or investing in) cycles, Elliott Wave count, and gaps, which are the basis/crux of the Trade the Cycles market timing system.
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 upcoming Short Term Wave A Downcycle SPX (S & P 500, http://bit.ly/i0nsT) will probably fill some or all of the 997.08 (filled), 987.48 (filled), 975.15, 940.38, 905.84, 855.16, 825.16, and 811.08 downside gaps.
Fed Credit rose a substantial +$11.372 Billion in the W/E 8-12-09, see http://www.federalreserve.gov/releases/h41/Current/. (Following the money, Fed and Consumer Credit data, and, insider trading activity, is obviously very important).
Federal Reserve bank credit rose a substantial +$11.372 Billion in the week/five day period 8-12-09, it collapsed a massive -$32.140 Billion in the week/five day period 8-5-09, it fell -$611 Million in the week/five day period 7-29-09, it fell -$1.087 Billion in the week/five day period 7-22-09, it spiked a massive +$34.247 Billion in the week/five day period ending 7-15-09, it 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 997.08 (filled), 987.48 (filled), 975.15 940.38, 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.
"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.
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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, BUT, turned super bullish since 8-7-09, at -1.42% versus the S & P 500 today/on 8-18, +2.01% on 8-17, +0.68% on 8-14, +2.02% on 8-13, -0.21% on 8-12, +1.91% on 8-11, +1.20% on 8-10, -0.71% on 8-7, +0.11% on 8-6, -1.01% on 8-5, -0.28% on 8-4, -1.61% on 8-3, -0.27% on 7-31, +0.05% on 7-30, +1.38% on 7-29, +0.16% on 7-28, -0.24% on 7-27, +0.07% on 7-24, -3.16% on 7-23, +0.68% on 7-22, -0.28% on 7-21, -0.46% on 7-20, +0.00% on 7-17, -0.94% on 7-16, -2.09% 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 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 very bearish -1.35% versus the XOI today/on 8-18, +0.68% on 8-17, +0.23% on 8-14, -1.13% on 8-13, +0.30% on 8-12, -0.20% on 8-11, -0.47% on 8-10, -0.18% on 8-7, +0.42% on 8-6, +0.22% on 8-5, +0.21% on 8-4, -1.65% on 8-3, -1.19% on 7-31, -2.21% on 7-30, +1.39% on 7-29, +0.18% on 7-28, -0.04% on 7-27, +0.14% on 7-24, -0.31% on 7-23, +0.08% on 7-22, +1.52% on 7-21, -1.51% on 7-20, +0.08% on 7-17, -0.82% on 7-16, -0.09% 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 (filled), 49.84 (filled), 51.07 (filled), 52.61, 53.43, 53.80 and 55.54, and, has downside gaps at 50.51, 49.76, 49.37 (filled).
SPX (S & P 500) has a bearish breakaway upside gap at 1012.73, 1010.48 (filled), 1004.09, 979.62 (filled), see http://stockcharts.com/charts/gallery.html?%24spx.
SPX (S & P 500) has downside gaps at 997.08 (filled), 987.48 (filled), 975.15, 940.38, 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 probably 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, 39.21 (on 8-17), 39.98 (filled), 39.10 (filled)), see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart.
Wave 5/Wave C down of the huge GDX/HUI/XAU Monthly Wave A Downcycle since 6-1-09 BOTTOMED on 7-13-09, see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart.
The GDX/HUI/XAU Monthly/Short Term (countertrend) Wave B/Wave 2 Upcycle since 7-13-09 (peaked on 8-4-09) PEAKED IN ROLLOVER MODE (GDX 39.21 (on 8-17), 39.98 (filled), 39.10 (filled) bearish breakaway upside gaps), and, was an opportunity to take profits/exit. See the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart.
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.
GDX/HUI/XAU are (Wave 2 Monthly Upcycle peaked on 8-4-09) in a Short Term/Monthly Wave A of Wave C/Wave 3 Downcycle since 8-4-09 (the NEM Lead Indicator closed at -0.31% versus the XAU today/on 8-18, +0.05% on 8-17 (yes, the same as Friday), +0.05% on 8-14, -0.52% on 8-13, -0.12% on 8-12, +0.30% on 8-11, +0.10% on 8-10, +0.64% on 8-7, +1.25% on 8-6, +0.05% on 8-5, +0.37% on 8-4, -2.10% on 8-3, -0.08% on 7-31, -1.76% on 7-30, +0.36% on 7-29, +1.04% on 7-28, -0.03% on 7-27, -0.14% on 7-24, -1.30% on 7-23, -0.63% on 7-22, +1.03% on 7-21, -1.05% on 7-20, -0.81% on 7-17, +0.22% on 7-16, -1.20% 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) of the Wave 2 Intermediate Term Downcycle since 6-1-09, see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart.
The five day intraday gold/silver sector NEM Lead Indicator closed at bearish (-0.50% to -0.99% vs XAU) today 8-18-09, 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.
The five day intraday broad market Walmart (WMT) Lead Indicator, that must be used in concert with the sector lead indicator, closed at extremely bullish (+2.00% to +3.99% vs SPX) today 8-18-09, see http://bit.ly/5zScR, which is usually a very short term bearish indication.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 39.76 (filled), 38.79 (filled), 37.30 (on 8-18), 37.18 (filled), 36.76, 35.93, 29.67, 29.13, 25.41, and 23.23. NEM has downside gaps at 40.47 (filled), 39.37 (filled), 38.77, 38.45, and TBD.
GDX has very bearish breakaway upside gaps at 44.55, 43.51, 40.92 (filled), 39.98 (filled), 39.21 (on 8-17), 39.10 (filled), and, NEM has ones at 47.44, 44.11, 41.54 (filled), 40.63 (on 8-17).
Gold hit a 5% major buy signal 29 weeks ago, see annotated chart three 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
Looking at SPX's (S & P 500, http://bit.ly/i0nsT) daily candlestick chart, see http://bit.ly/i0nsT, the upcycle since very late yesterday appears to be Wave 2 up of the Short Term Wave 3 Downcycle that began on Thursday 8-13-09.
SPX's (S & P 500, http://bit.ly/i0nsT) downside gap at 975.15 (987.48 got filled yesterday) will probably get filled in the next day or two. 940.38 and 905.84 are the next downside gaps after that.
Broad market Lead Indicator Walmart (WMT) put in a bearish dark/red candle (close below the open) with a bearish small spike today, see http://stockcharts.com/charts/gallery.html?wmt.
Today 8-18's broad market Walmart (WMT) Lead Indicator closed at very bearish, -1.42% vs SPX (S & P 500, http://bit.ly/i0nsT).
However, the market had clearly positive breadth today 8-18-09, see http://finance.yahoo.com/advances, which is obviously a bullish (but, breadth has generally been deteriorating in recent sessions/weeks) indication, but, since SPX (S & P 500, http://bit.ly/i0nsT) is in a Short Term Wave 3 Downcycle since Thursday 8-13-09, that's the primary consideration, along with the downside gaps at 975.15, 940.38, 905.84, etc. Obviously, a bullish indication in a downcycle is much less bullish than in an upcycle.
SPX's (S & P 500, http://bit.ly/i0nsT) likely countertrend Wave B/Wave 4 Intermediate Term Upcycle since 3-6-09 (see http://tradethecycles.blogspot.com/2009/08/spx-s-p-500-cyclical-bear-market-since.html, The SPX Cyclical Bear Market Elliott Wave Count) might have peaked in rollover mode on 8-7-09, versus the 6-11-09 cycle high at 956.23, see http://bit.ly/i0nsT, when volume spiked dramatically (highest volume since early May, on 8-7-09).
SPX's (S & P 500, http://bit.ly/i0nsT) Fibonacci downside targets are 884 (38.2%, 0.382 x 351.21 pt rally since 3-6-09 666.79 cycle low/1018 cycle high on 8-7-09, 905.84 downside gap), 843 (50%, 855.16 downside gap), 801 (61.8%, 811.08 gap). The Fibonacci downside targets jive reasonably well with a semi important cycle low occurring shortly after a downside gap gets filled.
Also, SPX's (S & P 500, http://bit.ly/i0nsT) Wave 5 Monthly Rollover Upcycle since 7-8-09 peaked on 8-7-09 at 1018.00, see http://bit.ly/ggZoR, rolling over since early Thursday 7-30-09's spike move.
Since Friday 8-7-09 SPX (S & P 500, http://bit.ly/i0nsT) did an inverse Elliott Wave 12345 Short Term Wave A/Wave 1 Downcycle (Wave A/Wave 1 down if SPX peaked on 8-7), that bottomed early on 8-11, see http://bit.ly/ggZoR. Then, an Elliott Wave 12345 countertrend Short Term Wave B/Wave 2 Upcycle peaked at mid session on Thursday 8-13-09.
So, a large SPX (S & P 500, http://bit.ly/i0nsT) Short Term Wave 3/Wave A down of Wave C Downcycle began on Thursday 8-13, and, Friday 8-14's upside gap from the open at 1012.73 is a bearish breakaway gap (as is yesterday's at 1004.09), see http://bit.ly/ggZoR. SPX's downside gap at 987.48 got filled yesterday. 975.15 is the next downside gap.
The way SPX (S & P 500, http://bit.ly/i0nsT) defied gravity in the Wave 5 Monthly Rollover Upcycle that began on 7-8-09 and peaked on 8-7-09 (compare the declines in July/August (until 8-7-09) to those that occurred in March, April, May, and June), see http://bit.ly/ggZoR, jives with it being a final Wave 5 type of blowoff spike move, of the likely countertrend Wave B/Wave 4 Intermediate Term Upcycle since 3-6-09.
The way SPX (S & P 500, http://bit.ly/i0nsT) volume spiked dramatically for well over a week, until 8-7-09, when SPX's likely countertrend Wave B/Wave 4 Intermediate Term Upcycle since 3-6-09 might have peaked, supports the important peaking action scenario.
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SPX's (S & P 500) volume was MEASLY (LOL) today 8-18-09, at 3.448 billion shares versus 5.872 billion shares on 8-7-09 (SPX might have peaked on 8-7-09) versus 5.460 billion shares on 8-6-09, versus 5.368 billion shares on Thursday 7-30-09 (5.008 billion shares on 7-31) versus the EMA (60) at 4.560 billion shares, which is bearish, see http://bit.ly/i0nsT (volume bar at bottom of chart and volume data at top left hand side), because, the big and smart money appears to have used recent strength to exit, and, didn't use today's strength to buy in a meaningful way. Volume was above average nearly every day for over a week, until Friday 8-7-09.
Today 8-18's broad market Walmart (WMT) Lead Indicator closed at very bearish, -1.42% vs SPX (S & P 500, http://bit.ly/i0nsT).
The five day intraday broad market Walmart (WMT) Lead Indicator closed at extremely bullish (+2.00% to +3.99% vs SPX) today 8-18-09, see http://bit.ly/5zScR, which is usually a very short term bearish indication.
The intraday SPX (S & P 500, http://bit.ly/i0nsT) Wall of Worry (SPX vs VIX) collapsed (both in absolute terms and relative to SPX, but, the relative aspect is what's important) substantially since the open, which is a very bearish indication, see http://bit.ly/UTZwc, as is the fact that a bearish unusually large rise in fear occurred yesterday (VIX spiked +14.92% yesterday 8-17). Some early weakness/downside gap filling action (watch the 975.15 downside gap) is likely.
The five day intraday SPX (S & P 500, http://bit.ly/i0nsT) Wall of Worry chart (SPX vs VIX) points to some potentially severe weakness early on Wednesday (watch 975.15 downside gap), 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 of the substantial collapse of VIX relative to SPX's price action (collapse of the SPX Wall of Worry) since very early yesterday 8-17-09.
SPX (S & P 500) experienced a very sharp +5.12% rise in complacency/-5.12% decline in the Wall of Worry today 8-18, since SPX (S & P 500) rose +1.01% versus the SPX Volatility Index VIX falling -6.13%, which points to significant/potentially severe SPX (S & P 500)/market weakness early on Wednesday 8-19-09.
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).
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.
I'll be looking to trade ultra short via QID, SDS, ERY, TZA, SRS, FAZ etc this week/soon.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
Keep in mind that the market tends to fall faster than it rises, larger % declines than % gains tend to occur, and, some of those declines will probably be from high levels.
Recent SPX (S & P 500, http://bit.ly/i0nsT) strength (Friday 8-7-09 cycle high) looks like rollover peaking action vs Thursday 7-30-09's cycle high, see http://bit.ly/ggZoR.
SPX's (S & P 500, http://bit.ly/i0nsT) huge spike move of the four weeks ending on 8-7-09 looks like/jives with important peaking action, see http://bit.ly/i0nsT.
Normally/often, when an important cycle high occurs, a bearish large spike on a bearish dark candle (close below the open) will mark the cycle high on the daily candle, and, Friday 8-7-09's candle isn't bearish, it's white (close above the open) with a tiny/small spike, see http://bit.ly/i0nsT. It's doesn't look like an important cycle high, but, it might be, because, the volume spike on Friday 8-7-09 was the largest since early May 2009.
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.
Looking at SPX's (S & P 500, http://bit.ly/i0nsT) five day intraday candlestick chart, see http://finance.yahoo.com/q/ta?s=^GSPC&t=5d&l=off&z=l&q=c&p=&a=p12,fs,w14&c=, the substantial strength from 7-30-09 until 8-7-09 looks like a final Wave 5 type of blowoff spike move, that was confirmed by well above average volume.
Since 7-8-09, when the current Short Term/Monthly Upcycle began, SPX (S & P 500, http://bit.ly/i0nsT) has done an extremely parabolic Elliott Wave 12345 up down up down up pattern (could also still be Wave 3 up of the Short Term Upcycle since 7-8-09, but, it appears to be Wave 5 peaking), with Wave 5 up in progress since very early on Friday 7-17-09 (peaked 8-7-09), see http://bit.ly/i0nsT. The Wave 2 and Wave 4 down corrections were very shallow and very brief.
There may be clear signs after an important SPX (S & P 500, http://bit.ly/i0nsT) cycle high occurs, such as a very sharp decline shortly after SPX (S & P 500, http://bit.ly/i0nsT) peaks, that may leave a very bearish spike/candle, and, a large bearish breakaway upside gap may occur (one did occur yesterday 8-17-09 at 1004.09).
Fed Credit spiked a massive +$34.247 Billion in the W/E 7-15 and the market spikes big time, coincidence? NO. See http://www.federalreserve.gov/releases/h41/Current/. Also, it's easier to spike the market near an important cycle high, when a cycle's strength is near a maximum point.
Data and indicators can only be evaluated after (are secondary to) understanding SPX's (or whatever index, stock or commodity you're trading or investing in) cycles, Elliott Wave count, and gaps, which are the basis/crux of the Trade the Cycles market timing system.
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 upcoming Short Term Wave A Downcycle SPX (S & P 500, http://bit.ly/i0nsT) will probably fill some or all of the 997.08 (filled), 987.48 (filled), 975.15, 940.38, 905.84, 855.16, 825.16, and 811.08 downside gaps.
Fed Credit rose a substantial +$11.372 Billion in the W/E 8-12-09, see http://www.federalreserve.gov/releases/h41/Current/. (Following the money, Fed and Consumer Credit data, and, insider trading activity, is obviously very important).
Federal Reserve bank credit rose a substantial +$11.372 Billion in the week/five day period 8-12-09, it collapsed a massive -$32.140 Billion in the week/five day period 8-5-09, it fell -$611 Million in the week/five day period 7-29-09, it fell -$1.087 Billion in the week/five day period 7-22-09, it spiked a massive +$34.247 Billion in the week/five day period ending 7-15-09, it 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 997.08 (filled), 987.48 (filled), 975.15 940.38, 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.
"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.
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.
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, BUT, turned super bullish since 8-7-09, at -1.42% versus the S & P 500 today/on 8-18, +2.01% on 8-17, +0.68% on 8-14, +2.02% on 8-13, -0.21% on 8-12, +1.91% on 8-11, +1.20% on 8-10, -0.71% on 8-7, +0.11% on 8-6, -1.01% on 8-5, -0.28% on 8-4, -1.61% on 8-3, -0.27% on 7-31, +0.05% on 7-30, +1.38% on 7-29, +0.16% on 7-28, -0.24% on 7-27, +0.07% on 7-24, -3.16% on 7-23, +0.68% on 7-22, -0.28% on 7-21, -0.46% on 7-20, +0.00% on 7-17, -0.94% on 7-16, -2.09% 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 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 very bearish -1.35% versus the XOI today/on 8-18, +0.68% on 8-17, +0.23% on 8-14, -1.13% on 8-13, +0.30% on 8-12, -0.20% on 8-11, -0.47% on 8-10, -0.18% on 8-7, +0.42% on 8-6, +0.22% on 8-5, +0.21% on 8-4, -1.65% on 8-3, -1.19% on 7-31, -2.21% on 7-30, +1.39% on 7-29, +0.18% on 7-28, -0.04% on 7-27, +0.14% on 7-24, -0.31% on 7-23, +0.08% on 7-22, +1.52% on 7-21, -1.51% on 7-20, +0.08% on 7-17, -0.82% on 7-16, -0.09% 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 (filled), 49.84 (filled), 51.07 (filled), 52.61, 53.43, 53.80 and 55.54, and, has downside gaps at 50.51, 49.76, 49.37 (filled).
SPX (S & P 500) has a bearish breakaway upside gap at 1012.73, 1010.48 (filled), 1004.09, 979.62 (filled), see http://stockcharts.com/charts/gallery.html?%24spx.
SPX (S & P 500) has downside gaps at 997.08 (filled), 987.48 (filled), 975.15, 940.38, 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.
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The GDX/HUI/XAU Wave 1 Intermediate Term Upcycle since late October 2008 probably 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, 39.21 (on 8-17), 39.98 (filled), 39.10 (filled)), see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart.
Wave 5/Wave C down of the huge GDX/HUI/XAU Monthly Wave A Downcycle since 6-1-09 BOTTOMED on 7-13-09, see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart.
The GDX/HUI/XAU Monthly/Short Term (countertrend) Wave B/Wave 2 Upcycle since 7-13-09 (peaked on 8-4-09) PEAKED IN ROLLOVER MODE (GDX 39.21 (on 8-17), 39.98 (filled), 39.10 (filled) bearish breakaway upside gaps), and, was an opportunity to take profits/exit. See the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart.
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.
GDX/HUI/XAU are (Wave 2 Monthly Upcycle peaked on 8-4-09) in a Short Term/Monthly Wave A of Wave C/Wave 3 Downcycle since 8-4-09 (the NEM Lead Indicator closed at -0.31% versus the XAU today/on 8-18, +0.05% on 8-17 (yes, the same as Friday), +0.05% on 8-14, -0.52% on 8-13, -0.12% on 8-12, +0.30% on 8-11, +0.10% on 8-10, +0.64% on 8-7, +1.25% on 8-6, +0.05% on 8-5, +0.37% on 8-4, -2.10% on 8-3, -0.08% on 7-31, -1.76% on 7-30, +0.36% on 7-29, +1.04% on 7-28, -0.03% on 7-27, -0.14% on 7-24, -1.30% on 7-23, -0.63% on 7-22, +1.03% on 7-21, -1.05% on 7-20, -0.81% on 7-17, +0.22% on 7-16, -1.20% 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) of the Wave 2 Intermediate Term Downcycle since 6-1-09, see the XAU at http://stockcharts.com/charts/gallery.html?%24xau. For GDX/HUI, see GDX's daily chart.
The five day intraday gold/silver sector NEM Lead Indicator closed at bearish (-0.50% to -0.99% vs XAU) today 8-18-09, 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.
The five day intraday broad market Walmart (WMT) Lead Indicator, that must be used in concert with the sector lead indicator, closed at extremely bullish (+2.00% to +3.99% vs SPX) today 8-18-09, see http://bit.ly/5zScR, which is usually a very short term bearish indication.
GDX (Gold Miners ETF, http://stockcharts.com/charts/gallery.html?gdx) has downside gaps at 39.76 (filled), 38.79 (filled), 37.30 (on 8-18), 37.18 (filled), 36.76, 35.93, 29.67, 29.13, 25.41, and 23.23. NEM has downside gaps at 40.47 (filled), 39.37 (filled), 38.77, 38.45, and TBD.
GDX has very bearish breakaway upside gaps at 44.55, 43.51, 40.92 (filled), 39.98 (filled), 39.21 (on 8-17), 39.10 (filled), and, NEM has ones at 47.44, 44.11, 41.54 (filled), 40.63 (on 8-17).
Gold hit a 5% major buy signal 29 weeks ago, see annotated chart three 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
posted by Joe Ferrazzano at
1:30 PM
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