Trade the Cycles

Wednesday, December 23, 2009

SPX's Upcycle Since 12-18-09 Is Peaking/Peaked

SPX's (S & P 500, http://bit.ly/i0nsT) Short Term Upcycle since Friday 12-18-09 is peaking/peaked (rolled over dramatically since early Monday 12-21-09), see the five day intraday candlestick chart at http://bit.ly/3qGxf3

Early tomorrow (half session, Merry Christmas!) it looks like SPX (S & P 500, http://bit.ly/i0nsT) will probably be weak, since the intraday candlestick chart looks bearish, with bearish candles occurring before session's end, see http://bit.ly/12SpXH

It's not a coincidence that an SPX session cycle low occurred at 1116.00, very soon after filling the 1118.02 downside gap from today's open, see the five day intraday candlestick chart at http://bit.ly/3qGxf3 Gaps have a strong tendency to provide a trading roadmap.

Gap/magnet
s to keep in mind tomorrow are yesterday 12-22's downside gap at 1114.05 from the open, 12-21's downside gap at 1102.47 from the open, and, any gap that might be created at tomorrow's open.

It's no coincidence that SPX (S & P 500, http://bit.ly/i0nsT) started to roll over dramatically on 12-21 soon after filling the upside gap/magnet at 1109.18 from 12-17-09's open, see the five day intraday candlestick chart at http://bit.ly/3qGxf3. 12-21's strength was basically just a brief gap filling spike. Much of the time SPX is simply engaged in gap filling action.

A factor recently/now is that Fed Credit rose a substantial +$22.764 Billion in the five day period ending 12-16-09, which was/is a bullish indication, see http://bit.ly/Ys2ds.

SPX (S & P 500, http://bit.ly/i0nsT) filled two gaps/magnets on Thursday 12-17-09, the 1107.93 downside gap from 12-16-09's open, and, the 1095.95 downside gap from 12-10-09's open (1095.88 session cycle low, once again a session cycle low or cycle high occurred very soon after a gap got filled), see the five day intraday candlestick chart at http://bit.ly/3qGxf3, and, see the daily candlestick chart http://bit.ly/i0nsT.

SPX
(S & P 500, http://bit.ly/i0nsT) has another downside gap/magnet at 1069.30 (after 1114.05 and 1102.47), see the five day intraday candlestick day chart at http://bit.ly/3qGxf3. 1046.50, 1025.21, and 1016.40 are the downside gaps after that.

SPX (S & P 500, http://bit.ly/i0nsT) volume was only 2.493 billion shares today 12-23-09 (2.849 billion shares yesterday 12-22-09, 3.360 billion shares on 12-21-09) vs the 60 day EMA at 3.987 billion shares, which is a bearish indication, because, the big money wasn't chasing today's modest strength in a meaningful way.

The five day SPX vs Lead Indicator Walmart (WMT) chart at http://bit.ly/4t6GS9 is very bearish, since WMT's leading to downside by -1.00% to -1.99%.
For the five day intraday broad market Walmart (WMT) Lead Indicator that includes HUI for gold bugs, see http://bit.ly/5zScR

The intraday broad market Walmart (WMT) Lead Indicator is/closed at modestly bearish today, see http://bit.ly/88OBwn

The five day intraday SPX Wall of Worry (SPX vs VIX) crashed since early Friday 12-18-09, which is an extremely bearish indication, because, it's a huge rise in complacency, see http://bit.ly/vryF4

The intraday SPX Wall of Worry (SPX vs VIX) fell significantly today 12-23-09, after early strength, which is a bearish indication for early tomorrow/Thursday, see http://bit.ly/UTZwc

VIX was up +0.87% vs SPX up +0.23% today, which is a bullish indication for early Thursday 12-24-09, because, it's a significant +1.10% rise in fear/+1.10% rise in the SPX Wall of Worry (SPX vs VIX) today, so, weakness is likely early on Thursday.

Market breadth was/closed at bullish/mixed (BB was modestly negative) today (NYSE up vs down volume is/appears to be correct), which is a bullish indication for early Thursday (it could already be factored into today's modest strength, since it was bullish most/all of the session), see http://bit.ly/lPIyW. Cycles/Elliott Wave patterns/gaps are the primary considerations.

The six month broad market Walmart (WMT) Lead Indicator is super bearish, see http://bit.ly/nCMaM SPX (S & P 500, http://bit.ly/i0nsT)/the market and nearly all sectors, stocks, and commodities (like the gold and energy sectors) are likely to get savaged over the next 6 to 12 months.

Also, the three month SPX (S & P 500) Wall of Worry chart is very bearish (keep in mind that it's basically a lead indicator), see http://finance.yahoo.com/q/ta?s=^GSPC&t=3m&l=off&z=l&q=c&p=&a=p12,p12,fs,p12,fs,w14&c=^vix

SPX (S & P 500, http://bit.ly/i0nsT) has been extremely flat the past month+, see http://bit.ly/i0nsT which looks like important peaking action; the Major Upcycle since 3-6-09 is probably peaking. SPX has made very little upside progress in recent weeks, it has rolled over dramatically.

Much of the time SPX is simply engaged in gap filling action. When a gap/magnet gets filled, look for a session cycle high or a session cycle low to probably occur shortly thereafter (timewise and usually also pricewise). We've seen many times in the past few weeks that a session cycle high or low has occurred very soon after a gap got filled.

Often important and even not so important cycle highs or lows occur shortly after (both timewise and pricewise) gap filling action is completed.

Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.

Fed Credit rose a substantial +$22.764 Billion in the five day period ending 12-16-09, which is a bullish indication, once the Short Term Wave 3 Downcycle since 12-16-09 bottoms, see http://bit.ly/Ys2ds

Fed Credit fell a substantial -$19.268 Billion in the five day period ending 12-9-09, which is a bearish indication, see http://bit.ly/Ys2ds

Fed Credit contracted a significant -$2.759 Billion in the five day period ending 12-2-09, see http://bit.ly/Ys2ds

Fed Credit fell a significant -$1.552 Billion in the five day period ending 11-25-09, see http://bit.ly/Ys2ds.

Fed Credit rose a massive $75.680 Billion in the five day period ending 11-18-09. This was another successful attempt by Space Shuttle Bernanke to prop up the market for a while.

NDX (NASDAQ 100) looks like it's peaking (major upcycle that began in November 2008), see http://bit.ly/73BXOt

The precious metals sector appears to/might have finally peaked in early December 2009, see the Blog post from 12-19-09 at http://bit.ly/6Kl4GQ

"The market" basically probably peaked in September (or at least began rolling over dramatically), when RUT/Russell 2000 (http://bit.ly/2UFqrk) and DJUSRE/Real Estate (http://bit.ly/4EmXGG) probably peaked on 9-23-09 and 9-17-09, and, when a dramatic multi day market volume spike occurred (6 billion shares area), see the volume bars at the bottom of http://bit.ly/i0nsT confirming that important peaking action was probably occurring.

As discussed previously, SPX (S & P 500, http://bit.ly/i0nsT) is heavily market cap weighted, with 4% of the components (20) accounting for nearly 33% of the movement, and, with less than 10% of the components (47) accounting for slightly over 50% of the movement.

Much of the SPX
(S & P 500, http://bit.ly/i0nsT) strength in recent months has been due to a relatively small number of large cap giants like XOM/Exxon (accounts for over 3% of SPX's movements, which is by far the largest weighting) and GOOG/Google doing well.

Chart one at http://bit.ly/18T7lw shows SPX's (S & P 500, http://bit.ly/i0nsT) Elliott Wave count since 3-6-09, which suggests that the Major Intermediate Term Upcycle since 3-6-09 is/was peaking.

Keep in mind that 5%+ follow through
must occur (for a major upcycle sell signal), after breaking the uptrend line since 3-6-09, before the Trade the Cycles system indicates that SPX has very likely peaked.

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.

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/


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