SPX's Short Term Downcycle Since 1-19-10 Probably Bottomed Late Today
SPX's (S & P 500, http://bit.ly/i0nsT) Short Term Downcycle since 1-19-10 probably bottomed late today 1-27-10, note the bullish white (close above the open) daily candle with a bullish inverse spike at http://bit.ly/i0nsT.
SPX's (S & P 500, http://bit.ly/i0nsT) volume was a well above average 4.634 billion shares today 1-27-10 versus the 60 day EMA at 3.901 billion shares, which is a bullish indication, because, it appears that the big money was entering in a big way today, which jives with a likely short term cycle low occurring today.
Follow me on Twitter (highly recommended), see http://twitter.com/tradethecycles.
Bearish signs however are very light Fed Credit yet again today, for the 8th straight day, and, there's a very bearish 3 month XOM Lead Indicator, as discussed in previous updates.
It might make sense to day trade long likely strength the next few days/week or so, instead of holding overnight. SPX (S & P 500, http://bit.ly/i0nsT) might have put in an important major cycle high at 1150.45 on 1-19-10.
Today's weakness might have triggered an important SPX 5% follow through major sell signal (I need to do a chart and take a good look, it's close to and might be a major sell signal today), which would indicate that SPX probably peaked on 1-19-10, AND, more importantly, that it's risky to trade long now. In 2007 SPX hit a 5% major sell signal in July and peaked modestly higher/rolling over dramatically on 10-11-07 versus the July 2007 cycle high.
It's no coincidence that SPX bottomed/put in a session cycle low yesterday very soon after filling 1-25's downside gap at 1091.76, see the five day intraday candlestick chart at http://bit.ly/3qGxf3, and, see the daily candlestick chart http://bit.ly/i0nsT. Much of the time SPX is simply engaged in gap filling action.
VIX fell -5.74% vs SPX up +0.49% today 1-27-10, which is a very bearish indication for early tomorrow 1-28-10, because, it's a very sharp +5.25% rise in complacency/-5.25% decline in the SPX Wall of Worry (SPX vs VIX).
VIX fell -3.38% vs SPX down -0.42% yesterday 1-26-10, which correctly was a very bearish indication for early today, because, it was a +3.80% rise in complacency/-3.80% decline in the SPX Wall of Worry (SPX vs VIX).
SPX vs VIX (SPX Wall of Worry) the past three days is a bullish rapid unusually large +16%ish rise in complacency, since VIX was down about -16% versus SPX up modestly.
The intraday WMT/XOM Lead Indicators closed at very bearish/bearish today, see http://bit.ly/bKhNsR.
The five day SPX vs Lead Indicator Walmart (WMT) chart at http://bit.ly/4t6GS9 is extremely bullish at today's close, since WMT's leading to the upside by +2.00% to +3.99%, which is usually a very short term bearish indication, because, SPX didn't respond well today to an extremely bullish indication. For the five day intraday broad market Walmart (WMT) Lead Indicator that includes HUI for gold bugs, see http://bit.ly/5zScR
The five day XOM (Exxon Mobil) vs SPX Lead Indicator is slightly bullish, since XOM's leading to the upside by +0.00% to +0.24%, see http://bit.ly/5CMSze. Maybe XOM is an even better lead indicator than WMT, since XOM is the highest weighted component of SPX (S & P 500, http://bit.ly/i0nsT) by far (about 3.11%).
Get ready for the VERY bearish three month XOM (Exxon Mobil) Lead Indicator: see http://bit.ly/8wiAN2.
Exxon Mobil (XOM), by far the most heavily weighted SPX component (3.11%), has a bearish breakaway gap and an ugly chart, see http://bit.ly/6Dr79y
Trading Roadmap: WATCH SPX's (S & P 500, http://bit.ly/i0nsT) upside gap/magnet at 1116.48 from 1-22-10's open, since a Short Term Upcycle has probably begun, see the five day intraday candlestick chart http://bit.ly/3qGxf3. Much of the time SPX is simply engaged in gap filling action.
Trading Roadmap: WATCH, in the next short term downcycle, SPX's (S & P 500, http://bit.ly/i0nsT) downside gap/magnet at 1069.30, see the five day intraday candlestick chart http://bit.ly/3qGxf3. 1046.50, 1025.21, and 1016.40 are the downside gaps after that. Much of the time SPX is simply engaged in gap filling action.
Market breadth closed mixed today (NYSE up vs down volume is/appears to be correct), which is a bearish indication for early tomorrow 1-28-10, see http://bit.ly/lPIyW. Cycles/Elliott Wave patterns/gaps are the primary considerations.
Fed Credit was only $4.093 Billion today 1-27/$4.639 Billion yesterday 1-26/$5.620 Billion on 1-25, it's been very light for the past eight days, see http://bit.ly/wQNYC, and, see the daily update earlier, at the Fed's site at http://www.ny.frb.org/markets/seclend/sec_lendop.cfm.
Fed Credit rose a significant/bullish +$5.144 Billion in the five day period ending 1-20-10 (The Fed bought a massive $49.377 Billion of Mortgage-Backed Securities, causing the weekly delta/change to be positive), see http://bit.ly/Ys2ds.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
The five day intraday SPX Wall of Worry (SPX vs VIX) is bullish, since a huge collapse/rapid unusually large rise in complacency occurred the past three days, see http://bit.ly/vryF4
The intraday SPX Wall of Worry (SPX vs VIX) is very bearish, since a collapse/very sharp rise in complacency occurred today, see http://bit.ly/UTZwc
The six month broad market Walmart (WMT) Lead Indicator is 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 bearish (keep in mind that it's basically a lead indicator), see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=3m&l=off&z=l&q=c&p=&a=p12,p12,fs,p12,fs,w14&c=%5Evix
SPX's intraday candlestick chart looks bullish at session's end, but probably peaking on a very short term basis, and, SPX closed near the session cycle high, which usually points to early strength, see http://bit.ly/12SpXH.
The SPX (S & P 500, http://bit.ly/i0nsT) Major Upcycle since 3-6-09 is probably peaking (possibly peaked on 1-19-10, rose in recent months thanks to massive liquidity from the Fed). 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 peaking. A major/very large price and volume blowoff type of spike move is likely when SPX puts in a Major Cycle high.
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.
A Fibonacci 0.618 retrace of the -909.30 point decline from 1576.09 on 10-11-07 to 666.79 on 3-6-09 puts SPX (S & P 500, http://bit.ly/i0nsT) at 1228.55 (Major Cycle High "target." I'm skeptical of it's validity in this case, partly because of massive Fed Credit/Quantitative Easing in recent months).
Called "Quantitative Easing" when Fed Credit increases (trends up over months), which is a fancy way of saying that liquidity is being injected into the financial system/markets, which is obviously an inflationary easy money policy. Massive Quantitative Easing in recent months, liquidity injected into the financial system, accounts for market strength recently.
Given the massive amount of Fed Credit (Quantitative Easing) in recent weeks, and months one simply can't fight Bubbles Bernanke and the Fed for now. Bubbles Bernanke might be the Trade the Cycles Blog Goat of the Year in 2010. Stay tuned.
SPX's (S & P 500, http://bit.ly/i0nsT) pattern of doing a brief pop very early on followed by a fizzle nearly EVERY DAY continues (probably the big boys/program traders bidding the market up very early every day, then they dump it on the lemmings), see the five day intraday candlestick day chart http://bit.ly/3qGxf3
A factor recently/now is that Fed Credit rose a substantial +$23.723 Billion in the five day period ending 12-23-09 (Called "Quantitative Easing" when Fed Credit increases, which is a fancy way of saying that liquidity is being injected into the financial system/markets, which is obviously an inflationary easy money policy), which was/is a bullish indication, see http://bit.ly/Ys2ds.
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.
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.
It's not a coincidence that an SPX (S & P 500, http://bit.ly/i0nsT) session cycle low occurred on 12-28-09 shortly after filling the 1126.48 downside gap from the open,see the five day intraday candlestick chart at http://bit.ly/3qGxf3 Gaps have a strong tendency to provide a trading roadmap.
It's not a coincidence that an SPX session cycle low occurred at 1116.00 on 12-23-09, very soon after filling the 1118.02 downside gap from the open, see the five day intraday candlestick chart at http://bit.ly/3qGxf3 Gaps have a strong tendency to provide a trading roadmap.
SPX's (S & P 500, http://bit.ly/i0nsT) volume was a well above average 4.634 billion shares today 1-27-10 versus the 60 day EMA at 3.901 billion shares, which is a bullish indication, because, it appears that the big money was entering in a big way today, which jives with a likely short term cycle low occurring today.
Follow me on Twitter (highly recommended), see http://twitter.com/tradethecycles.
Bearish signs however are very light Fed Credit yet again today, for the 8th straight day, and, there's a very bearish 3 month XOM Lead Indicator, as discussed in previous updates.
It might make sense to day trade long likely strength the next few days/week or so, instead of holding overnight. SPX (S & P 500, http://bit.ly/i0nsT) might have put in an important major cycle high at 1150.45 on 1-19-10.
Today's weakness might have triggered an important SPX 5% follow through major sell signal (I need to do a chart and take a good look, it's close to and might be a major sell signal today), which would indicate that SPX probably peaked on 1-19-10, AND, more importantly, that it's risky to trade long now. In 2007 SPX hit a 5% major sell signal in July and peaked modestly higher/rolling over dramatically on 10-11-07 versus the July 2007 cycle high.
It's no coincidence that SPX bottomed/put in a session cycle low yesterday very soon after filling 1-25's downside gap at 1091.76, see the five day intraday candlestick chart at http://bit.ly/3qGxf3, and, see the daily candlestick chart http://bit.ly/i0nsT. Much of the time SPX is simply engaged in gap filling action.
VIX fell -5.74% vs SPX up +0.49% today 1-27-10, which is a very bearish indication for early tomorrow 1-28-10, because, it's a very sharp +5.25% rise in complacency/-5.25% decline in the SPX Wall of Worry (SPX vs VIX).
VIX fell -3.38% vs SPX down -0.42% yesterday 1-26-10, which correctly was a very bearish indication for early today, because, it was a +3.80% rise in complacency/-3.80% decline in the SPX Wall of Worry (SPX vs VIX).
SPX vs VIX (SPX Wall of Worry) the past three days is a bullish rapid unusually large +16%ish rise in complacency, since VIX was down about -16% versus SPX up modestly.
The intraday WMT/XOM Lead Indicators closed at very bearish/bearish today, see http://bit.ly/bKhNsR.
The five day SPX vs Lead Indicator Walmart (WMT) chart at http://bit.ly/4t6GS9 is extremely bullish at today's close, since WMT's leading to the upside by +2.00% to +3.99%, which is usually a very short term bearish indication, because, SPX didn't respond well today to an extremely bullish indication. For the five day intraday broad market Walmart (WMT) Lead Indicator that includes HUI for gold bugs, see http://bit.ly/5zScR
The five day XOM (Exxon Mobil) vs SPX Lead Indicator is slightly bullish, since XOM's leading to the upside by +0.00% to +0.24%, see http://bit.ly/5CMSze. Maybe XOM is an even better lead indicator than WMT, since XOM is the highest weighted component of SPX (S & P 500, http://bit.ly/i0nsT) by far (about 3.11%).
Get ready for the VERY bearish three month XOM (Exxon Mobil) Lead Indicator: see http://bit.ly/8wiAN2.
Exxon Mobil (XOM), by far the most heavily weighted SPX component (3.11%), has a bearish breakaway gap and an ugly chart, see http://bit.ly/6Dr79y
Trading Roadmap: WATCH SPX's (S & P 500, http://bit.ly/i0nsT) upside gap/magnet at 1116.48 from 1-22-10's open, since a Short Term Upcycle has probably begun, see the five day intraday candlestick chart http://bit.ly/3qGxf3. Much of the time SPX is simply engaged in gap filling action.
Trading Roadmap: WATCH, in the next short term downcycle, SPX's (S & P 500, http://bit.ly/i0nsT) downside gap/magnet at 1069.30, see the five day intraday candlestick chart http://bit.ly/3qGxf3. 1046.50, 1025.21, and 1016.40 are the downside gaps after that. Much of the time SPX is simply engaged in gap filling action.
Market breadth closed mixed today (NYSE up vs down volume is/appears to be correct), which is a bearish indication for early tomorrow 1-28-10, see http://bit.ly/lPIyW. Cycles/Elliott Wave patterns/gaps are the primary considerations.
Fed Credit was only $4.093 Billion today 1-27/$4.639 Billion yesterday 1-26/$5.620 Billion on 1-25, it's been very light for the past eight days, see http://bit.ly/wQNYC, and, see the daily update earlier, at the Fed's site at http://www.ny.frb.org/markets/seclend/sec_lendop.cfm.
Fed Credit rose a significant/bullish +$5.144 Billion in the five day period ending 1-20-10 (The Fed bought a massive $49.377 Billion of Mortgage-Backed Securities, causing the weekly delta/change to be positive), see http://bit.ly/Ys2ds.
Nothing discussed on this Blog is a recommendation, or, should be construed as investment advice.
The five day intraday SPX Wall of Worry (SPX vs VIX) is bullish, since a huge collapse/rapid unusually large rise in complacency occurred the past three days, see http://bit.ly/vryF4
The intraday SPX Wall of Worry (SPX vs VIX) is very bearish, since a collapse/very sharp rise in complacency occurred today, see http://bit.ly/UTZwc
The six month broad market Walmart (WMT) Lead Indicator is 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 bearish (keep in mind that it's basically a lead indicator), see http://finance.yahoo.com/q/ta?s=%5EGSPC&t=3m&l=off&z=l&q=c&p=&a=p12,p12,fs,p12,fs,w14&c=%5Evix
SPX's intraday candlestick chart looks bullish at session's end, but probably peaking on a very short term basis, and, SPX closed near the session cycle high, which usually points to early strength, see http://bit.ly/12SpXH.
SPX's upside gap/magnet at 1150.23 from 1-20-10's open is a bearish breakaway gap.
The SPX (S & P 500, http://bit.ly/i0nsT) Major Upcycle since 3-6-09 is probably peaking (possibly peaked on 1-19-10, rose in recent months thanks to massive liquidity from the Fed). 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 peaking. A major/very large price and volume blowoff type of spike move is likely when SPX puts in a Major Cycle high.
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.
A Fibonacci 0.618 retrace of the -909.30 point decline from 1576.09 on 10-11-07 to 666.79 on 3-6-09 puts SPX (S & P 500, http://bit.ly/i0nsT) at 1228.55 (Major Cycle High "target." I'm skeptical of it's validity in this case, partly because of massive Fed Credit/Quantitative Easing in recent months).
Called "Quantitative Easing" when Fed Credit increases (trends up over months), which is a fancy way of saying that liquidity is being injected into the financial system/markets, which is obviously an inflationary easy money policy. Massive Quantitative Easing in recent months, liquidity injected into the financial system, accounts for market strength recently.
Given the massive amount of Fed Credit (Quantitative Easing) in recent weeks, and months one simply can't fight Bubbles Bernanke and the Fed for now. Bubbles Bernanke might be the Trade the Cycles Blog Goat of the Year in 2010. Stay tuned.
SPX's (S & P 500, http://bit.ly/i0nsT) pattern of doing a brief pop very early on followed by a fizzle nearly EVERY DAY continues (probably the big boys/program traders bidding the market up very early every day, then they dump it on the lemmings), see the five day intraday candlestick day chart http://bit.ly/3qGxf3
A factor recently/now is that Fed Credit rose a substantial +$23.723 Billion in the five day period ending 12-23-09 (Called "Quantitative Easing" when Fed Credit increases, which is a fancy way of saying that liquidity is being injected into the financial system/markets, which is obviously an inflationary easy money policy), which was/is a bullish indication, see http://bit.ly/Ys2ds.
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.
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.
It's not a coincidence that an SPX (S & P 500, http://bit.ly/i0nsT) session cycle low occurred on 12-28-09 shortly after filling the 1126.48 downside gap from the open,see the five day intraday candlestick chart at http://bit.ly/3qGxf3 Gaps have a strong tendency to provide a trading roadmap.
It's not a coincidence that an SPX session cycle low occurred at 1116.00 on 12-23-09, very soon after filling the 1118.02 downside gap from the open, see the five day intraday candlestick chart at http://bit.ly/3qGxf3 Gaps have a strong tendency to provide a trading roadmap.
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/months 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.
A factor recently/now is that Fed Credit rose a substantial +$23.723 Billion in the five day period ending 12-23-09, which was/is a bullish indication, see http://bit.ly/Ys2ds.
Fed Credit rose a substantial +$22.764 Billion in the five day period ending 12-16-09, which is/was a bullish indication, 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.
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.
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/
NEM XAU HUI
Often important and even not so important cycle highs or lows occur shortly after (both timewise and pricewise) gap filling action is completed.
A factor recently/now is that Fed Credit rose a substantial +$23.723 Billion in the five day period ending 12-23-09, which was/is a bullish indication, see http://bit.ly/Ys2ds.
Fed Credit rose a substantial +$22.764 Billion in the five day period ending 12-16-09, which is/was a bullish indication, 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.
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.
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/
NEM XAU HUI
posted by Joe Ferrazzano at
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