Nov 18, 2008 Commentary

Today is the exact 27 day cycle low. The SPX looks like it will try and test the 820 Thursday low today (with a higher "b" wave low, ideally). The set up is there for a decent rally in the days ahead as the e-wave configuration and cycles are bullish over the short term. We should see a rally into as early as Thursday to as late as Monday based on the 16 day cycle top combined with the 13 week cycle top +/- 2 weeks. The ideal 4 day cycle tops Thursday +/- one day.

Gold stocks should see a double top in this time fame and GDX should tag the 24/25 area in the coming days. This would set up another pull back before launching higher into late December. I was having doubts about this scenario, but it looks likely at this juncture that gold stocks and the stock market will decouple.

We are ST bullish, IT and LT bearish on the stock market looking for a low in late December. We are ST, IT and LT bullish on the mining sector looking for a ST top soon, and an IT top in late December.