Thursday, November 13, 2008
Nov 13 PM Update
The Dow is now up over 432 points. Our Direxion Nasdaq 100 bull/bear trading model is now up over 100% since Oct 20th. This is verified by Timer Trac. We are now buy and hold awaiting a move back up to the 1072 area. This could take until Thanksgiving. If we hit that area on Monday/Tuesday then all bets are off for the latter date.
Nov 13 Mid Session Comments
Got back early. The SPX 820 area has held and now we see a huge rally into month's end in both stocks and mining shares. GDX fell below 18 today and is a screaming buy. My target for the SPX is 1064/1072 and GDX near 29 by or around Thanksgiving.
All our models went long as a fund trade the PM NAV close yesterday.
All our models went long as a fund trade the PM NAV close yesterday.
Nov 13 Pre-Market Commentary
This will be my only commentary today. Today is the full moon. Last full moon (Oct 14) the market topped. 80% of the time full moons are tops. Not this time. Full moons always reverse the prior trend going in. The larger 5 week cycle low is due in this general time frame. Today is day 24. Since Oct 10 we have seen a bottom 12 days out on Oct 28 on the new moon, and now 12 more days out we should see a bottom today.
The Equality of Waves Principle I talked about earlier suggests the bottom to be 107 S&P 500 points below the Tuesday top and that points to 819/20 for the final bottom. We are sufficiently oversold to warrant a huge bounce. As Roger Dodger on Traders-Talk has pointed out, the sentiment and tick figures almost match the Oct 9th figures. The next day, the market tagged a bottom.
The next expectation is for a rally back up to the top of the range and that would be in the 1050 area where the declining 50 day moving average is located. How long it takes to get there is another matter. The smaller 4/8 day cycle top is due Friday +/- one day. The larger 16 day cycle top is due somewhere between Nov 20th and Dec 2. The last 2 cycles ran 17 and then 15 days. The larger 13 week cycle is due no later than Nov 24. Jim Curry's work suggests we see a top around Nov 21-28 +/-.
The overall trend is still down into December. The current pattern has continuation written all over it. Curry sees a low between the second and third week of December. I'm inclined to believe we see it more toward the third week and then a strong rally in mid Feb based on the 23 week cycle and the gold mining shares.
The mining shares are currently in an uptrend that should last until the third week of December. We are currently coming into a strong seasonal period for the mining shares from the end of Nov to the end of Dec. Also, we have some chatter about the Comex being forced to buy more gold on the Dec contract starting Nov 28 because many may demand delivery and they may be short in the physical gold department.
Soon, I believe the mining shares will decouple from the stock market. From late Dec to mid Feb the cycle in the mining shares is down while the stock market cycle turns up.
My best guess is we see a top in the stock market anywhere between Nov 17 and Nov 28 near 1064/72 and then down hard to 788 SPX by the third week of Dec.
GDX (the mining share proxy ETF) is now in the $18 area and a move back to the $29 area is expected.
The Equality of Waves Principle I talked about earlier suggests the bottom to be 107 S&P 500 points below the Tuesday top and that points to 819/20 for the final bottom. We are sufficiently oversold to warrant a huge bounce. As Roger Dodger on Traders-Talk has pointed out, the sentiment and tick figures almost match the Oct 9th figures. The next day, the market tagged a bottom.
The next expectation is for a rally back up to the top of the range and that would be in the 1050 area where the declining 50 day moving average is located. How long it takes to get there is another matter. The smaller 4/8 day cycle top is due Friday +/- one day. The larger 16 day cycle top is due somewhere between Nov 20th and Dec 2. The last 2 cycles ran 17 and then 15 days. The larger 13 week cycle is due no later than Nov 24. Jim Curry's work suggests we see a top around Nov 21-28 +/-.
The overall trend is still down into December. The current pattern has continuation written all over it. Curry sees a low between the second and third week of December. I'm inclined to believe we see it more toward the third week and then a strong rally in mid Feb based on the 23 week cycle and the gold mining shares.
The mining shares are currently in an uptrend that should last until the third week of December. We are currently coming into a strong seasonal period for the mining shares from the end of Nov to the end of Dec. Also, we have some chatter about the Comex being forced to buy more gold on the Dec contract starting Nov 28 because many may demand delivery and they may be short in the physical gold department.
Soon, I believe the mining shares will decouple from the stock market. From late Dec to mid Feb the cycle in the mining shares is down while the stock market cycle turns up.
My best guess is we see a top in the stock market anywhere between Nov 17 and Nov 28 near 1064/72 and then down hard to 788 SPX by the third week of Dec.
GDX (the mining share proxy ETF) is now in the $18 area and a move back to the $29 area is expected.
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