Smart Investment - mexicomike.ca

[samxxli]

I used to have core positions of juniors stocks for long term hold. I sold UXG (previous NPG) in mid 2009 and sold FCO early this year, I held both stocks since early 2002 with 60% of my original capital and came out with small loss. If I traded term (following markets timing as I outlined in this forum), I will be a millionaire now.

I currently do not have core positions of juniors stocks, I believe that junior stocks are in bear markets and prices will remain depressed for years to come. $CDNX follows the index of $TSX, and most previous popular junior stocks in this forum behave even worse than $CDNX and have completely decoupled from the gold advance.

I include long term counts for HUI, TSX and Oil prices to show their inter-relationship and also explain why I am bearish with junior stocks.







The prices advance since 2008 or 2009 lows were corrective in nature for all three charts with prices overlap and no alternation between wave 2 and 4. They can only be counted as B rallies of ABC correction.

The current prices weakness since recent highs are corrective with prices overlap, they are mid way b corrections (or X correction for HUI) of abc B rallies. The third leg of wave c (or wave Y for HUI) up of B rallies will follow to take the indexes to new highs.

If wave c up is equal to wave a up in prices or proportionally, then the B rallies for TSX will top at 15500, oil price at 120 to 130 and HUI at 750 to 850.

The corrective patterns for TSX and oil are 3-3-5 ABC flat; the C wave down will likely undo all B rises and then some from early 2012 to fall 2014 as shown in the charts. There will be large deflationary force from 2012 to 2014 for commodities and general markets.

The B rallies top for HUI (also silver and gold) is significantly higher than wave A top. The corrective ABC pattern is running correction with C wave down being a contracting triangle as shown in the HUI chart. Therefore while general markets are on devastating C wave of 5 waves down to below March 2009 low, HUI, silver and gold will be on 5 waves triangular C moves above wave A top.

Junior Stocks

Most of the previous popular stocks such as SNN, MTO, GOZ, ATW, SAM, TM, GGI, EPL, BGL, UC, AUN, ECU, GGC, NGG, MDN and KXL have not participated in B recovery rallies for HUI, prices have lost 80% to 95% and stay in low levels, many junior stocks stay even below Oct 2008 lows. These are strong indications that junior shares move more in sync with general markets than gold and they are currently being pulled down by the larger bearish force for general markets. If they don’t do well during counter trend B rallies and they likely will do badly during devastating C wave crash. I stay away from them no matter how cheap they are.

I do plan to fully invest with mainly gold stocks at the midway b correction low sometimes in mid September to mid October and I do intend to include those quality junior gold stocks such as EDR, SVM, and LSG etc for more leverage.



I include hourly chart to show the c (pink) advance of b (orange) up. The bigger pictures can be found from my last post and the top second chart of TSX index.

The chart is self-explanatory. It seems the top is still at 1145 to 1155. The reversal to start c (orange) wave down should happen sometimes the beginning of next week if the count is right. Wave c (orange) down is of 5 waves, I still target the low at 950 to 1000.



I only include hourly chart to show wave iv and v (orange) of bc up. The bigger pictures can be found from daily chart of my last post and top third chart of HUI index (with different colors for legend).

It seems there will be another leg up to 470 to 475 to finish b (red) up. HUI will then start c (red) wave down to my target of February low at around 350.


Happy Trading,
Sam

[samxxli]

Last week’s pullback for SPX was larger than I expected. I carefully reviewed the wave patterns and wave counts and concluded that the c wave (pink) up since July low of 1011 is a 5 waves 3-3-3-3-3 ending diagonal. SPX is currently in 5th wave up and the upside will be capped by the top uptrend line of the rising wedge. I include a more detailed waves counts to shown the 5 waves 3-3-3-3-3 ending diagonal.

The b wave pullback (pink) of wave v (orange) up for HUI was also larger than I expected. Yet the basic structure has not changed. I do expect now the c (pink) up of wave v advance for HUI will likely be very choppy of 5 waves 3-3-3-3-3 ending diagonal.

Both HUI and SPX will likely roll over and start large pullbacks of c waves down sometimes next week or the beginning of the following week the latest if the counts are right.





The first chart showed the intermediate counts for midway b (green) correction while the second chart concentrated on more detailed counts of 5 waves 3-3-3-3-3 ending diagonal of c (pink) up since July low of 1011.

SPX is currently in last leg of wave v (blue) up. The upside will be capped at around 1145 to 1155.

The force coming down of rising wedge will be strong and fast, and will at least undo the entire rise since July low. I expect the ultimate low at 950 to 1000.





I include a gold chart to show its difference from that of HUI and silver.

The ending triangle for gold is an expanding triangle with 5th wave failure while that for HUI and silver are contracting triangles

I expect the 5th wave up of the ending triangles for gold markets to be well below their recent highs (failures) and the c waves (red) down to follow will revisit their February lows.


Happy Trading,
Sam

[samxxli]

I include a long term count of major wave II for crude oil that has a wave pattern very similar to TSX. The waves counts for HUI and SPX have been updated which still move in the major direction laid out weeks ago. If the counts are right, both gold and general markets will roll over and start large pullback of c wave down in couples of weeks.



The Oil chart covers wave count of major wave II for crude oil; the pink lines designate the proposed moves based on my preferred count.

The meltdown for oil from July 2008 high of 148 to low of 35 beginning of 2009 was first leg wave A (red) down.

Wave B up is an abc (green) zigzag. First leg wave a (green) up topped at 87 in April, the fifth wave (orange) of wave a up was an ending diagonal.

Crude oil moves more or less in sync to TSX and SPX. Currently crude oil is in wave b (orange) up of midway b (green) correction. Wave c (orange) down will follow to take oil price to 65 to 70 to finish midway b correction by early October.

Wave c (green) up will follow midway correction b and take oil price to 130 to 140 by early 2012.

The third leg wave C down of major wave II will undo all wave B rise and then some from 2012 to fall 2014. Oil price may see bottom at 30 or lower. There will be large and deep deflationary force from 2012 to 2014 rivaling the meltdown of 1972 to 1974.



The SPX chart is self explanatory for short and medium terms moves based on the preferred count.

There does exist a possibility that there will be a near term pullback as b wave down if we count the rise from July low of 1011 as b wave up, I will redo the SPX chart if it happens.



Gold price has been weak, therefore I expect the current wave v (orange) up of the ending triangle for HUI to be a failure, and the top will be well below 501 as shown in above chart.

The c wave (red) down to follow will undo all wave b (red) rise and then some since February low. The February low for gold was 1044, for silver it was 14.6 and for HUI it was 363. IMO the advances for gold markets next week or two are selling opportunities.

Happy Trading,
Sam

[samxxli]

I still believe wave b (red) up is in play. The wave counts are shown in the following HUI chart.

However if HUI breakdown major support of 419.5 decisively, then major wave down is likely in progress.




Happy Trading,
Sam

[samxxli]

Here is my short update.



The current wave ii down (blue) is deeper than I thought; otherwise it proceeded as expected as shown in my last post.

SPX is close to wave ii (blue) bottom. Wave iii up, iv down and v up will follow before large pullback of wave c (orange) down unfolds.



HUI is approaching previous low 442.95. I still do not expect that HUI is on major wave down while SPX is on strong b wave up. I see the current decline for HUI as b (pink) down of abc (pink) advance. A 5 waves c (pink) up may take HUI to previous high at around 502.

If HUI breakdown major support of 440 to 443 decisively, then HUI is likely on major wave c down.

HUI has shown huge negative divergence during recent advances and the waves pattern also call large pullback of wave c down now or near future.

I am still waiting for coming c (red) wave low to load up buy and hold gold and silver stocks. In the mean times, I do short term trades only.


Happy Trading,
Sam

[samxxli]

I made very long term count for Dow (Super Cycle-based on Glenn Neely’s works) dating back hundred of years and made long term counts for super cycle wave (III) of Dow (also SPX) since 1949. I also made major wave I counts for gold, silver and HUI since 2001. They were all valid Elliott wave counts and I have deep convictions to the directions of future paths for general and gold markets. I will not be shaken out of my markets calls easily by some so called guru’s calls nor by somebody’s biased fundamental analysis.

That said I am also fully aware that anything can happen in the markets and I always stressed my views were personal opinions only. I am also open mind and flexible and is willing to make change to my counts (short, long and even very long term counts) given new and unconfirmed prices actions (like markets plunge 3% to 6% each day for a few days, and definitely not biased fundamental analysis).

I formulated intermediate counts for SPX and gold late last year. SPX was on the abc Zizag D wave up since March 2009 low and is expected to revisit 2007 high by early 2012 before it top out, gold (also silver and HUI) was on long B wave up to significantly higher for running ABC wave II correction. Currently both SPX and gold are on midway b corrections and are expected to come to end by September/October, wave c up (or x up) will follow to new highs at much higher levels.

The prices actions so far have verified my counts as the first leg wave a up for general markets (DOW, TSX, SPX, NDX, RUT etc) and gold (also silver and HUI) went up much higher than I originally expected. The current price weakness since April highs for SPX was corrective. The prices patterns were all overlapped and are of three waves as shown in following SPX chart. This is a correction within an ongoing uptrend. I see no reason to make change to my intermediate and long term counts.



I opted for that temporary low was in for SPX at 1011 when SPX broke out to new high last Wednesday and it was confirmed by strong prices actions late last week.

Since the new lows were not far from previous higher lows for most general markets indexes. I revert back to my old count as shown in above chart.

SPX is currently in c (pink) wave up of b (orange) up. I expect the high will be at least north of 1175.

I include a complete b (green) correction in the chart. The final b (green) correction low may drop to new low but it should not be far from 1000 and I still expect the b (green) correction to end by early October.



Gold and SPX maintained a positive relationship in large direction since gold bull started in 2001. If SPX is on strong b up, I see no reason that gold is on major wave down. I reviewed the price pattern of HUI and came out with new count of HUI as shown in above HUI chart. The strong move up last Friday for gold market gave more credibility to this count.

HUI is still in b (red) wave up since February low. The c (black) wave up of b is taking on the pattern of 5 waves ending triangle and HUI is on the last leg wave v up of the ending triangle.

The midway x (blue) correction for HUI will be a convention 3-3-5 abc flat. I expect b (red) up to top before SPX and the whole x (blue) correction for HUI to end sometimes in September and that is before early October for SPX.

I slowly switched to long for short term trade since Wednesday, sell stops are currently set at 453 for HUI and at 1045 for SPX. If sell stops were activated and my long positions got stop out, I’ll reassess the situation and may redo the count if necessary. Nothing is certain with the markets.

I do not have any long term buy and hold position and still wait for b (or x) corrections lows to aggressively load up long positions that may likely happen in September/October.



Happy Trading,
Sam

[samxxli]

I misunderstood and overreacted, my apology to Proticker. I think I was too concerned that I might have to compete with an opposing view in my blog. I honestly do not want my blog to become a public forum for diverse views.

Investors are overly bearish with general markets. I share a not so bearish view based on a gold bull perspective.

1) Dow Index will decline by more than 90% to 1000 Dow as the 1929 style crash camp predict- This is great depression, all commodities (copper, oil etc), silver and HUI will be decimated. I am a gold bull believing gold and silver to the moon, I rule out this possibility. I showed the board with a long term count that the current decade of 2010 to 2020 will replicate decade of 70 with Dow Index to fluctuate from 6000 to 14000.

2) Dow Index has started a new leg down to March 2009 low for double dips as some TV commentators claimed-Gold maintained a positive relationship to Dow Index since 2001. While gold moved up from 300 in July 2002 to 1033 in early 2008, Dow Index was in uptrend and during 2008 meltdowns silver and HUI fell much harder than Dow.

General markets and gold markets are in down trend now, if Dow is on the way to double dips, silver and HUI are vulnerable to revisit their October 2008 lows or they may drop significantly lower. This is also a “no” “no” to me, I believe silver and HUI have seen the lows in October 2008 and current weakness will stop above February lows (silver above 14.7, and HUI above 363). The most likely scenarios will be that both gold and general markets are in midway b (or x) corrections and they will be followed by another leg of c waves up to new highs at much higher levels.

Many gold bulls target gold to Dow ratio to 1 and they expect DOW Index to drop significantly lower to attain this target. I see it differently, I expect DOW index to stay flat at 10000 while gold price catch up and climb to 10000 to attain the target of 1.







I did the SPX count in hourly chart with minor change form chart of last Thursday; I now see the bottom at 950 to 1000 for a (orange) bottom. Wave b (orange) up will follow.

Dow index showed a more resilient price action, it only dropped 14.5% and it will likely stop at 9400 to 9500 for 32% retracement. TSX did even better, TSX dropped only 9.2% and prices patterns since April high of 12321 are clearly corrective in nature. I have not changed the intermediate and long terms counts for general markets.

http://www.safehaven.com/artic.....y-year-end
http://www.safehaven.com/artic.....over-again
I include a couple of articles to show similar parallels in 1998 and 2004. I reproduced the charts as shown above in first two charts.

I am open mind and flexible. If SPX plunge 2% to 5% for a few days just as the crash camp expected, I’ll redo the counts for more bearish scenario.



Gold price has dropped below downtrend line since March low and c (black) wave down for gold market very likely has started.

I use HUI to do wave counts. HUI is currently in lower degree wave iv (red) up correction, it probably will consolidate a bit more and then start another leg down to next major support to finish wave i (orange) down.

It is probably a good idea to sell all bear ETFs (HGD.TO, HBD.TO, ZSL, and GLL) and to cover all shorts at next major supports (silver at 17 to 17.4, HUI at around 430 and gold at 1165 to 1180) and that is exactly what I plan to do.


Happy Trading,
Sam

[ProTicker]

hi Samxxli,

Your counts adjusted are well in order. I enjoy your work and stated before , it is not much different than an expensive web site that I had 2 weeks free membership in. Your calls have been great . wished I looked at this with more scrutiny in the fall of 2008. You nailed it good . Since I have compared what you have to everything else and it is a very well general map. I would like to clarify just this ounce some points of interest you made. Again I appreciate your views and accept a consulting of your views. May I present a more balance of my views in lite of what was stated. Let me explain.

I do not know Deneric!

[samxxli]

To All,

The general markets are in deeper decline than I thought; I redo the wave count for SPX for a more bearish scenario. The target price of 950 represent 50% retracement of the rise since March 2009 low and it is also the target low for c (pink) low if c (pink) is equal to a (pink). I am still on the short side of SPX.




Happy Trading,
Sam


Hi Proticker,

http://danericselliottwaves.blogspot.com/
You mentioned Deneric’s name before, Daneric mentioned head and shoulder pattern for SPX frequently in his blog recently. It seemed you were greatly affected by him. Daneric is Prechter’s fan and he also called for sub 1000 Dow (400) and sub 100 SPX for more than 95% decline. Preachter and Dan are also very bearish in gold and silver.

You endorsed 1929 style markets crash for the general markets in your previous post and at the same times you are extremely bullish on gold and silver. I found it odd; I personally do not believe that 1000 Dow and 30 dollars silvers can co-exist. I believe silver price will likely be in low single digit in a deep deflation environment of 1000 Dow. USA.V and IPT will likely become worthless. Then again this is only my personal opinion.

I am sure you do not agree with me. That is natural. Everybody has its own market call and that’s what makes the market. I started the blog to add a realistic voice and never intend to discredit other opinions. I try to stay away from controversies and debate and that’s the reason I think two opposing views should appear in different threads. Imagine if Dsquare and I are posting in the same thread that would be very confusing. I hope you can understand.


Regards,
Sam

[ProTicker]

Samxxli,

I apologies to you. After reading my last post here, it did not ask anything of you nor is about counts and wave numbers. You are very tactful and appreciate the respect and commendation. In posting I may have taken away from the focus on wave counts. Expecting your reply to my s&P500 correction on retracement. Your suggestion as to a whole new thread would be in order.

Look very forward to reviewing your work as always , although i am not up to par with you in this focus as much. In reviewing a high cost professional web site in wave counts, I have found your work on the S&P 500 chart was very close to theirs. This was at Breakpoints.com. I am not subscribed.

Sincerely , keep up the good post
_________________
The world is littered with unsustainable debt. And global de-leveraging is still in the early stages.

[samxxli]

Hi Proticker,

You have been expressing very bearish views on general markets in different threads. I think it make sense that you take the initiative to start a new thread with title of something like “markets meltdowns” and put all relevant informations in one thread. Market crash is a popular view, it deserve a separate thread of its own for all members with similar views to freely express.

It is even better that you start your own blog to complement the works of Dsquare and me. I don’t think we need to do chart and waves count to do a blog. You just need to share your views on markets and your trading plan regularly. I learned a lot from your trades and stocks selections.

This board will be much stronger with various and diverse views.


Regards,
Sam



To all,

Gold writers are touting 1300 and 1350 gold prices. I don’t rule out 1350 gold price or even higher during current up cycle. But if we look under the surface, the picture is not that beautiful. The internals are deteriorating, even though gold stocks index and gold price are on new highs, many gold shares do not participate and prices remain depressed, NG.TO, SVM.TO and SSO.TO (I used to hold all three) are good examples.

I am happy that I got out of my buy and hold positions last time. Most of them (AXR, FVI, DMM, LSG, AVR, AUN) are still under water, and only KGI is in the green while USA.V is about even. All parabolic rises (gold) will result in significant decline, I am highly confident there will be better buying opportunities with lower prices for buy and hold positions sometimes this summer. In the mean times, I am only doing short term trades in both directions.

The decline since Monday high of 1131 for SPX was orderly. I see it as part of the base building process to prepare for steady advance of subsequent c rise.



The SPX chart is in continuation to the chart that I posted Monday Jun 7. For simplicity I include the counts for b (orange) wave of the abc (orange) midway correction only. You can go back to the chart of Monday Jun 7 to get the counts of bigger picture.

The decline since Monday high of 1131 will likely be a Zigzag, it is currently in b (blue) up correction with more upside. The chart above show a simple abc up correction, but it can be complex. Another leg of 5 waves down will follow to complete b (pink) wave down.

The 1929 style crash camp count the current wave as wave ii up, super cycle degree wave iii of 3 of III down will follow. This is the most powerful leg down in Elliott Wave and it will dwarf the Sept to Nov 2008 Markets meltdowns by a long shot. I am watching the development carefully.

I am open mind and flexible, if SPX breakdown below major support of 1040 significantly and with force, I will revise my counts to reflect a more bearish scenario.





I include HUI and silver charts. The counts became clearer now after price advance last Friday. HUI and Silver seem to be in the last leg up of the b (black) rallies, it should reverse trend after some more upside and start a large pullback of c (black) wave down soon if the count is right.

Nevertheless the trend will be considered up as long as gold price remain in uptrend since March low of 1085. We need gold price to breakdown the uptrend and drop below major support of 1215 to 1220 to confirm c (black) wave down is in play.


Happy Trading,
Sam

[ProTicker]

On Tuesday morning , the S&P 500 was around 30 points higher than where it is now, which placed the index above the 200 and 20 DMA's, a much stronger technical position. Now we notice that the SPX is attempting to tread water below all of its relevant trending moving averages -- the 20, 50 and 200 -- and the decline could be the formation of the "right shoulder" of a 9-month head and shoulders top

http://stockcharts.com/h-sc/ui?s=spx

If the SPX continues to weaken and violates multi-month support at 1037, 1032, then the significant downside potential of the top pattern will be triggered. Such an obvious topping pattern usually requires a few knee-jerk, whipsaw headfakes in the opposite direction confusing most investors .
If this is approaching, then we should expect a couple of rallies that get everyone into a positive frame of mind. From my technical perspective, the SPX needs to hold above 1072 to avert more immediate downside damage and to trigger near-term buying interest that can pop the index to 1100 or higher in the upcoming days. So far that's holding as of now it is 1084 at 2:04 pm est.

Without a doubt, the index is at a crossroads. We might know in a matter of hours if the "right shoulder" construction will be a straight down from current levels, or of a more complex nature that includes a couple of vicious short-covering rallies back towards the high. expect the latter, but to be prepared for the former.

In shorting the market , it was way to early by weeks and as now I can only hang on for the ultimate which looks to be in July sometime . #rd week in july looks like a bad time. We shall ride gold in the mean time. GDX looks strong and is trending higher. I bought LEAPS on GDX expire Jan 2012 of the $55 calls.


Cheers
_________________
The world is littered with unsustainable debt. And global de-leveraging is still in the early stages.

[samxxli]

Hi Proticker,

The target price for head and shoulder pattern for SPX that you mentioned is 820. I am not that bearish, I target SPX to bottom at 1000 or a bit lower. I do expect there will be at least another leg down to lower low below previous low of 1040.


Sam


To All,

I had been busy day trading and swing trading (2 to 3 days) during trading hours all week last week. I was also busy working at night such that I can only find times to do a short update today.

If I have to make calls for the markets, SPX is following the count that I posted Monday Jun 7 and gold market is still in b (black) wave up, wave c (black) down will follow. Both SPX and SPTGD (Canadian gold stock index) are in topping process, the 5 waves up since Monday low of 355 for SPTGD has been identified. Nevertheless the reversal to downtrend can only be confirmed by large spike down, if the pullback is corrective and sluggish, then the prevailing trend (up) may still be in play, b wave up for a flat can be higher than a top.


Happy Trading,
Sam

[navyblue]

Hey wxman, there are worse plays for a mid term swing trade than using the NYSI. IMO, watch out for that 50 mid line, around the 250 level.There should be a turn down there for the final leg of this correction.I wonder how easy it would be to catch a turn there, using such a "slow" oscillator.

[wxman]

http://stockcharts.com/h-sc/ui.....4296098961