Market Harmonics of the HUI, S&P and USD Index

By: David Petch | Wed, May 28, 2003
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Market Harmonics
Just as all creatures have different circadian rythmns....so does each market. The stochastic settings for each index are Fibonacci number based, I find indices fascinating, because they will give the quick ability to determine which sectors will be hot and what will not. The stochastic oscillator used in the charts below is the full stochastic setting. The first number (ie 89,21,55) 89 represents the number of periods used to create the stochastic. The second number %K (second value)is a moving average of the original stochastic. The %D is a moving average of the %K. Look for the %K (faster moving line) to do one full oscillation between the two channel lines. This gives clearer signals for tops or bottoms. The stochastics are a bit "IFFY" for calling bottoms, but works like a charm for calling tops. The green lines mark the market tops, and the red lines mark the market bottoms.

The chart below shows the USD Index. Most people are anticipating the USD to bottom in the next week or so. Look at what the stocs suggest. The bottom is probably 2 months away at a minimum.

The chart below shows the HUI. The HUI gave a buy signal two weeks ago The advance suggested here is about 3-4 months remaining, or around mid-September to early October.

The next chart shows the S&P nearly has a sell signal upon us. Again, the bottoms, especially in early 2001 were not very reliable. However, the tops were a near perfect match with the settings.

Elliott Wave on Gold itself is Difficult
The gold market is so manipulated, that to try and throw an accurate Elliott Wave count upon it is fruitless. The "thing" that has most e-wavers going nuts is we are all expecting a downward wave to finish the correction. The HUI is in an uptrend and is very bullish, just so people do not mis-interpret the next statement. Based upon the wave pattern, the move up is either impulsive or corrective......the way the final wave pattern develops in length, time, velocity, wave structure and intricacy will determine which it is. If it is a corrective wave, then the move down could retrace the pattern advance from 2001 by 38.2% to 50% (120-140 if we go to 190-200 on this move) and this would be the bottom of the bear since 1980.....based purely on the wave structure. If this was the case, then it is rare for a wave structure to end so high above a low that was placed in. The move up in gold would be incredibly strong if this pattern was the one that develops....... actually the end results are far more bullish for the corrective wave scenario than if we were in the impulsive leg of a new bull market.

Best for everyone to look at the indices, commodity traders will have a totally different mentality and outlook than an individual trading the stock itself.


 

David Petch

Author: David Petch

David Petch
TreasureChests.info

Treasure Chests is a market timing service specializing in value based position trading in the precious metals and equity markets, with an orientation geared to identifying intermediate-term swing trading opportunities. Specific opportunities are identified utilizing a combination of fundamental, technical, and inter-market analysis. This style of investing has proven to be very successful for wealthy and sophisticated investors, as it reduces risk and enhances returns when the methodology is applied effectively. Those interested discovering more about how the strategies described above can enhance your wealth; please visit our web site at http://www.treasurechests.info.

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