More Shaking?

I want to review the market moves from yesterday and their possible implications.  WIth that I am  also keeping in mind the FOMC minutes will be released at 2 p.m. Eastern today. That has the possibility of shaking things up at times.

My SPX thoughts are bullish, as shown in yesterdays chart. The SPX ‘paused’ yesterday after breaking to new highs.

That said,  I want to point something out that could weigh on the markets too…

The VIX  down at these levels show complacency , which often pointed to a pullback in the past. A POP in the vix usually weighs on the markets , even if only short term.

SPX – SO it is ( a break out) until it isnt. My stop would be below the break out

NASDAQ –  it is inside its consolidation, has room to go higher and there are many bullish stock charts out there.

USD-  Strong reversal in process.  I keep hearing that the USD is going to break to new highs.   It definitely could,  The break of that descending wedge is solid and cycles support that a low is in.   For me, the first area of interest is $96.55.    My overall big picture is still that the Dollar is toppy and commodities have been bottoming.   If that continues, I see the equity markets as “Sell in May and go away”  and commodities will continue recovering.   The Dollar & Commodities future track will be important.

COPPER –  did very well during the dollar correction April – May.   Tuesday it took a solid hit, and this is a warning for commodities in my mind.    If COPPER ignored the dollar rise, it would be more bullish for commodities.

In the 1st week of April , the dollar (See chart above of the dollar) shot up to its 2nd  top. Notice that Copper dropped in small candles the first week of April.  Copper  traders didnt believe the dollar move toward new highs.   Yesterdays candle was Large, down  2.5% . I’m watching copper too.

WTIC–  I have mentioned all along that a drop to test the break out could come.   The 50sma is in that area.  OIL has been strong, and  it did start to dip.  Click on the chart & look closely, It is at recent consolidation lows, but could drop further.

XLE–  this is near / at the target that I had for it.  It is quite oversold too.   If oil drops to the $54 area,  will some energy stocks break down?  Or will the XLE lead , and reverse higher? Lets watch it.

NATGAS – remains bullish in my opinion, still above the 10sma.  A high volume reversal in overbought conditions can indicate further selling however, so if you are trading NATGAS with leverage ( Many here use UGAZ) you likely sold. I still think NATGAS is going higher, but it does look like it can drop further from here.  If so, I think it will  be buy the dips.

SO now we have GOLD SILVER & MINERS

They went from bright & Shiny looking  to a one day smash. 

GOLD –  I posted this and mentioned that we could drop to the $1200 area  ( 10sma) , but I was looking at these targets. Then it got hit harder than I wanted to see…

GOLD TUESDAY–  dropping to the 10sma in 1 day is a little concerning. Volume was big. We have had 1 or 2 day slam downs in the past, but cycle wise we are on day 11. If my upside target isnt hit soon,  it becomes less likely.

SILVER broke out and I posted this.  It looked Bullish , but volume was quickly dropping off and I pointed that out, so I drew a small pullback before moving higher.  I said a “small” pullback…

SILVER– we got a slam.  It hit the 10sma and bounced, but is it done? I cannot say. If you look at May 1, it slammed for 1 day and downside was done, but you cant expect that, all you can do is honor stops.  If I bought  USLV or SLV for example,  I would have bought at the 50sma when I was pointing out the triangle break out. Maybe I would have bought the triangle break out.  That triangle may get tested near my stop  : (

I have mentioned that the MINERS looked to be bullish and metals were semi – bullish.  I also mentioned basing processes and trading ranges and Miners didnt seem to be “Selling off”, they have been in an up-trending channel,  so I didnt want to get shaken out.   IF this breaks down,  I will need to sell,  let me explain.    I bought some silver stocks and they reversed too.  Not every trade I take will work out, so I need to either lock in gains at uncertainty,  or keep losses small to preserve funds for the next trade.  I am watching silver closely, I still own silver stocks. 

This was SVM for example.  Looking great.

SVM Tuesday.  The 50sma and the trendline is my exit and it will be a small loss.

A look at GDX-  THAT could be an  ISLAND TOP.  Will the 50sma hold? It is also the channel, so if not, we may be breaking down.  Can we get an early clue???  I think so…

HUI-  An early clue .  It is already at a rather important mark, I am watching the HUI . If it breaks down, I can guess that the GDX / GDXJ will follow.

  I am being asked ,  “What do you think now that the dollar is rising?” 

Let me just say this for the Bigger picture –  COMMODITIES   like Copper, Gold, Silver, etc  (Except Energy so far)  seem to be in trading ranges and possibly bases,  so maybe they should really be traded that way.  I’m  thinking that if you are trading the Metals for example, one  should take profits when we have them and wait for pullbacks to re-enter, because that seems to be working for now.   Remember when stocks like VALE and CLF were looking excellent?  They have broken down and are likely basing now.      MINERS themselves seem to be acting a bit different  so far.   Some are trading in their own individual way, so I look at them that way.    Look at 3 month charts of  TRQ, BAA, GSS, EGI, etc –  they have acted bullishly short term.  BVN & NEM look good as I have pointed out ,  and they may be a ‘ Buy The Dip’ if they act correctly.

AEM has done rather well, and this is a possibility if it pulls back in a healthy manner,  watch the 50sma.

In the Tech Sector ,  there are still nice set ups  for nice trades ,  but outside of  trading , there is  boredom.

  Look at 3 month charts of  AAPL, GOOGL, FB, etc. A roller coaster ride sideways pretty much. Great gains some weeks, sell offs the next.

It is the stocks with certain bases and consolidation set ups that break out & run up nicely like  CMCM  that I like to look for

MOMO

SRPT

 I pointed out  VDSI in April at $24  – Data security – Still liking it

VDSI  $27

FMSA –  hasnt broken out yet. Shown here May 12

ZAGG for a quick trader on a break out higher

ZBB– still set up low risk too.  I own PLUG & ZBB for trades  .

So much has changed , but nothing has changed.   Things look bullish as they rise, and bearish as they drop.  I am trying to remain unemotional and just see how things play out.  I am watching the dollar and commodities for further clues going forward with Commodities .  The FOMC minutes from the end of April are released at 2 p.m.  That can trigger reactions in any sector too.  As always honor stops and dont worry if you take a small loss, it preserves funds for future set ups when the selling dies down.

Happy trading

~ALEX

Premarket action

AEO, PBY, CSC, SRPT ( WOW!  Up 45%??)   Chart was above .