A Mixed Bag

Short term movements in the markets are Mixed, so lets take a look at the charts and see what we can observe.

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SPX  – In the short term I see small bearish wedges  that could lead to a pullback or sideways move short term.  If this were to just surge higher and break out to new highs,  that would be bullish.

Interestingly,  The RUT, IWM, and IWC  did break to new highs recently and continued higher.  Are they leading ?

IWM – It also could pull back & back test the break out, but it remains bullish above the break out. 

IWM WKLY–   Big Picture:  Break out & back test complete.  That 1 yr+ consolidation actually  gives this plenty of room to move higher over time.   IWM, RUT, etc went sideways for a year while the DJIA & SPX went higher.  Maybe they consolidate for a bit while the small caps do their own run upward?

USD – this was looking bullish Monday

USD–   That was a bullish break out  Tuesday, up 1.13.  I expect higher prices in time.

WTIC –  Last week I got an email where someone was concerned that another newsletter writer claims that OIL cannot go higher with the dollar.   Yesterday Oil moved higher with the dollar. It looks like it is trying to break out from this consolidation, but another day or two is needed to get confirmation.

$NATGAS – I want to see NATGAS over $2.76

XLE–  Looks to be slowly improving as the MACD crosses higher and the RSI is moving towards >50% .  Volume was light and this still has a little work to do I.M.H.O.

GOLD, SILVER, and MINERS

This gets short term tricky.  I said that I am not shorting this yet, because even though I expect a sell off and we have had a small one, the intensity of the selling is mixed when it comes to Silver & Miners.  If the picture isnt somewhat clear, I cant recommend that trade. Lately Precious Metals have been selling off and then bouncing, causing more of a sideways grind than a good trending trade.  lets take a look.

GOLD – On day 9, reversing at the 200sma,  I did say that I thought that would be the top of this daily cycle. Looking at the month of APRIL however, sideways chop from day 13 made shorting it difficult. We MIGHT just grind sideways again , but I do expect us to drop down below that day 24 DCL in time. Gold is not a long position.

SILVER – Silver  was not joining in on the selling with Gold for the past 2 weeks.  It finally dropped yesterday . Volume was big, but then it recovered as though it delivered a shake out.  Shorting that move may not work.  I remain on the sidelines.

SILVERS WEEKLY CHART  does look bearish.  I am not going long if we get a bounce here. 

GDX – Miners have held up well.  With Gold dropping  $30 in the past 3 days,  Gdx has dropped less than $1.  GDX Broke out from a descending wedge,  was rejected at the 20sma,  and back tested the break out.  That is usually bullish, but I am not expecting more than a bounce with Cycles showing that we are in a 3rd daily cycle.  I am on the sidelines.

GDXJ – Juniors have really defied Golds selling. This set up is considered Bullish, but again I am watching how this plays out rather than trade it.  This chart shows that GDXJ has been moving sideways for weeks.  If you bought GDXJ in April & held,  you’d be basically break even 2 months later.  A better buying opportunity is likely coming.

  So basically it is still a traders market . There have been plenty of nice chart set ups ( especially in Pharma, Biotech, and Tech) that have been breaking out and running higher for nice trades if you are in front of your computer.   Oil is starting to look more bullish again, as it attempts to break free from this long consolidation.  Energy stocks may benefit and we saw some signs of life in  HK, KEG, REXX, WRES, etc yesterday.  Traders are trading energy again, but those who need to ‘buy & hold’ for days or weeks because they are not in front of a screen to babysit positions  really want to see a break out higher in OIL for safety.   GOLD & SILVER  are in an area that I dont think is trade-able at this point.  I do think that a great opportunity is coming, but I will have to watch how the 3rd daily cycle sells off into the next dcl.  In March there were only 3 daily cycles as it sold off into the early  ICL.   Could that happen again?    Or will there be a 4th daily cycle, even a  5th this time?   Theres no point in guessing at this time, it’s best to watch how things play out.  SO FAR there is a lot of sideways action and a disconnect between Precious Metals activity and Miners.

   So I am trying to focus on the Dollar, Metals, OIL & Energy for possible future medium term trades at this time.  Energy stocks may be starting to recover now, but at this point they need a little follow through.      I’m not adding any new trade set ups this morning.  Some of the past set ups mentioned here  are still valid,  if you wrote up a watch-list or please check the end of the last several  reports and see how they are playing out.  A pullback today or for the next couple of days  may offer a new entry on one that you missed.  Thanks for being here and happy trading.

~ALEX