Turning Points

I’ve been seeing differences between my long term view and my short term view for the markets. This could be indicating that we are seeing turning points. Lets discuss why that could be.

SPX –  I’ve been seeing this longer term. It looks like the markets are acting rather toppy.  Monthly charts are now showing weakness quite clearly as well.

Now looking at things from an even  longer term view…

It would be a rather huge drop, but could we  be seeing a future  “back Test” of the break out? A large wedge has formed and could lead to a pretty decent drop. 

SPX – Short term it looks like it wants to break higher, but again notice that todays price is right around last Decembers price or January’s price. Every time it looks like a good long set up, the follow through is lacking.   Also Cycle-wise, this is left translated and I would expect it to  roll over soon , even if we do get a bounce.

NASDAQ –  Same story.  This also looks like it wants to go higher. I actually see some good looking set ups short term, but some that I have seen recently have just broken down, so we need some follow through..

For example- We had a great run higher in AMCC in MAY, but then it fell apart. It looks possibly set up to run again, but as I am viewing things short term, I remain cautious longer term.

SOX– AMCC is a semiconductor stock, so I wanted revisit the SOX which I pointed out as breaking down weeks ago with this Long term chart in Aug 3. Is the Sox improving?

SOX –  Short term the SOX looks as though it wants to bounce, I see Bullish divergences.  Please keep the long term break down in mind if you are trading these markets.

MU is also a semiconductor stock. It looks short term bullish too, with a reversal in place. This looks like a buy and if it fills the overhead gap? Wow.

$USD – I have said that the dollar looked internally weak in its climb. It has since dropped and now is climbing again.  I do not see strength in this move either. Possible bear flag. (  Good for Gold?)

$WTIC – Many Oil / Energy stocks are trying to bottom, I think they are leading oil. I STILL expect OIL to move higher soon. Waiting for it to break above the 10sma or this wedge is prudent. I was tempted to buy UWTI for a trade yesterday, but I held back for now. UWTI is leveraged.

DIG – Trade idea. Dig has broken out & back tested. It is a low risk set up with a stop below the 10sma.  (Ultra – so its a bit leveraged)

REXX–  I just wanted to point out how some Oil/Energy stocks are setting up as bottoming despite Oils drop. See also CRK, EXXI, etc. 

CRK sits right on its 50sma, it could be considered a BUY with a stop under the 50sma.  It did just run up 200+% so it might go sideways for a bit to relieve overbought conditions, but it doesnt have to.

EXXI –  possible buy here with a stop immediately below.  Falling oil price is not influencing it, it may be being accumulated.

NATGAS – Looks bullish one day, bearish the next. Breaks higher , then turns lower, it is still in a consolidation. It really needs to prove itself with follow through.

GOLD,SILVER,& MINERS

Keeping in mind : Tomorrow is the FOMC minutes release

Nothing has changed here.  Gold had such a strong pop off of the lows that it quickly got overbought. It has now moved sideways toward the 10sma, but never reached it.  Was that it for the pullback?   Possibly.  It can also continue sideways and allow the moving averages to catch up.

 Could the FOMC minutes stall gold at the 50sma? Yes .  Could the FOMC minutes release Push it above? Yes,  both scenarios are possible so we must assume that anything can happen.

Gold Cycle Day 17 –   Cycles can run from 20 – 30days , so we monitor them along the way.   We could be 1/2 way through a daily cycle or late in the cycle.  I think its safe to say that this cycle will be Right Translated,  and that means that after a daily cycle low is put in, we expect a higher high in the 2nd daily cycle. So we can conclude that eventually we will see higher prices in Gold.

SILVER – Closed back under the 50sma. It could drop to the 10sma now. I think the SILVER STOCKS are acting the strongest.  You may get a buying opportunity if they drop . See for example  SVLC, EXK, SSRI, PAAS, etc.

GDX –  Also remembering that the FOMC minutes are being released tomorrow.  We could see a surge through the 50sma or be rejected at it temporarily. I am still Bullish and I’ll show you why.

This is one reason why.  Some Miners are really looking bullish coming off of their lows.  Just look at these 3 for example.  You’ll notice that these stocks bottomed in JULY and after a little sideways action, they burst higher. GDX bottomed in August recently and is currently in a little sideways action.  Burst higher coming?

 I gathered my charts last night and started writing at 6 a.m.  When I started Gold had run up to $1121, but now (8:15 a.m. ) both Gold & Silver are selling off.  I imagine that we aren’t going to see solid follow through before the FOMC releases the minutes.  I cant say what the initial reaction is going to be after that, but the longer term expectation is for a move  higher.  That means we can look for buying opportunities on pull backs in Mining Stocks.  I really like the silver stocks, and as I write Silver is selling off, so look for some of those stocks to either ‘Hold up nicely’ as Silver drops, or maybe they drop to their 10sma  or hold the 50sma and can be considered for a buy.

With the FOMC MINUTES being released tomorrow,  there may not be much follow through in either direction for any of the markets. There will be a lot to watch between now and then for clues however. I like several charts & ‘set ups’ in the market  (MBLY, MU, TSL, JASO, and other solar stocks–  DKS, MDT,etc    )  but lately I have seen nice looking set ups fall apart, so please remain cautious and honor stops if you are investing there.   WALMARTS chart looked good yesterday, it had formed a nice bottom.  Todays earnings may  kill that chart too 🙂   see WMT

I am focused on precious metals for now.  Energy is also on the radar.   ( And many Solar stocks are turning higher ,   see  JKS, JASO, TSL, CSIQ,   YGE , FSLR, etc).  

~ALEX