A Slow Motion Run To Nowhere

After watching the markets yesterday, I get the feeling that this week may be a sideways slow motion move that goes nowhere fast…until after the Fed Mtg.  Lets review some charts.

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SPX – You can see the same sideways move that has been playing out for weeks.

USD –  The USD peaked on day 8 of a new daily cycle. That would be a L.T. Daily Cycle if that day is not exceeded, and with current weak symptoms? I think the dollar will continue down.  It too has been a slow motion sideways move.

WTIC–  Another slow motion sideways move. This looks like a Bull Flag that wants to break higher, but will it before the FED Decision?  Maybe.

NATGAS has been sideways for months.  It tightened up that sideways move over the last 2 weeks.   I did see signs of life yesterday, but the overhead resistance is still in the way.  We hit the 50sma and the B.B. , so we’ll see if it can burst higher and finally put in a rally or not. After this much consolidation, a directional move could be significant.

GOLD – Gold currently has a day 34 low at that $1097 area.  It is oversold and definitely in the normal timing for a DCL, but will there be buying before the Fed decision Thursday? The difficult part for many is that even if Gold takes off higher, there will be concern that the Fed decision could knock it down.  Technically, it is a buy with a close (or move) over $1120. Keep stops in place, the Fed decision will not be an overnight gap down.

GDX – No big change here either so far. A close over the 10sma is safe, and we do see nice divergence at lower lows in price.  The Miners have reached oversold areas. There is a swing low in place, but that means nothing to me at this point look 4 or 5 days back and we had one then. We can still go lower.

GDXJ–   I pointed out in the comments section yesterday that I use the 10sma for GDX, but the GDXJ is a bit stronger.  GDXJ did not break to new lows when GDX did and it has popped above the 10sma a few times and then given it up.  It struggles at the 13 sma, so I use the 13 sma as a form of confirmation in juniors. 

So this week may just be a slow motion crawl , waiting for a catalyst like the Fed Mtg to juice the move . Yesterday was rather boring and even though I see some nice moves in some stocks , you cant tell if they’ll be here today and gone tomorrow. 

I have mentioned that I see changes and have been anticipating change for a while now. I see bottoming in Commodities and I saw a topping process in the equity markets. I pointed out the lows in OIL, CRB, GOLD recently at a time when the Markets were dropping. I drew up 2 charts for the weekend report on a different computer and I did not include them in the weekend report, so I re-drew them last night.  These charts are telling also – they tell me that the dollar is weakening and that what we see in Commodities could be trend changes and not a fluke.

USD : YEN-  The USD double topped vs the Yen on a weekly basis.

USD : EURO

The above 2 charts along with many other charts point to a possible change in trend, where the dollar is losing strength.  We see commodities, including precious metals, possibly bottoming in a significant way.   I wanted to point this out so that we aren’t overly focused on the Fed Thursday.  Yes, that decision will likely cause a rumble up & down in many sectors, we can expect short term volatility , but the longer term picture looks to be that of change.  The dollar was running straight up, but now it is struggling. Commodities were getting pummeled and now seem to be basing / bottoming. If we can remain focused on that, we may be getting in at the bottom of a new long term and profitable run in commodities.

 In the meantime, this week may be a slow motion crawl to nowhere.

~ALEX