The Coin Toss

Many sectors of the market look ready to break one way or the other. Can we gain an edge as to which way they will go, or is it just a coin toss? Lets take a closer look.

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This was the NASDAQ at the close on Monday. It was pushing against resistance in various forms.

Notice what seems to have showed up by the close today…

A bearish rising wedge.  The NASDAQ looks like it is going to drop lower now.  Futures are currently higher, so I am going against what I see.

The SPX  was approaching resistance too, shown here.

After a brief rally,  the SPX hit resistance and gave up Tuesdays gains. The markets may be setting up to pull back here.  Futures are higher as I write, so we’ll see if they give it up as the day goes on.  Let me explain why I think that may happen.

I had mentioned that I was finding a lot of charts that looked like a recovery, so that appeared bullish.  I still think that the SOX and semiconductors look pretty good, and there are other stocks that have nice set ups too.  I then mentioned that this would be a big week, because it was LOADED with earnings reports.  Are the charts still holding up? 

Look at that MACD as CMG approached the highs again. CMG was down another $64 after the markets closed  ($50 when I drew this).

Signs are there that we may be ready to end this rally out of the lows, especially if the rest of the earnings this week disappoint.  

I’m still waiting to see if the DCL is in with OIL,  or will we break the recent lows and drop a bit further?  Timing on day 40 is prime for a dcl anytime now.  ( I added on this chart a possible a-b-c-d target, dropping from the tag of the 200sma to the reversal off of the 50sma as a-b, with c-d possibly occurring now).  It would act as a shake out, but…

I do see plenty of Energy stocks acting rather bullishly  when you consider that OIL has been dropping for the past 7 days.  Some remain at  recent highs .  Lets take a look.

So as OIL dips into its Daily Cycle Low, many Oil Stocks still look good to me. You may want to start a shopping list if you haven’t yet, in anticipation of Energy making another  run higher.  These can still drop a little further, but they are holding up well with Oil down.

GOLD , SILVER, & MINERS

I almost want to send everyone back to yesterdays report and just read what I wrote there.  The dollar hasnt changed much and my thoughts for the next move in Gold and Miners is about the same as yesterday.  This one almost is a coin toss.  I do have reasons for thinking that Miners will still run up & tag the 200sma , and I will point that out here, but I am not  strongly  convinced.  As I mentioned yesterday,  I would use a move higher to lighten up and anticipate trying to re-enter positions lower with a daily cycle low.

GOLD – This could still go either way.  

GDX – Monday I pointed out this as a possibility. Instead of dropping to the 50%,  we reversed higher Tuesday.

I can still see this playing out, especially with the reversal, but it really depends on Gold  I.M.H.O.  

I decided to look at some individual stocks and see if they looked tired or healthy enough to move a bit higher.  I think it depends on what GOLD does, but lets look at those charts.

GG & ABX  are larger components of GDX.  They can go higher.

SA – Very nice move today, it wants to go to $9.

AUY – This also looks like it wants to go higher.

EGO, IAG, PAAS, MVG, and so on also have a bullish look to them. I will still call it a coin toss, because a bad day in Gold could easily send them breaking down.

I would actually like to see GOLD start dropping,  heading into the FED MTG next week.  If that happens, I think we stand a good chance of putting in a DCL  on or after the FED DAY  (Wednesday or Thursday).  It seems that the bigger moves in Precious Metals have been happening  right after the FED MTG.   As for what exactly will happen with Gold & Miners in the next couple of days?    Its somewhat of a coin toss. 

~ALEX