The Ups And Downs…

The saying ,  “What goes up must come down”  is true within Bull and Bear markets. Lets take a look at what is going up and what is likely to come back down, keeping in mind that the FED MINUTES are to be released later today.

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I drew this last week to show that I expected the SPX to move up to the purple line

SPX can still move higher to the blue resistance, but…

SPX –  We are at resistance in various ways. This may stall or stop the move. Also at 2 p.m. the Fed Minutes may push it higher or drop it down.

Note: The DOW chart  was in a similar position yesterday , and it actually broke higher.

IWM – Resistance is just overhead and the volume weakened a bit, so the Russell 2000 may stall here, but the MACD does look good. I think todays Fed Minutes will be an important time to watch the markets.

USD –  This consolidation has been going on for many months now. Yesterday the dollar lost the 200sma again, and it barley offers support now. Repeatedly breaking below the 200sma  shows weakness and the MACD is curling down.

WTIC – Oil dropped yesterday with an inventory report. Oil may be just doing a back test, so I will look to see if the bull flag / 50 sma offers solid support. If it drops that far.  I added the left side of the chart just to point out the springtime fail, but I think we put in an ICL in August and expect higher prices this time. I do not expect that type of drop this time.

NATGAS –  Thursday NATGAS reports come out and often affect the price. SO far you can see the continuing weakness and NATGAS continues to break down.

GOLD – Can the Fed Minutes break this resistance line, or will it drop it back down? We want Gold to break recent highs to make this a right translated daily cycle. The Miners and Silver have lead the way.

Before I go on to SILVER & MINERS, I want to point out something about pullbacks.   At times when these markets get overdone, they need to pullback and we look for a light pullback to support areas/moving averages, etc as a sign of bullishness.  We can also just keep dropping down intra-day and watch it get bought back, giving us a sideways move, We just saw a sideways move like that in Oil, it refuses to sell off . I just wanted to mention this because we are (timing-wise) getting due for a pullback, but it could be a sideways type move too.  

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SILVER – Silver is extended and has had a strong push higher.  Is this day 28? It would be due to drop down into a daily cycle low if it is.  Maybe the 50sma will hold as support if this is to remain bullish.    Silver dropping toward the 50sma is normal.  If Oct 2 was a dcl, we are early in that daily cycle and we may simply start to go sideways  or down a little to the 10 sma.

GDX – This appears to be a topping candle, so we should expect a pullback. Many sell when they see this candle and look to re-enter at important moving averages below. If this is day 18, this will likely be a right translated daily cycle  (bullish). We could fall to the 9EMA and bounce ( For a 1-2-3-4-5 type move) .

We have been focused on the Bullish Moves in the Oil / Energy and Miners recently. The key is always knowing that what goes up will have a pullback. WHAT TYPE OF PULLBACK is key to future movement.  Recently OIL & Mining stocks have been basing, so they have bounced and dropped and bounced and dropped. Look at that chart above of the GDX and you see that that often constructs a base. This can be bullish longer term, and the next pullback could clarify whether these remain Bullish or break down again.

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With that in mind,I wanted to go back to the CRB.

CRB– This also has spiked up out of the lows and consolidated those gains in a bullish manner. The CRB may be dropping to the 50sma / consolidation trend line (not shown). I’m watching to see if this is solid support , setting up  another run higher.

Look at these encouraging charts-

FCX – A higher low formed and then the FCX took off higher.  This consolidation since August was bullish,  FCX is up over 60% from those Aug lows.

AA – Up 40% from the August lows.

MTDR –  With this very constructive base ( That would have shook us out several times, right?) it burst higher with a fast run up over 40% since the  Aug lows.

VALE –  looks to be breaking out with nice volume.

AKS –  Also breaking out from a base. Closing above the 50sma, this could be a low risk buy with a stop at the trend line & 50sma ( I give it a little wiggle room – maybe the 10sma)

CENX – this looks like a double bottom base and a buy.  It reversed and couldn’t break out, but when it closes above the 50sma, it may run like we saw AA  (Above ) did.

We’ve  seen bullish bases and moves higher in the commodities sector. We expected that here, and I have mentioned that we may even be seeing commodities bottoming for the longer term.  The timing is right for that when you take into consideration 3 year cycles, etc.  IF these are the final lows, there will be a lot of profitable trades ahead as these sectors run up and pullback,  allowing us to buy & hold or enter and exit trades at key points. Until we know for sure, it also may be a bumpy ride,  locking in profits should not be viewed as a bad thing,  there will always be anther trade for the patient ones.  Bottoming often is bumpy.

There will probably not be a Friday report. This report was written as a lengthy report trying to cover all of the possibilities that can happen today and into tomorrow.  Friday is the last day of trading before the  weekend.You may want to start considering whether you want to lighten up before the weekend? Hold some positions in Miners or Energy stocks just to have some skin in the game? Some may want to just go to cash by Fridays close. It is something to consider since all markets,  bullish and bearish go Up and Down.

NOTE:   Markets are open on the US holiday Monday.  Banks are closed. 

~ALEX

I wanted to show a rather bullish pullback that happened yesterday in AREX. I mentioned above that sometimes we get a pullback intra-day and then buyers push it higher by the close. That is what happened in AREX.

AREX at 11:30 A.M. Eastern time. I would have stopped out below the moving averages.  I also thought of adding to my position if we reversed higher from there, because energy stocks have been so explosive . The price stayed down about 9 % all day. I did not add.

AREX –  It’s hard to believe this is how AREX closed. At the end of the day a large buy order came in and also over 1.2 million was added to the total. It held the 50sma and this remains a bullish set up.  Picture that happening  again today , tomorrow, and next week and you would get that sideways consolidation that I was talking about. It shows buyers accumulating on the dips and causes a sideways move like we saw in Oil.