Was That Smoke & Mirrors?

Did you see the Dollar rocket higher 1.38 and not  send Gold, Silver, and the Miners to their knees? Silver and Miners actually closed higher, so that was like a crazy illusion.  And then AMZN reported a profit and shot up $70 in after hrs, MCD, GOOG,  and MSFT are up big in after hrs after the markets already broke out higher today. Lets check out the action…

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SPX –  The SPX , DJIA, and NASDAQ broke out today, but the BIIB, IWM & IWC  lagged seriously. 

While that first hurdle of resistance was taken out , I’m still looking at this longer term chart.   On a weekly basis, can we break back above and recover (That would be very bullish), or is this just a back test of the break down?

BIOTECH is also not recovering at this time. Maybe we are going to see sector rotation where former flyers take a rest and other areas get some attention.  Possibly Commodities will start being accumulated?

$USD –  This was looking like a bear flag….BAMM!  This is a bullish looking set up presently, lets see how things follow through.

WTIC –  I circled this candle as a possible Inverted Hammer.  I will explain later why, but for now it has rested on the 50sma and it is due for a daily cycle low.

With OIL possibly putting in an inverted hammer  (bullish),  many Energy stocks still look like ‘ready set ups’ to me.  

XLE – It is not pulling back

VLO , HAL, CRK, CJES, EXXI, many others look like they will take off higher when Oil bottoms.  I pointed out HAL yesterday and it continued higher today .  I bought CRK for a quick trade today , but held on to it since it closed up near the days highs.

CRK – Makes HUGE moves when it goes, let me review that here.  It tripled and doubled on each run. My stop can be a bit below todays lows.

CRK – This was the longer term chart that I pointed out earlier this month. A whole different perspective if Energy stocks recover.

Lets consider this a mini-lesson

Let me show you an inverted hammer candle that can happen at a bottom.  The stock is selling off and suddenly runs up during the day and then sells off back to the lows. This disappoints  many, who think that it is a sign of weakness. If it moves higher the next day, it could be at a low.

Here is an example of a company that had one  after a run higher and a pullback . On Feb 5 we see that inverted hammer and if that was a sign of weakness, it would have continued lower the next few days, right?

GB – Notice Feb 5 onward.  Note: It can go straight up the following day, but in this example it went sideways and then higher. The lows were in.

My point?…

Maybe  OIL has an inverted Hammer today, and I saw plenty of other stocks flying upward and then sell off into the end of the day.

Notice FCX –

JOY

See also  AA, NOR, BOOM,   (maybe VALE).   Maria mentioned a few industrialsin out comments / chat section  and URI and GLPW were pretty impressive today.

GOLD, SILVER, & MINERS

I dont know what to say.  With the Dollar acting like an absolute Rocket,  Gold Silver and Miners usually get slaughtered. Gold was down 70 cents and SILVER & MINERS were green. WOW.

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GOLD – This is a view that shows a possible short 2nd daily cycle that was still Right Translated,  and a 3rd one that started on OCT 2.  I have entertained this idea for a while  ( GOLD & SILVER looked like new DCL’s on OCT 2), but I dont know if it is correct.  Cycle-wise Gold is a bit confusing.   This would explain a bullish view of Gold, with the Dollar not affecting it. It matches my idea of GDX in Thursday mornings report. 

GOLD – I drew this version of it Wednesday night an did not put it in the report. I used the GDX version instead.  Even though Gold looks bullish in this chart, I stated in prior reports  … “This isnt a low risk buy, but it is a chance to sell Miners higher and try to get in lower with the next DCL”.  Gold could simply bump higher than day 9 and then roll quickly over into a dcl.

SILVER–   Silver closed GREEN with the USD rocketing higher. How can I explain that?  I have to assume that there is strength building at these 3 yr lows and maybe we really are seeing a change of character.   I would picture a break above the 200sma and then many  Gold Bulls would  jump in –  it could then roll over.   A sucker type move possibly?  ( This is all guess work from here friends,  I truly was amazed at the USD rocket so much in 1 day and see the Precious Metals standing strong). 

GDX –  This is what I have been saying for a long time. Remember this chart?

GDX Currently –  Will we get that one more Pop?  It was up almost 2% with the dollar rocket.   This looks like it is on a 2nd daily cycle, but can it really be so different from Gold?

 GDX & GDXJ looked bullish today with a strong dollar.  Looking at a few individual miners, it is apparent that they are holding strong.  This could have very bullish implications long term, right?

Do these look weak, crushed, and broken,  with such a strong move in the dollar today?

We may be seeing an interesting change in character here.  Major bottoms are difficult to buy & hold due to volatility , but if we are seeing true bottoming action in Commodities and Precious Metals, the gains over time could be VERY good.  We are currently seeing 100% moves in some areas and they are still at there bottoming area.

Lets Go back to the chart of SA for example. Thats over 130% from the July lows to today.  It will NOT be the only one, and those gains were in just 3 months.  We just need to let time tell us if the bottom is really in yet. 

Have a great Friday and a great weekend!

~ALEX

P.S.   update: I pointed out CY the other day when I mentioned the SOX looked bullish. Cy had Popped 10% and closed above the 50sma. It might pullback and test the 50sma.

It has pulled back exactly to the 50sma (not shown) and today formed a high volume inverted hammer. This may break out soon if these markets continue popping.