A new year Approaches

As this trading year wraps up, I plan on using the weekend report to discuss some ideas of what we may expect in 2016. We have 2 trading days left this week and then it’s on to 2016. Lets review what the charts are saying…

DJIA – So far the Dow has made lower highs since May. We are at resistance and may drop back down to the lower support.  If this breaks out and runs to the blue dotted line, it will be the first set of higher highs. 

There are several interesting things to look at here…

SPX – Similar set up as the Dow, and the MACD is also now crossing higher.  It looks bullish.  Is it?

NASDAQ –  This looks bullish too, breaking back above the 50sma.

Take a look at AMZN & GOOG,  breaking to new highs again. SO have the markets recovered? 

Everything looks like it is setting up bullish, so why am I not loading up on Tech stocks and other equities?  I want to see what happens heading into the new year.  When I step back and look at various other areas of the markets  ( Recall my thoughts on the JNK Bonds, etc) , I still have trouble getting on board with the whole idea that this 7 or 8 year old bull market is going to keep moving higher. At this point what I see is a handful of strong stocks (  FB, NFLX, AMZN, GOOG, etc) lifting the markets , but many more are also being taken apart.

.

I will discuss more in the weekend report, but for now these next 2 charts also seem to lean closer to a topping area. 

.

CPCE –  Put / Call ratio flipped very quickly this week, from 1 extreme to another. Will we get a false break out in the markets? 

VIX – As the markets approach that overhead resistance,  it looks like a break out may be a temporary topping area.  The VIX has been bottoming in this area lately.

  So –  I love the looks of the GOOG, FB, and AMZN charts.  FB & BABA are a buy right here on the 50sma actually.  Those charts look like bullish consolidations and break outs. Other areas of the markets seem questionable, and heading into the new year, things may change quickly in January  ( As you will see later in this report).  That doesn’t mean sell everything, but use stops or trailing stops if you choose to buy these break outs.

.

USD – The dollar is also at an interesting point.  Lets watch that 98.50. I expected Gold to pop and the USD to drop, but that MACD is starting to look like it wants to turn upward on the dollar.

WTIC – No change,  the 10 sma still holds it up, the 20sma holds it back.   

NATGAS –  This finally had a little selling into the end of the day, so I would expect that this is where a pause or pullback starts. Very nice run, I’ll watch to see if the 50sma can offer support.  The  $2 to $2.10 area may be where a pullback takes it if it drops below the 50sma.

GOLD – What can I say.  No real change.

Yesterdays chart – a boring triangle so far

GDX – 

Often we see Miners bounce off of the 50sma and move sideways to build steam and break out above the 50sma.  We may be seeing that now. SLW  is an example of that.

  SO as mentioned, we only have today and tomorrow left in the week. I dont see any real reason to write a report for tomorrow with just that 1 day left in the year. The choice before everyone trading now is whether to to hold anything over the long weekend, since Mondays trading is January 4, 2016?  That may mean nothing, but also it may mean fresh selling to start the new year.  Fresh selling to start the new year?

Really? Selling to start off the new year after we just ran toward the highs with a MACD cross?  I guess it could happen.  🙂

~ALEX

What did Miners do last Jan 2015?  I’m not saying that we will see this again with the SPX or GDX,  it’s  just a good idea to see what did happen last year at this time. We humans forget quickly.