Testing

I dont regularly watch CNBC, but I was in the waiting room today and CNBC was on and I actually saw them reporting that North Korea tested a Hydrogen Bomb and caused the markets to sell off. I guess they dont use charts?  Was todays sell off sudden and unexpected? 

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SPX –  We’ve been discussing it for months here at Chartfreak.   This Dec 31st chart showed that the SPX hit the top of its trading range, lost the 50sma, and was likely heading lower into 2016.

Now lets take a look at potential targets…

SPX –  We may be close to a bounce point for several reasons, but we can always get a flash crash at any time.  If I was heavily short, I would be taking some profit and let the rest ride a bit.  A bounce may be shorted later if this picture remains weak on that bounce.

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The VIX  went much higher when we had that flash crash last summer, so things can get much worse.

I still get a mixed picture when I look at individual stocks charts. As mentioned in yesterdays report,  my former picks of DANG, GPRO, TASR, VUZI, etc, etc remain unphased, but many others now look bearish.  Notice that  some stocks that have sold off may put in a strong bounce if conditions favor it. Reversals in BABA, AAPL,  FB, AMZN, NFLX etc. occurred at the end of the day, so ‘shorts’ should be aware that a bounce can come.

 

FB –  These bounced yesterday with the sell off, but this isnt necessarily a buy.  It may go an overhead gap fill and suck in  “Buy the dip” traders,  then roll over again.  Buy the dip may not work here, show some caution if tempted to trade. 

 

Look at NFLX Wednesday.

USD – The USD  just made a higher high above Decembers high.  It became Right translated.   This late in the daily cycle, I expect it to drop and break that trend line soon. Then it will put in a DCL, and we may get our double top. ( Note, it’s unlikely that the tiny  tiny drop in the USD  caused a POP in Gold today.  They don’t seem fully correlated right now).

Reminder: The double top near 100.60 was pointed out here, similar to March/ April.

OIL  – January 4.   I pointed out the trend-line as a stop,  but also possible Bear Wedge.

WTIC – So  in Tuesdays report I switched to a weekly and OIL didnt look good with that heavy volume reversal. Bearish.

WTIC Wednesday – The false break of the 20sma 2 days ago reversed without follow through, and now there is a possible break down target of $29.62.  My weekly chart still has a target of $26 as mentioned in prior reports, but will we go there?  Are there any questions about Oil so far?

  Oh, The BEAR and a few traders want to know about that $26 Wkly target for Oil that I got weeks ago. Is it likely? 

If we go to $26,  it seems that it would have to be a quick false break down ( A Slam down & Reversal) from this blue wedge. I firmly believe at this point that this Blue wedge is real and should offer support.  $26 is well below the bottom of the wedge, so it appears less likely to happen any time soon.

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This is probably not a sector to be trading  right now, that’s why I have said that basically I am only bullish on Miners currently.  I do see some Oil / Energy stocks getting beaten down, and others holding up.  I will just point out what I see  as time goes by.

 

NADL  for example :  Oil got crushed today, down almost 6%! NADL did  stop run and was up 9%?  I wouldnt trust that for now.

HK :     HK is testing recent lows on lighter volume ( so far).

  SO some energy stocks may start holding up, but it doesn’t look low risk at this point with OIL breaking down .  OIL needs to stabilize first.  

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NATGAS –  Right on track so far.   This is how it is playing out.  Dec 29…

DEC 31 –  look for a flag

JAN 6 –  I would expect this to hold above the 50sma, a stop would be there if I owned NATGAS. It could always fall to a 50% retrace before continuing higher.

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GOLD – We had that Triangle, Bullish C.O.T. , and overall it was a Bullish set up.

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GOLD – FINALLY 🙂  Cycle count is a bit unclear, but it is a bullish break out above the 50sma and strong volume,  This should run for a couple of weeks (  not straight up, but direction is higher). 

GOLD – Roughly, you can see what prior runs did.  I would expect at least a tag of the 200sma/ $1140 ish .

 

I was asked in the comments about SILVER lagging here. I dont know if everyone reads the comments, so I will just mention a few thoughts here.   It is possible that a bottoming Diamond if forming.  It would break out higher soon.

This is an example of a Diamond bottom that broke higher.

EXK : We also may have a Triangle formation in some silver stocks, similar to the one that GOLD  just had. This chart should have said some “SILVER STOCKS” could be viewed as a triangle.

 

SSRI  –  I dont like the steep drop that the 50sma has here,  but a burst higher could punch through it if Silver breaks out too. SSRI didnt make new lows when Silver did in December, so the stock should be at its lows now.

PPP –   Traders, I like this set up right now. It is well above the 50sma already.  And see  HMY, GFI, SA, LSG, RIC, etc., etc  to see other Miners reacting well.

 

I reported longtime favorites of mine RIC & LSG in the past, due to their putting bases years ago. They are reacting very nicely after consolidating lately.  This is my weekly chart for LSG from this past summer.  A break of $1.25 could get exciting in the future.

LSG TODAY-  up 10%

RIC –

ABX  looked good today, but GG and NEM were lackluster, and that was passed on to GDX.    A bit disappointing on a strong move in Gold, I would have expected GDX to be up 5-6 %.   Miners have been leading , so we’ll see how they move going forward.  MUX is up 12% this week, SA, RIC, LSG, DRD, HMY, MGN, IAG, etc have moved before Golds break out, so things are acting correctly overall.

 

  Thats the way the markets are playing out this week. Crazy moves really. Miners are the only area that seem to be steady, so I am focused there.  By request –  I will have a little more commentary after I close here for those ‘traders’ that like to look up a few charts.  NOT FOR EVERYONE.  I see Precious Metals as the best place to be for the next couple of weeks. If this start of 2016 is an indicator of how the year may play out, shorting the bounces in the market may also become an option in time.  I wish all a successful trading day today and Friday. The weekend report should be interesting!

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~ALEX

 

For traders, I mentioned decent charts for   AKS, X, CENX.  The $CRB broke down with OIL, AA looks ugly , but AKS continued higher despite the selling.  Confusing.   I would avoid this area for now.    BABA, AMZN, DANG, VUZI, GDDY, NFLX, TMUS, WMT, TGT, LULU, and more are reversing and moving higher or possibly setting up for a nice bounce. You can look these charts up and trade them if the markets do get a bounce.  The markets are very tricky right now and personally I think Miners or Cash is best,  but I often get requests for possible side trades. These are a few interesting stocks during the selling. They may bounce and just fill overhead gaps. 

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Retail was hit hard recently.  Now it bucks the selling.  WMT, TGT, LULU, etc.

WMT crashed earlier in OCT.

WMT in the sell off? This is not a low risk buy, I’m just pointing this out as interesting. If the markets recover and this is all just a healthy correction,  these may recover first.

LULU actually looks like a good set up.  SO I am just looking at retail as a possible leader down and may start to show signs of bottoming? Time will tell, but it keeps me  from going “All in” Uber Bearish right now.

  SO  Trader beware, the volatility can be crazy!   VUZI  dropped to the 10sma, bounced, and then fell to the 50sma, and then bounced again.   Overall, it looks like it is trying to stay in an uptrend, but if the markets are longer term rolling over, it will not likely survive the volatility.  As a trader, I would keep trades small and have the TUMS ready! Best wishes.