March 28 – Bouncing Sideways

Monday saw many areas of the markets doing pretty much what was expected,  pulling back, consolidating, and just plain ole bouncing around.

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That means that for Monday night,  I dont really have a whole lot of changes to discuss.  What I spoke of in the weekend report remains valid, and nothing really changed in the SPX, DJIA, NASDAQ.

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SPX–   I expected more of a dip, so if I was watching every tick of the SPX?   I’d just watch the 13 sma until things change.  Look at October 2015.

USD –  The dollar dropped, but that doesn’t mean that it is rolling over and Gold is going to move higher. I’m not watching daily wiggles, I’m trying to be patient and let the markets tell me their real intent.  The USD can still move higher. We all know how devious these markets get. 

WTIC – In prior reports I have explained my thoughts on OIL. It is going to be tricky because of the inconsistent cycle counts.  This applies to UCO, USO, UWTI if you are trading those. Some may want to go back and see the weekend report or last Wednesday & Thursdays reports , where I put 4 OIL charts in there.

Todays move changed nothing.  It is a sideways bounce in the middle of a move until we see follow through  ( Up or Down).  It looks to me like Oil could easily drop to blue support,  time will tell.

NATGAS – This may have put in one of the only discernible changes. After crawling under the 50sma for a week,  it “MIGHT” be ready to break out & move higher. RSI stayed above the 50% line while price drifted lower.  The chart is bullish in appearance.  UNG, UGAZ, etc may make a move . My stop would be below today   (or that trendline)

CRB –  No change,  it too bounced sideways on the 20sma. I am expecting a DCL and a move higher.  I’d like to see it oversold and on the trend line, but that may not happen.

I want to mention that I was going through a file of charts from 2 weeks ago and found one that I liked but for some reason I  didn’t post it. SO I will post the chart then, and one for now  ( I looked now and it remains healthy looking).  They released earnings,  not so great since they deal with commodity mining, but they did offer a quarterly dividend.  I used to trade this stock and BOOM in the commodity good ole days. If I remember correctly, it was ticker JOYG back then. 

JOY WKLY –  3-17

JOY WKLY Now  –  Still may not be quite ready,  but it looks good.  It ran from roughly  $8 to $19 and is consolidating those gains around $15.  ( On the daily it is above the 50sma, but the 34sma is close by).

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$GOLD had a reversal higher with the USD reversing down today. Some wondered if this is it. If you read other blog posts or trading sites, you may see eager bulls ready to  BUY MINERS on these reversals as Gold pops and the Dollar rolls over.   I want to be patient.  

Timing wise,  I think we have weeks to go, and I have mentioned that there will be pops and false rallies,  so I will try to point that out .   In ‘real time’, they can  be very convincing.

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GOLD- seriously,  If gold rallied to $1250 in the next 3 days,  THAT would make us feel that we are missing the move, but look at $1260 on this chart. A down trend line can form there. H  & S ?  Time-wise I feel that it is too early for a buy here  (I like the strength though).  

SILVER – I only post this to show that when  reversals happen,  even strong looking ones, it does not mean Buyers are back for a new rally. See Blue Arrows.

GDX – The stochastics is getting into the oversold area.   We do have a gap overhead. I try to picture in my head that a small bounce could fill that gap, and the Bulls will be buying up in that area.  Will smart money be selling?  We haven’t even pulled back 38% yet.   I still want to be patient. 

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Note : So if you’ve decided to start accumulating Miners that you like for a longer term period like RIC, TAHO, SWC, SA, AU, SBGL, etc ,  or maybe you want a commodity stock like X, AKS, CLF, VALE  FCX, ETC –  you can buy wherever you feel comfortable.  Just know that they might continue to pull back.   Most will. I showed charts like this to point out that if commodities are out of their bear markets,  they could double or triple longer term.  Some already have, right?   But there are still individual risks…

For example,  in the past I have owned individual stocks that do a secondary offering of common stock to raise some money (google the definition),  and price drops for a bit as a result.  It isnt a killer, but it can happen after a stock runs higher and if you only own that 1 stock? You may wish you were not going in too heavily too early.  Once we bottom,  a basket can be accumulated easier and you catch it near lows. 

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   Can Individual miners do their own thing during accumulation stages?  Yes.  Some pull back 38%, others 61%, etc.   If you are thinking of buying early, I recommend that its not ‘a core position at any cost’.  In other words, You must add with the idea in your mind that you aren’t going to ride it down to the point where you are cut in half if it starts dropping more than expected.  A loose stop is o.k. to allow for a reasonable pullback, but a stop is still important.

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So that’s todays report.  No big change from the weekend, except that NATGAS may be readying for a break higher,   and I still expect that the CRB  should be close to a dcl.  Oil can bottom at any time. If it breaks down sharply,  I’d be very concerned.  The commodity stocks do look good in their own consolidations. Happy Tuesday .

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~ALEX

Theme pic dedicated to my buddy  MATT in Australia  🙂