She Said What?

I heard that Janet Yellen had lunch on Tuesday and spoke quite a bit about…never mind, lets just say that she spoke quite a bit.

Some things that I heard seemed to contradict other things that she said, but we see from the moves mid day onward,  the markets received it positively.  There are some very interesting developments…

SPX –  This chart was from the march 18 wkend report. A rising wedge that needed to break down.  I expected a dip after the recent run higher  to a daily cycle low maybe in early April, and then we have to see if this can break out – or break down. The markets did start to dip, but Tuesdays FED chat added some push to the markets.  Lets discuss this …

SPX – After dipping to the 13 sma, we had a break of the trendline and the 10sma. I usually look for that as we dip to a dcl. COULD THIS BE AN EARLY DCL, caused by hawkish Fed Chatter?  I think this might be day 3. We also could POP & DROP, breaking that overhead trend line. Lets discuss even further…

NYSE – You can see it clearer on the NYA chart.  The dip corrected the rising wedge.  It may be a little earlier than normal timing-wise for a dcl,  but with such a Right Translated daily cycle, the dip could be a very shallow DCL and the strength could continue moving markets higher. 

The NASDAQ – It has lagged a little,  pinching between the 13 & 200sma. The Fed said that they are there and the markets reacted bullishly. The overhead trend line could break today.

IBB –  This was selling off  Tues morning.  Now it looks like it may be ready to start a bullish move higher out of this base.

XBI – This was red all morning until FED YELLIN had lunch. Then we saw a bullish reversal.

This chart of LABU is by request.  So I request that you realize that this is a 3x leveraged ETF.   It moves 3x what the IBB or XBI  does.  Notice that they were up about 2%,  LABU was up almost 7%.  This moves in BOTH DIRECTIONS, UP & DOWN, I think that it should only be traded by expereinced traders in front of their screens.  You are on your own.  This is like NUGT & JNUG when trading GDX & GDXJ.

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So – I looked at various charts to see if they looked bullish or weak.  Many look pretty good.  You can look up YHOO, AMBA, TASR, FB, AMZN, GOOG, ARWR, XONE, VJET, SSYS,  ETC. ETC.

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Do you remember when I pointed out how the USD  has been reacting to the FED lately?  I showed this on March 4th.The FED speeches have been dropping the dollar.

I expected our last FED mtg to drop the dollar , shown here on March 11, and it did happen.

USD –  Tuesday  Janet Yellen started talking shop at lunchtime.  Same results.  If the USD breaks down here,  couldn’t GOLD make that rush to $1300?   I’d have to say that it is possible.   If The USD  holds that line,  Gold may do something else  ( Pop & Drop),  so I’ll discuss it in the Gold section.   Obviously nothing has become clear here in the middle of these moves with that FED luncheon .

TLT – No change,  Bullish as expected

NATGAS –  No change, this is what I have been expecting.

WTIC —  No change,  this is what I have been expecting. Oil cycles tend to run long as mentioned. See the weekend report for more oil charts.  Even a drop to $36 or $34 Oil is not bearish,  if the 20sma doesnt hold price up.. 

CRB –  The little sideways move for the past  week or 2 has caused it to go from overbought to just about oversold.  I liked the continued set up in CLF, VALE, X, AKS, STLD, etc,  so as mentioned in the comments yesterday, I added a bit more to my  CLF and AKS.   This is simply because so far ( famous last words)  they are dropping in the a.m. and closing higher.  That looks like accumulation. 

CLF –  No break out higher.  Volume still light in consolidation. I Added on dips.

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GOLD –  Did I mention that Janet Yellen started talking at lunch today?    I had no idea that she was doing a question and answer session.

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Its funny, this GOLD chart is from this weekend. I said to expect it to be tempting to jump back in, but that we should expect a little rally and possible H&S forming. I even said , “Do not get lured in” on this chart.

We saw a small reversal on Monday.  On Tuesday a Yellen push and all of a sudden I wonder,  “Was that a DCL?”.  GOLD is oversold.  So…

1. Look at that ORANGE DAILY CYCLES RISE.  Pretty much sideways with POPS.  It formed the head of the possible H&S. If you see type of move now,  we’ll probably get another meandering rise to form a right shoulder and then a drop.  I would love that,  a drop to the 200sma for our next entry point.  

2. We cant rule out a quick run higher if the dollar keeps dropping.  Gold could break above $1300 and then fade too.

The interesting part about it is that many Miners do remain looking quite bullish  (remember that they often do at tops) . GDX is  now oversold and some individual Miners are still near their recent highs and just keep rising, consolidating, and rising.  ( See PAAS, AG, GPL, etc). We still could get a failed daily cycle and then get our sell off lower.

GDX – Impressive move and it is oversold.  Are Miners going to act stronger than Gold? There are some good set ups out there in individual Miners,  and they are not overbought. Many have consolidated. 

For safety sake – I still have to point out that some may be toppy. Look at  AUY , IAG, GFI, etc for example.  They have had big reversals that didnt have follow through.   So I do see a mix of bullishness  , yet possibly just a  continued consolidation.

That said,   Look at IAG on the 50sma. This actually looks consolidated to support and seems to be set up for a move higher. For Traders –  Set ups like this could be considered lower risk, because you could put a stop under the 50sma if you bought it.   ( It may just continue sideways – I still think it is early for Gold to continue higher, so I cant recommend a bunch of miners at this point).

For similar type consolidated set ups ?

look at SA .  NGD & NG on the 34 sma.  SWC & TAHO remain strong. EXK is not bad looking. Traders may scalp some good gains.

So when I look at the markets,   they reacted bullishly to Fed Yellens luncheon. It MIGHT be a DCL,  or it may just be an ending POP on the first daily cycle and then we get our dip to a DCL.  We need time to see how this plays out.  I had recommended that a rally would come out of recent lows in February, and then that we should be caution when that rising wedge was detected.  I still think this is a traders market with recent set ups, but I’m not sharing buy & Hold set ups today for readers.   Reacting to the FED is tricky.  You can always get a knee jerk reaction for a day or 2 – Pop & Drop. If it’s a POP & RUN, then we might have been an early DCL and then you could still play it later.

For those TRADERS that like to look up charts, there are plenty of interesting set ups,  but they have been a bit jumpy .  BBRY,  MRO -BAS – CENX-  HSTM – MNKD? – AMBA- *TASR – FB -AMZN- GOOG- BITA – YHOO – ARWR- SBLK -TOO- SB,  XONE/VJET /SSYS

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SIDENOTE:

This is BBRY for example,  and how I see it as bullish if we just had an early DCL in the markets  ( Higher low). This could be a GIANT BASE after the recent correction. A break out here could run to $9.50.

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So traders may  find set ups to trade with stops close below recent lows.  Gains can be scalped if the markets continue higher.   I still like the commodities as lower risk, and BIOTECH is still near the lows , in a base.  It too offers less risk because stops can be placed close below.

LONG TERM INVESTORS –  Was that just a 2 month correction in a Bull Market or will our market dropping down continue?  That is basically where we are now,  at the critical point that I have been discussing.  A break out to new bull market highs,  or lower highs and lower lows continues?  Time is needed to be sure.

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So I look at the former flyers FANG.  FB, AMZN, Netflix, Goog, etc.  It is possible that their corrections are over and a bullish move continues.  I definitely see that happening in some stocks like GE, FB, ULTA, NKE and UA.  There are more that still look good despite the Jan correction.

Look at AMZN-  read the chart.

So I continue to monitor ‘current trade possibilities’ and ‘future investing ideas’ with these market overviews.  Right now we are at a pivotal point and it takes time to know if this action from JAN – Now is part of a big correction in a Bull,  or the start of lower highs and lower lows…a sell off.  This all takes time,  so while short term traders can still trade the moves,  we watch for longer term movement to guide the longer term trades.   Stay Tuned.

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~ALEX

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P.S. This report took several hours to write, to try to cover everything,  so please excuse typos. I’m too tired to proof read it 🙂