APRIL 2016 – REVIEWING THAT BIG PICTURE

Here at Chartfreak,  we have always discussed the day to day market movements,  trade set ups, and the bigger picture where things seem to be heading as time goes by.  So in this weekend report, lets discuss the various sectors of the markets again, short term and the Big Picture scenarios. 

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SPX QUARTERLY – If you were subscribing back in January, you may recall this chart.  I was pointing out the break below certain critical areas at prior tops never recovered, and I said we would watch these Quarterly, Monthly and Weekly.

SPX QUARTERLY –  The quarter has ended, so did that break down remain? Actually no, the SPX recovered by the quarters end. That did NOT happen during the 2000 and 2008 topping process. This would NOT be the time to think of shorting the markets.  That could be a bullish quarterly reversal,  and it could have follow through in the coming quarters.. 

SPY QUARTERLY –  This sideways consolidation is just that, at this point. 

So look at the NASDAQ QUARTERLY –

Do you see on the left side of our chart how the NASDAQ rode the 13ma (Quarterly) all the way until 1998?  It then did a shake out break at the pink line  and recovered. THEN we then saw 6 straight quarterly gains because it was a blow off top to the Tech bull mkt.  We have had a similar shake out/ reversal now.   This means that we need to watch for a break out to new all time highs, or a struggle and continued topping process. 

Friday – The markets keep popping, so have we seen a DCL ( that possibility was mentioned in recent  reports) or is one coming soon?  The conditions resemble the top in November. A little more time will clarify.  If this Drops to a DCL and then takes off to new highs,  we could see a much more bullish big Picture view  (And plenty of time to react to it).  The 6 quarter blow off in 1999 was CRAZY.

BIOTECHS

From March 17 – The weekly could have bottomed here, oversold and volume selling drying up.

We’d been discussing the BIOTECHS as a possible double bottom. ( A low risk entry) This was my March 21 chart.

IBB FRIDAY – A break above the 50sma with good volume. Low risk too,  with a stop below the 50sma if someone wanted to do it that way.  We now see that the ‘double bottom’ before March 21 was part of a bigger base.  We need to realize that that could continue, if this is a false break out.

XBI –  We have a break above the 50sma with good volume. Low risk too,  with a stop below the 50sma if someone wanted to do it that way.

XBI – Same exact chart as above, only I add the bullish inverse H&S view.  This inverse H&S is not confirmed until it breaks the neck line, but upside could be rewarding. 

USD – I pointed out that if we dropped to the bottom trend line,  the dollar could bottom and Gold could finally pull back in a more meaningful manner.

Friday – We may now see the Dollar move higher.

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WTIC – I have been waiting for a drop to the DCL and discussed how long these daily cycles in OIL can be. I also said that $36 or $34 would be good. We are just above $36 now.

When I look at this chart, the 50sma is at the $34 area, a 50% retrace is in the $34 area,  and a trend line back test is in the ….$34 area. I’m watching the Energy / Oil sector patiently.

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CRB –  I think that the commodities look good and are acting correctly. I will still show 2 Bullish charts and 1 shorter term semi- bearish.

THURSDAY MARCH 31 – Short term semi-bearish mini H&S that I saw on Thursday.  A drop to test that base area,  a dip below the 50sma (Shake out?). 

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The CRB  did drop Friday, and now is hitting the lower Bollinger Band . Also the stochastics is now oversold.

The 50sma is right below price.   Can we get a move higher please?     I have mentioned that I still like the charts of X, AKS, VALE, CLF, FCX, CENX, ETC ETC –  so a move higher could help them to move out of their current consolidations . Read the left side of the chart.

CRB WKLY– The Bullish buy signal from Feb lead to a break out and now a possible back test.   X – marks a good spot for price to find support.

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 At the end of Feb and beginning of March – I was watching an inverse H&S for Copper.  I posted this chart of Copper in addition to the CRB

COPPER –  It did break out and acted properly,  and is now pulling back after hitting resistance. Copper is now oversold on a weekly too.

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GOLD

Gold is basically going sideways or topping as time goes on.  There is nothing wrong with that. I am trying to exercise patience and keep an eye on things.  In a final daily cycle, price can drop quickly. Are we there? Price also can keep going sideways for a couple more weeks, so why not just watch it?  Gold found support on the 50sma Friday.  That may or may not last.

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GOLD WKLY – Waiting for a big dip may cause many to miss the next leg up,  so we are remaining open and unbiased to all possibilities as this plays out for the next couple of weeks. A reminder is that the dollar could be ready to POP,  that might weaken Golds ability to hang in there. 

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GDX April 1 – Miners are hanging in there with reversal after reversal, but my lower indicators aren’t impressed yet.  I dont think this move will break out above the purple line.  I am being patient before heavily investing in Miners, but I am watching things constantly.   MINERS tend to drop into a daily cycle low right at the end, but could they just go sideways?  Or do they need to drop a lot?

Look at this drop into the ICL in 1986.   This went fairly sideways, probably driving people crazy for Months, struggling at the 50sma.

Here it is again, sideways for months above & below the 50sma.  People likely got bored and so sick of miners.   Dont get so bored with Miners that you give up altogether. Hang in there, that next run was HUGE. Maybe we’ll see that again. 

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   So now we get to see what Monday brings.  Biotech looks like it’s breaking out,  we will look for follow through.  Without follow through,  you can get a false break out above the 50 and then a quick reversal. Then the basing process of the past 2 months can continue.  I only say that because buying that 3x etf LABU at lows 2 months ago has been dead money / bad timing.  The break above the 50sma Friday was still a lower risk trade,  because the upside potential out weighs any downside with a stop.   Good follow through will be a break out from its base. That could lead to a strong run higher. Staying inside of the base could just continue up & down sideways. Monday may help us to see a break out from the base.

  I like the commodities,  they are still acting correctly.  I think OIL is dropping into a DCL and will present a buying opportunity soon.  I think GOLD & MINERS will be dropping into a dcl for a buying opportunity in the near future too.  That means that things are lining up in various sectors for now.  For some, trading has already been good, but others are just content to wait for Miners or Energy stocks again.  For those waiting on these proper set ups, this time period may be boring and require patience.  Keep in mind that when the consolidation is done, we should get another run higher.  Those strong  % – gains lasted for weeks and I do expect that kind of run higher again. 

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Have a great Monday and Thanks for being here!

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~ALEX