April 25th – Give Me A Break

After the 1st round of the French Elections Sunday, we saw price break through many of the trend lines that we were watching.

SPX – This chart was from the weekend report showing that trend line resistance for the SPX.

And we had a break out on Monday, even if I use the peak of the spike on April 5ths reversal.  We’ve seen daily cycles run various lengths, see the 2 boxes drawn below, and so this does have the ability to run a bit higher.

Lat’s look at the NASDAQ…

NASDAQ – From the weekend report, The NASDAQ regained the 50sma and a possible MACD cross ( Inverse H&S).

NASDAQ broke out and I’ve mentioned that some of the TECH stocks have looked stronger than other stocks.  TTWO, JBL, AMD, etc. looked set to break out last week.  Now the question is, “Will that Gap fill, or will this just break & run?”  In January a strong gap break out higher did fill in 5 days, and then it took off higher. This gap could fill now or it could fill later on a back test of the break out at a dcl.  There is no real way of knowing.

USD – So far the USD has been putting in lower lows and lower highs.  On Monday, it held the lows so far.  The YEN,  USD & GOLD  all dropped quite a bit, while the EURO Surged higher. That was the knee jerk reaction, and time will balance this area out.

WTIC –  Oil held up at the 200sma, simikar to what it did in November. Is it dropping back  in a similar 1-2-3-4-5 manner, or is Oil still seeking out the ICL and will break the March lows?   Its hard to know, since the XLE broke to new lows.  I’m watching this 200sma for now and will look for signs in Energy stocks as time moves on.

NATGAS – No real change.  Some readers mentioned that they saw NATGAS at $3.07, but FINVIZ & STOCKCHARTS do not show that as a low. Even if it did, it remains above the 200sma & 50sma at $3.04.  I’m still debating re-entering my NATGAS long trade as it gets oversold here. NATGAS does look good so far.

GOLD, SILVER, & MINERS

Gold & Silver dropped and actually made a good attempt at recovering after the slam down overnight.

   Gold broke the uptrend line & 10sma and that is important to identifying a drop into a dcl.  I personally do not think that this was all we will see for a dip however.  Miners did NOT act like this recovery into the end of the day is real. Gold has time to drop further and is not even close to oversold.  1 scenario could be a drop into  Fed Mtg next week and then we see the dcl.  I will discuss this further with Miners.

SILVER –  Silver dropped and also put in a nice reversal candle.  It is still below the 50sma at this point and notice how the stochastics is not nearly as oversold as it has been at prior lows. I would expect a bit more weakness.

GDXJ – GDXJ actually gapped down on light volume.  I sold 1/2 of my JDST position, simply because that is my trading style. This could drop further, but it actually looks like selling dried up a bit short term.  Maybe it bounces for just a day or two and then resumes selling into the May 3 Fed Mtg?

GDX – GDX broke the uptrend line and the 10sma, signaling that it is dropping into a dcl. It also closed below the 50sma. This chart does not look like the selling is done either.  Again, we could see an up day on Tuesday and draw in the bulls / Buyers, and still have more selling ahead.

HOW WILL THINGS PLAY OUT FROM HERE?  There is no magic formula to know the exact track that things will take, but I can throw out a few ideas just to give visual ideas.

GDX –  I expect more downside sooner than later, so this is a less likely scenario.  It shows a bounce now as a 4th daily cycle that tops out at the FED MTG next Wednesday, and then it drops into an ICL.  That’s just 1 possibility.

GDX – A small bounce and then a dip into the dcl on May 3 Fed Wednesday next week. A bounce out of the Fed Mtg then rolls over after a few days into the ICL. Either way, the best buying opportunity is a few weeks away , but it could be the best buy of the year, stay tuned!

The General Markets broke higher and do have time to run further.  It just feels like the FED MTG next Wednesday May 3rd is going to play into the timing on all of these markets.  Oil is dropping after back testing a break down, I am watching Energy stocks for clues of where the lows might come in. NATGAS is holding up well.  We are finally getting the drop in Gold that we expected and SILVER & THE MINERS have been weak for a while now. Even though N.Korea is threatening to blow up a US Ship in the seas and other things are happening that would seem like RISK would have people buying Precious Metals, Miners have been weak and Gold & Silver are now dropping too. We are pretty much due for an ICL in the next few weeks, and that drop will be deeper than many expect.  A ‘bounce’ into a 4th daily cycle is expected first, and then that drop will come. Enjoy your Tuesday trading.

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~ ALEX

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TRADING –

XME – I wanted to take a look at the XME, because it represents Metals & Mining.  I know that the Miners aren’t very strong, but the XME does look to be holding up well on the 200sma.  SO I looked again at VALE, CLF, AKS, CENX, FCX, AA, etc.  Some daily charts do look good, others need a little work.   It is earnings season and they look set up to ‘pass’ or ‘fail’ .  Let’s take another look at a couple of them.

AKS –  April 20th I had this chart in my report. I like a wedge pattern when it breaks to the upside. Is this ready?

I wrote a report on Steel stocks, and liked the way they were setting up.

STLD – Earnings were released last week.   Is this Breaking out from a huge consolidation?  It looks to be, and STLD  ran like a gazelle out of the last consolidation.  I would expect this to eventually continue higher if earnings remain solid. A stop could be placed under the recent break out.

STLD WKLY – a “W” Pattern formed in the 2014-2016 consolidation. This looks ready for one more leg higher. If it is anything like that last run, it would be almost straight up.

AKS – AKS has volume increasing as it pushes against the 200sma and trend line. This one continues to look good. I’m not sure when they release their earnings though,  pre-market or after market, but I think it is today.

CENX –  The MACD does look to have divergence and the RSI is close to crossing the 50%.

AA – Nice burst of volume as it attempts to break out.  They released earnings Monday and last I saw AA was up $1 in after hrs at $34.35, right under the 50sma and above that trend line.  AA looks good.

TGB DAILY –  As mentioned above, I do not love all of the daily charts on  the metals stocks yet.  They look “o.k.”, but not really bullish.  Here TGB could be at support, but the 50sma has been strong resistance and the MACD is sloppy.  The 200sma is below and price may still want to go there.  The weekly charts do seem to be setting up nicely, however, so I am watching all of the metals stocks.  Let’s look at TGBs weekly chart…

TGB WEEKLY –   The weekly chart looks great.  TGB breaking to the upside would be a buy, but so far the consolidation continues and again, that 200sma is still below price and may be a target.