Holiday Trading For July 3

With only 1/2 day of trading on Monday in the U.S.,  wedged between a weekend and a holiday Tuesday where the markets are closed,  I think that we can expect light volume trading on that Monday.  Many people may have just checked out and gone away from Friday through Tuesday,  so let’s just discuss where we are with the markets.

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DJIA – The markets have started another sideways consolidation or pullback again, however…

This does look a bit like ‘distribution at the highs’ with that heavy volume. Please read the chart.

Since we are due for an ICL soon, we will find out soon if this drop take place deeper than most expect this time. A drop to 5900 or even 5600 is not out of the question, if we were to get an ICL type drop as shown? Or…

This would reflect a normal quick drop into a dcl and the ‘buy the dips’ take over, causing a continuation into a parabolic blow off top?

I’ll post my May 12th Parabolic chart again.

USD – The USD is due for a low, but it just keeps rolling over and dropping.  That is what happens when price is searching for an ICL , so we may be seeing final sell off phases  ( It seems that Gold does not believe the drop will last) . This resembles the drop into May 2016.

WTIC  This was June 23–  Important note for future reference = Do you remember when I said Oil has probably put a low in, because we then not only had an ‘inside day’,  but we had 2 inside days in a row at lows on this chart.  They often happen before a reversal higher.

You can see that those back – to – back inside days at the lows did lead to a reversal at the lows. Selling dried up and Oil continues higher. (Remember that for future reference in this report please).

WTIC BIG PICTURE – the last 2 runs ran well, and give us a possible target near $50 eventually, with resistance along the way.

Surprisingly,  I am still not seeing XLE & OIH confirm these lows in a strong bullish manner. Oil was up 2.5%.  Do we have ANOTHER drop ahead after this run?  If Energy stocks act continue to like they did on Oils last 2 runs higher,  we need to be cautious and unbiased.  I will continue to monitor this for us, but this still may just break out too.

I did point out last week that some of the leading energy stocks were doing well…

AREX–  And AREX did continue to have nice bullish follow through,  so I am watching for others to either start to catch up or continue to stall and send out a more bearish signal  ( XLE, OIH, OAS, WPX, etc.) .

OAS (  WPX AN OTHERS)  are just not acting like Oils lows are in place,  are they? Again,  Oil was up 7 days in a row & 2.5% Friday.  This is weak.

NATGAS – NATGAS failed at resistance as expected and I mentioned that if you took a leveraged position at the low ( Boil, UGAZ, for example) , it was time to let it go and see how this plays out.  We saw a decent reversal on Friday after attempting to fill the gap.  I want to see what Monday brings. A break out above resistance shown in the future would be quite bullish.

NATGAS –  The warning is that if that low at $2.85 breaks, and then this trend line  ( neck line)  the downside could get serious.  Serious enough to then short.  That is why I find it best to go 1 step at a time.

Reminder : This was from June 27 –  it is showing that pop or run to resistance an a possible roll over would form a double shoulder H&S.

URA – URA is still crawling along that 50 sma , and still looks bullish to me.  I pointed out in past reports charts like  UEC, URG, DNN, UUUU, etc.

GOLD, SILVER, & MINERS

Right now, being patient has been the best trade in many ways, like avoiding frustration.  I have been rather neutral, looking for signs of a directional move while the Miners move through a triangular formation. Some Miners are moving higher ,  others are again near the lows.  The May sell off looked somewhat similar to May 2016 in Gold, Silver & Miners ,  but so far we have no upside burst higher.   I am asked “Which way do you currently lean short term?  Bullish or Bearish?”  SO far time is moving on, and we do not have a big break higher out of an ICL, so…

GOLD – This is what I am leaning toward for the bigger picture, based on recent activity. A flush out drop into a low. I obviously check how things are playing out day by day and will keep us informed if things change.

YEN–  The YEN is often strongly correlated to Gold.  I have written a prior report about it and showed with many charts that they usually follow each other quite remarkably. That said, the YEN Weekly has failure at resistance so far. If it cannot burst higher, it looks ready to roll over further.

GDX _ That triangle.  At one point I expected that it might just break out higher & Run  ( it still could),  but if Gold drops like the above chart showed,   then GDX may do a false break down and then a strong run, as shown.  Again,  I monitor it day after day, and I will adjust if necessary.

GDX – Notice that in May it took 5 days to cross that MACD from severely under to over. currently on day 8, it lacks strength.

I want to add this next statement to that opening sentence  :   Often during light holiday trading, like we should see on that 1/2 day Monday, it is very easy to ‘push the markets around’.  Buyers may lack selling resistance.  Sellers may lack  Buy the dippers, and at times we get a whole lot of movement that may mean absolutely nothing on days like that.  We can actually get big moves on light volume, because the markets are easier to push around, and then they can flip & do the opposite on the next real trading day.  That said,   Mondays 1/2 day of trading may not mean a whole lot to the Big Picture.

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~ALEX

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Remember when I asked you to keep in mind those 2 ‘Inside Trading Days’ that I pointed out on Oil  in the chart below?

They often indicate that the sellers are losing control and buyers are holding up price above the lows.  If sellers close shorts or stop selling, buyer can push price higher.  Those lows are not able to be broken for the last 2 days and buyers may step in.

Guess what I saw on Nak as of Friday? 🙂  I see 2 inside days at recent lows too.  If the sellers have lost control and Buyers can push this back above the 200sma,  we may be seeing a “Shake out”.   I look forward to seeing if this plays out.