Moving

In last weeks reports, I was pointing out the things that were moving and really catching my interest.  Lets review and see how things played out and what that can mean going forward.

SPX WKLY – We had a very high volume sell off & reversal this week.  The last 2 stand outs had 2 different immediate reactions.  Aug 2011 just went sideways for weeks, while Oct 2014 recovered strongly. 

Which one is likely here, or is there another possibility? …

I posted this Monthly chart last week, but now I updated it.  I just want to point out that at the start of a bear market,  that 1st drop might be forgotten after weeks of trading sideways or up & down ( red circle). 

I already hear ” BUY THIS DIP – The Fed wont allow it to drop”.  They couldn’t do much about that first drop, huh?  It followed the FOMC meeting.  We may trade around  for a bit, but I think this market is cracking.

AUG 24 , I said that I do not recommend going short at the first drop  (last week) , because it gets very oversold and we can bounce.  Tops are a process , and we have been Topping since  the SPX highs of Mid May.  Those May highs have not been taken out all summer, instead volatility & sideways trading occurred.  Now look at the tops of the year 2000 & 2007 below. A couple of sideways double tops and down she went.

SPX – 28  Many began to buy the dip last week along with short covering.  Like past dips, some were  feeling that they may be missing the next big rally.   See how FAST October recovered? Can we expect that here?   on Friday, the  daily chart has a doji at the 20sma and possible resistance may  hinder things a bit. 

 I have said that we could bounce around and make it back up to test the 50 or 200sma and then drop.  That could be about the next FOMC mtg in September.   Will we bounce around for months like the Monthly chart above shows?   I do not know. These markets are on high margin & leverage. The house of cards may just tumble with out QE4.  Time will tell, but I remain very cautious.

The weekly USD looks pretty strong.  Reversal off of the 38.2% Fib line  (Amazing, huh?).  I have said that I see weekness short term for weeks now . Was that drop all there was to it?

USD DAILY –  I still see weakness within the rally, just like I saw earlier.   THAT CAN CHANGE, but for now, I see this.  I think we could see 97+ , but commodities are also possibly indicating that the dollars rally is a bounce.

Of concern for those Long the TLT.  Thats an ugly candle on the weekly.

TLT DAILY –  STATS: BELOW the 200sma.  Above the 50 sma, stoped at the 10sma last week. Light volume on the bounce, likely heading for that 50sma and purple trend line.  Stay alert.

CRB –  Rising with the dollar this week.  Bullish Engulfing at the lows. Strong divergence on the weekly chart.

WTIC WKLY  – BULLISH Engulfing Candle at the low. Strong buy I.M.O. 

WTIC DAILY – I called Aug 27  the FAT PITCH in my recent report.  A Buy on OIL & ENERGY STOCKS.   Friday many more ENERGY STOCKS ripped higher.   For oil, resistance is a bit overhead and this may cause a pause, but I think we could get a strong rally for weeks.  I am still hearing $20 Oil by many on CNBC.  I use that as a contrary indicator.  We play it step by step.

 GOLD,SILVER, & MINERS

MY PREAMBLE  ( I know, some want to call this my pre- ramble ) : I like the set up & timing of where we are at with Metals and Miners, we are in proper timing to put in our daily cycle lows.  I should mention that we  are early in the daily cycle compared to recent  DCL’s (Daily Cycle Lows) that came at day 31 or so.  I THINK MINERS could have their DCL in,  Gold has me undecided and I want to explain things that way.  I’m not overly concerned, I think Gold is VERY CLOSE , but I see things that need to be pointed out.   Lets get to the charts!

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GOLD  Aug 28. – Positive looking set up. Breaking above the down trend line. A break above $1146 is a bullish swing, a break above the 10sma is bullish too, but has yet to happen.   If we dont have a daily cycle low in place here (red arrow) , we are on day 25 and some have gone on for 30+ days.

SO along with the above chart, I see this when I look at the Gold chart Technically.  Was gold rejected Friday by the 10sma and the trend line, or just a pause? Light volume buying so far.

 SO I look at the GOLD WEEKLY CHART.  More concerns.  I see this pattern of gold spiking up one week and spiking down the next, and it almost always had follow through down. 🙁    That was a high volume spike down, and as a technical trader,  I do not like that. Actually I forgot to write on the chart that we saw this in Jan 2014 . It exploded higher  for 6 weeks after.

SILVER –  Aug 26th I posted the break down and said that it would be good to see SILVER back over $14.33.  Divergence was encouraging.

SILVER NOW –  back over $14.33

Silver weekly –  It is a bullish reversal of sorts.  Silver got rejected at the 10 ma on a wkly basis, and it was a high volume reversal.   It could be a high volume capitulation type stop run,  that would be great. Sadly, the MACD got rejected on a weekly basis, that concerns me for now just a little.  We need improvement this week. I am watching this carefully.

GDX WKLY –  This is similar story to Silvers weekly, under the 10 ma and a high volume red candle, but basically the GDX daily chart looks like a good set up. I am long.

GDX DAILY  – It looks bullish in many ways.  We want to see a break above the 10sma.  It is oversold and turned upward.  In Dec. at the start of the 2nd daily cycle we ran to the 20sma and dropped .  The lows were in, but this was the 1 to 2 of a 1-2-3-4-5 move.   It shakes out longs. We may or may not see this here, we could also break above the 10 & 20 sma to the 50sma and then drop down to test them in the 1 to 2 of a 1-2-3-4-5. 

GDX:GLD is heading in the right direction

SO I am cautious about what is happening in the broad markets.  Some are saying the selling is over and now BUY THE DIPS and THE FED will keep her afloat.   They may see higher prices, or they may get washed out soon.   These are volatile markets. 

I am seeing very good things with the CRB and OIL and ENERGY STOCKS.   Along with the CRB , I mentioned in past reports the set ups in  AKS, X, FCX, VALE, MDR and the likes.   With OIL AND ENERGY  I pointed out many that are also moving nicely higher.   BTU & ACI — MOON SHOTS.  ACI has now gone from $1 to $8.50 Friday  ( Do not buy , its way too late). 

This is from my last report…

“I will cover more in the weekend report, but I just needed to post today to point out the FAT PITCH that has been tossed our way.  We need to swing at it to make the gains desired.   There may be POPS and DROPS and pullbacks to buy, but for the next few weeks , we should see good gains in these areas.

  Look at our old energy stocks like  BASS- EXXI- OAS- LGCY- HAL , FCG, XES, ENLC, TEX, QEP, CPQ.   Smaller ones like  WRES, REN, GDP, SFY, SD, TPLM, MHR, etc are real cheap, but may be a tad riskier if they come out with earnings and miss, so beware of when their reports come out.    I have seen 4 reports released so far and all took off upside, so that is interesting  ( NADL &  SDRL for example) .”

I think METALS and MINERS may have bottomed.  We are waiting for a confirmation in both Gold &  GDX, but I see many things saying that it is likely in place. I bought back in last week, along with Energy stocks coming off of their lows,  and I am still holding. Some of the  Miners are moving along nicely.  SA has held on to its 100% gains.  MUX was up 20% Friday and AKG was up 18%, etc.  We may have up & downs, but if the lows are in for the start of a 2nd daily cycle, you will see Miners begin to tack on gains.   If we get some pullbacks to low risk entries, I will post charts in the coming days.  Right now  (As I said in my last 2 reports)  If you see an energy stock up 14 % off its lows,  do not mistakenly think it is too high, and that you missed it.  Some of these will race up 10%+ each day and are still considered coming off of the bottom.

Things are looking very interesting here.  Commodities look Bullish, the Dollar is rising , but they are rising with it. The markets are bouncing, but I am 50/50 here until I see whether they can get to the break down , just go sideways, or drop here and now for another leg down. They may bounce around,  I think SDS, QID, SOXS  actually look like they want to bounce soon.

I will cover things this week as they unfold, I hope you all had a great weekend, thanks for being here.  Tomorrow its back to the Markets, which can be as easy as a game of hopscotch! 

~ALEX