Time Decay

It’s time to discuss decay in the Oil and Metals markets, but first lets do a review of the equity markets.

SPX- This was Sept 15. I have been saying since August that I expect the lows to be tested sooner or later.

We see that happening now, so what next? …

SPX – I actually think we are going to see upside very shortly.  That doji at the lows is only 1 signal indicating that. Notice how the last few bounces have been 2 big days up, 1 huge day down, 2 large days higher, etc .  It could still be a choppy ride, difficult to trade.

IBB – I snapped this before the close, final volume was over 8 million.  The IBB was pushing on HUGE volume and cannot break the lows.  Often it will reverse immediately. When I say Rally,  I mean short term for now. 

Copper– Even copper is putting in a double bottom low. This is a bullish reversal for at least a good bounce ( watch FCX).

The dollar hasnt changed its look that much. No chart.

WTIC– Here is where  ‘Time Decay’ may come into play a bit.  Oil will not stop consolidating  sideways along the 50sma and it is running out of time cycle-wise.   Oil cycles actually can stretch quite a bit,  but lets just play it safe and say that its getting late and this could drop to a daily cycle low soon (like last spring). As I mentioned in a prior report, this is starting to look familiar.  We didn’t rally in the spring until we did a quick stop run. 

I do want to mention that I looked at DIG & DUG,  and DIG actually looks like a bullish back test.  Thats a bit odd, but it doesn’t track oil exactly anyways.  (Excuse chart typo).

GOLD SILVER & MINERS

I want to say that some of the best trades that I have made since the bear mkt in Gold/Miners has been Bear market rallies from an ICL to the top of the 2nd daily cycle.  Now I have to add that the last 2 ICL’s  (March and this one) have been very different, and it is a bit frustrating so far. 🙁

Time decay comes into play here.  Cycles are all about timing, and the move higher should come sooner than later in my opinion. Lets look at Gold.

GOLD– When Gold breaks out higher, it’ll be bullish, but it has stalled and is getting later in the 2nd daily cycle. We should have seen the first daily cycles highs taken out, since the 1st daily cycle  was right translated.  Time will tell, but if it’s going to , it must be soon.

GDX – Is it toast?  No, but time is getting later there too.  I dont see strength in Miners, so I want to caution readers that this is not acting ideally.  I am not heavily invested right now.  I now need GDX to prove itself.

GDX – The only bullish idea is that this looks similar to the drop last week before the pop and the MACD hasnt crossed down.  I feel that this wants to drop rather than pop at this point.

Before I show my last chart, I just want to say that using ‘cycles’,  time is getting to the point where a dip to a daily cycle low is fast approaching.  A blast higher is still possible,  but it gets less likely with each passing day. So playing the probabilities…it is less likely that we I have seen a blast higher late in a daily cycle.  I am not heavily invested,  I now need to see Miners prove them selves to me.

  That said,  I watch this on the side…

GDX BUY & SELL system that I developed.  I feel like this  shows how odd things are currently acting.   ( See the lower box) This has been a ‘BUY’ with the cross up,  ‘Sell’ the cross down visual. You would have made money every time for the past 3 yrs, but there was one odd whip saw where there were no gains.  The odd part is that we just made new lows in the first daily cycle and I didnt get a sell cross down (sell).  I still dont have one yet. 

Is this chart reading incorrectly right now for only the 2nd time in 3 yrs?   Or will we move higher  soon? THIS has me puzzled.

SO I have pretty much stepped aside in this action.  I got stopped out of some miners as they dipped below the 50sma and I will wait and see how this plays out.  AEM is my only good looking chart and I may just sell it. Right now,  Miners and OIL are neutral to me.  Some are still OK, others are not looking good.  There isn’t much more that I can say right here. It is frustrating, but it’ll resolve itself in time and now we have to wait and see how things unfold going forward.

I was looking for Silver & Miners to take the lead higher, they have been weak so far. Some may want to go to cash and watch, but if not, have stops in place.

~ALEX