In Search Of A Catalyst

If you are wondering why I chose the above picture, I’ll explain that later. Right now we have the markets in limbo, Natgas on Fire , and Precious Metals seem to be searching for a catalyst .  Lets do a review…

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NYA – I thought it was interesting that the NYSE looks a tad more bullish than than the SPX or NASDAQ short term. It had a MACD cross higher 2 days ago, while the SPX doesn’t  (yet).  It almost resembles a bullhorn pattern.

The markets sold off and recovered a bit Monday,  so maybe we get a bounce into the year end?  We have 3 trading days left, and they will likely get lighter  in volume as the week moves forward.   I can’t say for a certainty, but a light volume bounce into the end of the year MIGHT set up a stronger sell off to start off the 2016 year.

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The dollar didnt change much Monday, it still looks weak.

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WTIC –  OIL was rejected at that 20sma again and landed on the 10sma, but this was fairly light volume so far.  I’d say it  needs watching, but it may just be a normal dip and recover later. The MACD did cross higher this time, giving a more appealing look to the bounce.  Time will tell.

This is a reminder from the weekend report. I do think that we are close to final lows, but 1 more daily cycle could fit into the big picture.

NATGAS – Well, NATGAS blew right by my resistance target in the chart below from the weekend report.  I did mention that with short covering like we were seeing you can get those straight up moves, but I was hoping for a pullback to enter.

NATGAS – It doesn’t pay to chase moves like this, it will eventually settle down.  I have been mentioning that this would  likely be an ICL, and I think that is becoming clear now.

GOLD , SILVER, MINERS

To be honest, not a lot happened in this area today. It is a shortened,  holiday,   end-of-the-year  trading week.  We could be down today, up tomorrow, down Wed, up Thursday, and it may not mean anything.  We’ll do a review, but I dont want to read too much into a 1 day move on a week like this.

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GOLD – Gold could drop further and not damage anything, as long as the Dec 3 lows hold.  A break above the blue trend line or close above $1082 would be nice.   In the past I have said that when I’ve seen GOLD form its lows inside a triangle, the counts get obscure.  The moves can be fun once it bores everyone to death for a while.

GOLD 2012 Triangle bored everyone to death, gaining & losing the 50sma for weeks ( months). IT frustrates both longs and shorts,  and then it can explode.

SILVER – Big drop today.  Sometimes it leads to a scary sell off, other times we have seen a quick drop as a 1 day event. Today silver miners didnt get too shook up about it, so that is comforting. 

A  quick look at GPL shows a little silver Miner that didnt care that silver plunged today.

In fact,  Silver dropped to new lows repeatedly in Nov & December,   and this GPL WKLY CHART shows that this little silver miner actually bottomed this summer so far.  It is up almost 100% from summer lows.  As mentioned in prior reports – some Miners may be getting interesting as time moves forward.

GDX –   GDX dropped today.  I had mentioned that we possibly see a gap fill Monday. It held the 10sma, but there is a small gap at $13.50 too.  On this chart I just wanted to point out that we have seen this up & down action at the lows quite a bit recently.  Nothing new, I still expect a run higher .

GDX – This chart is to show 2 possible cycle pathways.  I think we are on day 6 of a 2nd daily cycle. The other idea is that we are still in the first daily cycle, day 25.  A low would be expected soon  in either case, unless this rolled over and took out the Sept 11 lows.  

 So why did I choose that theme picture?   I always search for a picture that ties in with the theme. I didn’t really like the ones that I found, so I  just went with a random happy picture.  At least there was a cat in that list.    We have 3 more trading days left in this end of the year holiday shortened week.  I dont expect too much to happen, unless we get some sort of catalyst.

~ALEX

Mini Lesson:

I mentioned one time that I was invested in a couple of Biotech / Pharma stocks in the past and I got chopped up when they didn’t get the FDA approval, or missed on testing results, etc.   Today we had an example of that in a company called Chimerix, so I thought that I would post it as a warning of why one should never put all of your eggs in one basket.

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CMRX –  News reports declaring the testing is in process.   The company will present at a few different conferences. Sounds good. Things are looking good. 

So now imagine that someone reads the news and thinks that this was in stage 3 testing and looked good.  “All IN!” .  It closed Friday near $35 , opened Monday at $7.86.  Closed at $6.62.  Down over 80%  – OUCH!

  I just wanted to throw this in here as a visual warning.   I have seen plenty of Biotechs do this when everything is riding on  one idea, one medication, or test result.   Some stocks gap up 50-100% higher, others fail and open down 50-80%. 

  With Miners, a surprise could happen out of the blue too.  Mines may experience an earthquake,  sudden flooding, or some geopolitical risk,  Government intervention, etc .).

  I haven’t seen many Miners drop like that in a day,  but I have seen some sell off  very quickly with bad news.  The point is, it is dangerous to put all of your eggs in 1 basket.  If you dont buy ETFs, then its best to start with small positions at first.  If we finally enter more of a bull run in precious metals again, then maybe collect several quality Miners as time goes on.  Create a basket.

  Maybe I could’ve changed that opening picture to  this in behalf of CMRX, but that’s not a happy picture.  So the lesson is,  dont put all of your money on one great looking company.  Start with small positions or build a little basket.