Time For Changes?

In recent reports we’ve been discussing some possible bigger changes in the coming year. Lets review the markets and see if these changes still appear to be setting up as we start a new year.

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2015 was pretty much a sideways year.

SPX, DJIA, RUT, NYA– Posted a yrly loss in 2015.  NASDAQ AND IBB posted small gains.

That alone is not signaling a change necessarily, so lets look at a few more things …

I pointed out in this Dec 14 chart  that a drop here may just fall to the lower Blue dotted trend line,  but that would also form a possible H&S, so that needs to be watched.

I’ve been short term bearish on the markets , and I find that to be playing out, so lets look at a few charts as of Dec 31.

SPX –  Rejected at resistance , it lost the 50sma and 200sma Thursday. It is also overbought.

IWM – Bear Wedge forming below the 50sma?  Room to sell off on the stochastics.

IWM WKLY –  Possible H&S , we need time for this to break down or break higher.

    SO I wouldnt be surprised to see more selling off in the markets as we head into 2016.

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USD –  I pointed out the possible double top on a weekly chart,  and then showed this daily chart to indicate similarities.  The chart shows that when this pattern formed in March, it also double topped on a daily basis into May.  We might have another burst higher, but I think the USD may be topping too.

Thursday the USD broke above that trend line, after a perfect pullback to the 50% line.  The dollar may continue higher short term, unless this was a false break out.  GOLD would normally drop under these conditions, but it is inside of a triangle currently and that triangle may hold price up.  Well discuss that shortly.

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CRB Wkly from Dec 28.  If that dollar double tops,  the CRB looks close to forming a meaningful low as it closes in on the apex of a Bullish Wedge pattern. That could lead to a big change in 2016 for Commodities. 

From Nov –  The Big picture ( below) shows the CRBs  long term support. When it tagged that wedge lower trend line in the chart above at $170, it dipped below support.  If it recovers the $183 area , we may see a possible shake.

So again, there could be a big change in 2016 for the beaten down commodity sector.

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You may recall that in Early 2015 I suspected that the commodities may be bottoming then,  because they were building small bases.   I pointed out buy set ups in many steel and aluminum stocks, etc.  They did bottom for weeks, but eventually broke down to new lows.  Notice on the big picture,  we see a possible reason why…

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AKS WEEKLY –  The bigger picture.  It is possible that last springs lows or  bounce were just a stop along the way to a bigger bullish descending wedge.  The apex should lead to the lows.

 

X WEEKLY –  US STEEL , last springs $20 to $27  bounce has also given way and we find US STEEL at $7.  Huge potential if this were to be a low in commodities. I’m watching the 13 MA reject price repeatedly on a wkly basis right now. A break higher could get interesting.

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$WTIC – My long term chart of OIL ( Dec 24) showed Oil was at prior support and also forming a bullish descending  wedge pattern.

WTIC DEC 31 – Currently Oil is struggling at the 20sma again, but this could just be flagging for a break out. The MACD has improved.   Also many energy stocks have been acting rather bullishly.

XLE –  It looks rather bullish with the Gap fill and reversal Thursday. 

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Examples of a couple of Energy Stocks that have been trade-able.  Many have been moving higher. If Oil breaks higher, I may start posting some trades set ups . 

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LGCY –  On dec 24 , I first mentioned this oversold nice % gainer with this potential. 

Now it pulled back and popped 37% again Thursday.   Almost up 100% from Dec 21, if Oil breaks higher it could almost double again.  

CJES –  This is forming a long base as Oil continued lower. A base with trade-able bounces. 

SGY – Double bottom with a shake out ?

 

NATGAS –  Over a week ago I said that I believe the ICL is in place .  I pointed out the 50sma  or 38.2% as possible support. 

Now we can watch for a possible flag if it continues to hold  ( I forgot to add the 50sma to this chart, but watch the 50 for support). This would also give the appearance of an inverse H&S.

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 What about GOLD, SILVER, MINERS?

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GOLD –  I still see the triangle. If the dollar pops, Gold may drop , but as long as it remains in this triangle, I will ignore it.

I found this old chart  ( over 1 year old) .   I drew in what has happened in the past year ( beyond that GREEN LINE) and we see that as the $USD ran strongly higher,  but notice that GOLD didnt really drop in like manner.  You would think that with that straight up run with the Dollar Gold would’ve fallen to $1000 easily. 

 

SILVER –  I just wanted to throw in a big picture. 

HUI BIG PICTURE  – This shows that Miners bottomed  FIRST, in 2000, while GOLD & SILVER bottomed later in 2001.  Is that happening now?  Miners bottomed in SEPT 2015 while Gold made new lows in Nov and Dec.

 

Reminder:  Some Miners bottomed already and continue to make bases or move higher as GOLD & SILVER dropped to new lows.  Is this all leading up to a change for 2016, where Miners bottom and make some nice %-Gains?  I am watching for clues all the time, and so far it looks pretty good.

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 MUX  looks like it bottomed in the summer of 2015 so far .

GPL –  A few silver miners that don’t care that  Silver broke to new lows recently.

AG –  Bottoming at $2.60- $2.75. 

EXK –  Bottomed in July/Aug 2015  ( 5-6 months ago now).

BAA –  Bottomed in 2014 so far.

NG – Bottomed in 2013

IAG –  Could a  $1 stock be going to $20 again someday?

  Those are just some of the Stocks out there that have bottomed ahead of the Precious Metals.  I refrained from showing RIC, LSG, and others that I have pointed out repeatedly in the past  ( SA going from $3 to $10)  🙂  

    The point is that there are signs that some big changes may continue to be taking place. When some of these beaten down stocks begin regaining favor,  the upside potential is pretty big.  You wont have to catch the lows, we will be discussing set ups along the way before they pop and run higher.  2016 could be a very interesting year for traders and investors.  I’m looking forward to seeking out opportunities that may be just ahead! 

 

~ALEX

Potential

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I wanted  to also add that I have been watching other areas gaining some traction.  Uranium stocks and the Solar space recently have been running higher.   When I stepped back to look at Solar stocks,  some of those bases are huge and could also lead to some pretty good gains, so we will keep an eye on this space too.   ( See  FSLR, CSIQ, TSL, JKS, SCTY, ETC)