1-10-2016 Coming Together

As time goes by, it certainly seems like the pieces of the puzzle are coming together to reveal the Big Picture that I have been discussing for months.  2016 could be a great year for some, painful for others if this continues. Lets review.

SPX WKLY

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RUT – NOT VERY ENCOURAGING IF WE DONT GET MORE THAN A BOUNCE SOON

TRAN –  Is this an uptrend?

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SSEC –  a 2 fold chart.  I wanted to point out how explosive these wedges can be.  On the other hand, we now see a H&S pattern in China.

BKX –  This would be a major concern in my opinion.  If the Banking sector breaks down, things could get ugly.  You should look up some of the charts for Banks. I will add 1 below the BKX chart.

J.P.Morgan –  This is breaking down on volume, along with GS, MS, etc.  This could bounce to test the 200sma.

  In Mid December  I had a rather lengthy weekend report , and I showed how the JUNK BONDS / High Yield were leading the way down by making new lows, and I said that I expected the markets to follow.  One of the charts I used was this one. 

  In the Year End weekend report  I had other charts with similar findings.  I also had others that I could not include, but I will share some now.  That report was just getting too long to include everything. In these charts another indicator that I used was also calling for a drop in the markets by weakening as the market bounced higher. It tells me that the move higher is ‘false’ or weak.

  Notice in 2008 the market made new highs  and the lower indicator didn’t follow.  That indicated a weak move, and I saw that happening in 2015  ( I still do). Now with each bounce I can check this for strength ( The problem is that it is a weekly chart, so we need a 2 or 3 week bounce first).

SPX WEEKLY WARNING –  A closer look.  On Dec 29 I wrote that “we could be here”,  it lead to a big drop in 2008.  I also Thought that we could be in the 2011 green circle area, less of a drop, if we dont close below the trend line. We just closed just below it Friday. Immediate recovery needed this week or selling can become extended- even panicky.

   So this is not a bottoming indicator and I dont use it that way.  It will not give a buy signal, but it may give a ‘short ‘ signal when we get a multi week bounce.  I will look at it again then. This does show us that the markets were topping at the end of 2015.

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AMZN – I wanted to look at the strongest stocks and see if I could find any ‘changes’. AMZN dipped below the 50sma in the past and recovered ( Will it now?).  Also the MACD used to cross down and a normal pull back returned it to the zero line  ( Healthy).  Now we crossed under & dropped below the zero line.   I am interested in looking at these type of things when we get  bounce. It is oversold.

Moving on…………..

WTIC –  OIL could actually be making a low here.  My weekly target of $26 area may not play out.  Cycle wise the timing is fine, and we have a break down on this wedge.  I drew this wedge on the JAN 5 chart to show extreme capitulation to that $26 area, but said that I doubt that would happen.

WTIC –  We broke below on Thursday & Friday, but this may be a throw over.  A false break down.  I wrote “important low” a little prematurely, since we need to see proof of recovery or this may be just another dcl.

WTIC CLOSE UP – We do see capitulation type volume and divergence, but recall that OIL struggles at the 20sma so far. 

Though OIL looks to have possibly put in a swing low,  XLE closed near the lows.   I drew a possible 1-2-3-4-5 where the target price could  be close enough. This chart doesn’t look like a low risk buy at all yet, the downside may not be quite done.

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NATGAS –  Acting as expected.  This was Jan 6.

And now great volume on the flag break out.  The 200sma may not hold this back.

GOLD , SILVER, MINERS

GOLD –  We finally got that move out of the Triangle. We could be on day 24, which may lead to a dip ending the 1st daily cycle, and then a move higher would follow. We also just may continue higher.  I am ignoring cycle count for now and just using other analysis. This set up has been bullish from the start, I expect higher prices.

GOLD WKLY –  In the Big Picture, if we are looking for a change in character,  we want to see a higher high eventually.

  The COT for Gold remains bullish.

Look what I found.  When Miners Bottomed in 2000,  the markets topped.  Looks very similar to what we see now.

HUI –  Earlier in the report I showed a wedge for SSEC, to show how explosive they can be. This looks similar to that one. I like many things about this set up. 

I have been asked if I feel that the Silver stocks will play catch up.  I do like some of the set ups on them ( Ag & EXK do  look a bit weak).

SLW-  Nice set up actually.

PAAS is improving

SSRI WKLY –  That was an ugly drop in October, but it may just be back testing a break out from its 2015 run of $4 to $8. At least when Silver broke to new lows in December,  SSRI held up.

Did you miss that move in SA where it tripled?   Maybe only a little.  Many of these Miners have good potential once they return to a bull run.  Let me show some of the possibilities if / when  the Bull Returns with some weekly charts.

Picture them returning to former highs over time.

  SO I say that the pieces may be coming together,  where we have a topping stock market and bottoms forming in Oil  ( soon?)  NATGAS, COMMODITIES  ( SOON?)  and Precious Metals.    Many Miners shown above look to have bottomed already,  but it can be a bit of a slow process when looking at weekly charts. Those charts of RIC, LSG, NG, SA, etc show promising signs when we consider that GOLD & SILVER just broke to new 5 yr lows.  What if   Gold does dip to $1000? These Miners already look to have their lows in, so it could be a buy the dip scenario.  I’ll keep an eye on the big picture, and as for the short term, I am still bullish on Miners,  NATGAS, and I’m watching to see what OIL  wants to do.   I know that we have some ‘traders’ here,  and they can probably look to trade a bounce in the markets.  They are getting quite oversold.    I hope everyone had a great weekend, thanks for being here at Chartfreak.   

~ALEX

I bought EGO & AUY because I like the set ups and a simple move higher could lead to 25-30 % Gains. 

RGLD –  This is an interesting set up . It got clocked this fall, but looks to have based out and may move higher soon.   Even a simple run to the blue line is 20%. The lows are $35,  they should hold at this point.