1- 12 -2016 What Kind Of Bounce?

We know that sooner or later the markets will bounce, but what should  we expect? A recovery or just a bounce? Lets check out the charts…

.

SPX- There are points of resistance to be watched along the way.  Look at the Aug – Sept ‘bounce’. That first month was rather lack luster, but the surge in October was brisk. With a reversal on Monday, we may get out move higher immediately.

I wanted to re-post my RUT WEEKLY chart and show what I think we could see.  I think that I drew the drop a little too steep, but the point is that the drop can be significant and still be a normal pull back in the big picture.

NYSE – Things changed from higher lows to a lower low in 2015 .  These things often take time to roll over, because the “buy The Dips’ crowd keep buying as the smart money unloads to them.

.

USD –  Jan 6  I expected a break of the trend line & 50sma and an immediate reversal 

We see the break of the trend line / 50sma  that I said I was looking for and a reversal. This looks bullish , but not very strong  ( at this point).  I have stated that I expect a possible tag or break of Nov highs & then possibly a double top there. This may not be good to Gold .

.

WTIC –  I had a short term target of $29.46, but a reversal at that trend line is more likely ( Looks to be a break of $30 and reversal). 

NATGAS –  I expected NATGAS to just continue higher, but it has paused.  What kind of dip remains to be seen.  Here are 2 ideas.  A  3rd idea is a running correction.  That’s a Slanted channel higher.

.

GOLD SILVER & MINERS

Unfortunately , I need to start with a word of caution:

Mondays move was within expected parameters for GOLD, SILVER & GDX/GDXJ, but I didnt like the way some individual stocks acted,  so I am watchful.

For example,  look at SLW.  PAAS and SSRI  and a few others  also showed abnormal selling in my opinion.  

I have been happy that MINERS  didnt break to new lows in DEC when Gold & Silver did.  Now some miners are acting iffy at best. My newer purchases of  AUY & EGO closed below the 50sma, so I got stopped out already.   Lets  look closer at Gold, Silver & GDX, but that is a disappointing development.

GOLD – This is normal.  We may be on day 25 and a back test of the break out or 50sma would be normal. The problem is that with Gold & SILVER –  good looking charts can change quickly,  so I remain cautious based on the Miners Monday.

SILVER –  At this point Silver is within acceptable parameters, but if this is a triangle, I dont see any downside room left to keep this healthy.    SO as a summary: Silver was rejected at its 50sma, and it is near recent 5 year lows.  The MACD remains ok.  Silver Miners action yesterday may be saying that this will break down? Again, “Cautious”.

.

GDX –  Like I said, this isn’t really bad  (Yet) , and this isn’t absolutely breaking down ( Yet) ,  but it concerns me when I look at individual miners. I got stopped out of a couple of miners and this was a steep drop, but we have had steep drops before ( Shown) where the next day went red too , but then the selling stopped there. ( Mixed thoughts here, so cautious). 

So let me re-post this chart of HUI.  I was obviously expecting this to break out in January  ( And we may) , then maybe back test on the next pull back.  I think that since this wedge also is not at the apex yet, we need to at least be cautious and watch any positions that we have.  I was in “buy the dips” mode for Miners,  now I am in watch the dips mode for now. 

GDX, GOLD, & SILVER –  And that above break out was anticipated in part because Miners bottomed and held up when Metals broke to new lows. This shows that GDXJ bottomed in July 2015, with GOLD and Silver  in the lower boxes breaking down.  This happened in 2000 – 2001 lows too.

So now I have to remind myself also that BASES can be just plain old difficult at times.  To show what I mean, look at this base of CENX after selling of in 2011-2012 sell off.   IN a Base from $6 to $10-  There were shake outs and sideways moves ,  runs higher and sell offs along the bottom , and then finally a blast off phase.  At lows, some stocks just blast off  (SA for example)  Others may meander.  SO for now,  I am cautious about any holdings until we see what Miners want to do above their current lows.

PLATINUM bottomed with Gold in Dec, but look what it did yesterday. Gold broke out strongly above the 50sma, PLATINUM was rejected.  We really have a mixed bag here, so precious metals went from pretty clearly bullish to oddly mixed in one trading day Monday  .

 So thats what I am seeing at this point. Gold should pullback to a dcl and then have another run higher as expected in the chart below.  ICL’s , even in bear market rally form, are usually 2 strong legs higher.  We will have to see if things play out the way they normally do here. Gold looks fine, Miners threw me a curve Monday.

.

~ALEX

.

I am adding a couple of charts of interest here. I think the markets could bounce soon, but even as they sell off,  some charts are holding up or even acting strong.  I will show them here for traders to consider.  My favorite is the first one. 

ANFI  – $2.70 to $11.  What sell off?

WMT – I pointed out some retail stocks last week, and many  continued higher, so some may need a pullback.  Others just held up nicely and may run with a bounce in the markets.   I am showing their strength  during this selling.

My absolute favorite Retailers for the past 5 years got beaten down lately  ( Under Armor & NIKE ).  Not a buy here I.M.O. but my other pick  ULTA has gone sideways and looks good.

I like this chart, but havent looked into the company in depth 

ZUMZ – footwear