Moving Forward On A Fed Wednesday

Today is sort of a Fed Wednesday. It doesn’t mean that there will be some big surprises, and in fact I do not expect anything like that, but I didn’t want us to go into this blind folded. Certain areas of the market are due for reversals in my opinion, and a Fed testimony before congress can act as a catalyst, even if nothing new is said. Lets just Look at the charts.

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Tuesday the NIKKEI was down 900 points, and it is currently down another 400 this morning, but…

They couldn’t get the sell off in the U.S. going.  THAT should have sold off the U.S. markets if they are going to drop In My Opinion.   I’ve been expecting a bounce, no change.

I have mentioned that when I look at the Banking index, it broke down and is struggling at lows…

BKX–  I pointed out these charts Jan 8 and 29th.

Currently there is still no bounce in Banking. That cant be healthy for the markets, but there is divergence at the lows, so we will see how this ‘bounces’ going forward. I do not expect a recovery, watch the 50sma for a possible short opportunity.

XLU and XME-  Rallies.

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USD –  Look what I found on Feb 8. I would say we can expect a FED WEDNESDAY bounce.  What might that do to Gold?

FEB 9 –  It sits right on the trend line. (Ignore the hieroglyphics, I collect my charts at midnight =  Tired).

It could be a pretty good size bounce, but these conditions have bounced for 8 – 12 days and then still rolled over in the past  ( So Gold could possibly drop quite a bit ).

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WTIC – I had a wkly target of $26.06 from November.  If this is an equal move down, we’d see $24.

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NATGAS – no change from yesterday, except slight improvement in the indicators. See yesterdays chart.

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GOLD , SILVER, and MINERS

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I can tell that we may need a good sell off here.   How?  Look at yesterdays Theme Photo and Title and my very first chart in the whole report.  Even with that opening for my report, I ( understandably) still got emails asking,  “What is your sell off target? When can I buy”.   The 1st chart in my report was GDX and some targets. This tells me that sentiment is extreme, especially for those that just missed that move.     Sentiment has gone from Jan 15ths –

” This thing is weak and can never rally at this point” to ” I want in!”   Now we might need a sentiment changer back to fear, but will we get one?

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GOLD – Yesterdays report gave this set of possibilities.

So far price remains around $1180 to $1190, so could we just flag? Yes, but sentiment is somewhat bullish everywhere, so a drop to the 200sma, Fed Pop in the USD is on the table too..

Here is a real sentiment killer, thought the chart remains bullish, and I have seen it in the past.

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Gold drops for days and then turns back up.  Everyone jumps in next week because a ‘swing’ is in place, and then it drops again.  Buyers sell again.  Thats an A-B-C .  This could take over 2 weeks and by then, Buyers arent as sure that they want to try it again, sentiment changes to fear ,  and it runs higher.

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Silver –  To most this looks just like every other time that it stalled and gave it up. IF Silver just kept going higher (like Gold did at the 200sma) , while Gold flags, that would be excellent, but I’ll take a flag too.

Silver wkly –  This is where you see a slight difference from the past tag of this area. Room to run higher on the stochastics, so my eyes are on Silver right now too.

Ok, I have 27 charts of GDX to show every single way that GDX could play out,  then I will tell you exactly which one will play out.   We know better than that.  I do always show several possibilities and the reasons why, and thats about the best that anyone can do.

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GDX FEB 8 –  I already showed this, it is a plausible idea. The $15 area,

It can happen quickly, or it can drag on in time.

GDX –  So I see $15 coming up again, but how long until we get there?   Does it have to go there?  No.  A flag could form.   Look at that topping action in October.   People eager to buy likely jumping in and out of NUGT/DUST/NUGT/DUST may not fair so well.     Patience may be needed unless you are a confident short term trader in front of the screen all day.

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So the markets are a bit choppy in every area.  We dont see clear direction so far this week, but maybe with the  Feds testimony before congress, we will get some kind of directional move.  Until then I personally just remain patient.  I sold a lot of my positions as stated in the opening paragraph of yesterdays report.  Then you start looking for ‘set ups’ that have consolidated recent gains, and this can take time.  SOME MINERS may keep going higher, individual stocks may present individual set ups.    Silver didnt get as extended as Gold, maybe silver stocks will hold up here? It takes time to know these things.

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I had mentioned that certain commodity stocks looked to have bottomed and they did run higher. Now they look to be consolidating and pulling back.  TRADERS may find opportunity here in time with STLD, AKS, VALE, FX, AKS, X,  etc.

FCX–  X had this set up, but it dropped below the 10sma. These are still overbought, so they may be formong a more complex bottom. This little run was almost 100% lows to highs.

CENX – 100% run.

  X – You can see a more complex bottom may be forming in Commodities , so it is worth keeping an eye on them.  The upside could be substantial if they bottom and recover in a Big Picture scenario.

After this Fed Wednesday , we’ll see if there is a possible short term trend that unfolds and is trade able or maybe waiting for a good set up to eventually short the markets for another leg down, and go long Miners for another leg higher. Sometimes patience pays off. 🙂

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~ALEX