No Real Change Here

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It’s Fed Wednesday, and so far there is no real change here, going into that decision.

 

SPX –  No real change in this chart, but there may be a change of character.  We have the Fed decision Wednesday and Quad witching Friday to pop this above the 200sma, or drop it down to maybe the 50sma area.  Tuesdays selling recovered.

SPX 3-15

Let me point out this …

 

I just saw something that makes the SPX actually look like it wants to take off  upside.    It’s a bearish looking ‘chart’ to me at this point, but one of my indicators pointed to a top last Friday and in the past 2 days quickly changed to bullish.  I’m very interested in seeing if the FED can push this through the 200sma.

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Other areas of the markets remain mixed.

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IWM – This is fairly neutral, could be a mid point flag.

IWM

XLU – After selling off in 2015 , Utilities look very bullish, and this includes ( many energy) stocks like  DUK, SO, NEE, NRG, EXC.

XLU bull 3-14

 BIOTECH has not rallied out of lows.  The IBB lingered at lows and looks to be breaking down. 

IBB 3-15

In fact, this looks quite bullish ( ultrashort Biotech). I am not recommending a position with the FED & QUAD witching ahead, but I think this looks set to go higher again.

BIS 3-15

So FED WEDNESDAY may be kind of exciting.

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$WTIC – Oil broke a trend line, and looks to be dropping toward support.  I ‘d like to see this act like a 1/2 cycle low and then run up to the 200sma before a dip into the DCL.

WTIC 3-15.

Oddly, this chart of Crude Oil shows oil on support

CRUDE.

The XLE – The dip in the XLE has been minor so far, and it filled a tiny gap and reversed higher today. 

XLE 3-15

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GOLD – Even though we have seen selling, it’s a mixed picture as to what the initial reaction to the Fed decision is going to be. I have to remain cautious because of where we are in timing cycle wise. The FED has been good for Gold at the last 2 mtgs, so Could GOLD pop Wednesday? It could. 

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GOLD WKLY– This can pop higher to that $1300 area,  but…

GOLD 3-15

GOLD DAILY –  I cant buy here, because I cant call it a low risk entry with divergence this strong at these highs. I need a dip to re-enter and I know we will eventually get a good dip into the next ICL.  This chart  still looks like a dip has started here, but a bounce is possible on any Fed day.

GOLD DAILY 

Sidenote: Individual miners may be being accumulated and may do their own thing.  HMY hit another new high today ! What a chart.  SBGL, AU, IAG, EGO, reversed and look fine by themselves,   so I just need to watch and see how these Miners play out.  They may bounce too, but could be temporarily  topping from the recent run, before having another leg higher this summer.

 

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  So its FED WEDNESDAY , what can I say?   Trading may be light and cautious going into the 2 p.m Eastern time.  Then we usually see  volatility, especially in Gold and the USD, after we hear from the Fed at 2 p.m.  At 2:30 we get a speech by J. Yellin and that can also cause a little action.   As I usually warn, the initial knee jerk reaction can run out of gas and sometimes you’ll see it  reverse from 3:30 to 4:00, into the close.  It can be fun to watch if you’re in cash,  a little crazy if you’re invested.  Enjoy your trading day!  🙂

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~ALEX

 

Mini-Lesson for traders

I did mention in recent reports that I was watching the $3.50 area to re-enter Vale. We got there today and price hung out in that area all day long. This is the area that I said I wanted to start a position. I posted this chart after Monday trading.

VALE 3-14

When I enter, I also have to be patient. I start with a small position, because It doesn’t mean that it will flip and run the very next day.   We could be in an extended consolidation. Let me show you possibilities to help us to  visualize this better.

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VALE 3-15.  This could go sideways in the support area for days or weeks! I would add to my position in this scenario.  DO you see where that 50sma is? Its at $2.88 right now,  so…

VALE 3-14

VALE also could drop down to that 50sma.  OUCH. That is why I said I start with a small position today.  I wont ride a big position down there, so I either start small, or I buy today and allow myself to stop out of / sell some if it goes below $3.25 or so.

VALE 3-14b

101 replies
  1. Gary Savage
    Gary Savage says:

    FWIW sentiment in IBB is down to 17% bulls. I don’t think I would sell short with that kind of negativity. Might be good for a double bottom or undercut low though. Biotech is probably in a stage 4 bottoming process. And the volume in the triple leveraged fund LABU has been gigantic. Maybe even more so than NUGT back in December and January.

        • chartfreak1
          chartfreak1 says:

          F.W.I.W. – ( refresh) Volume in LABU was “Gigantic” last fall too. 700% more than it had ever been as it was at $20.

          Today it is at $6, with even more volume in the sell off.

          So far it has indicated a bounce & then sold off with more volume, like a 3x etf often does.

          Can it bottom, sure. Best to wait for a sign of strength, unless you are a good nimble trader.
          ..

    • Peter Castillo
      Peter Castillo says:

      Good morning Alex! Good morning Gary! If you’re looking for Bio’s to rally, then might we see the indices rally with it? I have thought for the past few months that everyone forgot about the 1 tool left in the FED arsenal, weakening the strong dollar. So far they seem to be using it and all markets have responded, some more than others. Could it be we are setting up for a continuation of these rallies off lows into a possible blow off in the gen indices??

      • Gary Savage
        Gary Savage says:

        I tend to think it’s way too late in the 7 year cycle for stocks to be starting a multi-year bear market. Plus we have virtually every central bank printing trillions of currency units and negative interest rates. I doubt that is the recipe for a bear market. Over the last 16 years that has been a recipe for a bubble.

        So I’m in the camp that says what we’ve experienced over the last year has been the deep correction that will set the stage for the next bubble. Similar to what happened in 98 in stocks, or early 2007 for oil.

        And if we are about to enter a bubble phase then it has to eventually be led by biotech. That is where the innovation is, just like the personal computer and internet led the last bubble in the late nineties.

        • chartfreak1
          chartfreak1 says:

          I keep hearing about these 7 yr cycles for lows to come in, but I dont see lows hitting every 7 yrs.
          .(refresh).

          This is very inconsistent. That makes them unreliable data, doesnt it?Unless you say plus or minus a yr or so. They look quite vague and look to come about plus or minus a year,
          .
          so if you think you just saw a 7 yr cycle low, maybe? Maybe it comes in another year.
          .
          .

  2. rg64
    rg64 says:

    I just saw something that makes the SPX actually look like it wants to take off upside. It’s a bearish looking ‘chart’ to me at this point, but one of my indicators pointed to a top last Friday and in the past 2 days quickly changed to bullish. I’m very interested in seeing if the FED can push this through the 200sma. – which indicator?

    • chartfreak1
      chartfreak1 says:

      Hi RG – It’s not one that you would be familiar with .

      If you have been here for a while, then you have seen that over the years I have developed my own indicators for shorter or medium term movements in various sectors. I can often use them to call market changes of direction short term, though I dont always recommend trading that time frame. It is just another tool that is useful when anticipating turning points.

      Last Friday as that wedge was forming, the indicator was bearish, and over the past 2 days, it changed without a big drop. That is rare.

  3. Peter Castillo
    Peter Castillo says:

    I just want to throw this out there because a lot of us might be invested in energy and oil related stocks at this point, but xle:uso ratio is finishing a possible right shoulder on a H&S top. There is a positive though: that ratio took back the 50 sma and that ma is rising still. Just something to keep an eye on. If that H&S does finalize and breaks down, i would expect energy stocks to break down pretty hard and thus underperform oil. That could mean the market following also. A move to previous high on that ratio would negate the h&s top. Also in energy, ERY is getting oversold, so a bounce should be coming soon. First downside target i have for ERY is around $20, so we might have some more upside in energy left for now, but keep an eye on ERY. That should coincide with $64-65 in XLE which should be hard resistance. Just something to be aware.of, my opinion, fwiw.

      • Peter Castillo
        Peter Castillo says:

        I see the same as you Bill, but, there is a longer term trend line for ERY near $20, thats why I have it as a 1st target. The h&s target would have it between 16 and as low as 12. We’ll see what happens. I’ll post that chart later on so that everyone sees what we’re talking about. I doubt we see ERY hut those targets in this DC though. But who knows, i’ve seen stranger things. My gut is telling me we might see some weird stuff going on next few days.

    • Bill
      Bill says:

      I see what you are seeing on ERY. The Top to the neckline should be an equal distance to the final bottom on the right shoulder. I see a lot more room down for ERY. It looks like a visit to all time lows to me. although currently very oversold, we can see it stay there a long time.

  4. Mscrystal
    Mscrystal says:

    Yellen actually made bullish oil comments in her statement after the last meeting. Will be looking for any mention today

      • chartfreak1
        chartfreak1 says:

        Yeah, I dont know i fits just Fed Day trading, but the volumes are extremely low.

        I Liked the look of AREX, but not with that low volume.

        WRES & TPLM were fine, but TPLM gave up price.

        I’d like to see them consistently higher with Oil up $1.38

  7. chartfreak1
    chartfreak1 says:

    GLRI, ARP, LINE, WRES still look ok, but this is like watching paint dry until that Fed Announcement.
    .
    Line went $0.31 to $2.04, and back to $0.60 . wow.

  11. Alan
    Alan says:

    Thank you CF for you charts and mention of TOO a few days ago. I took action on that one and bought at $3.93 and am happy so far of course. Looking forward to your continuing thoughts and analysis on shippers!

    • chartfreak1
      chartfreak1 says:

      Nice trade Alan

      I was watching TOO, HERO, FTK lately ( Among others) .

      I was going to buy HERO on the 13 sma, and it broke below it, so I didnt get it. Then it reversed strongly today. I’m debating a buy here 🙂

  12. chartfreak1
    chartfreak1 says:

    GOLD / MINERS popped and ran after consolidation and commodites seem to also be perking up after consolidations.

    VALE, CLF, FCX , CENX, AA, PLG, MDR,

      • chartfreak1
        chartfreak1 says:

        You wont know until later, but they are all reversing higher , so it is consistent with a real move . As a trader…..

        buying with a stop below today and raising it as you go is one way traders can limit risk bit participate.

        Gap down would be the only drawback. GOLD up $28 is pretty strong ( Shorts may be covering)

  13. chartfreak1
    chartfreak1 says:

    I look at many of the set ups & reversals like this. (REFRESH)

    I added to Vale and bought CLF here. It is with the understanding that A stop is placed below todays lows, and it could get triggered if these drop tomorrow, but it looks like everything is taking off across the commodity board again.

    • Cason
      Cason says:

      Thanks for the lessons this week. Full position in VALE now. That CLF chart looks sweet. How far below would you set stops 2-3%? I don’t want to lose it on a spt test but you don’t want to follow it down either. That would be about 10 cents on VALE at current price.

  14. chartfreak1
    chartfreak1 says:

    MANY MINERS were expected to drop into DCL. They consolidated and may make a run higher. A stop can be placed below today and they may run for 5-8 days , even if it is a left translated daily cycle . Good gains vs small loss on stop out
    .
    refresh for example
    .
    SOME MINERS are extended higher than other commodity stocks, so they may be considered riskier
    .

  15. chartfreak1
    chartfreak1 says:

    NOTE: A small pullback tomorrow morning may offer a buy point in Miners or commodities.
    .
    OFTEN after a run up / reversal like this, you will become overbought on the 5,5,30,60 minute charts and tomorrow you start the day with a pull back . Thats why I’m not rushing to write a quick update . By the time I post it with charts, it’d be 10 minutes to closing and people may rush into something.
    .
    It’ll be best to see how things end,and maybe a pullback in the a.m. offers an entry.

    • Cason
      Cason says:

      Man, should have grabbed right after the announcement when GDX made first break. In the past a Fed pop just set up the next leg down, but not anywhere. Glad I took that starter position in EXK just so I’d have something.

  16. Mscrystal
    Mscrystal says:

    Getting pretty results today from SM VALE FCX TK SWN CENX AKS TOO (got back in TOO yesterday$

          • SonOfGud
            SonOfGud says:

            i paint myself,.. when i can get motivated…
            you obviously dont do gouache.. it dries really quickly 😉

          • Maria
            Maria says:

            u paint yourself?
            hmm… go figure .. I once had myself painted .. mardi gras nakedjaybird style…
            wooooooooooo hooooooooooo … THAT was fun…

          • Maria
            Maria says:

            truedat … but most don’t come back after 4 – (like daddy)
            *wouldnt wanna have 2getAspanking….

            wait … i take that back .. yes i would… ha ha ha

          • nancytheartist
            nancytheartist says:

            Wow , you left one crazy target for Maria with your first line! She got you good! LOL. Re: paint, you caught me…I usually paint with acrylics which do dry fast too…but I was thinking of oils, or when I glaze walls which can dry very s-l-o-w-l-y.

          • SonOfGud
            SonOfGud says:

            hah.. she keeps us on our toes.. can’t relax for one moment…
            i do oils & gum/temperas.
            but im with you.. i do hate waiting around for oil underpaintings to dry. .. but acrylics are too damned fast drying for reworking or subtle gradations

          • nancytheartist
            nancytheartist says:

            I’ve been painting murals/canvases/furniture/walls in acrylic for over 20 years and am used to the tricky stuff! Have learned to be able to paint watercolor style with glazes, or more like oil paint in an opaque style depending on what I am attempting. What do you paint?

          • SonOfGud
            SonOfGud says:

            mostly its been landscape,, both originals & copies of old masters (to self teach).
            i did actually start out with acrylics as a kid back in 70s, but it put me off with the quick dry.
            i always wanted to paint like Titian, but they turned out like a mental-institution therapy class daubs.. until i discovered oils 🙂

          • nancytheartist
            nancytheartist says:

            Sounds like you have had fun!
            Here is the key to acrylics, if you ever want to try them again…buy a Masterson Sta-Wet palette. Makes all the difference. Acrylics last for many days! And I use Liquitex matte medium to thin without losing the integrity of the paint [and a little water if really needed] You might learn to really like acrylics.Best to you.

          • SonOfGud
            SonOfGud says:

            thx nancy.
            i did have a Rowney staywet palette, but it was the speed of drying on the canvas that i didnt like.
            having said that.. i knew sweet f-a about painting technique & aesthetics then… and now i understand rather better.
            anyways, i was mistakenly trying to apply oil tech to acrylics.. when it wouldve been better to use them for what theyre best at.. ie quick dry painting method

          • SonOfGud
            SonOfGud says:

            ive still got a stash of acrylics from the 70s/80s.. which i will eventually get round to use.
            amazing that they were still usable,. when i checked last year!

    • Peter Castillo
      Peter Castillo says:

      No i did not Alex!! I was supposed to have sold it days ago, so I had made up my mind to sell it at the open. Fear not, however, I did put that $$ into another miner whose chart I did like better and ended up having a beautiful day as well. ;-). I wasn’t comfortable holding TGD, so I just switched to a miner I am more comfy holding long term.

  20. Cason
    Cason says:

    Random thought I had – compare energy company to oil performance. As I have stated before, what we need to see here is continued OUT-performance if oil simply consolidates. It’s not going up 6% every day, but if we are going to have longer-term (for than even a few days) positions then it needs to not get CRUSHED every time oil wiggles down a few percent b/c Iran did something stupid. Again (surprise!). Refresh!

  21. Cason
    Cason says:

    Not sure if Chris is ready to kick the bear thesis, but I am. Sure, the market will have to go again at some point, but I had played for an imminent rollover and we didn’t get that. So I dumped the TZA today. Had just enough to cover the commissions and maybe a little left over for a burger. I do continue to worry that if we really get a big flush to the downside it will drag energy and commodities with it. But not today!

      • Cason
        Cason says:

        Yeah, picked that up from this week’s report (finally got through to me). I had defined an upside that invalidated my thesis and when we got there, I got out of position. Trust me, that is an improvement for me. 😛

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