4-6-2016 FED Again

By the end of the day,  we’ll all be well Fed.  The Fed minutes are released today. Will the markets react?  We shall soon see.

.

SPX –  April 1 – Expecting a pull back

SPX  April 5–  We are getting a pull back and finally breaking below the 13 sma that I have been watching.  

Even that MACD that was holding tight is breaking down,  lets see what the Fed can do.

.

VIX – The vix is in the area where tops  ( Big or small) Often occur. See the SPX chart above Nov 1, Dec 1 , and end of December.

IBB – No break out from the base yet. This can drop down and consolidate further or go sideways, but it didnt get sucked down with the markets really.

.

WTIC –   We have been waiting patiently for a daily cycle low to appear.  The ‘timing’ is right for a low. We targeted the $36 or $34 area.   Some energy stocks are starting to hold up,  so I think we may be there.   Tuesday had a reversal, Wednesday may have follow through and that puts a swing low in place.  What will happen when we are Fed today with the Fed minutes? Let’s zoom in…

WTIC – Zooming in,  we may get a swing low today on day 36.  Oil looks bullish. A break above the 10sma is further confirmation that a low could be in place. I think it’s rather low risk, if you put a stop below the 50sma, but you may get stopped out, since Oil can drop to $34 by day 40. 

Summary for OIL? –  OIL INVENTORIES ARE RELEASED ON WEDNESDAYS. A reaction higher could put a DCL in place,  or a reaction lower could have us finally tag that 50sma.  So while we may be at the daily cycle low, confirmation is really needed to reduce risk. It is a guess at this point,  though the timing is right. If the FED Minutes reveal any concerns on inflation, Commodities , Oil, and yes, possibly Miners may get a pop. I’ll discuss a POP in Miners in a minute.

.

CRB –   This back test looks complete.  The CRB is oversold. I still like what I see in  the AKS, VALE, CLF, SID, etc consolidations.  They all moved higher today as the CRB dropped.    Is the CRB nearing a reversal?  I think so, but we’ll have to wait and see what the FED MINUTES can do. I like the set up.

Summary on CLF, VALE, CENX, etc?  I think they are rather low risk entries, because they are still consolidating their recent gains. Unfortunatley,  you cant use a tight stop, because they move in rather big daily amounts.

An example: Here is Vale again-  notice the pattern is bullish, but the daily swings are pretty big  ( 50 cents at times). This can just continue to rise and then break out – OR – it can drop to the 50% again in a W pattern because the 50sma is still down there.   There is no way of knowing.  Since it ran from roughly $2 to $5 , pulled back and made a series of higher lows, I view it as bullish and add on the dips.

,

GOLD & MINERS – 

Gold and Miners continue to consolidate sideways and defy logic  🙂   I mentioned that I didn’t think that the fact that we woke up & GOLD was up $14 Tuesday was  a reason to buy,  and I didn’t think Gold would close above $1235. You can see why ‘patience is a virtue’, but also difficult.  WHAT will the FED do?

Today the FED MINUTES are released.  The FED has caused a bullish reaction in  Gold & Miners each time she has spoken lately.  I still have to ignore whatever happens in Gold / Miners with the FED MINUTES Wednesday.  Timing is not quite right for a break out and run higher, but it could break above the downtrend line and roll over to a DCL next week.  In other words, a continuation of a sideways consolidation.

.

I must admit that with Miners, I observe set ups that really look good.  Certain Miners ARE-STILL-NEAR-HIGHS!   Look at DRD, HMY, SA, SBGL,  etc etc 

.

SA has run to former recent highs again.  Can a run to former highs fail?  Yes, remeber last Januarys double top as Miners dipped into their ICL.  We’ll have to see what the FED can do.

So we have a FED WEDNESDAY ,  and as usual,   anything  ( or MANY THINGS) can happen. In the past,  we have had our expectations in place and even when FED releases caused a POP in MIners or a “reaction” in some way,  we still got what we expected.  So even if we see a day or two of added volatility I have to expect a Daily Cycle low in the next week or two in Gold.

.

Review:   Do you remember the FED LUNCHEON last Tuesday, when we expected MINERS & GOLD to start dropping into a DCL?  MINERS SURGED HIGHER on that Fed Tuesday,  but dropped shortly after.   See that day in  the GDX chart below.  I still have to expect lower miners prices time wise, despite the Fed reaction today.  I do admit that this chart looks rather strong and healthy so far.

.

SO 2 p.m. Eastern Time ‘FED MINUTES’ may cause a reaction in various ways, but will they have any follow through tomorrow? We do have our basic expectations in place, and we will see how things look after we are fully Fed at the end of the day.

.

~ALEX

Bill ,  I hope you held your SRPT,  it looks good in pre-market up $1.50!  🙂