Not Quite Finished Yet

The Markets continue moving along, but in some cases we are not quite where we wand to be yet. Lets review…

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This was the SPX in Thursday mornings report.

Now lets look at the Big Picture as of Fridays close

SPX MONTHLY –  The Monthly is still making progress and only 1/2 complete. I mentioned the Quarterly bullish chart at the weekend report for the end of March, so this is looking at follow through. 

SPX WKLY – This is an unfinished picture. If we just go sideways for weeks, the energy could deplete. If we surge higher, we’re seeing a possible break free from the rounding top scenario. We see a rounding top formation, but that will be done away with if the markets can continue higher. Note the Pink trend line too. The markets are overbought, but they can stay that way, we need to see how things play out. The old saying used to be “Sell in May and go away”.

At the end of 2015, I called for a market drop or crash.   I mentioned recently that many things that I had pointed out in my December reports as bearish   ( HYG, JNK, BKX, RUT, TRANNIES, Bear Wedges,  etc  )  have improved after that drop and the recent rally.  Lets continue to monitor things now.

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BKX – My Jan chart showed am important green trend line. Price would need to hold $60, but it didn’t.

Feb 16 – Then I noticed a possible completion of the drop in a 1-2-3-4-5 move, after breaking the $60 & recovering.

BKX 2 months later – So we see the BKX near 67, even recovering the red line break down. Charts of Banks look good, as mentioned in last weeks report. The big picture remains unfinished, but we’ve seen improvement as time moved forward.  This is rather neutral.

BKX WKLY –  One bearish thing would be if the Banks lose some steam as time goes on, this is possibly  a bear wedge forming.  ( “Sell in May and go away?”) .

TRAN WKLY – Again we see improvement in the TRANNIES, but the BIG picture is unclear. This does have more of a bullish look to it, but it is NOT back  near its highs like the SPX is.. 

RUT— Also needs more time. Look at this chart.  Did you notice that price has actually been here for 2 years.

SUMMARY:  I show these views to track the future possibilities. In the recent bull market run, the SPX NEEDED a 10% correction or more to change sentiment and slow things down.  The above charts all show that we got a good correction in the first 3 months of 2016.  Now we need to continue to monitor if we are going to continue the bull and break to new highs?  Or will the markets roll over? There are theories as to how the markets act during an election year, or we also have the saying-   “So goes January, So goes the markets” for that year.  These sayings are based on historical performance, so we do keep them in mind, but the markets can do anything.  At this point I would NOT being shorting the market.  

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The Dollar looks ready to rally, that may affect things too. The markets were able to run higher last year when the dollar rallied, Gold struggled.

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OIL April 15-  For the first time in years, Oil closed above the 200sma and it remained above the 200 sma all week.  friday was day 8 of this daily cycle.  We still have a gap below that may want to fill.   I’m watching the 50sma and 10 sma for short term support.   This weekend was the big meeting for Oil, and Oil is selling off on Sunday night to $39.   The divergence warns of weakness, watch the GAP, and then the 50sma.  Also remember that when OIL sold off for 9 days in a row, some Energy stocks held up. We’ll watch for that.

OIL WKLY –  I do not want Oil to fall below $36.50 on a wkly close.  It is basically the 50sma on a daily. I also would rather that it holds the 200 sma on a daily, but a quick drop & gap fill and recovery all in 1 week on the above chart would work too.

XLE WKLY –  The XLE never dropped to the lower trend line.  It remains a bullish set up, but I do hate climbing on lighter and lighter volume.

OIL and therefore ENERGY are early in their daily cycles, so I expect more upside.  Individual companies  can be risky, so I have suggested smaller positions and a small basket if possible, or you can use ETFs,  unless you have done your due diligence and are confident in the fundamentals of the company.  I have posted charts of Energy companies that are acting very well.  See last Fridays report.

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SO MANY of our Commodity stocks charts that were mentioned here (  CLF, VALE, AA, AKS, CENX, SID, STLD, ZEUS, ETC. ) are bullishly set up and some wont pull back when we want them too, so keep that in mind as we look at the CRB.

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CRB – It looks good holding the 10 ma on a wkly basis. 

CRB DAILY – I posted this chart showing ‘gaps’ . We did ‘hook’ down and fill the top gap at 172.35 on day 8. It could drop further or that may be enough,  the picture is unfinished,  but many here want to buy a pullback, so we’ll keep an eye on it.

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Sidenote:  See prior reports at the end of last week.   We are waiting for a pullback in some commodity stocks like VALE and CLF, yet others like CENX and AA may be nearing a point where they break from their recent consolidations.

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GOLD, SILVER , & MINERS

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SO MUCH TO SAY. 

I’ve called for a pullback in Gold, and we actually have been getting one, but it is more of a slow motion sideways move for 2 month! 

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GOLD #1 – You can see that sideways move here (and my expectations).   This was GOLD April 14th.  PLEASE NOTE the 200sma and the FIB #’s as possible targets. If  we are patient, we may have a good entry point coming up in the near future. NOTE ALSO that the 200sma is turning up ;).   By May the 200sma  could be closer to the 50% FIb.

Weak MACD and Overbought.

As this pullback has taken place,  Miners ( especially individual ones) have done their own thing.  Some still breaking out higher to new highs. Anyone who owns a core position has been very happy.  Anyone  waiting for a pullback to buy are not happy.

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So this was GDX April 13 –  now a pullback,  since Gold has been?

This was GDX Friday, it did pullback for 2 days, but as of Friday it still looks bullish – ugh.

GDX – This Friday shot looks a bit more like it might be topping after falling back down to 1 support level that formerly acted as resistance.  It is overbought and shows weakness in the MACD and other areas. 

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 SO I AM STILL THINKING THAT THIS PULLBACK,

THIS SELLING, IS STILL NOT QUITE FINISHED.

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If we are on Day 10 of Golds Daily Cycle  ( And I cant exactly tell where we are with such a strong sideways move, but it looks like 10 or 13), we have another 2 weeks of possible downside. It can pick up or escalate as the selling takes hold, or it can keep going sideways under accumulation. Either way, a buying opportunity for the next INTERMEDIATE CYCLE should be nearing.

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GOLD #2 as of Friday – I mentioned this before and it is still remaining a possibility.  A sideways chop , POP & DROP, could continue as time goes on, relieving overbought.  It would be just a back test. No MAJOR deep pullback.

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AND MINERS?  –   Yes, they too may just Chop , POP & DROP , in a sideways consolidation move.  That is what we are seeing so far.  Look at the XAU in 1993 coming out of a low. I have shown this before to point out such sideways consolidations. For 6 months out of the lows, it was choppy & sideways and gradually higher and higher.  It actually ran higher for 8- 9 months before a significant looking drop back to the 200sma.

The above chart is why I mentioned months ago in JAN and FEB, that if you are going to start a core position,   you may want to only ‘partially’ sell on the way up and hold some for longer term.

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  I pointed out in January  that some Miners bottomed LONG AGO.  They bottomed YEARS AGO.  I showed NG, RIC, LSG ( Now purchased by TAHO), and a few others.  Huge bases were already in place and the lows were never revisited, so I said that they could be safe to buy & hold as core positions if things remain bullish.  They have remained Very Bullish so far  🙂

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   So for some of the newer readers:  At this point,  I want to revisit those charts from Jan again, and maybe a few new ones, and again discuss this idea of a core position.  That idea was based on certain Miners looking like they already bottomed …

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RIC – Actually bottomed in 2013. A Huge base was forming.

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NG – Bottomed 2013 & was breaking out already.

BAA– Bottomed in 2014& formed another base.

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 Then I had been pointing out the various buys in TGD from 10cents, then 12& 13 cents to add, and onward.

TGD even got to 23 cents,  yet a run to 30 cents was still 25%.  This was becoming a good candidate for a core position too. It was acting strongly, that 50sma was rising.

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TGD is NOW at 32 cents.  It did pop from that 23 cents to 27 cents, but then dropped. I sold that large drop and it dropped to the 50sma near 21 cents and recovered. It then moved higher for the last 2 weeks, and Broke higher on strong volume. It is now 32 cents.  These Juniors are acting strongly and possibly being accumulated.   As a ‘trader” I bought the large volume break above the trend line higher , so I ended up re-buying TGD higher than where I sold it.  Oh Well. Lets step back and look at TGD’s Big Picture.

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TGD – Again , have we re-entered the BULL market? After looking at some of the long term weekly charts,  I see real nice potential for core positions.  I love this set up longer term. A CORE position in TGD could pay off nicely over time, whether you bought it at 10cents, 13 cents, 20 cents, maybe even 50 cents in the future.

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I grabbed this weekly chart on April 11 for a friend. We are expecting a pullback in Gold & miners, but look how bullish these juniors were set up . I mentioned 2 Fridays ago a possible theory that since GOLD BOTTOMED DEC 3, And MINERS Bottomed over a month later in Mid January, Miners could still run higher before their next correction.    So again, as a ‘trader’ I bought the set ups in TGD and VGZ as short term trades  (and I missed AUMN and GSS) .  They all Popped and now some may just go to ‘core’ holdings.

So I just wanted to add 2 more of those LONG TERM charts again, to show that many Miners look to be bottoming for the next phase of this bull market.  A much stronger phase.   This way, whether this pull back ends  with a sideways move or  a good drop in the next couple of weeks, I think it will be a Great Buy!

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GSS Monthly is another great example- I missed this one recently. 13 cents to 74 cents.

GSS DAILY – Suddenly it is acting perfectly. It breaks from a base, goes sideways, runs higher, consolidates, runs higher and forms a large cup while Gold is due for a pullback. The last 10-15 days it almost doubled 🙂

Many of these weekly charts are acting like Long bases that could become very bullish.  These are low price stocks, but not Over the counter Bulletin Board stocks.   See 5 year weekly charts AUMN, MGN, XRA, and MGH.

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MGH – This is impressive and this is possibly the least impressive of the 4 mentioned above.

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 As you know,  in my reports I have been focusing on long ideas in Energy & Energy stocks, Biotech is still bullish as shown in Fridays report ( many may want to use more of the ETF s to avoid risk, traders can trade stocks mentioned here), and Commodities have been acting correctly as pointed out in last weeks report.   I will continue to look for low risk trade set ups and share them in the weekday reports.   I do still expect a pullback in Precious Metals. I’m only personally trading the set ups that I see using Technical analysis, but I cant recommend them here, since they are not low risk and need to be babysat with a pull back due in Gold. 

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I hope all had a great weekend, and now we can see what this coming week has in store.  I will discuss trades as they present themselves during the weekday reports. 

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~ALEX