May 15 Weekend Report

While looking at a variety of charts for the weekend report, I started to see things give us some mixed signals about he health of various sectors.  With that in mind I wanted to do something just a little different for this report.

.

I wanted to just take a fresh unbiased look at these charts and say to myself, “If I didn’t own a position in this area, would I view this as Bullish and want to Buy? Or would I view this as Bearish and avoid it?”  At times when you own a position, the bias is simply trying to justify why we might be holding a position. This rather neutral view may be helpful at this time.  I am getting mixed signals at this point.

.

SPX- I have been waiting for a second run higher, possibly breaking to new highs, because CYCLES seem to indicate that the first daily cycle is very very extended.  That said,  this weekly chart could be viewed as 50/50.  I see price rejected at the highs again, but that would just be the first daily cycle peak. Another push higher COULD break out to new highs. It is overbought, but it can stay that way.  Notice the little candle in the red circle.  We saw that before a plunge last time, but it was also in the 3rd daily cycle. 

.

This wkly chart would have me neutral, or with a stop below that 50 ma.

SPX DAILY –  This chart would have me feeling bearish. A drop to the 200sma looks likely.

The CPCE is closer to where bottoms took place and not tops

VIX –  The VIX looks bullish and that would be bearish for the markets.  Maybe that H&S on the SPX plays out,  and the vix moves to 20 , like it did in November.

NASDAQ –  The NASDAQ just looks weak and as though it is struggling.  It is not near former May 2015 highs like the SPX is.  The NASDAQ looks bearish to me.

IWM WEEKLY-  The Russell 2000 had a nice rally out of the lows, but is dealing with strong resistance from the price action in from Aug to Dec last year.  This chart is neutral and pretty much needs to prove itself. 

IWM DAILY – This looks bearish and is showing weakness.

BKX –  This is the Banking index.  It has been recovering since February and it sits on support in the form of a trend line and the 50sma. 

IBB – The IBB had that false break out from a base and has been  dead money if someone has been holding a position. As mentioned in a prior report,  this chart no longer interests me , until it proves itself. It could remain inside that base or even break down with that MACD failing like that.

.

So overall , the above General Markets and various sectors are neutral to bearish until they show a sign of strength. Cycle count would indicate that a push higher should be coming, but lately I have found ‘cycles’ alone have been difficult to read and pretty much useless in Precious Metals.  Now we see in the  SPX that the first daily cycle is supposedly as long as 2 daily cycles,  stretching out?  Cycles are being altered by forces within the markets. The charts are becoming  bearish in several ways until they show signs of strength. 

.

The USD WEEKLY  –  The dollar should have put in an ICL I believe,  but it still looks like a top in the big picture.

.

WTIC – I have liked OIL and Energy since calling the lows at $26.

CRB WKLY –  The CRB has been acting correctly and looks bullish long term.  I had a 190 target from long ago and then it could stall a bit.   

When it comes to some of our Metals stocks like CLF, FCX, AA, VALE, ETC. They have had a couple of strong moves higher in their efforts to recover from a bear market type sell off. This is what can happen in the process.

.

Because I think that we may be looking at a 3rd daily cycle here in the CRB, some stocks might not be as strong as they were during the  first couple of legs higher.  I tend to feel that the rally wont be to new highs. We could get a rally of sorts for 2 weeks ( 10 trading days = just a guess) and then temporary top & drop or move sideways to down.  The CRB is made up of a variety of ‘things’, and base metals could move on their own.

.

IF we remain in a bull market, and I do think that the CRBs lows are in, the 3rd daily cycle starts to re-set sentiment from strongly bullish to negative.  With recent price action people become less bullish, they get bored and frustrated when the gains arent as good as the first 2 runs higher. They  may eventually even start to short them.  In time we get  a new ICL and shorts are forced to cover , which then starts another upside strong run again.

CLF EXAMPLE:  This could go sideways rather than just take off higher, but it is oversold and at support,  testing the 200sma and a trend line. So I would watch and see if it can break strongly above the 50sma again, or will it struggle?

.

REMINDER:

We all remember that I was watching Gartman with Oil.  It seems like certain people like to makes these Bold Predictions to draw attention to themselves.  They never mention it again when they fail.    Some use Gartman as a contrary indicator.   I was calling for Oil to go to $50 & Higher in time,  he was saying that it will NEVER trade over $44 in his lifetime. This was his OIL prediction, and OIL trades at $47 currently. 

SO we have been waiting for GOLD to start a pull back.  Does this mean that it finally will?  Gartman is now Bullish on Gold ( After it rallied relentlessly from December to May). Maybe that means we get a May pullback into a summer low? 🙂

.

GOLD WEEKLY – This long term chart just shows that Gold is at resistance and so we see a sideways struggle lately. In the past it has pulled back to the blue line.  Notice how it rode the 50 ma in the bull market, it became resistance for the past 3 yrs. It could drop there if we get our pullback, but this is a bullish looking chart.  If this did a mid point sideways move and ran higher with a bigger correction coming later,  I would not be surprised. 

GOLD WKLY –

GOLD DAILY -So far price is capped under the trend line shown ( $1285ish), the MACD shows that momentum is falling. A pullback into the summer months would be perfect.

GDX –  The Miners have had a very bullish push higher.  They have run up, consolidated, run higher again, and are consolidating. This is a very bullish looking chart showing that the lows in Miners are in place. Longer term holders and Core positions have been rewarding this year.  We are waiting for a low risk entry / pull back to re-position. 

I’m sorry this is a little later than usual this morning.  I collected charts this weekend, but still had to write this report up,  and  I’m feeling a bit under the weather on this Monday. I am personally still in IPI & HBM and Energy stocks like BTE, BCEI, CWEI, LGCY , and I added back to my CLF position (  Not as much).  As I looked at charts this weekend, it does give a bit of a mixed picture in the General markets as shown above. The OIL and CRB charts still look healthy, and what can I say about GOLD , SILVER , and Miners that hasn’t been said already. I stopped trading Miners with the USD recent strength,  and I am hoping for a pull back to gain a low risk entry.  That run was excellent and even catching the first half was excellent as stocks doubled and tripled right out of the lows into March/April. Now some have even doubled from the March prices.  A pullback into June or July would offer a nice entry, so I am remaining patient before adding any longer term positions in Miners.

Lets see what Monday brings for our Energy and Commodity positions, and see if the other sectors give us further clues to their future price direction.  Have a good Monday!

.

~ALEX