June 9 Weekend Report

 

SPX – From Fridays report,  this shows that the SPX could be forming a megaphone  pattern as it sat around the 50sma.

SPX –  Friday the SPX moved higher off of the 50sma, but has a new daily cycle started 6 days ago?

This is what I would look for going forward…

Watch for a break above that 10sma and that trend line drawn on the chart above. A break above those should indicate that the SPX has a dcl in place a few days ago, however…

 

NASDAQ – The NASDAQ has been a bit weaker, breaking below the 50sma and closing there for days.  We have discussed that we are overdue for an ICL , and that could be what is developing here. This could be a back test and then a drop…

NASDAQ – I posted one of these last week too, showing that The Weekly chart of the NASDAQ shows that it could easily drop more than many expect.

USD –  The USD has just been weak.  Week after week it has bounced under and closed under the 10ma on a weekly chart.  It too is due for a Low & a bounce, but it cannot muster the bulls to step in yet.

 

WTIC DAILY–  Oil looked good coming out of the lows with 8 straight days of Buying.  Now suddenly it is already sending out a warning as of Friday.  Please read the chart…

WTIC WEEKLY– So the weekly closed down and took back more than 1/2 of that 8 straight days higher.  That is a warning too. It is oversold, but it can get very oversold if the bears gain control and so far it is heading in that direction once again.  This looks ready to drop again.

XLE  –  I noticed a break out in March and bought energy stocks. I Made some money, got stopped out on others for a loss, and haven’t touched this sector since, because this has been a long downward sell off.  Lower highs , lower lows.

 

LAST WEEK, I THOUGHT WE WERE FINALLY ABOUT TO BREAK OUT AGAIN–  so I mentioned that to prepare readers here that we may get ready to possibly buy. well, the XLE slammed to new lows and recovered Friday, but I cannot tell if this is a real low or not yet,  so I will remain patient.  Some of my indicators are saying that a low is forming, but that needs to be proven.

XLE – At this point,  XLE WEEKLY remains in a downtrend for sure. Notice that it is quite oversold for a weekly chart though.

NATGAS – NATGAS broke down at the end of May and it has not been able to recover on its bounce. This is a bearish looking chart and could drop pretty good if the H&S plays out. SO far, the neckline is not broken, so it is semi-neutral , but closed near the lows last week…

Reminder: Do you  remember the XLF & all of the Bank stocks H&S?

They all negated the H&S pattern with a break higher, so shorting it before the break down is risky. We should consider the NATGAS chart the same way.  I’m waiting to see if it breaks down or not.

From way back on June 9th – The H&S was possibly forming after that break down, but here we are a 1 month later on July 9th and price has gone sideways.  Shorting with leverage would not be working out here. I’d wait for confirmation if shorting is what you are looking to do.

STEEL – I mentioned that I thought that STEEL was bottoming a few weeks ago on June 10…

 

STEEL UPDATE – Steel itself has held these lows and still looks fine…

 

STLD –  This steel stock has put in a long consolidation and remains bullish.

 

AKS– AKS broke down and tried to recover on Friday, but came up a little short.  It did sell down a little each day last week, so it now needs to be monitored if you own it. A stop under the 50sma may have stopped you out. We’ll see if it can push higher- if not, it may be experiencing some sort of  trouble.

AKS WKLY– The weekly chart shows 1 bad week last week. $5.60 could be a stop, but you really want to see the weekly price back above the $6 area.

X–  This one actually has been pushing on the 200 ma on a weekly basis. It remains oversold and hopefully can push higher next week. Steel itself still looks good, so I don’t think that this is a bear flag for that reason, but if you own it, do not let it get away from you if it starts selling off.

 

PRECIOUS METALS ( & The YEN)

 

 

YEN– The Yen started to break down last week, and I would expect Gold to be doing the same.

 

GOLD – I discussed a break down in Gold & a possible bounce that Should NOT be bought, since it Could be a bear flag & back test.

 

GOLD – JULY 6th- I pointed out the same Bear flag with an early cycle count on day 10.  More downside expected.    I feel that this cycle count is correct,  with a DCL recently on day 30 ( If not, that would be day 41 on Friday).   If this count is correct & we dropped from here,  I would NOT be buying on day 11 ( Friday) 12 ( Monday) or onward,  I would be patient and watch this play out. We could drop into Day 20-30.

 

GOLD – So Friday GOLD did sell off sharply from that bear flag. Gold closed below the blue line  ( 200sma) last Tuesday.   Please read the chart. Day 11 or day 41.  I have to encourage my readers to be patient and wait for a confirmed swing low before going long.

 

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IF you like the prices of Miners now , and are really excited about buying them, imagine if they even get cheaper?  This could happen next week.

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GOLD WEEKLY –  SO I admit that in Jan, March, And May you see a similar  1 week slam down in Gold  ( Similar to last weeks).  That was the lows on the following week.  This does look different to me, so we may see follow through next week.  I recommend patience.

 

PERSPECTIVE

 

Is the C.O.T. improving?  Yes it is.  Is it better than the Dec 2016 ICL?  Yes, it actually is as of this last Tuesday.  Friday Gold dropped even further, so the COT likely improved. In the past I have emphasized not using the COT to trade, jump in early, gauge that selling will stop, etc,  so lets examine the current situation.

COT-  YES, this is showing that Smart money is now even LESS SHORT than in the last  ICL of DEC 2016, and that is Bullish.  ( SEE THE CHART NOW) . This is very encouraging & it does alert us to the idea that this drop may be an ICL drop and a great buying opportunity is coming,  but I still encourage waiting for more evidence…

GOLD – Please notice how this COT chart of the Dec 2015 ICL was looking.  Smart Money was still A LOT less short than now. So they can do better than the current short /long set up as Gold sells down more.  Patience is the best play here.

 

 

GDX –  From June 29 – will GDX continue lower?  I thought so here.  I drew a quick flash break down below May lows  & then a strong rally as a possibility.

 

Let me point out something else that stands out to me…

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GDX & GOLD – Currently Miners do not seem to be selling off as sharply as Gold.  SOME MINERS  are even holding up much better than Gold & Silver, as pointed out in prior reports.    Lets Look at GOLDS daily chart again below –  do you see 5 weeks of selling down in Gold here?  2 strong down days last week under the 200sma?   Yes you do.

DO you see 5 weeks of selling down here on Golds weekly chart, with a big drop last week?  Yes,  you do.

In GDX-  The selling down in GDX does not really seem to be selling down as steeply as we see in Gold & Silver.

GDX DAILY – Some of those down days are very small candles and price has remained sideways inside of this consolidation.  So far that is bullish for Miners, but it isn’t quite time to buy safely yet.

GDX –  I do see a break down here in the GDX trend line and near the 200sma, so we remain cautious for safety.   GDX could sell off more quickly once it closes below the 200sma for a day or 2.

I believe that the coming rally out of an ICL in Gold, Silver, and Miners will give us a great set up to make some really good trades and some really good money.   For that reason,  I may just patiently wait for those lows to be in place,  instead of trying to short this down, and then go long.

GDX WKLY –  If we are on day 11,  I have drawn a quick 1 or 2 week drop ( milder view) compared to GOLDs possible drop. Time will tell.

So basically,  Gold has been selling off for weeks and it really picked up last week.  It has broken below the 200sma and may drop further.  Is it on Day 12 Monday?  Or is it Day 42 and a low is very close as a result? It is a tough call when Triangles are involved, and the Miners remain minimally damaged around the triangle at this point.

THAT SAID, you can see why I am just patiently going to allow these precious metals markets to tell me what is going on at this point. Again, the C.O.T. is more and more Bullish as of last Tuesday, and Gold sold off another $14 or so Friday before bouncing,  so the Smart Money likely closed even more of their shorts.  With the cycle count on either day 11 or 41,  we will know this week where we stand.

 

The Good News? We are getting close.  🙂   We’ll see what Sunday night and Monday bring to the table. Enjoy the rest of your weekend!

 

~ALEX

 

 

TGB –  I still like this set up from June 28th, and believe it or not,  Price closed up 7% at $1.26  ( Same as it was on this chart).

 

TGB – A different view, a large Inverse H&S with a MINI Inverse H&S – it remains a bullish set up.