February 22 – No Straight Path

SPX – REMINDER:  2 weeks ago I showed how the Markets can base build after such a sharp drop & added volatility.  I mentioned that they may  drop to the 200sma in an  A-B-C type drop and then even go sideways.  SPX actually did drop to that 200sma after I posted this ,  so this may be base building.  See the next chart…

SPX – So far, the above pattern is playing out. Drop to the 200sma and now we wait and see.

I will be on the road for a few hrs this morning, so I am releasing this without a proof read.  Please ignore any typos.

The markets were very volatile after the release of the Fed minutes yesterday.  With that knee jerk reaction  and then an opposite end of the day reaction,  it left behind a very mixed picture for out Thursday trading.  Let’s take a look at the various markets with that ‘FED MINUTES’ reaction to see where we are.

DJIA 5 minute chart – We saw the Dow rising up over 100 points during the day,  then when the  Fed minutes were released,  it rallies up another 100 points.  Very shortly after that rally, it sells off from 25, 267 down to 24, 792.  The ‘rally’ and then ‘the sell off into the close’ leaves things a bit confusing….

DJIA DAY 7 – As you can see on the daily chart, the Dow ran to the 50sma, and turned down dropping to the 10sma. The MACD looks weak, and the RSI 50% was rejected. This  also may be base building.

SPX – You can see resistance at the 50sma so far and a reversal in that area.   Again, we may be building a base.

USO FOR OIL –  Not much has changed with Oil. It still may be early to short it, but we also see short term weakness in the RSI & MACD.

USD DAILY – If you watched the USD, it sold off after Fed minutes and Gold, Silver, and Miners put in what looked to be a convincing  rally. By the end of the day,  Precious metals sold off sharply and the USD closed higher, above the 10sma.  Now the USD looks bullish.  See the chart.

USD WEEKLY – If it closes above the 10 Weekly MA, that new low Tuesday could be that ICL. We wont know for a while.

GOLD INTRADAY – After the FED RELEASE,  Gold rallied sharply, and miners did too for 1/2 hr.   In real time it looked very convincing, but then it rolled over and sold off almost straight down for the rest of the day as seen here.  $1336 to $1323 is ugly real time.  Look at that chart, THAT is acting unpredictably.

GOLD – So Gold daily now looks like a double top.

GDXJ –  SO here is a 5 minute chart of GDXJ yesterday.  After the Fed minutes there was a very strong POP in miners for 1/2 hr.  By 2:30 P.M., it looked like a very strong rally was in place, and a possible bull flag. This looked quite encouraging!

GDXJ – And this is how it ended, selling off relentlessly.  So far, the rallies can’t be trusted.  Lets go to the daily chart.

GDX –  So this chart gives mixed signals now.  That was a buy-able strong reversal higher,  and the drop is on lighter volume than the rally.  The drop is only 61.8% retrace,  however the rallies have not been enjoying follow through.  We are under the 10sma and I am much lighter with my leverage now due to being stopped out on 1/2 of the JNUG that I bought around $12.   Before jumping back in, I am going to watch how this plays out.

Just a sidenote on GDX –  When I look at the SELL OFF in Miners in DEC compared to the sell off into February, the one in Feb still looks far greater than the Dec selling, and looks more like an ICL type sell off.

GDX –  I was noticing that the MAY 2017 ‘Failure’ reversed, rallied , and went stagnant for weeks, but those lows were not taken out. I’m wondering if this is just going to go sideways until the USD rolls over?

Did you see that intraday action? If you worked all day away from the screens, you may not have even realized how the day went looking at a daily chart,  but real time that kind of indecision and volatility is difficult to digest and understand.

So at this point, I am getting mixed signals where the volatility in the markets is causing them to ‘react’  or even ‘overreact’  to every news flash.  If GDX or GDXJ were to just continue sideways like the above weekly chart, 3x etfs can decay.   In addition to that, I knew that I will be away for a small portion of the morning, so I felt it best to reduce my leverage further.   For now, I am not adding anything until I get a little more clarity,  but I am still holding HMY, AUMN, SVBL, THM, and a smaller position  of leverage. I also still have positions in other sectors, such as ENPH, GGB, EDXC, POTN, and SPRWF.

Lately, due to added volatility,  my trading style has been to simply cut leverage when too much uncertainty pops up or reasonable ‘stops’ are triggered – I use mental stops. I locked in profits for now and basically bought JNUG in the $11’s and $12 area (at an average of $12ish)  and sold out at only $13.65ish average.  I missed getting out at the top of the recent run and  realize that that may not be the top, but circumstances have been much like the Theme Picture of this report.  Usually you can buy a low and hold for weeks, and those days will return, but for now I will take what I can get and play it a bit more safely, especially since I need to be away this morning. Enjoy your Thursday trading!

~ALEX

Again,  This GDX intraday chart looked fine, this rally after the Fed Meeting seemed to be the follow through expected…

And then this sell off was just ridiculous, but you have to take what the market gives you and go from there, so…

JDST –  I didn’t buy it, but I was looking at JDST & DUST into the close and they rallied the way  JNUG sold off.  Straight up into the close.  Even though GDX and GDXJ  daily charts do not outwardly look ‘bearish’, these do look rather bullish, though still trading  below the 50sma.

Just another set of things to watch as we go forward today.