Tuesday June 19th

Storms in the Market futures and storms in New England.  Due to powerful storms that rolled through last night, we lost Electricity and the Internet until this morning, so I got up at 4 a.m. to put this report together, I’m sorry if it is later than you expected.  I always try to at least get the report out by Market open, but I prefer to give you a lot more time to digest it by releasing early.  The weekend report Covered Gold extensively and really nothing has changed from there, so please refer to the weekend report again for Miners, if needed.

 

SPX –  This is a wedge that should break down, because we are due for a dcl. I’m watching the 50sma, it acted as support and resistance in April/May.  This could become a BUY, but it would be best to wait for a swing low .  EDIT: The Futures as of 6:00 Eastern actually have SPX down 30, but that is still well above the 50sma,

 

VIX -The VIX looks rather bullish, so as the General Markets drop, we want to watch a multitude of things to see if the drop remains a bullish pull back ( Buy opportunity). So far, as noted in the weekend report,  the General Markets have been bullish.

 

QQQ – Another wedge that should break down. The 50sma for QQQ is 167.27,  but the 50sma has NOT acted as support recently, so we will watch the drop as it unfolds.

 

WTIC  – That was a big reversal in Oil yesterday, but I actually expected further downside, and I have mentioned that a tag of the 200sma seemed likely, so this MIGHT become a L.T. daily cycle & drop to that 200sma.   I mentioned in the comments yesterday that Day 41 may have been a dcl, but the trend line was never broken for confirmation and then OIL dropped sharply, so is this day 49 or is this a failing daily cycle from day 41?  It remains unclear.   I expected a tag of the 50sma and then maybe a drop to the 200sma, so I didn’t buy Oil at day 41.   Note:  Oil inventory is tomorrow.  What about ENERGY STOCKS for a clue ?

 

XLE- This looks bullish, but the MACD doesn’t (yet) & stochastics is NOT oversold yet.  That is a mixed picture too, seeming to indicate more OIL downside eventually.    I would say that as a short term trader, I could buy this for a short term trade, until I see if it can grow into a longer term trade, because XLE is NOT dropping as sharply as Oil.  It did remain Bullish here with higher lows as oil dropped.

WTI – This is an Energy stock that looks quite Bullish. It is a buy, but because of Oils uncertainty, a Stop MUST BE USED, maybe under the 50sma.

 

 

OAS  – This COULD move higher, but also looks like a possible H&S with a falling MACD.  It has held up well during Oils drop, but it could continue to go sideways and tag that 50sma over time too, right?

 

WPX – This also has held up well during Oils drop, but it also has a weak MACD .  You can see in the past that even though WPX is a long term bullish stock, it has doubled in 1 year. That said, it also gets very choppy in consolidation / sideways periods, so if Oil drops, this may continue sideways too.

So Oil & Energy had reversals, and Oils timing seems good for a low, but it may be dropping further over time, we’ll know better from the way it rises out of these lows.  As for Energy stocks, they look good, but are also in small consolidations.

.

GOLD HRLY CHART–  I used this chart  in the weekend report to show ONE THING that I wanted to watch with Gold. I said that in MAY after a big drop, we saw sideways chop, and I copied it to the place where we are currently after Fridays drop.

 

GOLD HRLY CHART– This is that area after Monday and into this morning near 4 a.m. Eastern. It looks like it wants to attack the recent lows, and that is ok. I’ll explain later…

 

GOLD HRLY CHART – So back to MAY, you see that it chopped along and did gradually make lower lows, lower highs, lower lows, and so on, until a drop to a final low & small rally took place.  My  ONLY POINT HERE is not to be surprised if GOLD makes a lower low.  I HOPE IT DOES, and the reason for that is discussed next.

GOLD SWINGS  – We need to really rise a lot higher above Fridays highs, to get a swing low currently. I’d like a new low, and then rise above that days high for a swig low and then the 10sma & trend line, to ease the parameters for a swing low in Gold.   NOTE: MAY had a swing low, but it turned out NOT to be the ICL. I tried to be Very careful not to encourage people to “go all in” at that low, and I certainly did NOT go all in.  It became just be a dcl in May.   last Fridays report I did say that it looked as though it could be an ICL since it held up after FOMC & ECB, but then it dropped, so let me show you 1 more thing…

 

GOLD SWINGS – This shows last JULYs ICL.   Look how many ‘False lows” formed.  There are 2 ways to look at this –

1. The  “I want to be cautious now” view, and the

2,  “ I’ll be OK over time anyway” View.  Lets discuss that further …

.

 

GOLD SWINGS –  The  “I WANT TO BE CAUTIOUS” view   means not hurrying to buy every bounce like Mondays bounce.  Why?  In July as an example, each bounce looking like a low did not prove to be the ICL in July, and THAT CAN BE FRUSTRATING if you are stopped out again & again. We could see that now…

GOLD SWINGS – The “I’ll BE O.K. OVER TIME ANYWAY” View means that we are very close to an ICL timing-wise, and buying any of those lows did eventually recover.  Honestly though, THIS IS MENTALLY EXHAUSTING IN REAL TIME.  Each of those following drops were large, right?  Drop, bounce, Drop, bounce, etc.   And if you examine it, it was like watching Gold drop BIG once a week all through June.  IF THAT HAPPENS NOW, and our ICL is in July-  do you want to hold through that?  It can become very uncomfortable.

I do own a small leveraged position right now, along with EXK, FSM, AUY, but it is Very small and price is still in my buy area. That position is actually green as of Monday.  Looking at last June and that DROP-DROP-DROP, I may decide not to hold that small JNUG position , but I will probably hold EXK, FSM.  It is usually best to wait for the SWING LOW CONFIRMED to get leveraged, because this sector can drop sharply.

 

.

GOLD-  I still would expect GOLD to bottom before $1238.30, and I have actually mentioned $1250 ish from way back in May, but only time will tell.  The important thing?  WE ARE 6 months from Dec 2017 ICL, and we are DUE ANYTIME NOW into early JULY.  Look at past ICLS on this chart. They were actually all V-Bottoms, which are  sharp drops and sharp rallies.  We could still drop & then Rally sharply soon.

 

GDX – And this is why it may just be best for me to close my leveraged position. YES, we can just break higher & rally from here, but we also can drop quickly and v-bottom here too. YES, I could ride out a drop and add down there and be fine too but timing wise, it feels like the GDX / GDXJ daily cycles are coming to their end.  Miners resisted Golds drop so far, but they are due for a dcl too.

I can own either situation and make good money on the rally phase, but it may be best to exit until a low is in and then buy the rally leveraged when the rally starts.

.

 Not much changed in the charts from the weekend report Monday, but the futures are hinting at the break down of the rising wedges in General Markets as the daily cycles get older.  These may turn into buying opportunities, but I would be patient and allow things to set up.   Many stocks have had nice runs, and you may be able to get in at lower prices.   Did you miss AMD, TWTR, CY, CREE, SQ, etc etc ?   They may be going on sale.

 We’ll also see what happens in the Precious Metals and Energy sector today.   WE ARE CLOSE TO AN ICL IN GOLD.  I DONT THINK I HAVE EVER SEEN MORE THAN A 7 MONTH GAP BETWEEN ICLS, and we still have a series of higher lows at this point.  that makes Gold Bullish longer term.

.

Enjoy your Tuesday trading!

.

~ALEX

 

.

In a prior report, I mentioned that some SHIPPERS have been running, and some have been basing out. Todays futures being down may affect this short term, but I grabbed these 2 charts yesterday and will point out the set ups.

 

NAT – Longer tern, this could really have good upside and it began breaking from this base ( up 21%) yesterday. If it stalls due to market conditions , you may want to look to buy a pull back.

 

NM – I actually mentioned this one in that report, but it wasn’t done basing.  It has been slowly climbing, and could POP & RUN with that sector at any time. It looks to be popping lately, so I thought that I would add it to the report.   I was going to add charts of TOO, SBLK, FRO, DRYS, TNK, DCIX, DSX etc-  but with the power outage, I do not have time.  You can look those up on your own- to get a feel for this sector.  TOO, DCIX really looked good yesterday too.