How’s It Looking For Those Miners?
That theme picture seemed funny, because it seems like day after day the deterioration has been relentless in that sector. Actually, many Miners do not really look that bad, and I will point out a couple of Miners that are setting up rather nicely too. We’ll be discussing the General Markets , Oil, The USD , and Precious Metals for the final trading day of the week.
SPX – So the SPX is near the highs of January and we have resistance up here. We are coming due for a drop into a DCL, but this became a right translated daily cycle, so we can expect a drop and then a return to these levels. The channel has been a good guide for DCLs so far.
SPX – Stepping back, we see a bearish rising wedge. The Apex is actually about a week or two away, so this could go higher, but with the purple & blue line as resistance, it may get rather choppy and then drop.
SO IT’S A TRADERS PARADISE & A STOCK PICKERS DREAM DURING EARNINGS, ESPECIALLY IN TECH, BUT FOR LONGER TERM INVESTORS OF ETFs? ITS JUST ‘O.K.’ IT IS AN UPTREND, BUT TECH AND SMALL CAPS ARE WHERE IT HAS BEEN PROFITABLE. Check this out…
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DJIA – In 8 months the Dow was extremely choppy and hasn’t recovered to the Jan highs. This has been a lot of sideways choppiness for the investors of the DOW ( OR UDOW).
NYA- The NYSE is basically just as choppy. In 8 months the NYA has hardly even recovered.
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AND THEN WE HAVE THE TECH SECTOR
NASDAQ DAILY – The NASDAQ recovered Jan highs as quickly as March, but sold off and gave it all up again into April. It then went on to recover those march highs in June. As soon as it reached the highs, it dropped sharply in June, and then July, so it has Not always been an easy ride for the ETF holders ( TQQQ).
It can continue higher as drawn here, but I doubt it, since we are coming due for a DCL soon. I believe that June was a DCL, July was a 1/2 cycle low. If the next daily cycle forms as L.T., we could drop into an ICL, and you can see how sharply TECH can drop ( see Feb). Let’s discuss this…
NASDAQ DAILY – If you look at this chart, you see that the NAZ often sells off after breaking former highs, with a period of profit taking. Buying the dips works, not buying near the break out to new highs. MACD (Momentum) is waning a bit as we approach the highs again, similar to last March at the highs.
NASDAQ DAILY – In early March, notice how the run to new highs accelerated before falling apart? Could we see that now? It is possible, but I don’t know if that it is likely with that MACD already falling as price hits highs. Let’s look at the NDX…
NDX – NDX reversed into the close Thursday and ended up red on the day. The RSI looks to be weaker than the last time it was at these levels. When I look at NDX, I get cautious not giddy, but why?…
1. In the last 8 trading days, NDX has almost recovered what it lost in basically 3 days. Did you notice that a 3 day sell off erased 3 weeks of gains? Everyone is so Bullish, that no one seems to remember that sell off. Also…
2. Note that the June sell off to a dcl was also a 3 day slam down that erased the prior 3 weeks of gains. That’s how quickly these markets can change, when Big Boys take profits. This is why I keep saying to raise your stops and stay cautious. That is a DCL in June and a 1/2 cycle low in July. When a dcl comes due, the drop can be quick and it is coming due.
The NASDAQ. How soon we forget? See the chart…
1. In June – 3 quick days of Panic wiped out 3 weeks of gains.
2. In July – 2 panic days ( simply FB & NFLX earnings miss) wiped out 3 week of gains
3. On day 29 of this daily cycle, we will be coming due for a dcl. Just stay frosty. After that, we’ll watch for a L.T. or a R.T. Daily cycle, because the ICL is coming due too.
As mentioned : It has been a TRADERS / STOCK PICKERS MARKET
Many individual stocks have either had HUGE %-gains on an earnings beat, or they’ve been crushed in an earnings miss. How can a DCL come, with so many Bullish Earnings Beats?
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If you look at many of those the earnings ‘winners’, it seems that it has been just a temporary celebration. After earnings season ends, the Markets can drop on ‘News’, ‘Tweets’ , and so on. Let’s discuss…
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GOOG – GOOG Popped on great earnings, everyone praised GOOG as a superior company that you should buy now on CNBC, and then GOOG dropped & gave up the gains in the following week, but no one said a word. GOOG is great, but timing is key.
GPRO – GPRO got people excited too, but the gains evaporated so far, so now we can move on to the next earnings excitement.
ETSY – ETSY was exciting!! – for a day. Pop & Drop. ( I actually like this set up with a stop under the 50sma)
So what I am saying is that all of the ‘excitement’ of earnings, day after day on CNBC, is a tad misleading. It hasn’t been POP & RUN, POP & RUN, POP & RUN, Buy & Hold these leaders. It has been a ‘POP & DROP’ – Take the money / profit taking, etc. (Except AMZN 🙂
So all we hear is that stocks are exploding higher on earnings and its a raging bull market, but as you have seen, profit taking can come out of nowhere. Yes, the economy is great, firing on all cylinders, but when a DCL is due and the Big Boys lock in profit, a sharp 3 day drop can erase weeks of gain, so I just wanted to point this out to my readers.
SAIL – SAIL popped yesterday on earnings, but started to drop too. That is a dojji. Can it hold the gains, or will it be down in that GAP next week just like GPRO, due to profit taking?
KBSF – This one gapped open to $8! That was almost 60% gains instantly in premarket, and then it closed down and in the red. Down 72 cents.
For those that are ‘long’ since the dcl, One can continue to remain long and raise a stop along the way. Profit taking is normal after such a huge POP, and they could buy it back at support, but that can also lead to a drop into the next dcl. People forget how fast the NASDAQ can drop in just 3 days, so a stop is important.
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NASDAQ WEEKLY– I see a bearish rising wedge in the Bigger Picture, but the apex is a little further along. That said, a drop into a DCL can start at any time.
FOR NOW: It remains a day traders Paradise with the economy boosting earnings this season and many companies popping higher as a result.
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WTIC – so DWT & DRIP are working out.
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USD – From Aug 8, I did NOT want the highs taken out. So far it was L.T. with a peak on day 8.
USD – $95.44 was the prior high.
EDIT: As I proof read this morning, I see the USD at 96, but Gold still has not broken the lows. It’s good to see that Gold didn’t drop below recent lows while Gold broke recent highs.
USD – $95.49 highs on Thursday. Unless that was a dcl 11 days ago ( and I didn’t think that it was), this just became R.T. with the new highs. So basically it might roll over at resistance, but should come back to the trend line overhead again after the next dcl. SOMETIMES triangles and tight sideways moves act abnormally, but I actually did think that the USD was looking more bullish as time went on, so this is a conundrum. We’ll have to see if this affects Gold.
UUP – The Volume on UUP was weak, and that is good. Breaking out to new highs on 1/2 of the volume usually rolls over rather quickly, unless a surge of volume comes in the next day.
REMINDER: THE USD COT ( and Sentiment) IS EXTREMELY BULLISH , WHICH IS ACTUALLY BEARISH FOR THE USD
GOLD – Golds lows were not broken, but the trend line and 10sma above has not been broken and closed above either. That means that we do not have a ‘confirmed swing low’ yet.
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EDIT: As the USD broke to new highs, GOLD dropped but did not break the lows, this is a live Gold chart as of 7 a.m. Gold is now moving higher again so far. THAT IS GOOD NEWS, the recent low is still in place.
GDX – At 12 Eastern time, the 10sma was holding price back, so I captured this chart and posted it in the comments area midday. We would need it to run up into the close and not sell off.
GDX – The Miners tagged the 10sma and closed down again. It is amazing how it does this. Where does that leave us?
1. We still have an unconfirmed swing low until the day 28 lows are broken.
2. I mentioned a ‘buy signal’ in tech analysis, which is a last engulfing as seen on day 27, and you can buy a reversal on day 28, with a tight stop under the day 28 lows.
3. IF you bought that, you could just sell because of the failure of the 10sma, wait and see if the lows hold, or allow yourself to be stopped out if it breaks lows and buy then next swing low.
GDXJ – GDXJ also tagged the 10sma and dropped. That is why we usually wait for the ‘safer’ entry- buying a close over that 10sma with a stop. This is still an unconfirmed swing low, but a break under the day 28 lows continues the daily cycle count. Thursday was Day 29 or day 1.
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INDIVIDUAL MINERS
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HL WEEKLY – Hecla Popped over 10% on its earnings release, and closed up over 8% on the daily. That is encouraging. I noticed on the weekly chart that HL may have actually reversed right off of a supportive downtrend line. This close to the ICL, it may be ready to go.
HMY DAILY – I also like the way HMY looks on a daily chart. Gold has been selling down below the Dec ICL, but HMY has a series of higher lows. That is encouraging too, when we see the sell off in Precious Metals. It bounced off of the 50sma.
HMY WEEKLY – The weekly chart of HMY looks constructive too.
PAAS – I couldn’t find any news, but PAAS shot up over 10% at one point today. It was also able to hold on to 9% of those gains on the day. That makes 6% for the week. With Precious Metals selling off, PAAS is actually a nice looking chart.
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General Markets : Earnings are keeping the stock market very exciting for stock pickers, but for those rising ETFs ( maybe leveraged ETFs), parts of the market are boring & choppy, slowly climbing higher, while other areas (Tech for example) are fairing better. I would remain aware of the timing, raise stops as price moves higher, and remember that those 3 day drops took a lot of gains off of the table recently.
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Oil is selling off as expected
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The USD made new highs, but UUP looked like it was lacking energy to push it above resistance. The USD may then start to drop & help Pop our precious metals sector.
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Precious Metals : We’ll just have to wait and see what Friday brings our way when it comes to precious metals. We still have unconfirmed swing lows in place for GDX & GDXJ, so we’ll see if the lows hold on Friday, or if we break down and Friday becomes a day 30 continuation.
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