F.O.M.C – Back At The Crossroads

(This report was written Tuesday  night )

Warning, this report goes against ” common group think”   Why? Well , I want to show why slowly but surely it looks like the “Buy The Dips” crowd may be exiting the building and the next few charts may be proof.  AAPL & YHOO  had pretty good earnings,  can they save the day?  Or will it prove to be just another bounce? We shall soon see, but it’s also another F.O.M.C. Wednesday and as you know…anything can happen after 2 P.M. Eastern time!   In the meantime, lets glance at a few charts.

 

MSFT –  Oh she used to be a wall street darling.  This is a Weekly chart and so far the volume is HUGE for 2 days.

 

Is that just a fluke?   A one bad amongst many beauties? …

 

 AUDIO    http://www.screencast.com/t/Mauul1K6cAM

 

 

Behold P&G

 

Whats going on here ? Well, I have been pointing out this consolidation period in the markets ,  and it has been a little confusing because you’ll see a few good set ups and then a few bad,  but those are down right UGLY. THAT looks like Big Money bailing out at the top. Also a few of us have had conversation about the S.O. S. #’s  coming up.   As they add up,  I feel that it is a warning sign, and I have said that I do see weakness internally when I look at charts.   Topping is also a process,  it can take time to “give it up” and since these things take time  ,  Lets examine a few more charts.

 

INTC –  also not so healthy looking. This is my 1st target, but there are lower ones if selling starts to increase.  Look at the WEEKLY MACD with higher highs?

MU Weekly _  it could recover, but there seems to be a pattern forming

 

NOW AAPL and YHOO had great earnings after mkt.  Lets see what that can do to help the markets.   ( 6 a.m. Eastern) Pre-mkt AAPL is up 9 & Yhoo is up $4& that puts NAZ futures up 55.  We’ll see how this plays out

 

 

This is what our markets look like.

QQQ  –  Ugly gap down . Needs yahoo & AAPL to rescue it

 

SPY – Yes, this could be “O.K.” if it turns up –  but I still see weakness internally

 

SDS is the ultra short etf for the S&P , and it looks a little bullish .  If the markets start to crash, traders may want to grab SDS, TZA , SOXS, etc.

SO MUCH to say about GOLD/SILVER/MINERS…

  -But it is F.O.M.C. Wednesday.  Nothing I say matters when 2 p.m. Eastern approaches, right?

 

Technically-  they look great.  Cycle -wise,  you need to be cautious because we MAY be in the 3rd daily cycle if a Daily Cycle Low  was just put in.  As mentioned in the past,   if we are in a bear market rally, this cycle will likely double top or briefly spike higher an then roll over.

   I pointed this out in this chart ,  so we would STAY FROSTY –  STAY ALERT – it has spiked a top & rolled over before.

 

  And reminder:  I pointed out that 3rd daily cycles  ( purple squares) often drop in bear mkt rallies.

 

ARE we in a bear Mkt rally again?   Or is this strength real?     NO ONE can say for sure, but there are signs of strength, so lets just look at bullish looking charts to be fair.

$GOLD last week (WKLY) .  First time since Jan 2013 we closed above the 75 WMA  and it is still there now , above $1276

 

Yes,  I have been calling for a pullback in the $USD for a while.  A break out & drop back inside is usually a “false break” and returns to the lower channel .

The markets have loved a strong dollar,  Gold didnt all last yr.

 

This was a SILVER shake out this morning,  buyers stepped in & an inverse H& S formed.

 

The 2 hr chart signaled a buy  Monday on GDXJ  ( click to enlarge)

 

 

Today I snapped the 4 hr chart…the consolidation sideways has made it as oversold as DEC 16 & Nov 5 in that 4hr time frame

 

 

So Lets see DEC 16 and NOV 5  on GDXJ .  Price rose and then went sideways before going much higher, so we’ll have to see .

 

The point is,  Cycle wise it could be a short burst higher.   Tech Analysis -wise?    Miners are  a bullish set up .

  I bought AG with this set up yesterday ,

And it also became a BUY as it broke the bull flag  today (2nd chart)

GDX has stages that I watch  with resistance points and less resistance. I drew this JAN 16 & we have paused at each resistance,  now we see if we can break higher above $23 area ….or consolidate / drop ?

 

So thats all I can say on a day with an F.O.M.C. mtg.   You can see that as usual,  Metals and miners can go either way.  They look very bullish, but are we in the 3rd daily cycle and still in a bear mkt type rally?  Or are we breaking free , a solid 1.7 yr bottom in place and no one believes it and most have missed the boat and will continue to have doubts?

You have choices that only you can make.  

-Sell and lock in profits now if that makes you more comfortable ?

– Sell 1/2 and ride the fed mtg out ?

– Ride the first 1/2 of the day and sell before  2P.M. Eastern?

 

 

It really depends on your risk tolerance.  You can always get back in if it looks like we are going higher and you jump out now. There is always another trade.  I have not been completely out of the Miners once since the lows, because I have seen plenty of reason to ride them for weeks .  I have said from Dec that we may have to sell late Jan early Feb though   ( a nice 8 week run) , and with that in mind I am watching as things unfold.   I wont be shaken out,  but I will allow stops to take me out if necessary…or if I see strong selling and trend lines or moving averages breaking down,  that could be a sell too at this point.

We could be at a cross roads in various ways.  The Markets look weak and sickly…yet AAPL and YHOO had great earnings.  MSFT /  PG /  TSLA / AMZN / etc etc look like Big Boys are slowly unloading at the top with each rally, yet Miners look to be being accumulated?  Energy is finally putting in a second bottom  (Double bottom bounce) and we caught that just right too.   We will continue to watch things unfold and try to take advantage of opportunities as they present themselves.   Dont feel bad if you sell and things continue to go higher, plenty of other newsletters missed the whole move!  You will have locked in some profit and you will get another chance to get it on a pullback.    Theres always another trade.  As always ,  Thanks for being here!!

 

~ALEX

 

p.s.   side-point,  The storm was a good one!    3+ feet of snow and the 60 M.P.H. winds caused drifts that were over 5 ft.

This was my neighbors car…it is NOT a Volkswagen Bug