Elephant In The Room

Can we talk about the elephant in the room for a minute? Not the one seen above, I’m actually talking about the one below . Notice how the Trannies sideways move has lost strength & momentum.

 

IYT-  Zoom in and see the break down in the IYT

 

How can this be in such a strong market. Buy the dip mode is in full force, right?

Well did you see airline stocks Wednesday?  Check out AAL, LUV, SAVE, DAL, etc,    They all looked to be heading to the exits.

 

 

And for some time now rail stocks looked to have topped.  Can they recover?  Sure,  but isnt it more likely a sign of things to come?

Check out how  UNP, CNI, CP, KSU, NSC, GWR etc have damage. The 200sma is turning  down too.  2 examples below:

 

SO I just wanted to point out that what we see above,  along with what appears to be the rising wedges that I have been mentioning could be signs of topping action  ( Or at least a good size correction ).   We have had a very strong bull market without even a healthy 10-15% correction for years now .  My thinking is partly this  : If you are invested in ETFs in your retirement accounts,  PLEASE HAVE STOPS IN PLACE.  And yes, there is more.

 

RUT – is that a wedge, break down and now back test? 

 

 

IWM consolidated and run upward looked really good recently.  Now it looks like a rising wedge , break down and back test.  It needs to break higher quickly, because that could negate the pattern.

 

IWM –  this looks like a back test  (double top ) coming.

 

SPX-  struggling at new highs so far.  We really need to see some follow through or it will probably start to sell down

 

$USD –  This will likely affect Commodities. It’s early in this daily cycle, I am watching the overhead moving averages and see if they are re-gained or act as resistance.

 

WTIC –  OIL can drop further, but it is holding up well and I am expecting another run up soon.

 

 

I saw someone on Twitter draw the XLE like this and they actually said they were adding to their shorts.    SO is the Glass half full?  Is the Glass half Empty?   I am told that there are 3 kinds of traders… 1.  The glass half  empty   2. The glass half Full  3.  The complainer either way.  SO this is how it goes…

1.  XLE  –  Glass half empty according to someone Twitter poster,  he is short.   Its my chart, but his way of viewing it .

 

2.  XLE  –  My thinking is that it is a buy.  The Glass half Full

 

3. There is that 3rd trader,  the complainer in the same situation.

Ok, sorry about that.  All that talk of bearish wedges and so on,  I needed to lighten it up.  🙂    I do believe that the XLE is a buy  on a break of that down trend line –  see  chart 2 above .

 

NATGAS – It too is holding up nicely,  but it can pull back and remain healthy.

 

GOLD –  SILVER –  MINERS

 

GOLD – Notice how the ICL from March has a run up and then a sharp drop to the blue line.  Did we just have the same thing happen?   Wednesday was a doji and found support on a test of a recent break out & blue line.  I mentioned in the weekend report that gold may fall to the $1200 area and that was ok.  It did, and I would now like to see this hold. Yesterdays low was $1202.70

 

SILVER –  this actually looks like it wants to drop further.  It doesnt have to , but it has that look.  If silver drops further,  I would expect GOLD to drop too.  Silver is at $17.11  and the 50sma is near $16.50.

 

 

HUI–  Nothing changed on the HUI.  I am watching the HUI, because it is at a critical point of support in my opinion.  If the low of  May 7 is taken out, it is likely more than a stop run.

SO lets look at a couple of rather bullish looking set ups in Miners  ( I have shown  TRQ, BVN, BAA, EGI, GSS, etc etc )   I thought these two looked interesting too. Why? People have been conditioned to NOT BUY ANY MINERS!  So as these rise and show strength, people are not even noticing.

NEM

HL –  not ugly

 

So that is not only what I see,  but it’s also a lot of what is on my mind.  Unfortunately it is a bit of a mixed picture out there.  I see some great set ups, I see many stocks breaking out of consolidations and running higher .  Even the SPX has broken out to new highs…so I have to report that.   At the same time I see these bigger picture Bearish looking rising wedges and a break down in transports.  I have been mentioning since January that GOLD / OIL look like they were bottoming and we traded those. Then it was the CRB double bottom and NATGAS that bottomed and it started to seem like Commodities are bottoming and basing,  so could the equity markets could be getting toppy?  Or could we finally get a correction ?   Is the Dollar going to double top & roll over , allowing these things to take place?  Time will tell,  and we here at Chartfreak will try to stay ahead of the changes.    Today and Friday will be the end of trading before the long weekend in the U.S..     The markets are closedon Monday, so I dont expect anything crazy,  but some may chose not to hold over the long  weekend.   I will be away Friday, so I will have a weekend report to wrap up the full weeks activities.

 

Thank you very much for being here –  have a great weekend!

 .

~ALEX

 

Trade ideas to throw out there for our active traders.  They are not always just a BUY THIS NOW… but these pretty much could be.

I mentioned  CUBA showing this may 5th

CUBA WKLY – Still good

 

SEM –  This really moves nicely.  Cup / Handle breaking out this week.  It might pullback to the handle , or not.  I would buy now and add if it pulls back.

 

PLUG –  I own it,  it has popped higher and dropped to test.

 

I have been showing this.  It now is a LOW RISK set up

ZBB may 7

ZBB  may 15  on the 10WMA

 

ZBB–  right now , reversal candle at the 10 WMA