Greek Solution ?

There is a rumor out that Greece is about to accept a bailout and futures are up strongly. Is it the same old “buy the dip”  that we’ve seen again and again after every sell off in the markets?  Maybe.  Could it be a back test of the recent break down, only to continue selling off?  To the charts…

SPX – obviously that was a big drop Monday and basically just a pause or bounce so far Tuesday .

The jump in the futures brings the SPX back up under the blue trend line…

This might just be a back test before the selling resumes, so it needs to be watched. If the Greek deal doesnt come through, the selling may begin again and the leg down continues. The NASDAQ is the same. At this point all we can do is look at the charts and note critical points.  At the end of this report you will see something that I find interesting.

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NASDAQ- do we back test / tag the 50sma and drop, or continue the topping process that appears to be taking place?  I would have thought that we bounce & go lower and that this would be a good place to go short, especially since we are not oversold.

IWM, IWC, and RUT –  this makes me pause on the ‘short’ idea.  These markets actually havent really broken down yet. They are not yet at an oversold point so may sell off more too, if the Greek Deal falls through.

BIB – Biotechs still look fine  (more on this at the end of the report)

USD – I wanted to look at the USD and see what happened with that bearish engulfing candle Monday . There was a recovery attempt Tuesday.

UUP–  This actually looks bullish.  Is that a strong reversal higher or just short covering ?

JD reminded me in the comments section that The Bonds look to have bottomed. TLT could be breaking out of a falling wedge and there is nice volume coming in.  Divergence at new lows is present.     TMF is a 3x play on this, it can be bought right here with a stop below the trend line.

The CRB also popped yesterday.  That was interesting.

Strongly Bullish charts –  Some may want to watch for a  pullback to the break out as a possible place to go long.

WTIC–  an the beat goes on   🙁  The MACD shows momentum weakening, so caution is warranted.

NATGAS –  I am not long NATGAS , but maybe if this downtrend is broken and price closes above it I would try a trade.

So you can see that many things still need watching and I am doing that from the sidelines. There is a valid trade long in TMF  (TLT) , but the jump in futures this morning may just be a bounce or back test of the recent break down.  Oil and NATGAS continue to go sideways.

GOLD,SILVER, and MINERS

GOLD –  Due to the cycle timing,  I would expect more downside going forward.  We are on Day 17 and a Low can form at any time, but latley they have been coming in at 26 to 32 days.  Thats weeks away.    The prior DCL was broken (Failed) so we should drop lower from here into the next DCL , even though there may be bounces along the way .  If you glance quickly at this chart, it is basically a 3 month sideways move, very tricky to trade and that may continue.

SILVER– I pointed out the divergence yesterday on this chart.  Lower lows in price and higher lows in the indicators.   That usually indicates that a bounce is coming / selling isnt gaining traction.

SILVER June 30  – it looks like silver is being bought back at recent lows with the ‘tails’ extending 20 cents lower than closing price. Price was down 31 cents at one point, and closed down 9 cents.  A bounce may be coming.

GDX –  I would expect lower prices into a DCL in Miners too. If the surge on June 17 is a dcl, there could be a lot more time until the next low.   In the past there have been short daily cycles,  but it would take a break above the purple trend line to get interesting.

   Let me explain something here for safety sake.  I actually got an intraday “buy” on GDX yesterday, based solely  on indicators that detect extreme oversold levels.   Silver stocks started to turn higher and look “Interesting”.  Maybe a bounce is coming.   I was thinking that You may use your own methods to trade and you also may get a ‘buy’ signal, but I am cautious about anything longer than a trade. WHY?  GDX often just sells off quickly when timing for a Daily Cycle Low arrives. Bounces out of oversold often only last 1-3 days.

  GDX is very oversold and it looks like it wants to move higher, so as a cautionary note , Let me draw what “Could ” happen.  You can see that GDX sells off fast when it wants to find a dcl.   This is not  a likely price  projection, just a visual note to help us to avoid getting too bullish early.  If we are only on day 9, it could actually be another two weeks before a DCL arrives.

SO for now I still need to be patient and watch how things unfold for the lower risk trades  (Except for TLT /  TMF, that trade looks pretty low risk.).  It may take a little time, but I believe a strong trade may be coming in the Miners at the next ICL.  Many Miners are already showing strength ,  even in this 3rd daily cycle.  I am still scalping or trading 1 or 2 trades intraday, but it is easy to get chopped up in small losses in choppy markets. Today the rumor is that Greece is close to accepting a bail out deal, and that should begin the process of clarifying the next follow through move. If they reject it,  todays gap open may just be a back test and a place to go short via  TZA, DXD, SDS,SQQQ, SPXU , SOXS, etc.     I’m remaining mostly cash right now.

ALEX

I said that I would discuss Biotech at the end of this report . I have been pointing out some Biotech / Pharma stocks lately  ( IDRA, EYES, ZIOP, KITE, BLRX, EYES, etc ).   Now Look at this chart of XBI, It remains bullish.   I am thinking that BIOTECH may be a place to find more long trades and here is why.

XBI– Biotech sector remained bullish.  It had its strong correction in May and hardly dropped Monday .  Is it indicating that the other markets will go higher after a brief correction too? Or is it just that biotech will  continue to draw in investors?

These stocks werent sold off  this week as much as they were in may. 

HALO – strong run

SCLN –   Rough shaky Cup & handle breaking out & back tested already.  Not affected Monday,  this may be a buy here .

ZIOP – Wasnt affected by Mondays sell off  – so we may have a sector that is showing evidence that it still wants to go higher

BLRX –

IDRA – I pointed this out a week ago and bought it. This is it today,  still a buy.

The above charts look like good set ups to me.  The question is…With a holiday shortened week, do you want to be long anything going into the weekend?  The choice is yours.