She’s Breaking Down…How Bad Is It?

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We saw GOLD break to new yearly lows yesterday and I read in several different places that people were going short for the drop to below $1000  (Again).  We will discuss why I do not agree that this is the time to be going short.  NATGAS remains interesting and OIL and Energy Stocks continue to have my attention too, so First lets look at a few other charts.

SPX - The markets stalled at the 200sma and a down trend line that I mentioned earlier. We could  drop to the 50sma, but timing wise, we are due to go higher soon.This may be a pause before breaking above that 200sma.

SPX 11-17

The USD has been strong , but it may be due for a rest.  Yesterday was a short term topping or reversal candle, but it is not  a strongly reliable one. If the dollar is due for a rest,  what might that do for the commodities that are now being heavily shorted? 

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Winds Of Change

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The Markets always have that Ebb and Flow action where they pull back and push forward.  We have been in the timing for some change as mentioned in the weekend report, and today we did get those winds of change blowing through.  lets take a look...

 

In the weekend report the SPX chart pointed out possible turning points, seen here.

SPX 11-13 daily 2

Here I am pointing out the action in the SPY, the day ended with  117  million.  We are in the timing for a DCL  (Daily Cycle Low, so I do believe that today was a DCL.  If this pop drops  ( to the 50sma?), I think support will hold. This is a buy with a stop below the 50 sma.

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This Market – Hot And Cold

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This week various sectors actually made some moves that could affect the short and longer term outlook. Lets dig right in and review what has happened. 

SPX - Expecting a pullback with resistance at former highs, this is wedge was posted and a possible channel could form. 

SPX 11-9

SPX - The channel has been broken, but thats not bearish by itself yet.  The SPX tagged the 38% retrace.  We could even fall further this week to the purple dotted trend line for a back test. This is also the 50% retrace and the 50sma is there, so good support could be found just below current price.  I do expect a bounce soon.

SPX 11-13 daily 2

This is not bearish at this point, but let me show you something a little more concerning here...

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