AUG 1 2014 - First off , There has been a lot going daily this week in my personal life, my friends son was in a severe accident and a few other things have kept me busy, so I have not been in front of the screen as much as usual this week. That said, I haven’t Tweeted & Posted as often as usual so I wanted to Quickly just throw out some brief Charts & Thoughts since it got a little CRAZY after the Fed Mtg.
SPX - It was DUE for a pullback using cycles and Technical analysis, but you can never tell how much or how fast. This COULD get serious – but as I mentioned, there were signs that it was coming. The VIX, $CPCE, Internals , and of course PRICE PATTERNS showed we were due. See the daily & weekly below.
SPX WEELY – Overbought RSI WEEKLY & it hit the Top of the channel
The SPX DAILY also showed that it was ready for a pullback (Note the Rising Wedge – MACD , RSI, and Orange arrow) …
THIS could get ugly, and time will tell. It is already due for a bounce , closing under the B.B. so you may see a reversal soon, but will it last? OR will the sell off continue? It has work to do before the charts can be repaired I.M.O.
Yesterday almost everything got hit. They call that Throwing the Baby out with the Bath Water (I have been looking at NATGAS, URANIUM, AND GOLD/MINERS for LONG set ups, and only NATGAS remained Green). URRE & UEC actually looked really good, but the Uranium ETF ( URA) got hit, so I didnt take position in URRE Or UEC. Was it just END OF THE MONTH SELLING IN GOLD / MIners ? Or is something bigger coming to the downside? Lets review a few charts.
I drew this $USD & posted in my last report, and it is being fulfilled and is at the BLUE LINE now. This puts pressure on Metals
GOLD – Using Technical Analysis, Gold remains fine to MIxed (So Far). Using Cycles, its called a “FAILED” daily cycle and points to further weakness. I’m pressed for time so I will allow the Charts can explain.
GOLD WEEKLY – WEAK using the 10WMA , Needs to close above $1297 to regain a healthier WEEKLY look.
GOLD DAILY – Technical Analysis wise , the Daily isnt damaged. Normal 61.8% pullback, “Testing” a break out Candle, and getting oversold is all considered normal (So Far). We keep an eye on things , however, because it is starting to lose steam & starting to trend downward.
GOLD CYCLE-WISE – Because of the lower low, this chart using cycles indicates further weakness & lower prices. We look due for a bounce, and then another drop? This can remain bullish, however, if it follow this path. This is a “ROUGH” idea simply pointing out a path if we continue weak for another daily cycle. OF COURSE ANYTHING CAN HAPPEN and some believe we will now sell off to $1000, since GOLD didnt act as a “Safe haven” when the MKTS sold off yesterday. THAT – IS – POSSIBLE . I’m just taking it one step at a time . YOU DO NOT have to be invested at all turning points!! Sometimes we get stopped out or take our leave to watch how things unfold. THAT is prudent – It offers a clearer path later.
GOLD DAILY AGAIN- There are still signs of lower prices on this chart too, so again, I am showing what could play out if GOLD just bounces along until it gets oversold. This would be a Descending Wedge Pattern & is Bullish when resolved upward. If you read my last report – You saw my BULLHORN pattern too – its still possible too.
Miners – They actually held up well for a blood bath of a day. I read a lot of Panic & “CRASH” talk, but that is usually associated with Leveraged positions and JNUG, NUGT holdings where losses feel more painful . Why do I say that? Because the GDX & GDXJ charts didnt even break to new lows yesterday in a large sell off day. Please take one second and stop here….Look at 3 month charts of GG, RGLD, NEM …. Very strong for a sell off day and GG & NEM both had earnings releases Tuesday Night. The perfect excuse to wash it out.
GDX DAILY – Bullish side would be that since cycles call for more weakness, that GAP could get filled as it works into oversold positions
Another Bullish view. This pullback is normal & quite mild for Miners so far. Remember when the toilet would flush if the Markets or Gold sneezed??
SO FAR volume is lightening as it sells off. Since we do need a little more downside , and It does look like it could go either way, we keep in mind that if the selling starts to pick up…. ANYTHING CAN HAPPEN THOUGH!
Bearish side could look like this.
What can I say? The Markets took a good WHACK. It was due, but it was a big one too. We are now due for a bounce . $SPX closed outside the B.B.’s $RUT & IWM closed on theirs, but this MAY just bounce to the 20sma and then start selling off again. LOOK AT YOUR WEEKLY & MONTHLY CHARTS TONIGHT. The Month of JULY ended, the WEEK closes tonight. THIS tells you whether the bigger picture looks healthy or weaker. There are many other things to look for and look at as time goes forward and can be discussed in future reports. For now I will just leave you with advice similar to what I have mentioned before… Learning lessons.
When markets get whippy, seesaw- like , jumpy & Bumpy…You DO NOT Have to be invested all the time. Especially if you want to ‘test the waters’ on something that looks like a good set up (Maybe $NATGAS now for ex) – smaller %’s are what you should test it out with. You can add to gains on mild pullbacks if you find a trending move, but jumping in 100% to try to “Make that money back that I lost!” can often cause emotional trading, bigger losses and frustration. So we Honor our stops and take the smaller losses as “lessons paid for”. We WILL have good entries soon enough, whether its short after a weak bounce & unfulfilled downside targets or we stabilize after some selling to balance the scales of fair value. THAT is what you really want though, PATIENCE for a “GOOD SET UP” and a “Low Risk Entry” . By Keeping losses small and managed, and waiting for proper set ups to enter can really increase your confidence and ability to make money in the stock market. Its STILL not always just that easy, but you need to have a solid plan and stick to it.
Best wishes to all for a good weekend and thanks for stopping by!
AEM – I mentioned how GG & NEM could have gotten hammered after earnings, but held up nicely in yesterdays sell off.
Well, AEM had earnings too, but as I posted in my last report – this needed a pullback badly.
See their chart now and you’ll see why we dont fight the charts when they need a pullback