Friday, 24 February 2017

TVIX, UVXY - first net weekly gain of 2017

Whilst most equity indexes broke new historic highs, the VIX saw a fractional net weekly decline, it was notable that the 2x lev' bullish VIX instruments of TVIX and UVXY saw net weekly gains of 6.1% and 5.9% respectively. However, one positive week does little to offer any realistic hope of near term VIX even in the mid teens.


TVIX, daily



UVXY, daily



Summary

First, an update on the VIX, which saw a net weekly decline of -0.2%.



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As for TVIX and UVXY...

It was indeed the first net weekly gain of the year. Ironically, that only brings TVIX and UVXY back to levels from two weeks ago.

There is increasing interest in 'VIX protection' - especially for April, and thus whilst front month VIX still closed net lower for the week, the second and further out months are actually a little higher. The underlying problems of futures rollover, and statistical decay make holding such instruments a perpetual nightmare.

The outlook for equities remains outright bullish, and VIX could easily slip back to the 10s... even 9s next week.
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*for the record, I have ZERO interest in being long the VIX in the near term.. and that has been the case since last summer.

Thursday, 23 February 2017

X - chop within a broader bullish trend

It was a rough day for US Steel (X) which saw some significant weakness, settling -7.8% at $37.31. With talk that President Trump's infrastructure bill might be delayed until 2018, the HFT algo-bots took an axe to many of the manufacturing/industrial stocks. For now, mid/long term trend remains bullish, with a monthly close >$40 due.


X, daily



X, monthly



Summary

Its very notable that despite today's smackdown, US Steel is still net higher for the month by a very powerful 14%.

Recent price structure was a giant bull flag.That was decisively confirmed with a move into the $41s. It would seem to be just a matter of when we'll see a monthly close above the key $40 thresold. Whether that is this month... March.. or not until the early summer, it shouldn't much matter to those long.

Technically, a monthly close >$40 will offer grander upside to $60.. whether by year end.. or early 2018.

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The CEO Longhi met the President today... and boldly equated Trump with Eisenhower.


Trump will present the State of the Union next Tuesday, and that will likely highlight an intended 1 trillion dollar infrastructure bill.

Wednesday, 22 February 2017

GE - the slow moving corporate monster

Whilst the main equity market saw a day of minor chop, there was a touch more weakness in General Electric (GE), which settled -0.7% @ $30.32. Mid/long term trend is bullish, and by end 2017, the $35/36s would be the natural 'bullish case' target.


GE, daily



GE, monthly



Summary

GE rarely gets much attention. Certainly, the momo chasers have zero interest in such a slow moving stock.

Things only turn bearish with a break <$28.. where rising trend is.

Best guess.... the 34/35s by end year. The $36s will be just about possible... on a stretch.

Tuesday, 21 February 2017

FCX - the bad news continues

Whilst the broader market saw another bullish day, there was notable weakness in Freeport McMoran (FCX), which settled lower for a fifth consecutive day, -5.2% @ $14.13. Next support is the recent low in the $13s. If that fails to hold, then a test of the 200dma in the mid $12s... where the 200dma is lurking.


FCX, daily



FCX, monthly



Summary

So.. another rough day for Freeport, as its in the midst of a dispute with the Indonesian govt' who are still refusing an export license... to terms that FCX (so far) can't accept. Further, this past weekend, Chappy Hakim, the chief executive of Freeport's Indonesian unit resigned. That sure isn't inspiring confidence in the company.

Short term price structure is ugly.. as the low $13s seem viable.

Seen on the giant monthly cycle though, things only turn bearish in April if FCX is sustainably trading under the mid $12s.. which would be a break of the 200dma, the monthly 10MA.. and rising trend, that stretches back to the core low of $3.52 from Jan'2016.

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Najarian, CNBC


Dr J' highlighting the DB downgrade of FCX from hold to sell, with a target of $12.50.
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Yours truly is bullish the Gold, Silver, and especially Copper miners for the mid/long term, as I continue to see the inflationary scenario panning out into 2018... something the central banks will be very pleased about.

Friday, 17 February 2017

GDX - gold miners cool a little

The gold miners have seen the first net weekly decline of the year. The ETF of GDX settled the week on a significantly negative note, -1.6% at $24.79, which made for a net weekly decline of -2.0%. Near term outlook threatens further cooling, but broadly, the miners look super strong.


GDX, daily



GDX, weekly



Summary

We're seeing some distinct resistance at the 200 day MA, around the $25.00 threshold.

Even if the metals - and related miners, cool for another 2-3 weeks, it won't negate the broader bullish trend. A serious attempt to break above last summer's high in the GDX $31s seems a given within 3-6 months.

Any monthly close >32 will offer a grander run to around $50... with a timeframe of no later than late spring 2018.