Thursday, 30 October 2014

GDX - miners continue to collapse

Whilst the broader equity market saw general gains, with the precious metals continuing to slide, the mining stocks saw even more bigger declines than Wednesday. The miner ETF of GDX settled lower by an extreme -7.3% @ $18.20. Downside target 15/14s.


GDX, daily


Summary

Despite Gold still yet to break core support of June 2013 - $1179, the miners are effectively in crash mode.

GDX looks set to collapse into the mid teens into November.
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*I am looking for a crash wave in the precious metals as early as next week.. with primary target of Gold $1000.

Wednesday, 29 October 2014

GDX - miners collapsing

With the precious metals back on the slide, the mining stocks were under renewed severe pressure. The miner ETF of GDX, settled lower by a very significant -4.2% @ $19.66. Near term outlook offers a crash wave in the metals.. with GDX to 15/14s.


GDX, daily


GDX, monthly


Summary

It is pretty clear... the loss of the $20s.. now opens up the mid teens.. which frankly... seem an obvious downside target.

Gold looks set for a major wave lower in November... and that offers very viable downside of GDX 15/14s.

Tuesday, 28 October 2014

TVIX - still on the slide

With the VIX falling another -9.5% to the 14s, the 2x bullish VIX instrument of TVIX was severely impacted, settling -12.3% @ $2.84. Further weakness to the 2.60s seems viable, before a short term recovery rally.


TVIX, daily


Summary

*first, an update on the VIX...


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With the VIX being cut in half from the spike high of 31.06, TVIX (along with UVXY and VXX) have been essentially destroyed.

However, on any basis, the bulk of the down wave has now occurred, probably on the order of 90/95%.

Best guess.. further VIX weakness into the FOMC of Wednesday afternoon, but a reversal of some degree seems likely.

Best case for TVIX is a 'moderate' recovery to the 3.75/4.00 zone... but that will be of little solace to those who have been holding long since the $6s.

As ever... such leveraged instruments are for short term holds only... not least due to the statistical decay issue.

Monday, 27 October 2014

CHK, RIG - energy stocks under pressure

Despite the main equity market seeing only minor weak chop, there was renewed significant weakness in the energy sector. Chesapeake Energy (CHK) and Transocean (RIG), settled lower by -3.7% and -5.6% respectively. Outlook is bearish into early 2015.


CHK, daily


RIG, daily


Summary

Suffice to say... both stocks are being pressured by a strong USD, but even more so, by weak energy prices. With Oil back under the $80 threshold, the energy stocks are going to remain very weak, even if the broader market can hold the recent gains.
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*I remain a fan of both stocks across the longer term, but if Oil slips to the low $70s (or even 60s) - which seems highly probable, then both are vulnerable to a further 25/35% lower across the next few months.

Friday, 24 October 2014

TVIX, UVXY - naturally on the slide

With VIX seeing a net weekly decline of -26.4%, the bullish VIX instruments were badly impacted. TVIX and UVXY saw net weekly declines of  -27.5% and -28.4% respectively. Near term outlook is for minor chop ahead of the next FOMC.. before renewed upside.


TVIX, daily


UVXY, daily


Summary

*first, an update on the VIX, weekly


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The TVIX/UVXY holders had plenty of warning last week, with TWO black-fail daily candles. The two stocks are lower by around 45% since the highs... and it is another reminder of just how dynamic these instruments can be.
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Best guess... VIX to floor in the 15/14s next week... before another major equity wave lower.

If VIX explodes into the 40s.. then TVIX/UVXY will increase in value by a factor of 3-4 times.

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As ever though, such instruments are for short term trading only, not least because of the inherent 'statistical decay' problem.