Thursday, 26 May 2016

RIG, SDRL - unable to hold early gains

With WTIC oil flirting with the $50 threshold, energy stocks opened broadly higher, but it was notable that many saw rather strong daily reversals. The oil gas drillers of Transocean (RIG), and Seadrill (SDRL), settled lower by a significant -1.9% and -7.8% respectively.

RIG, daily

SDRL, daily


Little to add from a few days ago.

Price action remains broadly weak. This morning was just another classic instance of sig' opening gains, but then the sellers reappeared.

Of the two companies, SDRL is more vulnerable, and I would be surprised if it survives into year end.

Wednesday, 25 May 2016

INTC - bullish breakout

With the broader US equity market closing broadly higher for a second day, there was similar strength in most tech stocks. Intel (INTC) settled higher by a significant 1.1% @ $31.39. The net daily gain made for a clear breakout from narrowing price action that stretches back to the December high of $34.98.

INTC, daily

INTC, monthly


Suffice to add, INTC is now one of the most bullish stocks out there.

Equity bulls merely need a break above the March high of $32.47. If that is achieved, its open air to the high $34s.

On any fair basis, any price action above $32.50 would be strong evidence against the broader bearish outlook.

*I like INTC for the long term, but would only see INTC as a valid long, ifchasing it on a break >$32.50.

If instead, the main market rolls over again, INTC is set for much lower levels... the giant monthly cycle would offer $20 by late autumn. For now, that can (understandably) be seen as mere crazy talk.

Tuesday, 24 May 2016

GDX - miners falling with the metals

With the USD continuing to climb (+0.4% in the DXY 95.60s), the precious metals were pressured lower, and that naturally impacted the related mining stocks. The ETF of GDX settled lower by a rather powerful -5.5% @ $22.46. There is strong price cluster support in the 21/19 zone.

GDX, daily

GDX, monthly


So, a pretty sig' daily decline, and the monthly candle sure ain't pretty.

Broadly though, its highly notable that GDX remains some 80% above the Jan' low of $12.40.

Even a decline to the 19s wouldn't do much to damage the massive multi-year break of trend that occurred a few months ago.

I remain broadly bullish the gold/silver miners... unless spot Gold prices <$1170.

Monday, 23 May 2016

RIG, SDRL - drillers under pressure

With oil closing significantly lower (but still relatively close to the $50 threshold), the oil/gas drillers of Transocean (RIG), and Seadrill (SDRL), were naturally on the slide, settling -2.9% and -3.1% respectively. Mid term outlook remains bearish, as both companies look extremely vulnerable to disappearing entirely.

RIG, daily

SDRL, daily


RIG: recent price action is pretty messy, but is broadly still leaning weak, holding well below the 200/50 day MAs.

SDRL: almost back to the April low of $2.70.

Of the two, SDRL is the most problematic, and I'd be extremely surprised if this company is not on the pink sheets by the autumn.

Friday, 20 May 2016

TVIX, UVXY - cooling into the weekend

With the VIX still yet to show any sustained/significant upside power, the 2x lev' bullish volatility instruments of TVIX and UVXY cooled into the weekend, with net weekly declines of -7.6% and -7.7% respectively.

TVIX, daily

UVXY, daily


*first, an update on the VIX, which saw a minor net weekly gain of 1.1%

The VIX remains broadly subdued, as despite the market sliding from the high of sp'2111 to 2025, the style of price action is very choppy... and that hasn't inspired any fear in the mainstream.

Underlying MACD (blue bar histogram) is set for a bullish cross within 2-3 weeks, and that will offer the first realistic opportunity for powerful VIX upside.

As ever though... VIX tends to spike very quickly... and almost as rapidly... cools.

As for TVIX and UVXY, it could be argued they are trying to make a floor, but if VIX doesn't break into the 20s within a week or two.. they are going to merely decay further.

Broadly.. the US equity market looks highly vulnerable to the third major down wave since summer 2015. The big unknown is just how high that might drive the VIX... just the high 20s... or far higher... to the 40/50s - as seen last August.