Friday, 20 January 2017

GDX - miners somewhat stuck

With the precious metals somewhat stuck at resistance, the related mining stocks are similarly stuck. The ETF of GDX settled the week net higher by 1.7% @ $23.12. Near term outlook is very mixed, not least as any renewed USD strength will pressure the metals lower, and by default... the related miners.


GDX, weekly



GDX, monthly



Summary

Suffice to add... we are in a mid term upward trend from the Dec'2016 low of $18.58. That remains significantly higher than the Jan'2016 low of $12.36. Broader price structure since last summer is arguably a large bull flag.. or wave'2 retrace.

The 200dma is in the mid $24s. Frankly, I want to see at least the $25s to have some kind of provisional bullish confidence that the $18s were indeed a key higher low.

The super conservative 'bullish chasers' can start chasing with a weekly/monthly close >$27.

Thursday, 19 January 2017

X - still a big bull flag

Whilst the main market saw moderate price chop, there was significant weakness in US Steel (X), which settled -4.9% @ $33.21. The swing lower was due to renewed chatter about possible oversupply in the steel market. Broadly though.. price action is bullish, and structure is still a big bull flag.


X, daily



X, monthly



Summary

Suffice to add.. price action in X remains very volatile.

Broadly though.. price structure is one big bull flag.. that will be provisionally confirmed with a break into the $36s next week. Things turn extremely bullish with a monthly close >$40.

*next earnings... Jan'31st.

Wednesday, 18 January 2017

X - big bull flag

Whilst the main market was in minor chop mode, those was very significant upside in US Steel (X),which settled higher by a rather powerful 8.3% @ $34.93. Price structure since early December is a very clear bull flag, that will be provisionally confirmed with any price action in the $37s.


X, daily



X, monthly



Summary

Suffice to add... that IS a big bull flag, right? Having ramped from the $17s in early Nov' to the $39s, X has seen around 6 weeks of choppy weakness.

We have a floor around the 50dma of $31.80.

A monthly close >$40 will offer a straight run to $60 within 9-15mths. That might seem overly bullish, but then... I'd merely suggest anyone reflect on the past few months of broad strength.

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*earnings due: Tue' Jan'31st.

Tuesday, 17 January 2017

BAC - cooling financials

Whilst the main market began the week on a moderately weak note, there was more significant weakness in financials. Bank of America (BAC) settled -4.2% @ $22.05. Broadly, the 25/26s look a given.. .whether by late spring.. or the summer.


BAC, daily



BAC, monthly



Summary

Friday's daily candle was of the black-fail type, and its not exactly surprising to see that early warning of trouble pan out with significant Tuesday declines.

Broadly though, BAC remains unquestionably hyper-strong. The breakout last Nov' above multi-year resistance of $18, was extremely important. Arguably, its one of the most bullish signals in the entire US equity market.

Mid term target remain the 25/26s... which really aren't that much further to the upside. Its somewhat amusing that no one (that I'm aware of) is yet talking about the $30s.

Friday, 13 January 2017

TVIX, UVXY - another week lower

With the US equity market still regularly breaking new historic highs, market volatility remains very subdued. The 2x lev' bullish VIX instruments of TVIX and UVXY saw net weekly declines of -5.8% and -5.9% respectively. Near term outlook offers little realistic hope that VIX will even break into the mid teens.


TVIX, daily



UVXY, daily



Summary

First, an update on the VIX, which saw a net weekly decline of -0.8%



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As for TVIX and UVXY... there is nothing to be said other than 'normal service' continues.

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*UVXY saw a rev' split of 1 for 5 - as of the Jan'12th open. No doubt...TVIX will follow, although nothing is scheduled right now (that I'm aware of).

As ever... holding such leveraged instruments overnight, across the weekend, or worse... across multiple weeks rarely ends well, due to a number of issues, not least 'statistical decay'.
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Yours truly sees the VIX-long trade as dead, and has ZERO interest in being long the VIX for some months ahead.

Yes, there will be sporadic spikes to the mid/upper teens, and perhaps even test the key 20 threshold this spring. Yet broadly, the US equity market is unquestionably super strong, and that will see the VIX pinned low.