Friday, 2 December 2016

TVIX, UVXY - short term upside

With equities broadly lower across the week, volatility was on the rise. The 2x lev' VIX instruments of TVIX and UVXY saw net weekly gains of 8.0% and 8.2% respectively. Near term outlook threatens further equity cooling to the sp'2160s, which would equate to VIX 16/17s.

TVIX, daily

UVXY, daily


First, an update on the VIX, which saw a net weekly gain of 14.4%.

As for TVIX/UVXY, short term gains amidst the usual mid/long term horror.

If sp'2160s.. with VIX 16/17s... TVIX/UVXY should see another 10/15% higher

There is little reason that the VIX will be above the key 20 threshold for the remainder of the year.

As ever, the 'statistical decay' is a relentless problem, and holding overnight, across the weekend, or worse... multiple weeks, rarely ends well.

*yours truly has ZERO interest in being long volatility, as the broader US equity market remains outright bullish. That view only changes if sp <2130, Dow <18k.

Thursday, 1 December 2016

RIG, SDRL - drillers soaring

With WTIC oil powerfully higher for a second consecutive day, there was notable strength in energy stocks. Transocean (RIG) and Seadrill (SDRL) settled higher by a very significant 3.6% and 11.1% respectively. Near/mid term outlook is now bullish, with a clear 25/30% upside by mid 2017.

RIG, daily

SDRL, daily


RIG is leading the way... well above key resistance of $13. There is little but empty air to the $18/20 zone. Current price action is threatening an insane ramp to that level within weeks... rather than months. Regardless... it is a bullish break.

SDRL has followed RIG, with a massive break above declining trend/resistance, which is where the 200dma is also lurking. Its a massively bullish break. Next upside is the soft psy' level of $4, and then the April 29th high of $5.21.

Both certainly merit attention into year end. 

Wednesday, 30 November 2016

GDX - a dire November for the miners

With the precious metals of Gold and Silver seeing rather severe net monthly declines, the related mining stocks were naturally dragged massively lower. The ETF of GDX settled the day -1.9% @ $20.83, which made for a net monthly decline of -15.1%. Near/mid term outlook remains outright bearish.

GDX, daily

GDX, monthly


Its pretty straight forward...

Higher USD - as interest rate expectations are really starting to ramp.
The higher USD is putting natural downward pressure on the precious metals.

With economic/market sentiment at the best levels since 2007, the precious metals are losing more of their inherent 'fear bid'.

With the precious metals lower, the Gold/Silver miners have duly repriced to the downside. The only issue now is whether GDX puts in a higher low, or breaks below the Jan'2016 low of $12.40.

The one indirectly bullish aspect for Gold/Silver is Copper

Copper, with Gold/Silver, monthly, 20yr.

Its difficult to see Copper continue to climb across much of 2017, without Gold/Silver not eventually catching up.

Tuesday, 29 November 2016

CNX - rising as the war on coal is ending

Whilst the main market settled moderately higher, there was notable strength in Consol Energy (CNX), which settled +2.6% @ $20.25. November is set to close very bullish, with the $26-28 zone probable by late spring/early summer 2017.

CNX, daily

CNX, monthly


It has been a very long time since I highlighted any of the coal miners. Since I started posting here in spring 2012, all but one of the old familiar names has imploded, and been effectively delisted to the pink/junk sheets.

Consol is the last surviving properly-listed US coal miner. It imploded from the $47s in summer 2014 to a low of $4.53 this past January.

Effectively, CNX has since hyper-ramped 300% across the year, back to levels last seen in July 2015. From a pure price perspective, there really isn't anything but empty air to the 26/28 zone.

In terms of profitability, CNX is still struggling... see:

The war on coal ending

For those who watched the many Trump rallies, one particularly regular issue was the notion of ending the 'War on coal'. A Trump administration will no doubt help the coal industry to some extent, not least in terms of levelling the playing field against solar.

Further, most fail to realise that besides energy production, coal has many industrial uses.

It will be interesting to see how CNX trades into next spring, and how much President Trump highlights the coal mining industry.

Monday, 28 November 2016

GDX - miners bounce with the metals

With the precious metals starting the week on a broadly positive note (Gold +$11, Silver +0.9%), the related miners similarly built gains. The ETF of GDX settled +3.8% @ $21.40. There remains powerful resistance from $25-26, and mid term outlook remains bearish until a daily close >$26.00.

GDX, daily

GDX, monthly


Even if the metals can claw a little higher across the remaining two days of the month, November is still on track to settle extremely bearish for gold/silver, and the related miners.

Indeed, the monthly candles are highly suggestive that December will break new multi-month lows.

The real issue is whether GDX will eventually retrace fully back to the Jan'2016 low of $12.40, but that is a very considerable 40% or so lower.

yours... eyes on GG, ABX, KGC, AUY, and a fair few others.