TVIX, UVXY - strong gains for the week

With continued equity weakness, the VIX climbed a little higher into months end. The 2x bullish VIX instruments of TVIX and UVXY both climbed, settling +2.1% and +1.6% respectively. Across August, TVIX/UVXY gained around 20% and 25% respectively.


TVIX, daily

UVXY, daily

Summary

First, the VIX weekly...

Indeed, for the VIX itself, we saw very strong gains this week of 21.7%. There looks to be easy upside to the 200 MA of VIX 20..within the next two trading weeks.
--

*my main market outlook remains unchanged, with sp'1570/60s, and VIX in the low 20s.

In terms of TVIX/UVXY, that should equate to further upside of around 35-45%.
--

As ever, even those equity bears seeking much lower lows in Oct/Nov - as low as the sp'1400s, should be mindful  that holding any leveraged instrument across multiple weeks is rarely a good idea.

Yes, I might sound contradictory, since I've highlighted the gains for August, which on any basis, are VERY significant, but still...the longer term charts are clear enough, in illustrating the decay issue.

TVIX, UVXY - creeping higher

Despite the main equity indexes closing moderately higher for a second day, the VIX clawed upward. The 2x bullish VIX instruments of TVIX and UVXY, closed +3.0% and 4.6% respectively. Near term trend remains bullish.


TVIX, daily

UVXY, daily

Summary

First, a reminder on the daily VIX chart...

It was particularly interesting that whilst the equity indexes still managed to close a little higher, the VIX gained

Unquestionably, the near term trend for volatility remains to the upside, and despite the persistent decay issue, both TVIX and UVXY have been trending upward since the floor in early August.

Best guess in the near term.. VIX should move briefly into the low 20s, which should equate to sp'1570/60s.

In terms of TVIX/UVXY, that might equate to further upside of 35-45% 

--
**Special note...at the close of Thursday Aug'29, TVIX will see a reverse split, 1 for 10.

So, early Friday, TVIX should be trading somewhere in the 19/20s.

GDX - rolling over again

Despite the main market actually managing a small gain, the miners slipped for a second day, with the mining ETF of GDX, settling -2.5% @ $28.36. Near term trend remains broadly bullish, but the last few days should be a concern to those holding long into September.


GDX, daily

Summary

The miners have had a great run lately, and certainly, two down days do not wreck the broader trend.

Underlying MACD (blue bar histogram) cycle ticked lower for a fifth consecutive day, and is set to get a bearish cross at the Thursday open..along with going negative cycle.

Certainly, GDX is going to face some downside pressure in the remainder of the week.

First support is at the 50 day MA in the low $26s..so there is risk of 5-7% downside without doing too much damage.
-

Again, it should be noted, trading volume in the miners remains VERY high.

TVIX, UVXY - soaring in the near term

With equities seeing very significant declines, the VIX closed strongly higher, with the 2x bullish VIX instruments of TVIX and UVXY seeing large gains of 15% and 17% respectively. Near term trend looks bullish for volatility, especially ahead of an uncertain 'war-weekend'.


TVIX, daily

UVXY, daily

Summary

First, keep in mind the daily VIX chart...

The VIX close in the upper 16s certainly qualifies as an important jump higher, but we're still to test the big 20 threshold. However, considering the bigger weekly equity charts, VIX in the 20s does look viable within the next few days.

The really big question is what happens over the weekend in the middle east..and how the market will cope with it.

The 2012 VIX high was 27. Are we on the edge of a VIX explosion into the 30s?  However, I have to think the 30s look very improbable in the current multi-week down cycle.

So long as the main market can hold above the June low of sp'1560, the VIX will likely get stuck in the low 20s.


TVIX/UVXY

Certainly, today's gains are the best since late June. A few more days higher would really compound the current gains..and if the VIX can get into the low 20s..then we could be looking at another 30/40% higher by the Friday close.
--

*As ever though, mid/long term holds for the leveraged instruments is never a good thing, due to the statistical decay factor.

NFLX - failed break above channel

With the main markets a little spooked in the closing hour, Netflix (NFLX) slipped back, closing just under the top of a broad ascending channel, but still saw a net daily gain of 1.6% @ $282. Near term trend remains bullish.


NFLX, daily

Summary

Today was a relatively quiet day in the main market, but the 'hysteria' stocks as I prefer to call them, certainly saw some rather strong gains earlier in the day.

FB, GRPN, TSLA, and NFLX all saw gains.

Indeed, NFLX saw a break above the channel today, but the close was a touch weak, with a rather clear spike.

Bears should be looking for at least a moderately lower Tuesday close, whilst Bulls merely need to hold above the rapidly rising daily 10MA - currently $266.

*considering the QE of Tue/Wednesday, bulls will likely be able to hold NFLX - and indeed, the main market together.

GDX - strong gains to conclude the week

With the main equity market melting higher into the weekend, the miners excelled, with the miner ETF of GDX, closing +2.4% @ $30.08 - the highest close since early June. Near term trend remains bullish, with a target of at least $32, if not the 34/35 zone, where the 200 day MA is lurking.


GDX, daily

GDX, monthly

Summary

The miners are doing very well, and are now a very powerful 36% higher..across the last 8 weeks. On any basis..that is indeed impressive.

No doubt, the rising Gold/Silver prices are really helping, and GDX is certainly closely correlated with their parent commodities.


Just another bounce?

My mid-term outlook on the precious metals is for further significant weakness, with new lows 'sometime in 2014/15', with Gold In the $900s, and Silver in the $12/10 zone.

I realise those are very bold downside targets, but if they are right...where are the miner stocks going to be?

I find it unlikely that GDX will be able to put in any monthly closes above $40..if not $35..where the 200 day MA is lurking.

--

So...near term...continued gains into September, but I'll be looking for a few weeks of toppy-chop, before a renewed multi-month push lower, possibly lasting all of next year.

AAPL - getting stuck in the low $500s

Despite the main market pushing back upward, AAPL was relatively subdued, closing +0.1% @ $502, with a range of 505/498. Near term trend remains bullish, but AAPL is looking tired after a significant ramp from the April low in the $380s.


AAPL, daily

Summary

*my main market outlook is for a small bounce to the sp'1680s. That might mean AAPL simply doesn't make any new highs, but merely trades in a choppy fashion for the next 2-4 days.

If the main market does continue to broadly decline into mid-September - sp'1600/1575, then AAPL should at least pull lower to the $450s, where the 50 day MA will be lurking.

Underlying MACD (blue bar histogram) cycle ticked lower for the third day, although there is no definitive bearish cross...yet. That looks likely by middle of next week.

GDX - miners bull flag?

With the main equity market closing lower, the miners were not able to escape, and the miner ETF of GDX, fell a significant 4.75% to $28.89. Near term price formation could easily be a bull flag though, with next upside to the $34/35s.


GDX, daily

Summary

It remains a very marginal situation for GDX. Is it a bull flag? Well, so long as GDX holds above $28.00 by the Friday close, its still a valid flag. Otherwise..a fall back to the 50 day MA in the low 26s is the target.

The problem for GDX remains the metals. Near term, the metals look set to continue higher, another 5-7% or so. Yet, mid-term outlook is pretty deflationary.

If that is the case, the miners - even the ones that do manage to turn a profit, are going to see their stock prices smashed below the June lows.
-

*trading volume in the miners..and indeed metals..remains VERY high.

NFLX - breaking to the upside

With the main equity market battling back higher, Netflix (NFLX) joined the party, and excelled, closing +5.2% @ $273. This was an important daily close, above the recent high of mid-July. Despite the strength, if the main market weakens <sp'1600, NFLX will struggle to break into the $300s.


NFLX, daily

Summary

No doubt a lot of NFLX bears saw their short-stops get triggered today. Indeed, with a very bullish daily close (a new high for 2013), there is now absolutely nothing bearish about NFLX.

*my mid-term equity outlook continues to look for the main indexes to see significant weakness into mid-September, with the sp'1575/50.

If that is the case, then NFLX will most certainly be held back, and the $300s will become exceptionally difficult, until at least the next earnings season in mid/late October.

MRO - key support fails

Whilst the main indexes saw moderate weakness across the day, Marathon Oil (MRO) saw much greater weakness, closing -4.3% @ $32.62. It would seem the previous price formation was indeed a bearish pennant, with next support in the $29s.


MRO, daily

Summary

With the main market seeing some weakness since the sp'1709 - 11 days ago, its not surprising that MRO is also lower, but the declines are indeed much more severe.

Today's daily close below the 200 day MA was the first since the big April ramp - when the sp' was a relatively low 1538.

MRO looks set for the $29s within the near term.

If that fails, the next key level is considerably lower..the $23s - the summer 2012 lows, when sp' was 1266 !

TVIX, UVXY - ending the week marginally lower

Despite the main indexes closing the week with further moderate declines, the VIX still slipped. The 2x Lev' (bullish) VIX instruments of TVIX and UVXY saw Friday declines of around 2.5%. Across the week, the VIX saw net gains of 7%, but remains in the lowly 14s.


TVIX, daily

UVXY, daily

Summary

First, the weekly VIX chart..

So, the VIX saw net weekly gains of 7%, but the VIX remains at bizarrely low levels. Clearly though, equity bears do have the second consecutive weekly gain for volatility.

That does bode well for the rest of August and first half of September. Certainly, VIX looks likely to spike into the 20s..if only briefly, in the coming 2-4 weeks.

--

For the leveraged VIX players meddling in TVIX/UVXY, the problem remains the same. The VIX remains at a bizarrely low level, and even a Dow fall of over 200pts on Thursday wasn't enough to kick the VIX beyond the high 14s.

-

As ever, with the statistical decay issue*, such lev' instruments are only for very short term trading.

*for the record, I have never meddled in TVIX/UVXY..or the VXX, for largely that reason. I have actually found VIX calls (although highly volatile, and with the proverbial 'detonator clock), far more useful.

NFLX - big drop coming?

With the main equity indexes falling below key support, Netflix (NFLX) was part of the carnage, falling 3.2% @ $253. First support is the 50 day MA at $238, but if the main markets are weak into September, NFLX could fall all the way down to the $170s  where the 200 day MA lurks.


NFLX, daily

Summary

We have a very clear large bear flag on the daily charts, spanning the past 3 weeks.

If NFLX can put in a few daily closes in the mid $230s or lower, then <$200 looks very viable this September.

A capitulation floor in the $170s - where an obvious huge price gap is - along with the 200 day MA, would make for a very reasonable long-entry level.

GDX - miners battling higher

Whilst the main equity market slipped moderately lower, Gold/Silver commodity prices rose, and that helped the Gold miner ETF of GDX, which closed +5.5% @ $28.70. Near term trend is bullish, next target is the 30/32 zone.


GDX, daily

GDX, monthly

Summary

It has been a choppy six weeks for the miners, but the current up wave is certainly a little stronger than the ones seen since last year.

There is very obvious resistance for GDX in the $30/32 zone, but even more so, the declining 200 day MA of $36.07* will be extremely difficult to break over

*for Gold and Silver, the equivalent levels are GLD 140s, and SLV 25/26
-

Trading volume for GDX  has soared in the past six months. Does this increased 'trader interest' represent a floor is now in?

The problem remains, underlying price momentum is still in deeply negative territory. It is going to take MANY months, probably a full year, just to negate the fierce downside from the highs of spring 2011.

Best guess? A further wave lower in 2014, and this will most certainly occur if Gold/Silver commodity prices continue their broad monthly down trend.

AAPL - $490s earlier than expected

Whilst the main indexes saw the usual latter day recovery, Apple (AAPL) soared on news that Icahn has picked up an AAPL position. AAPL closed strongly higher, +4.7% @ $489, having peaked in the $494s. Near term trend looks moderately bullish into opex.


AAPL, daily

Summary

Well, I thought I was bold with a target of $485/490 by opex, but with the announcement that Icahn is jumping on board, a little bit of hysteria has returned to AAPL


AAPL resistance $500/520

AAPl will find it VERY tough to break and hold the $500s in the days ahead, not least if the main market rolls over into September. There will be strong resistance at the May and November 2012 lows.

-
*important note...this was the second daily close above the 200 day MA. On any basis, this is not one for the bears to still be holding short.

AAPL - an important daily close

Whilst the main markets saw minor chop, Apple (AAPL) put in the first daily close above the (still declining) 200 day MA, settling +2.9% @ $467. Near term trend is generally bullish, and a move to the big $500 psy' level looks very viable in the near term.


AAPL, daily

Summary

The last six trading days have been really interesting to watch in AAPL.

We've seen a very clear baby bull flag that played out across the entirety of last week. Today's jump confirms the bull flag..and the fact AAPL closed above the 200 day MA...that's very bullish for the near term.

Certainly, further upside looks likely across the rest of this week, first soft target is the upper trend line of the channel. which by opex will be bordering $490.
--

*AAPL has not closed above the 200 day MA since November 2012.

TVIX, UVXY - vainly trying to battle higher

With the main indexes closing moderately lower, the VIX gained 5%, and the 2x bullish VIX instruments of TVIX and UVXY both closed higher by around 3%. Near term VIX trend is to the upside, but much higher levels of volatility look very unlikely for some weeks to come.


TVIX, daily

UVXY, daily

Summary

First, keep in mind the weekly VIX...

Across the week, the VIX gained almost 12%, which certainly merits some attention.


General pain for the leveraged players

From a simple price perspective, it is easy to argue that until there is a daily close above the 10MA, the relentless down trend continues.

For the TVIX & UVXY holders, the obvious problem remains one of a market that is almost entirely fearless. The relentless 'statistical' decay remains the inherent issue in such leveraged trading instruments, and frankly, I find it bizarre that so many are still trading these things at all whilst the VIX remains at such a low level.

Arguably, the only time TVIX, UVXY, and even the more stable VXX are worth bothering with, is when there is decent market volatility, and clearly, that is NOT the case the right now.

My general market outlook into September is for a multi-week down cycle to sp'1600/1550, but even tht might not be enough to kick the VIX above the key 20 threshold.

For TVIX and UVXY..the long term direction is clearly to zero - but then..even the prospectus notes that!

SCCO - soars with the precious metals

With Gold, Silver, and Copper prices soaring, the miners saw very strong gains, with Southern Copper (SCCO) closing +6.5% @ $27.58. Near term trend remains to the upside, but there is severe resistance in the $28.75/29.25 area. It will be extremely difficult to hit the $30s.


SCCO, daily

Summary

I remain a fan of the miners, not least FCX, but also SCCO. Both have great long term outlooks, but with commodity prices very weak since the spring 2011 peak, both have been decimated for the past two years.

Despite the miners all soaring today, they do remain within very broad downward trends.

I do not expect a trend break in the current up wave, not least if the metals get smashed lower - as I'm seriously expecting.

SCCO looks set to rollover in the coming few days - along with the main market..and the precious metals.

It remains very viable for SCCO to slip under $20 this autumn, which would be an extremely severe drop of 25%

FB - still holding the big gains

Whilst the main market slipped for a third day, Facebook (FB) continues to show underlying upward pressure, closing +0.9% @ $38.88. Near term price momentum is cooling down, but FB doesn't look likely to be trading <$30 at any point in the remainder of the year.


FB,daily

Summary

For the FB uber-bulls out there, today's closing gain was yet another sign of the major shift that has occurred since the recent earnings.

It would appear general consensus is for late 2013 price action in the $45/50 zone, which might equate to sp' in the 1850/1900s.

AAPL - testing the 200 day MA

AAPL managed a brief test of the declining 200 day MA in the $471s. With the main market weak across the day, AAPL closed -0.9% @ $465. Near term trend is still broadly bullish, but a few more daily closes <$470, will bode for a multi-week down cycle into September.


AAPL, daily

Summary

*My main market outlook is for a multi-week down cycle beginning this week.

It would seem AAPL is syncing up with the main market, and whilst the main indexes are starting to max out, AAPL is getting stuck at what is a very important MA.

Downside for Sept? If sp'<1600, AAPL looks set to at least decline to $420, if not a second big test of the late April low in the $380s.

Best guess though, the April low will not be breached.

AAPL - about to test the 200 day MA

With the main market generally still holding together, Apple (AAPL) was particularly strong, closing +1.5% @ $469. This was the highest daily close since mid Feb', and AAPL is now a mere $2 from testing the declining 200 day MA. An important few days ahead.


AAPL, daily

Summary

*My original 'general' main market outlook has been for the market to max out this week. If that is the case, it will be somewhat difficult for AAPL to sustain itself above the 200 day MA.

An interesting few days ahead indeed.
--

BIDU - still battling higher

With the main market still broadly climbing, its not surprising to see Baidu (BIDU) climb, but the continuing speed is extremely powerful. BIDU closed the week +3.6% @ $139. Near term trend is unquestionably bullish, the next key level is the spring 2012 high in the $150s.


BIDU, daily

Summary

Suffice to say, a great company, with one of the best profit margins out there...

see stats @ yahoo! finance...

If the main market generally 'soars into spring 2014' - with the sp>1900, then BIDU is headed for the proverbial moon.

New historic highs seem likely, and with a net profit margin of 40%, it would seem BIDU looks set for the 250/300 level by next spring.*

That may seem an incredibly bold target, but relative to everything else out there, it looks grossly under-valued.

GDX - falling in a soaring market

Whilst the main market continues to soar, the miners - along with Gold/Silver, are failing to participate. The Gold Miner ETF - GDX, saw a significant decline of 3.3% @ $26.10. A near term bull flag might be failing, in which case...renewed severe downside is imminent.


GDX, daily

GDX, monthly

Summary

For the Gold bugs out there, they have to be wondering just what is necessary to halt the fall in not only the gold/silver mining stocks, but also in the commodities of Gold/Silver.

Despite the FOMC continuing to keep QE at $85bn a month, and despite the main market breaking new historic highs, the miners are looking in real trouble again.

Any price action for GDX <$25.00 will probably be enough to confirm a failed bull flag...and the start of yet another multi-week down cycle.

Mid-term outlook...new lows...perhaps all the way back to the 2008 lows in the $15s.

*the same outlook seems likely for Gold and Silver, with a key multi-year low, no later than early 2016, but far more likely 2014.