Tuesday 31 December 2013

GDX - a year of pain for the Gold miners

Whilst the broader equity market saw very strong gains across the year, the Gold miners saw very severe declines. The Gold miner ETF of GDX settled @ $21.13, a 2013 decline of $24.83 (-54%). The bigger monthly cycle is not yet offering any clear sign of a turn.

GDX, monthly

GDX, daily


2012 close: $45.96
2013 close: $21.13    net decline; $24.83  (-54%)

Along with the precious metals themselves, the miners have been in a world of hurt since the peak in late spring 2011. With Gold slipping from the $1900s to the upper $1100s, it has been no surprise at all to see the broad ETF of GDX having collapsed over half.

2014 outlook

First, I should note that I see Gold eventually flooring at $1050/950 in 2014/15. If that is the case, it'd be highly suggestive that the miners still have some way to fall.

For GDX, that probably means a hit/test of the 2008 low in the $15s, before we see a decisive turn on the bigger monthly charts.

Best guess...GDX fails to hold the $20s....eventually hits the mid teens..before forming a key mulit-year floor.

Monday 30 December 2013

AAPL - closing the year with moderate gains

Whilst the main market saw very strong gains build across the year, Apple (AAPL) saw very significant weakness, slipping from $519 to the June low of $384. AAPL looks set to close in the mid $500s, which makes for a latter half recovery of around 45%

AAPL, daily

AAPL, monthly


Regardless of where AAPL closes the year tomorrow, it has very much been a V shaped price structure.

APPL sure was the most unloved stock of the early summer, but since that brief break into the $300s, AAPL has consistently battled higher.

Relative to the main market, AAPL remains bizarrely undervalued.

For 2014, the big question is whether the Sept' 2012 high of $684 will be surpassed. That will be extremely difficult, not least if the main market rolls over in late spring/early summer.

Friday 27 December 2013

TVIX, UVXY - melting lower into year end

Whilst the main market is broadly still climbing, the VIX remains weak. The 2x bullish VIX instruments of TVIX and UVXY saw a second heavy week of declines, slipping -11% and -12% respectively. There is little reason why the VIX won't remain in the 14/11 zone until mid/late January.

The following two charts are 'performance' charts, from Jan'1st > Dec'27. I think they clearly highlight the issue of 'statistical decay', and how holding for more than a few weeks, really doesn't really work out so well for Mr Retail investor.

TVIX, daily

UVXY, daily


*First, an update on the VIX weekly, which declined by -9.6%

There really isn't much to add. The 2x leveraged instruments are just suffering the usual decay problem, and even the VXX will similarly be a loser-trade until late Jan/early February.

My personal view is that it remains pointless to be bullish volatility until at least the late spring/early summer, and even then, it will be somewhat risky.

As ever, such instruments are for short term holds only.

Thursday 26 December 2013

DRYS - well on the way

With the main market rising, Dry Ships (DRYS) - along with most other shippers, is continuing to power higher. DRYS settled up a powerful 12.7% @ $4.70, the highest close since May 2011. There is easy upside to $5..if not $6 within the near term.

DRYS, daily

DRYS, weekly

DRYS, monthly


*see my other regular postings for updates on the BDI

Suffice to say, DRYS has broken the old resistance, and is now well on the way to the 5s, if not the 6s.

Indeed, if the BDI can break to the 4000s by the late spring, DRYS could even be back into double digits - last seen in May'2009 (after a low of $2.72 in March 2009), before the main market rolls lower across summer/autumn 2014.

Without question, a very interesting and dynamic sector to watch.

Tuesday 24 December 2013

RIG - breaking the down trend

Whilst the main market trended higher across Nov/December, Transocean (RIG) has slipped around 15%, from the $55s to $47.00 last Friday. The Christmas Eve close, +2.0% @ $48.12, is a reasonably clear break from the down trend. First upside target is 51/53.

RIG, daily

RIG, weekly

RIG, monthly


It has taken a fair bit longer than I expected, but RIG has finally appeared to put in a floor of $47.00 - the Friday quad-opex low, and now we're headed higher..back into the 50s.

Relative to the main market, RIG remains bizarrely valued.

see: key stats @ Yahoo finance

Based on the price action in the past few years, I'd have to assume RIG has a reasonable chance to ramp into mid January.

Near term targets: 51/53, then a test of the 55 high.

Mid-term: 75/85, by late 2015.

Monday 23 December 2013

DRYS, DSX, NAT - Shippers cruising higher

Whilst the broader market continues to climb, the shippers are finally starting to join the party. With the BDI set for the 3000s in early 2014, stocks like DRYS, DSX, and NAT, all look set for further very significant gains into the spring.

DRYS, weekly

DSX, daily

NAT, daily


*first, an update on the BDI, which is of paramount importance for those watching the shipping stocks...

BDI, monthly, 7yr

My BDI target for the spring is 3000/3500. If that is the case, I'd have to expect a stock like DRYS to be somewhere in the $5-6 zone. Certainly though, the 7s look...difficult.

As for DSX and NAT, they are clearly already starting to build strong gains to conclude the year, and will surely keep on pushing higher, into mid January..and more broadly..into the late spring.

Friday 20 December 2013

TVIX, UVXY - just another major fail

With the sp'500 soaring from a test of the 50 day MA of 1767, the VIX was crushed in the latter half of the week. The 2x bullish VIX instruments of TVIX & UVXY saw all the recent gains wiped out, with net weekly declines of -12%.

TVIX, daily

UVXY, daily


First, an update on how the VIX closed the week...

VIX looks set to remain in the 15/11 zone into mid/late January. Only then, is there the small chance that we might briefly see the low 20s - via the next debt ceiling concerns.

As for TVIX/UVXY..and indeed...the VXX, all look set to decay into January.

Seasonally, the equity bears/volatility bulls..simply have everything working against them.

Thursday 19 December 2013

GDX - about to lose the $20s

With Gold and Silver commodity prices still on the slide, the mining stocks remain extremely weak. The miner ETF of GDX slipped another -2.0%, settling @ $20.45. GDX looks set to lose the 20s, the only issue now is whether the 2008 low of the $15s will be tested.

GDX, daily

GDX, monthly


The precious metals are about to take out the June lows..and GDX is about to lose the $20s. For the gold/silver bugs out there - who are typically loaded up with mining stocks in their 401ks..this remains the worse possible end to 2013.

There is simply no sign of the current multi-month wave ending, and GDX itself looks set to lose the 20s...as early as tomorrow.

Wednesday 18 December 2013

F - snaps lower on reduced outlook

Whilst the main market soared after the uncertainly of QE-taper was removed, Ford (F) snapped lower on a reduced outlook for 2014. Ford settled -6.3% @ $15.64..with a close just below the key 200 day MA. Near term weakness to the low $14s is expected.

Ford, daily


With a lowered outlook, the possibility of the 18s..even 20s is now off the table for at least another few months.

The break below the 200 day MA is pretty important, and the next level of support is the obvious zone in the low $14s.

If the 14s can hold in the current down wave..then upside to the upper teens by late spring 2014 is still viable.

Tuesday 17 December 2013

DENN - hobbit inspired upside?

Whilst the main market saw some pre-FOMC chop, Denny's (DENN) slipped -1.5% @ $7.04. Price structure is a rather clear bull flag, but must hold above the rising 50 day MA, which at year end will be in the 6.90s. There is viable upside to $8/9 by late spring 2014.

DENN, daily

DENN, monthly


*occasionally, I'll look at a random stock..and this one was inspired by a kooky video from Redlettermedia


Seriously though...

DENN is an Interesting company, and the last few years have seen it broadly soar from the collapse wave lows of 2003 and 2009.

See WIKI, for a broad summary

The past few years have seen revenue fall around 10%. The one good thing, Denny's remains moderately profitable, with net margins of just over 5%. Not exactly inspiring, but then the restaurant companies usually struggle to push much above 7-10%..even when everything is going well in the broader economy.

see keys stats @ yahoo finance

In terms of price, DENN is offering a rather clear bull flag on the daily charts.

Next upside is a break above the late Nov' high of $7.51. That certainly looks viable into early January.

Back to the IPO of $10 ?

The real target for the bulls should be the original IPO (Jan 1998) price of $10.00.  In the same month, it briefly hit $11.56..which remains the historic high. I will be particularly interested to see how it reacts if the broader market pulls lower in Q2/Q3 next year..before the next intermediate floor is put in.

One to watch across 2014.

Monday 16 December 2013

F - aiming for the $18s

With the main market closing with some gains, it was not surprising to see Ford (F) higher, settling +1.6% @ $16.86. Ford looks set for a challenge of the late Oct' high of $17.92. If Ford can put in a few daily closes in the 18s...then the low 20s look a given in early 2014.

F, daily


Ford remains a soundly based company, and is one that is very reflective of the broader economy in many ways.

From a pure price perspective, once we see 2 or 3 daily closes in the 18s, it should be a good sign that both Ford, and the wider market, will see continued significant strength in the first half of 2014.

All time high: $32.83... April 1999.

Certainly, that doesn't look viable until 2015, but for the long term buyers...that would be a hugely impressive 80% higher than current levels!

As ever...Ford remains one to watch.

Friday 13 December 2013

FB, TWTR - both headed for the $60s

Whilst the main equity market battled hard to hold the low sp'1770s, the momo stocks were living in a world of their own, and ramped hard into the weekend. Facebook (FB) and Twitter (TWTR) both saw very strong gains of 2.9% and 6.9% respectively, and both look set for the $60s.

FB, daily

TWTR, daily


It was amusing to see the Drudge Report today highlight how Twitter - a loss making social media company..is now worth tens of billions.

After all, Twitter is just a website, with very limited advertising revenue. Just what is the future for this bizarre company?

How about a merger/buy out from...FB ?  

The $60s are likely

FB looks set to challenge the $54 high of mid October ($56s in AH, on earnings) next Mon/Tuesday..and if the main market holds together..post-FOMC, then FB will probably be in the $60s before year end.

TWTR, at the current rate of increase, will probably be $60 by the Monday close.


Thursday 12 December 2013

FB - jumps on inclusion to the sp'500

Whilst the main market saw opening weakness, Facebook (FB) jumped 4% higher, on news it will be added to the sp'500 index later this month. FB settled +5% @ $51.83. Near term outlook remains bullish, and a test of the recent high in the $54s looks likely within days.

FB, daily


FB teased the bears recently..only to re-take the broken $44s..and is now continuing to surge on more positive news.

The inclusion into the sp'500 will mean many institutions that track the sp'500, will be forced to buy it, and thus we have added underlying upside pressure for the rest of December and into January.

The big issue is how will the market react to Q4 earnings..even if they are 'better than expected'.

So long as the main market broadly keeps rising, FB has a good chance of breaking the $60s by late January.

Wednesday 11 December 2013

GDX - miners still very weak

Despite a recent bounce, the miners remain very much within broader down trends. With weak Gold and Silver prices, the miners are under constant threat of much lower levels. The gold miner ETF of GDX fell a very significant -3.8% @ $21.19. Near term outlook is very weak.

GDX, daily

GDX, monthly


The recent two day bounce is already almost fully negated in just one down day.

The mining stocks remain under severe downside pressure, as best seen on the bigger monthly charts.

GDX could easily lose the 20s by year end, and then the only issue is whether the 2008 low in the $15s will be hit before we see some kind of major multi-year low.

*my outlook on the precious metals is very similar, with renewed downside very likely into year end, and probably continuing in the early part of 2014.

Tuesday 10 December 2013

FB, NFLX, TWTR - momo stocks in demand

Whilst the main market saw minor chop across the day, the real action was in the momo stocks. All the usual suspects saw very significant gains of 2-5%, and look set for general upside into early 2014. With the momo stocks catching a firm bid, its bodes well for the main market.

FB, daily

NFLX, daily

TWTR, daily


Most notable of all the momo stocks...the TWTR, which put in the first daily close in the $50s. Just ten trading days ago, TWTR had lost the $40 psy level, and looked set for the low 30s. What a turnaround!

Similarly, FB which had broken the H/S neck line recently...is continuing to recover, and has put in a key daily close above the 50 day MA in the $50s. Now..the talk is about 'when will FB hit the $60s?'

Overall, all the momo stocks look set for further gains into year end. Certainly, the current trend is strongly bullish.

*my main market outlook is for sp'1830/50 zone by year end, which if correct, should indeed mean the momo stocks are at least somewhat higher than current levels.

Monday 9 December 2013

TWTR - just who is buying?

Whilst the main market started the week with some moderate choppy upside, some of the most notable gains were seen in Twitter (TWTR), which settled +9.3% @ $49.14 The real question is, just what maniac is buying this loss making over-valued nonsense?

TWTR, daily


It remains very early days for this latest social media/momo stock. Unlike FB, which suffered from the opening day, TWTR is holding up very well in the $40s, and a year end close in the $50s now looks viable.

Considering the fact that it remains a loss making business, it is a wonder it has managed to hold the $40 threshold, never mind the looming break into the $50s.

It remains a crazy market..and the price action/valuation in TWTR is one of the finest current examples.

Friday 6 December 2013

TVIX, UVXY - rough end to the week

With equities snapping higher, the VIX was whacked lower, and for the 2x bullish instruments of TVIX & UVXY, it was a rough end, to what had earlier been a particularly good week. Across the week, TVIX/UVXY declined by -2.3% and -1.7% respectively.

TVIX, daily

UVXY, daily


*first, an update on the VIX weekly.


So..the week concludes with the VIX lower by 8.5%, and TVIX/UVXY slipping around 7%.

With the main equity market likely to close the year somewhere in the mid sp'1800s, the VIX is very likely to steadily decline into year end.

If that is the case, then TVIX/UVXY..will similarly decline, and suffer from the added old problem of decay.

Looking ahead into 2014

I see a moderate equity down wave of perhaps 5-7% in late Jan/Feb, but even that won't last long.

I am personally more focused on trading the next bigger down wave...with an intermediate top in late spring..and then 20% of equity downside..no later than Aug-Oct.

Arguably..next April/May will be the first reasonable period to consider going long volatility, but even then, the VIX is a tricky one to trade. It never stays high for very long.

Thursday 5 December 2013

RIG - golden cross on a down day

Despite closing -1.1%, Transocean (RIG) still achieved an important golden cross (50MA moving above 200 MA). Near term trend is weak, but if RIG can clear the daily 10MA - currently in the mid $50s, then there is comfortable upside to 53/54 before end year.

RIG, daily


*firstly, I will note, I am currently Long RIG, from $50.07, seeking an initial exit in the 52/53s, but am seeking much higher levels in the mid/long term.

So..a down day..but an important technical achievement, in the form of a golden cross. Certainly, I can't be the only out there noticing that today.

Underlying MACD (blue bar histogram) remains outright bearish, but is starting to tick upward. At the current rate, it will take at least 7-10 trading days for the cycle to go positive.

If the main equity market can see broad upside into late Dec/early Jan, near term upside target is a rather conservative 53/54.

Mid term target is 60/65 by late spring 2014.

Wednesday 4 December 2013

FB - farewell to hopes of downside

Whilst the broader indexes saw moderate weakness, Facebook (FB) built solid gains, settling +4% @ $48.62. The recent break of the neckline - of an apparent H/S formation, has turned out to be a clear failed bearish move. Today's strong closing gain fully negates the initial break.

FB, daily


*first, a reminder on the H/S idea...which is now to be trashed.


The above outlook was a very valid formation just over a week ago, with the break below the neckline into the $44s...downside to $35 was very viable.

Yet, it would seem Mr Market can't resist the FB, and the low $50s now look a given before year end.

FB in early 2014

The real big issue now is what will FB earnings be in January? Q3 earnings were good, with an AH spike into the $56s, but the market simply sold into those good numbers.

Can FB soar into the 60s by early February..if earnings continue to be good?

Assuming the market holds 'broadly' together..including the next debt ceiling/budget issues in Jan/Feb, it would seem more than likely that FB will be breaking new upside territory in early 2014.

Tuesday 3 December 2013

TSLA - bears on the run

Whilst the main market saw moderate weakness across the day, Tesla (TSLA) opened 6% higher, built gains, settling +16.3% @ $143. This is probably just an overly large short-squeeze bounce. There is obvious resistance in the 160s..where the 50 day MA is lurking.

TSLA, daily.


For me, the only issue is whether the big $100 threshold will hold in the weeks ahead.

A few daily closes <$100, will open up the secondary target zone of 70/60. Oscar Carboni has again been on the bearish TSLA wagon, and I'm certainly open to seeing further downside in this overly hyped car maker.

Near term price momentum is clearly swinging to the bulls..but there will indeed be stiff resistance in the 150/60 zone. I certainly do not see any realistic hope of TSLA holding the 170s or higher for some very considerable time.

*As it is, I never trade the momo stocks, I have no patience or tolerance for the momo stocks. They sure are entertaining to watch from the sidelines though!

Monday 2 December 2013

GDX - Miners keep on digging deeper

Whilst the main indexes saw minor chop, the real action today was in precious metals and the miners. With metal prices significantly lower, it was no surprise to see the miner ETF of GDX fully negate the Friday bounce, closing -6.3% @ $20.88.

GDX, daily

GDX, monthly


Near term looks weak for the mining stocks - as it does for Gold/Silver prices.

Mid-term could be offering a significant low, but the mid-teens for GDX remain a very viable target sometime in 2014.