Friday 31 January 2014

GDX - significant monthly gains

Whilst equities saw general weakness across January, the miners saw significant strength. The mining ETF of GDX saw net monthly gains of a very significant 11.1% @ $23.47. However, the broader multi-year down trend still continues.

GDX, monthly


*I thought it might be useful to highlight the monthly charts for spot Gold and Silver. Unquestionably, the commodity prices for the two key metals have a very powerful influence on the miners.

Gold, monthly'2, fib levels

Silver, monthly'2, fib levels

In terms of GDX, I can't take the January gains too seriously. Mining bulls have been teased before, in Aug/Sept of 2012, and July/August of 2013. Seasonally, the metals don't do well until the second half of the year. Indeed, the past two years have certainly reflected that.

GDX/miners facing multiple number of problems.

I still think sub $20s are viable before we reach a multi-year cycle low, especially if Gold slips to $1050/950 later this year..or in 2015. I realise the latter target will dismay many of the gold bugs out there..who have been getting overly confident with end 2014 targets of $2000 gold.

Further, if the main equity market falls 15/20% this spring/summer, that will only add to renewed downside pressure on the miners.

The miners remain my favourite sector, but for now, I still think it remains one to watch, rather than build holdings for the long term.

Thursday 30 January 2014

FB, TWTR - social media stocks back in favour

With the main market on the climb, and 'reasonable' earnings from Facebook (FB), the social media stocks were particularly strong. FB and Twitter (TWTR) closed powerfully higher by 14% and 6% respectively. Near term outlook though is shaky, whilst main market remains <sp'1820.

FB, daily

TWTR, daily


*the closing black-fail candles on the daily charts do not bode well.

However you want to interpret the FB Q4 results, they certainly weren't terrible. FB is making a profit, and revenue is climbing very strongly.

I myself remain no fan of the social media stocks, they remain wrapped in media hysteria, and the valuations are just plain stupid.

If the main market rolls over again in the coming few days, then both FB and TWTR will likely see most..if not all of the current gains be taken away.

Wednesday 29 January 2014

UGAZ, DGAZ - huge increases in trading volume

With continued severe wintry conditions across much of North America, Natural Gas prices have again soared. The 3x leveraged instruments of UGAZ (long) and DGAZ (short) closed an appropriate +32.5% and -31.1% respectively.

UGAZ, daily

DGAZ, daily


*I can't recall ever covering Nat' Gas before, but with the sharp jump in prices, and the icy cold across Canada/USA, I thought it merited a mention.

First..a reminder on Nat' Gas...monthly (non-log chart)

It remains notable that despite a huge gain of almost 30%, Natural Gas prices are still less than half of what they were in 2005 and 2008.

As for the 3x UGAZ and DGAZ instruments, they sure are attracting a lot more trader attention lately, with phenomenal increases in trading volume.. especially in DGAZ.

As ever..such instruments are for short term holds only, due to the usual statistical decay issue.

*the EIA natural gas report is due tomorrow at 10.30am. That will likely increase the gas chatter even more in the finance world.

Tuesday 28 January 2014

AAPL - headed for the 200 day

Despite good headline earnings numbers, the market still sold lower the tech monster that is Apple (AAPL), closing lower by a very significant -8% @ $506. With a break of key support, the 200 day MA - currently $479, is a natural price attractor in the coming days.

AAPL, daily


As I noted yesterday, maybe if AAPL had made a quarterly loss - like AMZN or TWTR, it'd have risen?

These remain crazy times, and AAPL is one of many stocks that are still mis-priced by the market. I realise some might argue that 'the market is never wrong'...

I can only refer anyone with that view to the bubble highs of 2000 and 2007. Wasn't the market wrong then about the near term outlook?

Anyway..AAPL raked in $14.50 EPS in Q4, which is makes for an astounding annual EPS of $55/60. Considering the stock isn't even $550 now..that makes the PE...sub 10..which is frankly...plain stupid.

see key stats @ yahoo finance.

Despite noting the 'mis-pricing'..there is indeed natural downside to the 200 day MA..which is currently close to breaking into the $480s. A hit of that looks viable in a few weeks..if not days.

Monday 27 January 2014

GDX - miners restrained by the weak metals

Despite the latter day bounce in US equities, the mining stocks sure didn't benefit. With Gold and Silver prices on the slide, the Gold mining ETF of GDX dropped a significant -3.3% @ $22.89. Near term outlook is mixed, and will be highly dependent upon how the metals trade post FOMC announcement.

GDX, daily


With Gold/Silver prices weak, along with the main US equity market, it was no surprise to see the Gold miners lower.

Yes, we're still holding the short term bullish trend, but we've seen this sort of price action dozens of times since late far..its never ended well for the mining bulls.

Broader weakness

My mid-term outlook is for further weakness in the precious metals. If that is the case, then the miners will be held lower, even if the broader US equity market can rally later this year.

A fair question remains, will GDX hit/test the 2008 low in the $15s..before this major multi-year collapse concludes? Right now...I still think there is very significant possibility, especially if Gold slips to the big $1000 level.

Friday 24 January 2014

TVIX, UVXY - huge buying interest into the weekend

With the VIX surging 31.7% @ 18.14, the 2x bullish VIX instruments of TVIX and UVXY saw a monstrous surge in trading volume - almost double the previous record. TVIX and UVXY both closed with daily gains of an extremely powerful 17%.

TVIX, daily

UVXY, daily


*first an update on the VIX, which saw net weekly gains of a rather astounding 45.8%

In terms of the 2x instruments, as ever, the decay is a real problem. It will only take one major bounce in equities to crush the VIX, and that will easily knock TVIX/UVXY lower by 10% or so.

Best guess...VIX maxes out in the 19/20 zone, with sp'1780/60.

Things only get interesting if the VIX can push into the mid 20s, but that sure looks difficult.

As ever...the 2x leveraged instruments are for short term holds only, as any mid-term chart fully displays.

Thursday 23 January 2014

EBAY, NFLX - contrasting post earnings reactions

Whilst the main market saw some borderline significant declines, Ebay (EBAY) and Netflix (NFLX) saw some interesting trading, having both posted results late Wednesday. EBAY settled +1.1% , whilst NFLX closed with extremely large gains of +16.4% @ $388

EBAY, daily

NFLX, daily


*I generally don't follow/chart EBAY lately, is indeed a blank chart.

A jump to the upper bollinger band

In both cases, you can see how the upper bollinger band is natural first resistance. NFLX still closed with very strong gains, but the daily candle for EBAY sure isn't too inspiring - a black candle.

Of the two, I much prefer EBAY, not least on the basis of valuation.

Further, as I've often said, EBAY is arguably recession proof. When times are tough, people end up selling things..and more often than not...the place they go to market their unwanted items is EBAY. Even better..they will often also use paypal to process the payment.

Wednesday 22 January 2014

UAL - soars above the 2007 double top

Perhaps the most notable stock break through of the year so far, United Continental (UAL) has broken through the 2007 double top high of $48.25. UAL settled with gains of 2.6% @ $49.17. The daily charts are offering the first ever foray into the low $50s.

UAL, daily

UAL, monthly, 9yr


Suffice to say, the break into the 40s was indeed a key initial break, and now we're around 30% higher so far this incredible gain.

With the break into the $49s, there is..simply nothing but empty sky above for UAL.

The price action in UAL bodes pretty well for the other airlines, inc' Delta (DAL)

Tuesday 21 January 2014

FB - climbing ahead of earnings

Whilst the main market saw some moderate price swings, Facebook (FB) was one of the stronger sp'500 components, settling higher by 3.9% @ $58.51. Near term outlook is bullish, and FB will probably be supported by a similarly rising equity market into end month.

FB, daily


Suffice to say, the FB is broadly still climbing. With earnings next week, the big issue is whether the market get excited by further 'reasonable earnings'. Of course, the most recent earnings were fine, but Mr Market still sold Facebook lower after the initial spike.

Considering the underlying MACD (blue bar histogram) daily cycle, FB has open air to the upper 60s next week, and even a brief foray into the low 70s looks viable.

FB remains one of the top 5 momo stocks, and is most definitely one to watch

*next earnings, at the Wed' close, Jan'29

Friday 17 January 2014

GDX - making a break for the 200 day MA

With Gold/Silver prices continuing to rally for a fourth week, the mining stocks are battling real hard to break a huge downward trend that stretches all the way back to Sept'2011. GDX closed the week with gains of 2.7% @ $23.24, and looks set to challenge the 200 day MA in the $25s

GDX, daily

GDX, monthly


First, let me be absolutely clear...

The miners - along with the precious metals have seen MANY...oh so many little bounces, in the past two years. Each time the metals and miners have risen for a few weeks, many in the infamous 'gold bug community' have called a key multi-year floor.

Lately, we have also seen many big names call for end-2014 Gold prices above $2000. To me, that sounds like the same type of crazy talk we've seen every week since spring 2011 when the metals were broken.

My general outlook for Gold/Silver remains unchanged, with mid-term targets of $1050/950, and $12/10, respectively.

If that is the case, then the' the ETF of GDX will remain under general sustained downward pressure for much of 2014, if not also 2015.

The bulls need an awful lot

First, those who are still calling for a floor in the miners, need to see a few daily closes above the 200 day MA. For GDX, that is now in the $25s..which is not too far higher.

Yet..the bigger monthly chart is more clear. Bulls need to see GDX put in a monthly close above the 20MA..which is currently in the $35s - a huge 40% higher.

Regardless of the near term minor price action, I still find it hard to believe the precious metals have floored, and if that is the case, then the miners will remain pressured..until that event has occurred.

F - battling back upward

Whilst the main market saw some minor chop, Ford (F) climbed higher for the seventh consecutive day, settling +0.2% @ $16.73. Near term outlook remains moderately bullish, but there is obvious resistance in the mid $17s. Any daily close in the 18s..will open up a further move into the low 20s.

Ford, daily


It would seem the recent break under the 200 day MA - on rumours the CEO, Mulally would leave, was a simple over-reaction.

Relative to the main market, Ford remains greatly undervalued, with a PE of just 11.

see key stats @ yahoo! finance

A real company

Ford is one of those companies that actually produces a real product..that has real use to the general populace, and one that I continue to have high confidence in. Whilst companies like AMZN, and TWTR are loss making, Ford has one of the greatest corporate histories in America, and there is no doubt it will outlive many most of the hysteria-surrounded/momo stocks.

*Next earnings: Jan'28...and after the recent price weakness, it will be fascinating to see if Ford is trading in the low 20s next month.

Tuesday 14 January 2014

TSLA - surges higher

With the main equity market rebounding higher, Tesla (TSLA) was one of the big gainers, surging an extremely strong 15.4% to settle @ $160.76. Near term trend remains bullish, and a few daily closes in the 170s would open up new historic highs, but those will no doubt be dependent upon good earnings.

TSLA, daily


Today's gain of 15% was indeed one hell of a jump - on very heavy volume, even for what is unquestionably, one of the leading momo stocks.

Part of the gain is no doubt related to the broader strength/rebound in the main market. However, it would seem TSLA was climbing on nothing less than 'tweets' from the CEO Musk.

I will note, I continue to watch this stock purely for 'entertainment reasons', and have zero interest in ever trading it..along with any of the other crazy momo stocks. I have little tolerance with these periodic extreme down..or up moves.

*next earnings are not due until mid February.

Monday 13 January 2014

DRYS - reacting to the sharp BDI drop

Whilst the main market saw some significant declines, there was particular weakness in the shippers, not least Dry Ships (DRYS), sinking -6.2% @ $3.62. With a very sharp fall in the BDI, the recent high in the low $5s is now looking a very considerable way up.

DRYS, daily

DRYS, weekly


*first, an update on the BDI

BDI, weekly

Another 7% lower for the BDI today, and its back in the 1300s...almost a full 1000pts below the levels of late November.

It had appeared DRYS would just do a standard back test of the old $4 level...yet..with the BDI still on the slide, DRYS has failed to hold. The fact the main market is seeing minor weakness is also not helping.

Where is the next support?

The bigger weekly chart is offering next major support around current the $3.50s. A weekly close <$3.50 would be a real problem, and open the door to the $3.00 threshold...right back to mid-November levels.

Certainly, the current situation is marginal for the bulls, and the recent break back into the $3s will have seen a great many having been kicked out of their positions.

Friday 10 January 2014

GDX - miners end the week on a positive note

With Gold and Silver commodity prices continuing to rally - although still below old broken support, the Gold miners ended the week on a reasonably positive note. The Gold miner ETF of GDX, settled +3.4% @ $21.99 - right at upper (descending) channel resistance.

GDX, daily

GDX, monthly


The broader trend for the miners remains highly dependent upon spot Gold & Silver prices.

As things are, I still expect Gold to eventually test..if not briefly break, the giant psy' level of $1000. If that is the case, the miners are going to remain pretty low, no matter how oversold they might currently be argued to be.

All things considered, there still looks to be a reasonable chance of GDX falling to the 2008 low in the $15s.

Further, if my main market outlook - for a summer/early autumn correction of around 20% turns out to be broadly correct, then the mining stocks will remain under added downward pressure, at least until Q4 of this year.

Thursday 9 January 2014

ANR, BTU - coal miners breaking support

Whilst the main market saw continued chop, the coal miners were especially weak. Two of the big names, Alpha Natural Res' (ANR) and Peabody (BTU) fell a very significant -4.0% and -2.5% respectively. With clear breaks under rising support, both look likely for further near term downside.

ANR, daily

BTU, daily


The miners have all been struggling for the past few years - ever since we saw a secondary (relative to summer 2008) commodity peak in spring 2011.

The big leaders in Coal.. ANR and BTU, really have major problems least from a technical/chart perspective.

There is clear downside in ANR to $5.50...perhaps even the summer low in the $4.70s

As for BTU, near term weakness seems a given to the low $16s, if not the mid $14s.
Without question, whilst commodity prices remain (surprisingly) weak, the miners are going to really struggle, and this very much includes the precious metals miners.

Wednesday 8 January 2014

UAL - headed comfortably higher

Whilst the main US equity market continued to see minor price chop, United Continental (UAL) soared, closing +6% @ $41.02. Primary upside target remains the 2007 double top high in the $48s, which seems viable with the next few months.

UAL, daily


There is little to add from a recent post.

Certainly, I don't expect a straight run to the $48 target in the current multi-day rally, but by late spring...UAL will surely have tested the $48s.

A monthly close >$50..would be something exceptionally bullish this year, and bode very well for 2015.

Tuesday 7 January 2014

DRYS - back test of the old resistance

Whilst the main market has seen slight weakness in the past few days, Dry Ships (DRYS) has slipped a little over 20% to back test the old $4.00 high. It is highly probable that $4 is the new floor, and we're now set for a push to the $6/7s.

DRYS, daily

DRYS, weekly


For the traders out there, this makes for an extremely easy trade.

Long, with a stop around the 4.05/3.95 area.

For me, the only issue now is not whether DRYS will battle higher in the coming days/weeks, but whether it can break into double digits by the late spring.

$10 sound impossible? I could reel off a list of a hundred stocks that have seen their price double up across just a few months.

As ever....DRYS..along with all the other shippers will react very closely to the action in the BDI...

BDI, monthly, 7yr

BDI target remains 3000/3500 by April/May...the 4000s are just about viable..if sp'1950/2050.

Monday 6 January 2014

RIG - coiling up... for a snap higher

Whilst the main market continues to see minor weak chop, Transocean (RIG) managed a small gain to start the week, +0.17% @ $48.76  Recent price structure is a very clear bull flag, and there looks to be easy upside to 52/53 within the very near term.

RIG, daily

RIG, weekly

RIG, monthly


*I remain long RIG, from $50.07, and a secondary block in the $47.30s.

RIG remains bizarrely valued...

see key stats @ yahoo finance.

Frankly, I'd be surprised if RIG doesn't see the mid/upper 60s by late spring - assuming main market proceeds into the sp'1950/2050 zone.

Long term outlook..into late 2015 is $125/150...which I realise it an extremely bold target, but in terms of valuation is not particularly high.

Friday 3 January 2014

UAL - climbing to the upper $40s

United Continental (UAL) closed the week with very significant gains, settling +5.8% @ $39.91. A move into the upper $40s looks viable, with a challenge of the 2007 double top high of the $48s - which seems viable by late spring.

UAL, daily

UAL, monthly, 10yr


With a successful back test in the $36s, UAL broke into the $40s for the first time since February 2008.

In many ways, the UAL daily chart is somewhat similar to the Dow and Transports, as it should do though!

Airlines still battling

UAL is still struggling (when aren't the airlines having problems of one kind or another?) but if the broader economy holds together across 2014, UAL should have a reasonable chance at putting in a few profitable quarters.

see key stats @ Yahoo finance

My main market outlook for late spring 2014 remainsa multi-month cycle peak in the sp'1950/2050 zone. If that is correct, then I would most certainly be seeking UAL to test the 2007 high in the $48s..which is a clear 20% above current levels.

UAL is most definitely one to watch, and will be a good indicator also of where the Transports index is headed into the March-May time zone.

Thursday 2 January 2014

F - bear flag on the daily chart

Whilst the main market saw moderate weakness to begin the year, Ford (F), managed a fractional gain of 0.06% @ $15.44. Price structure looks to be a pretty clear bear flag, with downside to the 14.30/00 zone within the next few weeks.

Ford, daily


It sure looks like a bear flag on the daily charts. Baring a few daily closes above the 200MA, currently @ $15.78, Ford looks set for another wave lower..probably to the low 14s.

Mid/long term outlook, still appears fine into mid/late 2015, with upside (at least) to the $28/32 zone