Friday 28 February 2014

GDX - strong monthly gains

With Gold and Silver prices seeing powerful gains across February, it is no surprise to see the gold mining stocks on the rise. Across the month, the ETF of GDX gained an impressive 10.3%, settling @ $25.91, back to the levels last seen in Sept'2013.

GDX, daily

GDX, monthly


So, the second consecutive monthly gain for the miners, but..we've seen this picture before - July/Aug' 2013, and Aug/Sept 2012. On both occasions, it didn't end well, did it?

My concern remains that the precious metals have not yet put in a key multi-year low. I'm still highly suspicious that Mr Market will want to wash out the $1000 Gold holders. before a grand new multi-year rally can begin.

*if the main market rolls over late spring/early summer, the Gold miners will surely join the party to the downside.

Thursday 27 February 2014

RIG - an earnings miss

Transocean (RIG) missed slightly for Q4/full year earnings, with an early morning decline of -3% (intraday low: $41.44). Despite a latter day recovery, closing -1.1% @ $42.55, RIG is well below the old busted key support zone of $50/47.

RIG, daily

RIG, weekly


The Oil and Gas sector is one of the most unloved sectors in market land. Whilst profit less stocks like AMZN and TWTR continue to gain, the heavy industrial companies - such as Transocean and Seadrill, remain under constant downside pressure.

The bigger weekly chart for RIG is especially lousy, and we have a possible large multi-week bear flag developing.

With a forward PE of just 7, RIG is - on some level, undervalued by at least 30/50%, but as ever...'it is...what it is.

see key stats@ Yahoo! finance

For now, from a pure price perspective, RIG is a broken stock, and looks vulnerable to slipping into the 30s. If the main market does see a (however brief) multi-month decline this late spring/summer, then RIG will surely continue to fall.

I have even seen talk of an eventual floor in the 20s - which is indeed where it has floored a few times in the past decade. Yet..the low 20s is another 50% lower, and that would give a PE of 6/4.

Crazy market...crazy prices.

Wednesday 26 February 2014

AAPL - surprisingly weak

Despite the continued climb in the Nasdaq, Apple (AAPL) has been weak since early December, settling lower today, -0.9% @ $517. Critical dual support is at the recent low, along with the 200 day MA, in the upper $480s.

AAPL, daily



*first, keep in mind the Nasdaq, monthly

It would seem we'll close higher by a very significant 4% or so this month.

Crazy valuation

Relative to the main market, AAPL, with a forward/trailing PE of just 11/12 is one of those stocks that

see key stats @ yahoo! finance  

From a pure price perspective, the equity bulls need to hold the $480s...where we have multiple key supports. Any monthly close <$480..and the door is wide open to much lower levels this spring/summer.

As ever, AAPL remains a key stock to watch!

Tuesday 25 February 2014

TSLA - hysteria driven

Whilst the main US equity market saw minor chop, there was a particularly powerful hyper-ramp in Tesla (TSLA), which settled higher by a crazy 13.8% @ $247 (intraday peak $259). Near term trend is bullish but today's move makes the smaller cycles very over-extended.

TSLA, daily


I have little to add on what is a pure hysteria stock.

Yes it makes rather attractive cars for the high end market, but really, it remains wrapped in media hysteria, and remains one of the ultimate momentum stocks.

As even some of the anti-TSLA traders noted today, they won't chase it higher as these levels, but neither would they short such a stock. There is very viable upside to the 300s, if not 400s late 2014/early 2015.

Monday 24 February 2014

UGAZ - huge opening reversal

Whilst the main US market built gains across much of the day, Nat' gas prices saw a huge swing. From pre-market gains of +7%, the Nat' Gas 3x lev' ETN of UGAZ turned red and dive bombed into the afternoon, settling -17.8% @ $29.44. Is the winters peak in for Nat' gas prices?

UGAZ, daily


*first, an update on Nat' Gas, weekly

I should note, I had expected at least further upside for Nat' Gas, with best case upside of $7.50/8.00 by late March. The pre-market gains were indeed affirming that outlook, but the daily close has turned out to be VERY bearish.

We have a clear bearish engulfing candle on UGAZ. Opening gains..but with a huge net daily decline. This certainly does not bode well for the Gas bulls tomorrow.

One potential sign of a multi-month top in gas prices is the increasing volatility. Are we forming a choppy top, as we approach the Spring?

For those on the long side, trading ever..are imperative in these wild instruments.

Friday 21 February 2014

UGAZ - powerful weekly gains

With Natural gas prices seeing a renewed push higher this week, the 3x lev' (bullish) ETN of UGAZ soared, settling +9.6% @ $35.79. Across the week, UGAZ gained 31.3%, whilst Natural Gas prices climbed 17.9% to $6.14

UGAZ, daily

UGAZ, weekly


*first, an update on Nat' gas prices, weekly, 3yr

Upside target for Nat' gas is the 7.50/8.00 zone by mid/late March. As many recognise, the closer we get to spring, the closer we are to a seasonal peak in Nat' gas prices.

As ever...the 3x leveraged instruments are subject to very strong decay issues, and are almost always only for short-term holds.

Thursday 20 February 2014

UAL - bullish pennant confirmed

With the main US equity market seeing a rebound, the Transport stocks especially excelled. United Continental (UAL) closed with a very strong gain of 5.5%, @ $45.68. Price structure was a very clear bullish pennant, and that has arguably been confirmed with today's gain.

UAL, daily


The airlines have done particularly well in the past few months, and UAL is one of the big names to get most attention.

With the 2007 double top of $48.25 already having been taken out, next obvious target is the big $50 psy level. Best guess...$53/55 by late March.

*my broader market outlook is for a primary inter'3 top in the US/world indexes, with a multi-month decline of 3-5 months.

If that is the case, UAL will surely pull back, late summer downside would be around 35/30. I suppose it is possible UAL might get cut in half if the market really gets spooked this late spring/summer - by geo-political concerns**

**who wants to fly whilst a war is breaking out, right?

Regardless of any downside action this summer...UAL looks broadly strong into mid/late 2015, and I'd guess will probably be a $100 stock...assuming sp'2100/2300 or so.

Wednesday 19 February 2014

ANR, BTU - coal miners jump

Whilst the main market saw some chop across the day, there was some significant strength in the coal miners. Alpha Natural Resources (ANR) and Peabody Energy (BTU) closed higher by 2.7% and 2.8% respectively. Near term looks at least moderately bullish.

ANR, daily

BTU, daily


*note the trading volume, some rather interesting buy side interest.

Certainly, today's gains were significant - although gains were cut in the closing hour as the broader market weakened, but the broader trend - that stretches all the way back to 2011 (when commodities last saw a major peak), is still very weak.

If the main market unravels this late spring/summer, the miners will no doubt get smashed to new lows, and that probably includes the Gold/Silver miners too!

Tuesday 18 February 2014

UGAZ - continuing to climb

With natural gas prices continuing to climb, the 3x lev' (bullish) instrument of UGAZ settled strongly higher, +12.1% @ $30.54. Near term looks bullish, with general upside into March. As spring draws closer though, the gas bulls are going to face the green shoots of a milder spring.

UGAZ, daily


*first, an update on Nat' Gas, weekly

The highest daily close for Natural Gas since Feb'2010.

For those that can tolerate the volatility, UGAZ - and its sister ETN, the DGAZ (3x short) are proving to be very dynamic price movers. That is no surprise of course, considering the very cold winter in North America.

Unquestionably, as the spring draws nearer each day, the gas bulls are going to face increasing pressure.

As ever, long or short, these 3x instruments are for short term holds only. It is very rare to see a multi-month gain - as remains the case in UGAZ.

Friday 14 February 2014

GDX - strong week for the miners

With the main US equity market continuing to climb, along with precious metal prices, the Gold mining stocks closed the week strong. The ETF of GDX closed +1.9% @ $26.35, with net weekly gains of a powerful 10.2%. Outlook is bullish, with upside to the 30/35 zone by late March/early April.

GDX, daily

GDX, monthly


Everything continues to look bullish for the mining stocks - and indeed, the precious metals.

There looks to be at least another month or two of broad upside, and it will be real interesting to see how much strength the miners can display into mid/late March.

Not surprisingly, the mainstream is now starting to wake up to the broader trend change. Across the long weekend, there will doubtless be a huge amount of metal/miner market chatter.

We'll surely see continued strong gains for both the mining sector, and the broader equity market next week.

Thursday 13 February 2014

GDX - miners fighting back

After a significant swing back to the downside on Wednesday, the gold miners are fighting back, with the ETF of GDX, closing with very strong gains of 4.4%  @ $25.85. Perhaps most important, today was the second daily close above the 200 MA this week.

GDX, daily

GDX, monthly


*Normally I try to highlight a different stock every day of the trading week, but the action in the miners (my favourite sector) is something that does merit extra attention. With the break above the 200 day MA on Tuesday (the first time since Jan'2013)...this is an important time.

So..a second daily close above the 200 day MA in 3 days, and the miners - along with precious metals, are showing the first real strength since last July/August.

However, unlike last summer, the bigger monthly cycles are much more supportive of the current move.

Best guess..this is month'3 of a 4-6 month up cycle. I'm still concerned that Gold will eventually have to test the big $1000 psy level, before a multi-year low is in.

Wednesday 12 February 2014

STX - battling to hold the 200 dma

Whilst the main market is likely seeing a minor retracement, Seagate (STX) remains especially weak, settling -0.3% @ $49.31. Price structure in the short term remains a bear flag, and STX might first need to test the rising 200 day MA - in the mid $45s, before resuming the longer term up trend.

STX, daily


Seagate remains one of my favourite companies, not least since as a computer tech, they are usually my hard drive of choice.

STX remains reasonably profitable (although certainly not on the level of AAPL, or GOOG), and with a valuation that remains unquestionably 'cheap' - with a forward PE in the 8s.

see key stats @ yahoo finance

Underlying MACD (blue bar histogram) on the daily cycle is extremely low, and should start to offer some upside in March.

Next earnings are due: late April

Tuesday 11 February 2014

GDX - continued strong gains

With the main market rising, and higher Gold/Silver prices, everything is now in favour (at least for the short term) for the miners. The ETF of GDX, closed +3.85% @ $25.65, the first daily close above the 200 day MA since January 2013.

GDX, daily

GDX, monthly


Arguably, today's daily gain, is reflected even better on the monthly chart

Next upside target is the 30/35 zone, the latter of which is a powerful 40% higher from current levels.

Certainly, the next few weeks..and 2-3 months could see a long awaited multi-month bounce.

...and indeed, I'd still call it a bounce.

*If the main market sees a sig' correction this summer, the mining stocks will get whacked lower, barring some jump >$1500 Gold - which seems completely out of range right now.

Monday 10 February 2014

GDX - miners on the edge of breaking out

Whilst the main equity market churned sideways, there was some real notable strength in the Gold miners. The ETF of GDX closed a significant 3.4% higher, settling @ $24.73, just a touch under the key 200 day MA. A monthly close >25, opens up 30/35.

GDX, daily

GDX, monthly


The gold bugs - of which most are very much loaded with mining stocks, are understandably taking a real interest in the past few weeks of broad gains.

Yet...the bugs have been repeatedly teased since the grand decline began in late 2011..when GDX was in the mid 60s.

First things first, for those who are bullish the mining stocks...

1. a few daily closes above the 200 day MA
2. a monthly close >10 MA... the $25s
3. any subsequent retracement to hold above the monthly 10MA.

Still bearish on Gold/Silver

I remain broadly bearish on the precious metals until Gold has at least briefly tested the huge psy' level of $1000. However, this could take another year to which point Gold - along with the mining stocks, may have seen a moderate multi-month gain.

For anyone getting overly excited at today's GDX close, I can only refer them to the monthly action of Aug/Sept 2012, and July/Aug 2013. In both never ended very well.

Friday 7 February 2014

TVIX, UVXY - a second day of horror

With the VIX getting crushed into the low 15s, the 2x bullish VIX instruments of TVIX and UVXY saw a second day of abject horror, both declining by around -12%. Across the week, TVIX & UVXY saw net declines of around -17%.

TVIX, daily

UVXY, daily


First, an update on the weekly VIX

We have yet another huge fail in the VIX to break AND hold above the 200 weekly MA. This magnitude of fail does not bode well for equity bears for 'some weeks'.

As for TVIX/UVXY, the net weekly declines, mask huge gains seen on Monday. Most notable, whilst the VIX put in a lower high on Wednesday, TVIX and UVXY still managed to break new highs - as the main market was still concerned about the looming Friday jobs data.

As ever...the leveraged instruments suffer from severe decay over time, and are (almost always) for short term holds only.

Thursday 6 February 2014

TWTR - still sold lower

Despite surpassing consensus expectations, Twitter (TWTR) still collapsed after posting Q4 earnings. After a brief 6/7% spike in Wednesday AH, TWTR settled a rather extreme -24.2% lower @ $50.02. Near term looks shaky, especially if the main market resumes lower.

TWTR, daily


Yesterday afternoon, I had noted TWTR looked more vulnerable to downside than upside. At best, $70 seemed briefly possible, but that 'regardless of the number, good or bad', I expected the stock to slump.

My downside target range was 60/55, and to see TWTR hit $50 in the opening 30mins of this morning was somewhat amusing.

In the closing minutes of the day, there was again another micro wave to the downside, with TWTR again finding strong support at the huge $50 threshold.

*I remain watching the momo stocks, but..have zero interest in trading such 'hysteria' surrounded stocks. I have next to no tolerance or patience for such price swings..whether higher..or lower.

Wednesday 5 February 2014

UGAZ - another explosive day

Natural gas prices were around 8% higher in pre-market, but as morning progressed, there was another one of those sporadic severe swings to the downside. UGAZ closed -10.8% @ $32.67, having earlier peaked @ $41.68. Near term outlook remains....unstable

UGAZ, daily


First, an update on Natural gas prices..., weekly

We have two very spiky (bullish exhaustion) candles on the weekly chart, and Gas bulls should be pretty concerned. There is high risk of downside back to the $4.50s..which is a further 10% lower. Of course..that'd equate to 30/35% lower for UGAZ !


As for UGAZ, pretty amazing to see this 3x ETN swing from the $41s in pre-market to the $30s in the afternoon. The natural gas leveraged ETNs are the wild west right now...very tough to guess the price direction from one day to the next.

Here in southern England, there will be at least a few dozen residents less bullish about natural gas than they were last night.

Residential gas explosion - see BBC news 

Tuesday 4 February 2014

UGAZ - another surge to the upside

With Natural gas prices surging by 8%, the 3x bullish Nat' gas ETN of DGAZ climbed a huge 21.5% higher, settling @ 36.59. Near term trend is strongly to the upside - if subject to brief sporadic sharp pull backs of 15/25%.

UGAZ, daily


*first, an update Natural Gas prices

3yr, weekly


As for DGAZ, trading volume continues to remain huge, and looks set to just keep on increasing into the early spring. As with all 2x...and especially 3x leveraged instruments, holding across multiple weeks - never mind months, usually ends badly.

The multi-month gain in DGAZ - despite significant periodic drops, is a rare case of a leveraged instrument climbing across 3-4 months.

Monday 3 February 2014

TVIX, UVXY - climbing on huge volume

With volatility coming back to the market for the first time since last October, the 2x bullish VIX nstruments are seeing huge trading volume. TVIX and UVXY settled with daily gains of 16.8% and 18.1% respectively.

TVIX, daily

UVXY, daily


*first, an important update on the weekly VIX chart

It is arguably most important to keep in mind that the 2013 VIX high was 21.91. A daily close in the 22s or higher this week will be a very important warning of much higher the months ahead.

As for TVIX/UVXY..and even the non-leveraged VXX, the higher VIX is going to further ramp these instruments in the days ahead.

Best guess..sp'1710/1690 within the next 3-7 trading days. That will probably equate to VIX 25..maybe 27.

From there...VIX will likely get re-crushed to the mid teens again..before the 'real fun' begins.