Monday 31 March 2014

ANR, BTU, CNX - another tough month for the miners

Despite the broader market seeing minor chop across March, the coal miners remained very weak. Alpha Natural Resources (ANR), Peabody Energy (BTU), and Consol Energy (CNX), saw net monthly declines of -20.9%, -6.9%, and -0.4% respectively. Outlook into the summer is bearish.

ANR, monthly

BTU, monthly

CNX, monthly


*please note, ALL upside targets for the miners remain 'On hold'.

As ever, the weaker miners did especially poorly, not least ANR, whose monthly decline of -20.9% was an unquestionably severe fall. Only the larger CNX managed to close the month, broadly flat.

Best guess...continuing weakness into the late spring/summer - not least if the equity market does (briefly) roll over..back to the sp'1625/1575 zone.

From there, I'd look to pick up some of the surviving coal miners..although the battle back upward will probably be a multi-year slow crawl.

Friday 28 March 2014

TVIX, UVXY - poised to surge, if briefly!

US equities saw moderate swings across the week, with the VIX naturally seeing similar minor moves. The 2x lev' (bullish) VIX instruments of TVIX and UVXY saw net weekly declines of -2.2% and -2.8% respectively. If sp' can break <1830 next week, then the VIX should surge into the high teens.

TVIX, daily

UVXY, daily


*first, an update on the weekly VIX, which saw a net weekly decline of -3.9% .


As for TVIX and UVXY, this sort of chop is never good in terms of the decay issue, although volatility itself is the decay is somewhat less.

If VIX 17/18 next week, both TVIX and UVXY should climb 15/20%. Of course, for those holding since early February, that amount of gain is not going to make up for the cumulative losses.

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

Thursday 27 March 2014

GDX - miners bounce into the close

With continuing weakness in both the broader equity market, and in Gold/Silver commodity prices, the miners were weak... until the closing hour. The ETF of GDX, settled +1.3% @ $23.80. Near term outlook is broadly bearish, with a near term target of $22.00.

GDX, daily


*a little closing hour surge, but still..the broader trend is weak...


Whilst the broader market remains weak, and with a bearish reversal on the monthly Gold/Silver charts, the outlook for the miners looks 'rough' this spring.

All the hysteria talk about Gold @ $2000 by year end..and the miners 'to da moon' is indeed..likely to end the same way as it did in 2011, 12..and 13.

*to be clear, I remain a fan of the mining stocks, but...I just don't see this as a decent buying opportunity, not least if the broader market rolls over this spring/summer. 

Wednesday 26 March 2014

FB, TWTR - momo stocks trashed again

For the second time this week, the momo stocks were slammed lower. Facebook (FB) and Twitter (TWTR), both saw very significant declines of -6.9% and -7.1% respectively. Near term outlook is bearish, and both look to have broken key support.

FB, daily

TWTR, daily


Little to add, except that from a purely entertainment perspective..these hysteria stocks continue to offer some comedy gold.

*here is a thought, maybe FB should buy KING ? The ultimate tech marriage?

Tuesday 25 March 2014

TWTR - broken support, fading hysteria

Whilst the main market saw some moderate intraday swings, there was again some notable weakness in a few of the momo stocks. Twitter (TWTR), slipped a further -1.85% @ $47.87, the lowest level since Dec'9. With the key psy' support of $50 broken, near term outlook is most certainly bearish.

TWTR, daily


Suffice to say, a classic case of broken support..and the stock now looks destined for a test of the Nov'25th low of $38.80.

Monday 24 March 2014

FB, NFLX, TWTR - momo stocks trashed

It was a pretty weak day for the broader market, but it was a mini horror show for the momo stocks - especially those in the tech sector. Facebook (FB), Netflix (NFLX), and Twitter (TWTR), saw net daily declines of -4.7%, -6.7%, and -4.2% respectively.

FB, daily

NFLX, daily

TWTR, daily


One question that arises from today's collection of momo declines, are they a warning for the broader market? Has the hysteria bubble finally burst, or is this just a little washout, with further broad gains due in April/May?

The rest of this week will be really interesting to watch..and be part of.

As ever, I do not trade the 'hysteria' stocks, but they are always worth watching, and can sometimes herald a broader change in market direction when the momo bubble periodically pops.

Friday 21 March 2014

TVIX, UVXY - heavy weekly declines

With the VIX declining by -15.7% this week, the 2x lev' (bullish) VIX instruments of TVIX and UVXY saw heavy net weekly declines of -11.7% and -13.1% respectively. However, if VIX has floored in the 13s, then next week should offer some significant upside.

TVIX, daily

UVXY, daily


*first, an update on the VIX weekly

Most notable in the above chart, we have a general series of higher lows since the early Jan' low of 11.81. This is certainly somewhat interesting, since equities have still managed to push from the earlier high of 1850, to 1883.

As for the 2x instruments, it has certainly been a rough week for those holding across the entire week.

The equity rally of Mon/Tuesday was expected, although even I was somewhat surprised to see VIX back in the 13s, not only ahead of the FOMC, but even this Friday morning.

What is clear, with each day we move forwards this spring, the odds swing increasingly in favour of the equity bears/VIX longs. However, it will not be until late April/early May that the bulls will face a concrete wall. 

As ever...such lev' instruments are for short term holds only, the decay remains the incessant problem for holds more than a week or two - as this past week also illustrates.

Thursday 20 March 2014

UGAZ - cooling into the spring

Whilst the main market built gains after some initial weakness, Natural Gas prices were weak across the day, with the 3x (bullish) ETN of UGAZ, settling -5.4% @ $23.41. Near term outlook is for further weakness, not least now that spring has arrived.

UGAZ, daily


*first, an update on Nat' gas, weekly

We have a very clear reversal from the mid 6s, and there really isn't any support until the mid 3s, which is roughly another 25% lower.

As for UGAZ, the outlook looks pretty grim. With each day as we move forward in spring, the price pressure is increasingly to the downside.

Of course, there remain serious issues with Russia/EU over gas supplies, but with winter now fading, the pressure is off, at least for six months.

As ever, such 3x leveraged instruments are highly problematic for holding across multiple weeks. Even moderate sideways chop will lead to significant statistical decay.

Wednesday 19 March 2014

GDX - falling through rising support

With Gold and Silver prices on the slide - along with the main equity market, the mining stocks saw sharp declines. The ETF of GDX closed -3.7%, at $25.46, below rising trend support. Near term outlook is for further weakness, with key support around $24.75

GDX, daily


* a golden cross is due Thur/Friday, despite today's very significant drop.

With Gold also on the border of breaking rising trend support, the miners now face some trouble in the immediate term.

If GDX fails to hold the 50/200 day MAs, then the door is open the 24/23 zone.

Tuesday 18 March 2014

PLUG - dying hysteria

Whilst the main market climbed, the hysteria continued to wane in the fuel cell stocks. Plug Power (PLUG) continued to weaken, closing -8.7% @ $5.94. Near term outlook is bearish, with next soft support (arguably) the 50 day MA, down in the $4.30s.

PLUG, daily


I just wanted to highlight this crazy stock again as a reminder of what happens when all the hysteria drys up.

Without the media attention, without the pumpers, PLUG doesn't merit much attention at all.

..and I should probably leave it at that.

*I've never traded PLUG, and have ZERO tolerance for the hysteria stocks...the ride up could be fun..but it almost always ends the same.

What happened to buying companies with a sound balance sheet, and that make a reliable profit?

Oh yeah..don't get me started on AMZN or TWTR !

Monday 17 March 2014

GDX - miners retracing

With Gold and Silver prices seeing a significant retracement, the miners saw similar weakness. The ETF of GDX closed lower by a very significant -3.3% @ $26.82. Near term outlook is for eventual renewed strength, once the metals turn higher again.

GDX, daily

GDX, monthly


It would still seem GDX is headed for the low $30s, assuming Gold can break into the $1450/1550 zone across the next few months.

However, I remain highly suspicious that the precious metals will see a further wave to the downside in late 2014/2015, with Gold testing the giant $1000 psy' level.

If that is the case, then the mining stocks will greatly suffer, regardless of how well the broader equity market might be doing across the next 12-18 months.

Friday 14 March 2014

TVIX, UVXY - strong weekly gains

With the US equity market slipping, the VIX broke into the 18s . This was reflected in the 2x lev' (bullish) VIX instruments of TVIX and UVXY, which saw net weekly gains of 14.7% and 16.1% respectively. Near term outlook is for a brief VIX decline into the FOMC, before a powerful surge >20.

TVIX, daily

UVXY, daily


*first, an update on the VIX, which gained 26.3% across the week.

VIX looks set to break >22 in the coming few weeks, which would surpass the 2013 high,

As for TVIX and UVXY, both will probably see considerable gains after the next FOMC.

However, as is always the case, the VIX never stays high for very long, and both will be subject to severe statistical decay if we see some strong day to day swings in the equity market.

*I will consider going long VIX next Wednesday afternoon, after the next FOMC announcement is out of the way.

Thursday 13 March 2014

RIG - back to summer 2012

Whilst the main market remains relatively close to historic highs, Transocean (RIG) has been in a general decline since last November. With the market weak today, RIG slipped a further significant amount, settling -3.1% @ $39.54, the lowest level since June 2012.

RIG, daily

RIG, weekly


As I noted some weeks ago, with the failure to hold $47, RIG holders were in trouble..and we're now almost 20% lower since late 2013.

I remain bullish about the Oil/gas sector for the very long term, but for the moment, the market has near zero respect for the entire sector.

If the main market rolls over this spring - down to the low sp'1600s, then RIG looks set to slip to the low 30s. However, if Q1 and Q2 earnings deteriorate..there is the risk of an ultimate fall..back to the low $20s/upper teens - the floor from 1999-2004.

RIG remains a company I will continue to closely follow across the summer.

Wednesday 12 March 2014

DRYS - shippers sinking

Whilst the main market saw some moderate weakness, there was again some significant declines in many of the shipping stocks. Dry Ships (DRYS) settled -3% @ $3.57, the second consecutive daily close under the important 50 day MA. Outlook is now bearish.

DRYS, daily

DRYS, weekly


*I had strongly considered getting involved (long side) with DRYS last week..and indeed even at the start of this week, however, price action just looked overly weak, and so I dropped the idea.

First, an update on the BDI, weekly

Certainly, if we've just seen a lower high in the BDI, there are major problems ahead for not just the shipping/trans sector, but also the broader market.  First downside target is a weekly close <1100. We'll see some media attention if the BDI slips back under 1000, later this month/early April.

A pretty lousy daily close for DRYS, and the weekly chart is starting to look pretty ugly.

If the main market rolls over next week, there is again the real threat of another major wave lower..back into the $2s.

I remain a 'fan' of the company, and more so, the sector in general, however...recent price action is indeed weak, and the next support is the 200 day MA, which is close to the $3.00 threshold.

A few daily closes <3, would bode very badly for the late spring, and across much of the summer.

Tuesday 11 March 2014

PLUG - battery meltdown

Whilst the main market saw some moderate weakness, the real entertainment was in Plug Power (PLUG), which opened higher, but saw a huge collapse in the afternoon, settling -41.9% @ $5.99. Near term outlook is messy, with earnings due this Thursday.

PLUG, 60min

PLUG, daily


So...a new high of $11.72, but today's reversal was a classic bubble bursting in what was a parabolic rise.

PLUG holders had almost THREE hours of warning of trouble, via the opening black-fail candle on the hourly and daily chart.

As I often note, those black-fail candles are usually very often good early warnings of trouble. They don't always work out...but...I'd say 70/80% of the time..yes!

Day'1 down..what next?

The reversal around 12pm was very stark..and there can be no excuse for anyone being surprised at the severity of today's daily decline. There isn't any significant support until the 50 day MA..and that is still a considerable way lower in the upper $3s.

No doubt..some will wonder whether this stock is headed all the way back to the $1s..and that is indeed a very viable prospect, not least since the company doesn't make a profit.

*earnings are due Thursday (although I'm unclear as to what time this will be).

Monday 10 March 2014

PLUG - market fuelled hysteria

A quiet start to the week in the main market, but Plug Power (PLUG) saw further extreme gains, settling higher by 24.3% @ $10 28 (intraday peak: $11.41). Near term trend remains extraordinarily bullish, but is entirely unsustainable for much longer.

PLUG, daily (arithmetic scale)


*I've selected an arithmetic scale, rather than log', since I really wanted to highlight just how crazy powerful the ramp in PLUG has been.

PLUG remains a loss making company. There remains lots of talk about a possible link with Tesla (TSLA), but still..a loss a loss maker - although yes, that has never been a problem for hysteria stocks like AMZN or TWTR,

see key stats @ yahoo finance

PLUG is getting a lot of media attention, and has recently been getting a fair bit of coverage on clown finance TV. The herd are literally stampeding into PLUG. At some point...probably just a few days, the herd are going to try to exit/cash out, and many are going to get crushed near the exit door.

It will be...entertaining to watch.

*Next earnings are due this Thursday, March'13.

Friday 7 March 2014

ANR, BTU - the greatly unloved coal miners

Whilst the main US equity market continues to break new historic highs, the coal miners remain the most unloved sector in market land. The week concluded with a major snap lower, with Alpha Natural Resources (ANR) and Peabody Energy (BTU), falling by a very severe -12.5% and -5.3% respectively.

ANR, daily

BTU, daily


The above charts are interesting, but from a bigger perspective, the real horror is more clear...

ANR, monthly

BTU, monthly

*please note, the upside targets are most certainly 'on hold', with broader downside now expected across the spring/summer.

How are ANR and BTU actually doing?

First, see key stats..

ANR @ yahoo finance
BTU @ yahoo finance

ANR is still losing money - and that is in a supposedly 'recovering US/world economy'. BTU is doing less bad, but still with net margins of -7%. All things considered, the lack of profitability is a real concern. How badly might the miners fare if the economy actually slipped into recession, whether 2015, 16.. or whenever?

Commodity prices remain relatively low - despite the huge QE from many central banks, and again it should be noted, if the economy turns lower...lower output prices are going to add even more problems to the miners.

Indeed, Copper prices are now vulnerable to slipping under the key $3 threshold. If Dr Copper has a problem, then it could be a key signal of looming trouble this spring/summer.

Copper, monthly

Long term outlook

I am very bullish for just about all mining/resource stocks in the very long term. However, the immediate  trend is clearly very weak, and if the main market does see a multi-month decline this spring/summer (back to the sp'1600/1500s), then the miners are going to see further significant downside.

For me, one of the more curious questions is whether any of the big miners are going to either merge/buy out each other in the next year or two?

Many seem to think coal is a commodity/fuel that is no longer necessary, I'd most certainly disagree with that sentiment. At some point, the surviving miners are going to recover, but that is probably a very considerable time away.

Regardless, I will be closely watching the miners - Coal, Gold/Silver, Copper, across the spring and summer. 

Thursday 6 March 2014

GDX - miners clawing higher

Whilst the main equity market is still broadly climbing, the miners are similarly also climbing - no doubt helped by rising Gold/Silver prices. The ETF of GDX settled with somewhat significant gains, +1.3% @ $26.84. Near term outlook is bullish, with upside to the big $30 threshold.

GDX, daily


*Today was the highest daily close since Sept'19

Little else to add. Clearly, near term trend is bullish, and with Gold/Silver prices also on the rise, the miners have done very well since the low in the December.

Indeed, GDX is now over 30% higher in just under 3 trading months.

The problem remains, if the metals don't keep pushing higher, and...if the main equity market rolls over in the spring/summer, then the miners are going to be in real trouble.

I'm still inclined to an eventual floor in Gold..somewhere in the $1050/950 zone. If that is the case, then GDX will eventually break new lows.

Wednesday 5 March 2014

DRYS - back in the $4s

Whilst the main market remains broadly bullish, the transport stocks are battling to join the party. Dry Ships (DRYS) saw significant gains today as it broke back into the $4s, settling +6.7% @ $4.14. Near term outlook is bullish.

DRYS, daily

DRYS, weekly


It has been a messy opening few months this year for DRYS. Yet..with the sp'500 in the 1870s, and the Trans in the 7500s, DRYS is finally starting to pick up some momentum again.

With the break into the 4s, the late Dec' high of $5.00 is now the obvious target.

*my broad outlook is for a key turn around the time of the next FOMC of March'19.

Best guess, DRYS does at least get close to testing the big $5 threshold, but if the main market rolls over again, we could be looking at a double top..with DRYS slipping back to the 3s..even 2s by late summer - if sp'1500s.

I remain a fan of the company, but only on a longer term basis, and DRYS is without question a pretty speculative stock to meddle in.

Tuesday 4 March 2014

TVIX - widow maker still making widows

With the US and world equity indexes rebounding strongly, the VIX is back on the slide. The 2x lev (bullish) VIX instrument of TVIX fell a considerable -12.1%, settling @ $7.17. Near term outlook is for further downside, and the usual 'decay' problem sure won't help.

TVIX, daily


*first, an update on the daily VIX

As I noted yesterday, the daily closing candle for the VIX did not bode well for the equity bears. Today's gap lower was certainly not exactly a surprise. A black-fail candle - as I like to call them, are not to be dismissed lightly

As for the TVIX, rest of the week doesn't look good.

My broader market outlook remains a target equity cycle high around the time of the next FOMC (March'19). If that is the case, the TVIX will merely decay for another 10 trading days or so.

As ever...such lev' instruments are for short term holds only. Rarely do multi-month holds work out..even when the trend is going the 'right' way.

Monday 3 March 2014

UGAZ - weakness despite geo-political concerns

Probably the most notable weakness of the day was in Nat' Gas prices. Despite some very valid concerns about the Russia/Ukraine situation, Nat Gas prices swung from minor opening gains, to close -2.3%. The 3x ETN of UGAZ closed -7.3% @ $25.19

UGAZ, daily


*first, an update on Nat Gas' weekly

So..Gold, Silver, and Oil all benefited from concerns about the increasingly unstable situation in the Ukraine..yet Nat' gas actually declined. I'm pretty bemused at this, maybe it will turn higher tomorrow..or later this week, but really..its kinda odd.

Of course..spring is coming though, and we're another day closer to a seasonal peak..before 6-9 months of downward price pressure.

As for UGAZ, the statistical decay will likely be a real nightmare across the coming late spring/summer. As ever...such 3x leveraged instruments will generally slip lower on a month to month basis..even if the trend is somewhat in their favour.