ANR, BTU - coal miners still digging deeper

Despite the main equity market building gains into months end, the coal miners remain an especially battered sector. Alpha Natural Resources (ANR) and Peabody Energy (BTU) ended the week badly, -5.1% and -3.2% respectively.


ANR, daily

BTU, daily

Summary

The daily charts look bad, but...the monthly cycles really put things in perspective...

*please note, the upside targets are 'on HOLD', but I thought I'd leave them on the charts...

ANR, monthly

BTU, monthly

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I remain cautious about ANR (in terms of possibly imploding), although I have much greater concern about Arch Coal (ACI) and Walter Energy (WLT).

I am still bullish in the long term for coal, after all it remains a relatively cheap and plentiful resource, and at some point, even the US Govt' will cease trying to curtail its use.

I have no interest in picking up any mining stocks in the immediate term, not least since I still believe Gold will eventually break into the low $1000s..perhaps the 900s. Until the precious metal prices floor..the mining stocks are not going to be able to begin a new multi-year ramp.

AAPL - soon to be split

With further gains in the broader market, Apple (AAPL) continued its multi-month climb, settling +1.8% @ $635, the highest level since Oct' 2012. Near term outlook is bullish, and the historic high of $676 is now just another 5% higher.


AAPL, daily

AAPL, monthly

Summary

*AAPL is due to be split, 7 for 1, at the Monday open..June'9th.
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Suffice to say...with the broader market still climbing, AAPL looks strong, and as many recognise, relative to a lot of the 'junk' out there, AAPL is grossly undervalued.

Regardless of the near term though, equity bulls should be mindful of the MACD (blue bar histogram) cycle on the bigger monthly cycle. If that starts to level out, and roll lower by July/August, it could be a bit of a rough late summer/Autumn.

Gold miners continue to dig deep

With precious metals breaking lower yesterday, the mining stocks are greatly suffering. The miner ETF of GDX fell a further -1.5% @ $22.07, and looks set to lose the $20s this year. Near term outlook is most certainly... bearish.


GDX, daily

Summary

The metals broke lower yesterday - as expected, and that is putting strong downward pressure on the mining stocks.

This is despite continued broad upside in the main market..and is EXACTLY what I have been noting since 2011.

If Gold slips to the low $1000s, even the 900s, the miners will continue to fall, regardless of however strong the main stock market might be.

TVIX, UVXY - now is still not the time

With equities holding the sp'1860s, and rebounding into the weekly close, the VIX resumed the decline. The 2x lev' bullish instruments of TVIX & UVXY saw net weekly declines of -9.0% and -8.8% respectively. Near term outlook is for continued decay, not least if the VIX slips to the 10s...or even 9s.


TVIX, daily

UVXY, daily

Summary

*first, an update on the VIX, which saw a net weekly decline of -8.7%.

VIX is now close to levels not seen since February 2007. VIX 10s look likely with sp'1910/20s, the only issue is whether single digit VIX is seen before the current multi-week equity wave completes.
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As for the 2x lev' instruments, as well as reflecting a lower VIX, we're just seeing the usual statistical decay.

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As ever, such instruments are for the short term, if not merely 'intraday' holds.

There will no doubt come a time this year when these instruments will double up..or even more..but they will almost certainly not recover to levels from just a few months ago.

*I currently have no intention to be long the VIX until at least mid June. My own preference would be to pick up a VIX call block..strike, Sept/Oct, in the low 20s.

BTU - still no love for the coal miners

Whilst the broader market continued to push higher, there was significant weakness in the coal mining sector. Peabody Energy (BTU) closed lower by -3.1%, @ $17.49. There is easy downside to the low $15s, but if the main market breaks this summer, then perhaps even lower.


BTU, daily

BTU, monthly

Summary

*all upside targets on the monthly chart are currently on hold.
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I will again first note, I am bullish on ALL miners in the long term, but for now...perhaps across into 2015, the coal, gold, silver, copper, miners are generally still exceptionally weak. A break below the 2013 lows seems viable for most mining stocks (inc. GDX, <$20), this year.


Peabody...not going away

BTU is a great company, and I've zero concern about whether it will still be trading in the years ahead.

What remains a problem is the very strong anti-coal stance from the US leadership, there remains a lack of any respect for what is one of the few viable long term energy resources.

However, world coal demand remains relatively strong, and at some point, the mining sector will start to benefit from increased margins.
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In contrast, I remain VERY wary of Arch coal (ACI) and Walter Energy (WLT). Both look vulnerable to imploding entirely within the next 6-18 months. I'd not be surprised if both don't file for bankruptcy, just as JRCC and PCX have.

NFLX - back test of the old broken channel?

With the main market rebounding, Netflix (NFLX) saw some particularly strong gains, settling higher by  5.1% @ $391. Near term outlook is bullish, and if the main market can claw a little higher into June, then the $400/410 zone looks an easy target.


NFLX, daily

Summary

*with the recent rally, a death cross (50 day breaking under the 200 day) looks to have been avoided, at least until late June/early July.
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What should I say on the NFLX?

Well, at least it does make a profit, which is something AMZN would do well to attempt to emulate.

On a purely chart perspective, the very long duration up channel - which broke late March, looks set for a back test of the old channel floor within the near term.

A move into the low $400s in June would match up with an equity market in the sp'1920/30s or so..before a renewed wave lower across the summer/early Autumn.

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*as ever, I don't trade the momo/hysteria stocks, but they remain somewhat entertaining to keep an eye on.

GDX - broader trend remains bearish

With precious metal prices remaining weak, the miners remain similarly weak. The miner ETF of GDX, settled -0.1% @ $23.39. There is near term downside to the low 20s, and the 2013 low of $20.13 looks set to be taken out this year.


GDX, daily

GDX, monthly

Summary

The broader trend remains weak. If you believe that Gold/Silver prices are going to weaken further, then the miners will no doubt also fall - regardless of what direction the main equity market takes.

My own target for Gold is a key multi-year cyclical floor of $1000/900s, which might equate to GDX in the mid..even low teens.

Without question, the miners are 'bizarrely cheap', relative to the 2011 highs, but for now...I'm not getting involved until I believe precious metal prices have fully floored.

AAPL - holding the $600s

Whilst the main market saw moderate gains, Apple (AAPL) was especially strong, closing with net gains of 1.2% @ $604, the highest level since October 2012. Near term outlook is bullish, with comfortable upside to the 615/25 zone by mid June.


AAPL, daily

Summary

Little to add from a recent post.
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AAPL is just a few weeks away from a 7 for 1 stock split...and once the price is lower, we'll probably see some extra demand, for purely 'oh look, its cheaper now' psychological reasons.

An obvious target, post split, with be the $100 level... equiv' to $700.

However, unless the main market proceeds to sp'2000...and beyond, I can't see $100 this side of the summer..but more likely, in late 2014..or spring 2015.

Relative to the main market..AAPL is grossly mispriced.

CHK - heavy weekly declines

Chesapeake Energy (CHK), ended the week on a strong downward note, -4.7% @ $27.64, which made for a net weekly net decline of -7.3%. This was an especially stark reversal, considering the stock began the week with the highest level ($30.48) in over two years.


CHK, daily

CHK, weekly

Summary

*I bailed on CHK this past Monday morning, whilst the main market was pushing upward. My exit of the $29.80s looks pretty good now, although at the time, I was somewhat annoyed, since a mere few hours later, the stock was in the $30.40s.
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First..see  Bloomberg

It would seem CHK is still wrestling with a dispute with Michigan state, over the auction/bidding outcome of some exploration rights.
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CHK, still good?

As a company..and sector, I still favour CHK, but I intend to leave it alone until the late summer/early autumn.

If the main market does see a multi-month rollover, CHK will be considerably lower. This will be the case regardless of oil/gas prices, and probably..even of the outcome of the ongoing legal battle.

Best case - from a buying perspective, $20. The mid/low teens seem unlikely, even if sp'1625/1575 - which remains my 'best bear case' for this year.

AAPL - broadly strong

Whilst the main market saw moderate weakness across the day, there was noticeable resilience in Apple (AAPL), which settled lower by just -0.04% @ $593. AAPL looks set to climb into the 610/20 zone in late May/early June.


AAPL, daily

AAPL, monthly

Summary

The tech behemoth that is AAPL is holding up very well, considering the recent post earnings gains.

AAPL is due for the 7 for 1 stock split in early June, and no doubt that will get a great of media attention.

The first obvious target will be a move from $85 (or so) to the natural psy' level of $100. That is of course a very significant 20% higher.

As many also recognise, with the stock split, AAPL now looks set to join the Dow'30 this coming autumn. That will be a major bullish factor for both AAPL, and the broader market.

Dow..bears...beware!

FCX - battling higher

Whilst the main market saw a day of mostly minor chop, the giant miner Freeport McMoran Copper and Gold (FCX) saw strong gains, settling +1.9% @ $35.57.The bigger weekly cycle looks bullish into the low $37s - the Jan'2 high.


FCX, daily

FCX, weekly

Summary

*I was recently long this stock (for earnings), and I kinda missed the bigger part of the move, as the main market broke new highs.
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FCX looks set for the low $37s...but the $40s look unlikely this summer, not least if the broader market does eventually rollover (if only for a few months!)

FB, TWTR - momo stocks bouncing

With new historic index highs, the momo stocks managed to push significantly upward. Facebook (FB) and Twitter (TWTR) closed higher by 4.6% and 5.9% respectively. Near term outlook is for further gains of at least 3-5%.


FB, daily

TWTR, daily

Summary

Suffice to say, the main market - as I suspected, is seeing another up wave, and that is really helping to bring some buyers into the battered momo stocks.

There looks to be a comfortable further 3-5% of gains to come in the near term.

First resistance...

FB 62, at the 50 day MA
TWTR, the big 40$ threshold
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If the main market rolls over this summer - down to sp'1625/1575, both stocks could be cut in half.

CHK - strong weekly gains

With earnings coming in fine, Chesapeake Energy (CHK) built very significant net weekly gains of 5.4%, settling @ $29.81. If the big $30 threshold can be broken through, there is open air to $31 to $34 within the next few weeks.


CHK, daily

CHK, weekly

Summary

CHK saw some pretty wild price action when earnings were released this past Tuesday, but overall, the broader up trend is continuing.. as especially seen on the weekly chart.

An attempt to take out the July 2011 high of the $34s appears just about viable by late May/early June.
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*I remain long CHK from the $29.20s, and will consider an initial exit in the $30.25/50 zone next Monday.

RIG - good earnings, bearish reversal

Transocean (RIG) posted much better than expected earnings, and opened significantly higher at $44.80, but immediately saw a major snap lower, settling -4.1% @ $41.56. Next support is the 50 day MA in the $41.30s.


RIG, 60min

RIG, daily

Summary

*I was long RIG, and bailed at the open, at $44.70..which frankly, I was very pleased with. I also bailed on sister driller Seadrill (SDRL), but am still holding Diamond offshore (DO) - seeking 55/56 on the latter.
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Earnings were indeed good, yet as ever...sometimes the market simply doesn't care, and we saw some considerable selling across today.

All things considered, despite my exit this morning, I will strongly consider a re-entry (if only for a day-trade), somewhere in the $41.60/30 zone.

If the 50 day MA is broken under, next support is around the $40 threshold.

DO, RIG, SDRL - drillers battling higher

Even when the main equity market was lower this morning, the Oil/Gas drilling stocks were still holding slight gains. Diamond Offshore (DO), Transocean (RIG), and Seadrill (SDRL) closed +1.1%, +0.6%, and +1.5% respectively. Near term outlook is bullish.


DO, weekly

RIG, weekly

SDRL, weekly

Summary

*rather than get overly wrapped up in the day to day price noise, I will again highlight the bigger weekly cycles.
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Broadly speaking, the drillers broke a multi-month down trend just a few weeks ago. Last week was a bit of a choppy mess, but this week, the drillers are again making a play to push significantly higher.

Reasonable near term targets...

DO - 56
RIG - 45
SDRL - 36
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Certainly, if the main market gets stuck - as I believe it will, sometime between mid/late May..and early June, I'd expect the drillers to also start rolling over, but from levels at least 5-10% higher than currently.

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**RIG has earnings at the Wednesday May'7 close.. so it will be interesting to see how that trades across Thursday..and into the weekend.

TWTR - the rats sell after being unlocked

Twitter (TWTR) has had a tough time since the late 2013 rally to $74. The recent break of the core support floor has opened the door to an eventual hit of the IPO issue price of $26. TWTR, settled -18.2% @ $31.71, on extremely large sell side volume, after the latest unlock.


TWTR, daily

Summary

Suffice to say, I find it highly amusing to watch this loss making hysteria surrounded stock get another smack down.

Until it starts turning a profit, along with a long term business plan that makes even mediocre sense, I can't take it the least bit seriously.

Primary target is a hit of the IPO issue price of $26.

If the broader market can slip into the sp'1600s this summer...then TWTR could be in the teens.

AAPL - breaks into the $600s

With the broader market rebounding across the day, Apple (AAPL) built significant gains into the close, settling +1.5% @ $601. With the big $600 threshold now broken, the door is open to the 620/25 zone.


AAPL, daily

Summary

Little to add.

As ever, relative to the main market, AAPL remains a bizarrely priced stock, and 'should' be in the 700/800s.

As things are..the 7 for 1 split is due early June..and AAPL will probably be added to the Dow in the autumn.

Regardless of any summer weakness (especially in the main market), long term bullish..at least into mid/late 2015.

TVIX, UVXY - now it not yet the time

With the VIX seeing a net weekly decline of -8.2%, settling @ 12.91, the 2x lev' (bullish) VIX instruments of TVIX and UVXY naturally declined, by -7.6% and -8.6% respectively. Near term outlook is for the VIX to remain in the low teens for some weeks.


TVIX, daily

UVXY, daily

Summary

First, an update on the weekly VIX

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I do not expect VIX to be breaking back into the 20s until mid/late June at the earliest. If the broader equity market can put in a key inter'3 top this May/June, somewhere in the sp'1900s, then VIX is set to start a broad climb...but not quite yet.

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As for TVIX and UVXY, clearly, whilst the VIX is only seeing minor chop, the old problem of statistical decay is going to plague these instruments.
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Best guess?

I'm seeking a key inter'3 top in the US equity market this summer, somewhere on the sp'1925/50s, and then a multi-month rollover, down to 1625/1575. In my view, that is probably the very best the bears can hope for, before the next hyper wave to the upside.

What would that mean for the VIX? I'd have to assume at least the 25/30 zone, but if there is some major (if brief) geo-political conflict this summer, then VIX has a small chance of spiking much higher.

My own plan is to pick up a VIX call block (Sept/Oct) 20/25 strike, sometime in late May/early June.

TWTR - trying to reclaim the broken floor

Whilst the main market saw minor chop, there was some notable strength in the momo stocks. Twitter (TWTR) had to fight hard to hold minor gains of 0.3% @ $39.09. Near term outlook is moderately bullish, but there will be severe resistance in the 42/45 zone next week.


TWTR, daily

Summary

The break of the support floor - taking out the Nov' 2013 low, was a major fail for TWTR. Yet, the Wednesday candle was itself a reversal, and we did see TWTR breaking (if briefly) into the low 40s today.

Immediate outlook is moderately bullish, but even if TWTR can claw 10/15% higher across May/early June, I certainly see this stock falling to the IPO issue price of $26 later this summer.

For the moment, TWTR remains a loss making momo stock, and it remains somewhat entertaining to keep an eye on.