GDX - another terrible month for the miners

With Gold losing the 2013 low of $1179, the miners continued to fall into the weekend. The ETF of GDX settled -5.4% @ $17.21. Across the month, GDX declined by an extreme -19.4%. Near term target offers 15/14s... back to the lows from the crash wave of 2008.


GDX, daily

GDX, monthly

Summary

It should come as no surprise, that despite a huge 12 day ramp in the broader equity market, the miners are effectively in crash mode.

The reason is of course due to the resumption of falling prices for the precious metals. With Gold taking out the 2013 low... there is no support until the giant $1000 threshold.

GDX looks set for the 15/14s within weeks... perhaps days.. if Gold crashes by $75/125 next week.
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Until the metals put in a key floor - which seems unlikely until at least Gold $1000/900, then the miners are going to remain under severe pressure.

GDX - miners continue to collapse

Whilst the broader equity market saw general gains, with the precious metals continuing to slide, the mining stocks saw even more bigger declines than Wednesday. The miner ETF of GDX settled lower by an extreme -7.3% @ $18.20. Downside target 15/14s.


GDX, daily

Summary

Despite Gold still yet to break core support of June 2013 - $1179, the miners are effectively in crash mode.

GDX looks set to collapse into the mid teens into November.
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*I am looking for a crash wave in the precious metals as early as next week.. with primary target of Gold $1000.

GDX - miners collapsing

With the precious metals back on the slide, the mining stocks were under renewed severe pressure. The miner ETF of GDX, settled lower by a very significant -4.2% @ $19.66. Near term outlook offers a crash wave in the metals.. with GDX to 15/14s.


GDX, daily

GDX, monthly

Summary

It is pretty clear... the loss of the $20s.. now opens up the mid teens.. which frankly... seem an obvious downside target.

Gold looks set for a major wave lower in November... and that offers very viable downside of GDX 15/14s.

TVIX - still on the slide

With the VIX falling another -9.5% to the 14s, the 2x bullish VIX instrument of TVIX was severely impacted, settling -12.3% @ $2.84. Further weakness to the 2.60s seems viable, before a short term recovery rally.


TVIX, daily

Summary

*first, an update on the VIX...

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With the VIX being cut in half from the spike high of 31.06, TVIX (along with UVXY and VXX) have been essentially destroyed.

However, on any basis, the bulk of the down wave has now occurred, probably on the order of 90/95%.

Best guess.. further VIX weakness into the FOMC of Wednesday afternoon, but a reversal of some degree seems likely.

Best case for TVIX is a 'moderate' recovery to the 3.75/4.00 zone... but that will be of little solace to those who have been holding long since the $6s.

As ever... such leveraged instruments are for short term holds only... not least due to the statistical decay issue.

CHK, RIG - energy stocks under pressure

Despite the main equity market seeing only minor weak chop, there was renewed significant weakness in the energy sector. Chesapeake Energy (CHK) and Transocean (RIG), settled lower by -3.7% and -5.6% respectively. Outlook is bearish into early 2015.


CHK, daily

RIG, daily

Summary

Suffice to say... both stocks are being pressured by a strong USD, but even more so, by weak energy prices. With Oil back under the $80 threshold, the energy stocks are going to remain very weak, even if the broader market can hold the recent gains.
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*I remain a fan of both stocks across the longer term, but if Oil slips to the low $70s (or even 60s) - which seems highly probable, then both are vulnerable to a further 25/35% lower across the next few months.

TVIX, UVXY - naturally on the slide

With VIX seeing a net weekly decline of -26.4%, the bullish VIX instruments were badly impacted. TVIX and UVXY saw net weekly declines of  -27.5% and -28.4% respectively. Near term outlook is for minor chop ahead of the next FOMC.. before renewed upside.


TVIX, daily

UVXY, daily

Summary

*first, an update on the VIX, weekly

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The TVIX/UVXY holders had plenty of warning last week, with TWO black-fail daily candles. The two stocks are lower by around 45% since the highs... and it is another reminder of just how dynamic these instruments can be.
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Best guess... VIX to floor in the 15/14s next week... before another major equity wave lower.

If VIX explodes into the 40s.. then TVIX/UVXY will increase in value by a factor of 3-4 times.

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As ever though, such instruments are for short term trading only, not least because of the inherent 'statistical decay' problem.

AMZN - earnings miss

Amazon (AMZN) posted EPS of ($0.95), and the stock is duly reacting very negatively in early AH trading, -$21, around the $290 level. Next support is the May low of $284, if that fails.. then $260.


AMZN, daily

Summary

Suffice to say.... a pretty lousy earnings report.. and outlook is not pretty.

All things considered, if the May low fails to hold, AMZN longs should be very concerned of much lower levels ahead.
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If the main market falls into the sp'1600s (best bear case)... then AMZN downside target would be $200/180, no later than spring 2015.

CREE - lights out

With earnings missing market expectations, Cree (CREE) opened sharply lower, settling lower by a very severe -17.7% @ $27.26. Broader trend remains weak, with next support around $25, but $20 looks viable within 2-3 mths.


CREE, daily

Summary

Little to add.

CREE is a company I like, who can't like light bulbs, right?

However, the company is having real problems, although remains 'reasonably' profitable with good sales revenue. It is simply just not enough to please Mr Market.

CREE looks headed for $25 (as I noted some months ago), and if the main market slips <sp'1800, then CREE will likely test the Dec'2011 low of $20.25
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A fine company for the long term... but I ain't interested until another 40% lower.

XIV - bearish volatility instrument on the rise

With US equities continuing to climb for the fourth consecutive day, the VIX was knocked significantly lower once again. The non-leveraged bearish VIX ETN of XIV settled higher by  8.0% @ $32.92.


XIV, daily

Summary

With the VIX getting smashed back lower from a cycle peak of 31.06 to the 16s, it is no surprise to see XIV rallying strongly from the recent 24s.

Indeed, there are two classic floor 'hollow red' reversal candles, the first with a very powerful spike, highly indicative of a cyclical floor.. aka.. a peak in volatility.
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Like the bullish VIX instruments of TVIX and UVXY, there are serious issues of long term decay for XIV.. although to a far lesser extent.. due to not being 2x leveraged.
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Near term outlook is for VIX to continue sliding lower, to the 15/14s... which will likely offer another 2-3 days of upside for XIV.. along with the broader equity market.

UNG - Natural gas fails to hold support

Despite the main US capital markets starting the week in a moderately bullish mood, Natural gas opened sharply lower, taking out the key support of $3.70, settling -2.4% @ $3.67. The ETF of UNG closed lower by -2.5% @ $19.73. Outlook is bearish.


UNG, weekly

Summary

*first a look at Nat' Gas, weekly cycle

We have a very large multi-month bear flag that stretches all the way back to June. With the break into the $3.60s, there is no support until 3.30/20.

I do not expect the $2s... not least with winter not far off for the northern hemisphere.

TVIX, UVXY - increasing demand for volatility instruments

With US equities breaking new lows this week, the VIX soared into the 31s. Trading volume in the VIX instruments continued to soar. TVIX and UVXY settled with net weekly gains of 12.1% and 12.2% respectively.


TVIX, daily

UVXY, daily

Summary

*first, an update on the VIX, weekly

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With the VIX not only breaking above the key 20 threshold last week, but this week into the low 30s, the VIX instruments are gaining huge trader attention.

Trading volume is at record levels, even with the VIX cooling down from the Wednesday peak of 31.06.
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*Despite the ramp from sp'1820 to 1898, my broader equity market outlook remains bearish, with a primary target of sp'1650. Considering we have already seen the VIX in the low 30s, VIX 40s now appear a very valid target.

CHK - soars on an asset sale

Whilst the main market saw continued swings, Chesapeake Energy (CHK) soared on news it had agreed an asset sale to SW Energy for over $5bn. CHK settled higher by a rather extreme 16.5% @ $20.70. Key resistance is the old floor, around $23.


CHK, daily

Summary

Suffice to say, a powerful daily gain for CHK, but it was on the back of an asset sale.

The question has to be asked, is CHK really desperate for the cash? Is it having serious issues with subdued energy prices?
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Regardless of today's gains, if the main market falls to the sp'1600s, CHK looks vulnerable to falling to the low teens... back to the summer 2012 low in the 12s.

NFLX - Mr Market not impressed

Netflix (NFLX) earnings appeared at the close, with the stock snapping lower by around 22%. With the break of the 200dma in the $413, next support is not until the April/May floor of $310/300.


NFLX, daily

Summary

Suffice to say... earnings failed to impress the market.. with the stock violently snapping lower.

Obvious target level is the floor from $310/300 zone from April/May.

DRYS - the sinking ship

Whilst the main market managed some mixed gains, there was further weakness in Dry Ships (DRYS), hitting a new multi-year low of $1.32, but settling u/c @ $1.47. Near term outlook offers a bounce (along with main market), the next obvious target is $1.00.


DRYS, daily

DRYS, weekly

Summary

Yesterdays news that DRYS had decided to cancel a debt auction has only added to depressing outlook. The lack of new incoming funds was a major disappointment to the market, which slammed the stock around -20% lower.

Today was not particularly much better, with declines of around -5% in early morning... with a latter day bounce that only managed to claw back to evens.
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Overall, DRYS looks set for continued multi-month declines, and the $1.00 threshold now looks a valid target - not least if the broader market slips to sp'1700/1600 within the next few months.

With the BDI remaining in the low 1000s, the shippers are all having serious trouble in trying to stay afloat. Considering this is supposed to be a 'growing economy', DRYS is really struggling.

If the global economy has even a moderate recession within the next year or two, DRYS looks in trouble of sinking to the ocean floor. It would be a great shame, having followed the stock since 2008.

CHK - energy stocks remain under severe pressure

With US equities ending the day on another particularly weak note, the energy stocks were especially hit. Chesapeake (CHK) settled lower by a significant -5.8% @ $17.86. Next key support is around $12, the low from summer 2012.


CHK, daily

CHK, weekly

Summary

*I remain a fan of CHK (and energy as a whole), but it looks headed for the low teens, not least if the main equity market falls into the sp'1700s before year end.
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The past few weeks have been brutal for CHK, and today's daily close is the lowest level since summer 2013.

TVIX, UVXY - powerful weekly gains

With equities seeing some wild swings... but broadly on the decline, the VIX continued to increase. The 2x lev' bullish instruments of TVIX and UVXY saw net weekly gains of 37.8% and 36.5% respectively.  Near term.. choppy... and a significant retrace.


TVIX, daily

UVXY, daily

Summary

*first, an update on the VIX, weekly

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As for TVIX/UVXY, they - like the VIX, have probably peaked in the near term.

It would be very natural for the VIX to get ground back to the low teens into late October/early Nov, before the next major wave.

*my 'best bear case', remains sp'1800/1750.. somewhere in that area, which if correct, would at least equate to VIX 25/30 zone, a level we've not traded since summer 2012.. when the sp' hit a low of 1266.

BTU - coal sector destruction.. continues

With the main US equity market seeing renewed weakness, the coal miners were back on the slide. Peabody Energy (BTU) settled lower by an extreme -9.3% @ $10.23. The $10 threshold looks set to be lost.. opening up the $5 low from 2003.


BTU, daily

BTU, monthly

Summary

Little to add from posts across the past few months.

Coal miners... .and Gold/Silver miners look set to continue falling into next year.
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In the case of BTU.. I'd guess it will again by cut in half. I follow the company... and unlike Arch Coal, Walter Energy, or Alpha Natural Resources, I have little concern about the viability of BTU lasting across the longer term.

GDX - hyper gains.. but still broadly bearish

With the release of the FOMC minutes, alluding to 'we might like a weaker USD', the metals climbed.. but it was the miners that went into hyper bullish mode. The Gold miner ETF of GDX soared a rather extreme 7.4% @ $21.94.


GDX, daily

GDX, monthly

Summary

...I can pretty much guess some of the comments and post titles that will be all over the Gold/silver bug community sites this evening....

Miners soar... key floor IS in
Fed wants weak dollar... new mega uptrend begins!
Yellen will cause new historic highs in the Gold/Silver market.
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Yet.. we've been seeing floor callers in the precious metals AND miners for the past 3 years. Sure, today's gain is very significant... but what about the fact that...

...GDX broke the 2013 low of $20.18 just this very morning?

Ohh, and yes, I realise some will call it a double floor, but the metals (notably Silver) are already well below the 2013 lows.
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Certainly, Interesting gains for the miners... but it does very little to negate the recent declines, never mind the broader 65% collapse since spring 2011.

GDX - just another down day for the miners

Despite higher Gold/Silver prices, the miners were hit by broader equity market weakness. The ETF of GDX settled significantly lower, -3.4% @ $20.43. which is now just 1% from breaking the 2013 low.


GDX, daily

Summary

Little to add.

Gold/Silver miners continue to decline... almost everything is going against them.

GDX looks set to lose the $20 threshold... and seems headed for $15... perhaps even $10.... if you consider Gold will eventually see a key multi-year floor of @ $1000/900s next year.

GDX - miners still digging lower

With precious metal prices seeing further significant declines, the miners remained under severe downward pressure. The ETF of GDX settled the day -4.6% @ $20.63, with a net weekly decline of -6.1%. The December 2013 low of $20.18 looks set  to be broken.


GDX, daily

GDX, monthly

Summary

Suffice to say, with the rising USD, commodities are all under pressure..and the precious metals are not escaping. With lower metal prices, the mining stocks remain on the slide.

GDX looks set to at least fall to the mid teens by spring 2015. I suppose there is a possibility of $10 by late 2015/early 2016 - especially if Gold $900/875, but regardless, in the immediate term... the sector remains utterly hated by Mr Market.

CREE - lowered outlook

Whist the main equity market broke another lower low, CREE opened sharply lower, on news it had lowered its outlook for Q1. CREE settled -12% @ $34.85. Next key support is around $30, but CREE looks headed for $25 within the next few months.


CREE, daily

Summary

There isn't much to say on CREE. I kinda keep an eye on it most weeks, I like the company, but today's lowered outlook was not exactly inspiring.

CREE saw huge sell side volume today, and the broader price trend has been dire across the entire year. CREE looks set to continue its multi-month decline, with next support in the $30/25 zone. If the main market gets knocked lower to at least sp'1800, then CREE will almost certainly be around $25.
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*I have no position, but would actually consider going long, if $25 in early 2015.

F - continuing to slide lower

With the broader market continuing to slide, Ford (F) slipped lower, settling -1.3% @ $14.59. Key support is around $14.30/20... but that should hold in the current cycle. If there is broader market weakness into year end, then Ford looks vulnerable to eventually hitting the low 12s.


Ford, daily

Summary

The market has been particularly unhappy about the recent negative outlook, and Ford is now in the process of testing the low from early February.

I'm guessing that will hold in the current down wave, but if the next bounce gets stuck around the 200 day MA - currently around $16, Ford will be in trouble.

After any break of the low $14s, next core support is not until the low $12s, and that is a good 15% lower.