GDX - severe declines into the weekend

With the USD on the rise, and Oil prices in collapse mode, the precious metals saw similar severe declines (Gold -$30). This naturally impacted the mining stocks, the ETF of GDX settling lower by a rather extreme -8.7% @ $18.36... primary target remains 15/14s.


GDX, daily

GDX, monthly

Summary

*it is notable that GDX managed a net monthly gain of 6.7%, a significant gain on any basis, but the manner in which the precious metals AND mining stocks closed the week, is very bearish for December/end year.
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So... a severe snap lower.. and with weakness into the early close of 1pm, GDX effectively imploded, unravelling around half of the gains from early November.

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Holding to original downside target of Gold $1000/900s...

.. which has dire implications for the mining stocks. Gold in the $1100/1050 zone would likely equate to GDX 15/14s.. and that is possible before year end. Gold around the 61.8% golden fib ($890s) would likely equate to GDX around $10.... although even if that is the case, it will take a further 4-6 months to reach that depth.
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*I remain short GDX.. seeking an exit in the 15/16s.

SDRL - implodes with a suspended dividend

Whilst the broader equity market traded a little higher into the Thanksgiving break, there was severe upset in the oil/gas service sector. SDRL missed on earnings, duly suspending the dividend, and settling -22.8% @ $15.99, the lowest level since Aug'2010.


SDRL, daily

SDRL, weekly

SDRL, monthly

Summary

*frankly, I think the monthly chart is pretty damn interesting. We had a critical lower high in June of $39.35.. and we're now lower for the fourth month of five.
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Oil/gas service sector under severe pressure

WIth Oil prices continuing to slip from the June high of $107.. to the current $73s, there are severe problems for those offering services to Petroleum industry.

Many expected SDRL to cut the dividend in today's Q3 earnings release, but (as far as I know) no one expected it to be suspended.

Frankly, I do not envision SDRL to start paying a dividend again until Q3 2015 earnings.. due late Nov'2015.. a full year away.
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Naturally, other drillers were also severely impacted today...

RIG, daily

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Broader downside targets (as stated many times in recent months)... remain...

RIG 20/17
SDRL 12/10
...

I have no significant concerns about the long term future of RIG or SDRL, both will be very tempting buys next year. Although that will be dependent on whether Oil can put in a key floor in the early spring ($65/60), or decline further in the year to the 50/40s.

DRYS - the terribly troubled shipper

Whilst the broader equity market has more than tripled since 2009, Dry Ships (DRYS) - along with the rest of the shipping companies, have remained weak. Today, DRYS settled -3.3% @ $1.45. The broader outlook remains 'subdued' whilst the BDI remains so very low.


DRYS, daily

DRYS, weekly

DRYS, monthly

Summary

*DRYS remains an old favourite of mine to keep an eye on, not least having watched it implode from over $100 in summer 2008.. to the lowly $1s.
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First, see key stats.. @ yahoo finance

A key problem for DRYS is the near $6bn of debt. With market cap of just over 0.6bn.. that makes for a debt to market cap' of 1000%.... truly lousy.


The BDI - flat lining since 2011.

BDI, monthly

The BDI (Baltic Dry Index) really explains why most shippers are still suffering. Freight rates are still stuck at very low levels. Whether you want to attribute that to over supply, efficiency gains (larger ships), or just a weak global economy, doesn't really matter.

What does matter is that with the BDI still in the 1000s... most shipping companies are struggling just to stay (no pun intended) financially afloat.


Will DRYS survive?

Considering we're in an economic growth phase, DRYS is performing badly. What happens when the next recession hits?

My guess? Maybe some kind of reverse merger with another of the shippers, NAT or DSX. The problem remains the debt, and even if DRYS can turn profitable in 2015, it'll remain in persistent trouble because of the interest payments ($332 million in 2013).

I sincerely hope DRYS won't disappear next year, it'd be the end of an era.

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*a reverse split in DRYS stock seems very likely next year, not least if the price falls under $1.
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*I hold no position in DRYS, and have no intention, unless I see some real inflation start to appear in the economy.. along with the BDI >2500.

RIG, SDRL - drillers remain broadly weak

Despite the main market remaining strong, there remains broad weakness in energy stocks. The oil/gas drillers of Transocean (RIG) and Sea Drill (SDRL) settled lower by -1.3% and -2.9% respectively. Mid term outlook is bearish into spring 2015.


RIG, daily

SDRL, daily

Summary

Suffice to say, considering the broader equity market, the energy sector remains very weak.... but then... Oil itself continues a multi-month down wave.

If Oil $66/60 in early 2015, then the oil/gas drillers will continue to decline.

Most bearish downside targets...

RIG, 20/17
SDRL 12/10.. although the latter would likely require some degree of major downward revision for 2015 profits.
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I am long term bullish on both companies, but until Oil levels out, there seems no point in getting involved on the long side.

TVIX, UVXY - VIX instruments in decay mode

With the broader equity market breaking new highs, the VIX remains subdued. The 2x bullish lev' instruments of TVIX and UVXY are merely decaying, seeing net weekly declines of -4.4% and -5.6% respectively. Outlook into early 2015... further declines.


TVIX, daily

UVXY, daily

Summary

*first, an update on the VIX, weekly

There is the threat of a brief spike to 18/20 before year end, but with continued action from the central banks (not least China and the ECB today)... the risk of an upside VIX spike remains low.
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As for the VIX instruments of TVIX and UVXY, both are simply back to the usual price action of the last few years.. on a slow.. but gradual decline.. due to the usual 'statistical decay'.

Considering the broader equity market, I have ZERO intention to be long VIX in any manner for some months.. and indeed, the last VIX position I took was summer 2013.
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*with TVIX set to lose the $2s.. another reverse split looks due within the next month or two

INTC - back to September 2000

With moderate price chop in the broader market, Intel (INTC) was a standout, settling higher by a very significant 4.6% @ $35.94. This is the highest daily close since Sept'2000. Outlook is bullish, with a very valid upside target of the $50s by summer 2015.


INTC, daily

INTC, 20yr, monthly

Summary

*it is notable that whilst the core of the tech market blew up in March'2000, some stocks still managed new highs later that year, with INTC being one of them.
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Intel remains one of my top tech stocks, and I certainly have more respect for it than AAPL or the GOOG.


The $50s in the current multi-year rally... really?

Considering the broader trend, I've now little doubt INTC will just keep on battling higher for another 6-9mths.. perhaps even a year or two beyond that. With a superb product line, INTC has a secure long term future.

ANR, BTU - coal miners still broadly weak

The coal miners remain one of the most unloved sectors in the US equity market. With some moderate weakness in the broader market, Alpha Natural Resources (ANR) and Peabody Energy (BTU) settled lower by -9.7% and -4.2% respectively.


ANR, daily

BTU, daily

Summary

Little to add.

The coal miners have seen a moderate rally since the main market floored in mid October, but today's daily decline bodes badly for the rest of the week... month.. and probably into year end.
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BTU looks fine across the longer term, but ANR remains 'suspect'.. along with ACI and WLT.

DAL, UAL - airlines flying to new highs

With the broader US market continuing to climb, the airlines also gained. Delta (DAL) and United (UAL) both settled with very significant gains of 3.1% and 4.1% respectively. Near term outlook is bullish, especially if Oil prices continue to fall into early 2015.


DAL, daily

UAL, daily

Summary

Unquestionably, the huge fall in oil prices since the early summer has massively helped give a genuine earnings boost to the airline stocks. Indeed, it should be expected that earnings/profit margins for both Q4 and also Q1 should be significantly improved.

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In terms of the two stocks, Delta airlines remains a more stable stock, and arguably a better company.... but United is certainly also 'reasonable'.

F - approaching strong resistance

Whilst the broader market saw more micro chop, there was significant strength in Ford (F), which settled higher by 2.7% @ $15.55. Next key resistance is the 15.75/16.00 zone, where the 200dma is lurking, along with the pre-snap price cluster area of late September.


F, daily

Summary

The daily close last Thursday above the 50dma was a significant bullish victory, but far more important.. the 200dma..and the $16 threshold... which was where the downside snap began from.

Until we see at least a few daily closes above $16, Ford remains a broken stock.

With the loss of the Feb' low in October, there is still threat of another wave lower to $12.
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*Unquestionably, Ford is better positioned than GM or the still largely irrelevant TSLA. Long term outlook for Ford looks fine. It survived the 2008/09 collapse wave, it'll no doubt survive the next financial crisis.

GDX - wild week for the miners

Along with the precious metals, the mining stocks ended the week on a very strong note. The mining ETF of GDX settled higher by 6.0% - having opened -2%. Across the week, GDX gained 2.0%. The broader outlook remains bearish though.


GDX, daily

GDX, monthly

Summary

*I'd refer anyone to the broader weekly/monthly cycles for Gold and Silver.
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Today's reversal in the miners was due to the very strong reversal in the precious metals... which themselves swung higher because of the failed opening gains in the USD.

A second net weekly gain in the miners does NOTHING of significance to the broader downward trend. Indeed, this could easily be argued to be a mere back test of the old broken support from a few weeks ago.

Bearish to GDX 15/14s.. if not 12/10 in first half of 2015.

ANR, BTU - coal miners resume the slide

Whilst the main market only saw moderate weakness, the coal sector was under renewed severe downward pressure. Alpha Natural Resources (ANR), and Peabody Energy (BTU) settled lower by -7.8% and -4.9% respectively.


ANR, daily

BTU, daily

Summary

Little to add from the previous posts across the last two years.

Coal miners look set for continued weakness.

The smaller companies, ANR, ACI, and WLT all look in serious trouble, and frankly, I'll be surprised if those tickers are still active given another year or two.
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BTU, along with Consol (CNX)... are far more stable, and should (at least in theory) be able to survive across the longer term.

RIG, SDRL - continued weakness

Whilst the broader market saw minor chop, with weak energy prices, the oil/gas drillers saw continued weakness. Transocean (RIG) and Sea Drill (SDRL) settled -3.2% and -1.5% respectively. Broader outlook into spring 2015 is.... dire.


RIG, weekly

SDRL, weekly

Summary

*I'm trying to refrain from getting lost in the day to day swings.. and focus instead on the bigger weekly cycles.
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I have VERY high respect and confidence in both companies across the longer term, but for now, with Oil weak (seemingly headed for $65/60)... the sector looks set for continued weakness.

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Broader targets....

RIG 20/17
SDRL 12

.. which seem viable as early as next spring.

GDX - just another bounce

With precious metals holding significant gains into the close, the mining stocks caught another bounce. The ETF of GDX settled higher by 4.5% @ $18.23. Price structure is arguably a bear flag on the hourly/daily cycles.. with broader downside to 15/14s.


GDX, 60min

GDX, daily

Summary

*I am short GDX from this afternoon @ 18.33. I am seeking an exit in the 16s.
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Without getting lost in the minor day to day noise, the broader trend in the miners remains to the downside.

Precious metals are similarly STILL in a huge multi-year down trend, and I remain looking for Gold to test the giant $1000 threshold, whether late this year... or in early 2015.

So long as metals hold within a broader down trend.. miners will remain very weak.. regardless of any continued broader market strength.

GDX - smacked back lower

With precious metals sliding lower across the day, the mining stocks were naturally re-crushed. The mining ETF of GDX settled lower by a very significant -6.4% @ $17.45. The broader downside target remains 15/14s.


GDX, daily

Summary

Weak metals... and all those calling a key floor last Friday are once again having to review their broader outlook.

There is ZERO reason why Gold won't hit the giant $1000 threshold, and if that is the case, then miners have another 25/30% to fall.

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Notable mention for the 3x short junior minor ETF of JDST..

JDST, 60min

The daily swings are VERY powerful.. and as ever.. it is the stuff of dreams for the day traders. Holding across multiple days..or weeks... huge problems in terms of statistical decay.

GDX, JDST - the volatility continues

With the precious metals surging into the weekend, the mining stocks made another attempt to bounce. The leading miner ETF of GDX settled higher by a rather extreme 8.1% @ $18.61. Broader downside to the 15/14s still seems viable before year end.


GDX, daily

GDX, monthly

Summary

The mining stocks are catching a lot of attention right now. Across the last few weeks I've seen many call a floor for GDX.... all the way from the 25s to the mid teens.

Now we're back in the 18s..and no doubt across this weekend there will be the usual suspects.. floor calling. The issue with the floor callers, is that they believe the metals have floored.. which is frankly stupid.

Gold broke the 2013 floor ($1179) just last Tuesday. By definition, a new multi-week down cycle is underway, and one that could easily take Gold to $1000 within months.. if not weeks.


Without question, I see no clear multi-year floor in the precious metals... and by default... neither can the miners be said to have floored.

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A special mention for the 3x short (junior miner) ETF of JDST

JDST, 60min

Not surprisingly, today's decline was a fierce -34.3% @ $24.27 (JDST was trading in the $36s in pre-market.. just before jobs data).Having now filled the gap zone.. JDST has a fairly high chance of having floored.

As ever, price action in the miners will be largely depedent upon how the metals open. If Gold is higher by another 5/10 next Mon/Tuesday, then GDX will have a chance at back  testing the old broken 2013 floor of $20.
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*As ever, the leveraged ETFs are for short term holds only, due to the statistical decay.. which right now is extremely high, with regular powerful day to day swings.

GDX - failed bounce

Whilst precious metals opened moderately higher, the mining stocks caught a strong bid, with GDX reaching an intra peak gain of around 6.5% @ $17.69. However, there was a very sharp late day sell off, settling +3.1% @ $17.11.


GDX, daily

Summary

Suffice to say, mining stocks will remain under strong downward pressure so long as the precious metals are weak.

My broader downward target for Gold is the giant $1000 threshold (viable by year end).. and that would equate to GDX 15/14s.

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Notable, 3x short (junior miner) ETF of JDST...

60min cycle

A move into the 39/41 zone looks viable at the Friday open. There is one scenario of a move to 39/41... and then another wave lower to 33/28 on Monday.

Regardless, as with all leveraged ETFs, there are significant issues of 'statistical decay', and by definition are for short term holds only.

GDX - the horror show... continues

With precious metals continuing to slide, the mining stocks were naturally getting smashed lower from the open. The miner ETF of GDX settled lower by a very significant -3.1% @ $16.67. Near term outlook is for 15/14s.


GDX, daily

Summary

The intraday bounces are pretty sharp... but they never last long... and GDX looks set to remain in sync with the precious metals.
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*Trading volume remains HUGE. It is arguably a sign that the bulk of the decline is done... which I would agree with.. at least in the near term.

RIG, SDRL - continuing to collapse

With severe weakness in oil prices, the oil/gas stocks continue to slide. Transocean (RIG) and Sea Drill (SDRL) settled by a very extreme -5.3% and -8.8% respectively. Near term outlook is very bearish... with huge declines likely into spring 2015.


RIG, weekly

SDRL, weekly

Summary

Suffice to say, both companies are 'soundly based'... but are being severely impacted by the continuing strong declines in Oil.

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Targets...

RIG 20/17
SDRL 12,    both by spring 2015.

GDX - miners bouncing

Having collapsed - as a collective, by almost a fifth across October, the miners start November with a bounce. The ETF of GDX settled higher by a very significant 3.5% @ $17.81. Broader outlook though remains extremely bearish.. at least to the 15/14s.


GDX, daily

Summary

No doubt many will again be floor calling.. although the same people were buying GDX at 20, 19, 18, 17, and the 16s last week.
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Unless you believe Gold is not going to test the giant $1000 threshold, the miners still look set for much lower levels.