Friday 27 February 2015

GDX - a rough month for the miners

With precious metals seeing significant weakness across February, the mining stocks were naturally impacted. The ETF of GDX saw a net monthly decline of -4.5% @ $21.28. There remains high probability that the lows from Nov'2014 ($16.34) will be taken out this spring.

GDX, monthly

GDX, daily


Suffice to say... after the net monthly gains of Nov-Jan, the miners... along with precious metals, are back on the slide.

New multi-year lows look due this spring.
It remains entirely possible that many mining stocks will see a further 30/50% lower between now and the late summer.

*holding to downside target for Gold of $1000, perhaps 900/875 by Sept/Oct. From there... a key floor, which would by default, be a time where I will be interested in being long both the metals.. and miners.

Thursday 26 February 2015

CHK - continuing to unravel

Whilst the main market saw mixed chop, there was notable weakness in the energy sector. Chesapeake (CHK) settled lower by a very significant -4.4% @ $17.19. The bigger picture is offering a capitulation low in the summer, somewhere in the $12/10 zone.

CHK, daily

CHK, weekly


Recent earnings were lousy.. and it is no surprise to see CHK continue to implode.

With Oil prices looking vulnerable to breaking the recent $43 low (most bearish case remains 35/30 zone)... CHK looks set for broad weakness into the summer.

*I remain very bullish about CHK - and most other energy stocks, once we're past the summer. For now.. it is one to watch.

Wednesday 25 February 2015

AA, CENX - big trouble in Aluminium

With Century Aluminium (CENX) failing to meet market expectations, the stock was slammed lower at the open. CENX and Alcoa (AA) both settled significantly lower, by -4.7% and -12.9% respectively. Near term outlook is bearish, and with both losing the 200dma, the broader outlook has also turned bearish.

AA, daily

CENX, daily


Suffice to say, CENX has really spooked the market, and its taken AA down with it.

With both losing the 200dma, outlook into the spring is starting to look pretty lousy.

Consider the giant monthly cycle for AA

$18 has been a key threshold to break, but with today's move into the $14s, AA is looking in serious trouble.

Most bearish outlook for summer...

AA: $12/10 zone
CENX: $10

Of the two... I'd favour AA, but right now... neither look remotely attractive... not least after today's declines.

Tuesday 24 February 2015

AAPL - somewhat over-stretched

With the broader US equity market breaking new historic highs, Apple (AAPL) was similarly at new historic highs, but settling -0.6% @ $132.18 (intra high 133.60). Despite the current price action, AAPL is at long term trend resistance, a brief cooling to the 125/120 zone is very viable.

AAPL, daily

AAPL, monthly


*with just 3 trading days left of the month, AAPL has a very powerful net monthly gain of 13.3%, but then.. Q4 earnings were frankly.. superb.

To be clear.. a retrace is very viable... but broadly.. the trend is hyper-bullish.

AAPL remains grossly mispriced relative to the main market. Given another 24-30 months, AAPL will likely be trading in the $250/300 range... before the current QE/paper bubble blows up.

Without question, AAPL is arguably one of the top 3 stocks not to short. 

Monday 23 February 2015

RIG, SDRL - just another bad day to drill

Whilst the main market saw minor weak chop, there was particular weakness in the Oil/drillers. Transocean (RIG) and Seadrill (SDRL) settled lower by a significant -4.5% and -3.2% respectively. Near term outlook remains very bearish, not least as WTIC Oil looks vulnerable to breaking the recent $43 low.

RIG, daily

SDRL, daily


*I'd refer anyone to the bigger monthly cycle charts for RIG or SDRL - as highlighted in previous posts.

Suffice to say, a bad start to the week for the oil/gas drilling stocks. The broader trend remains exceptionally weak. Whilst oil/gas prices remain vulnerable to breaking new lows, RIG & SDRL look similarly likely to break new multi-year lows.

**RIG has earnings this Wednesday.

Friday 20 February 2015

GDX - miners set for new multi-year lows

With precious metals continuing to slip, the miners were naturally pressured lower. The ETF of GDX saw a net Friday decline of -0.4% @ $20.45. Across the week, GDX fell -3.8%. The broader outlook is for the Nov'2014 low to be broken under. In theory... GDX could be cut in half by late summer.

GDX, daily

GDX, weekly


Suffice to say... so long as the precious metals remain weak, the miners will be similarly weak.

My target for Gold remains the giant $1000 threshold, roughly 20% lower. Typically, the miners drop 2x the rate of Gold.

I expect GDX to break new cycle lows this spring... and perhaps eventually flooring in late summer.... in the low teens. At that time.. and price... it will arguably be a generational buying point.

Thursday 19 February 2015

FB, TWTR - momo stocks catch a bid

Whilst the main market remains largely subdued, there was some very significant afternoon strength in many of the momo stocks. Facebook (FB) and Twitter (TWTR) settled higher by 3.5% and 1.9% respectively. Near term outlook is arguably somewhat over-stretched... and a minor retracement remains viable.

FB, daily

TWTR, daily


Little to add.

*I have ZERO interest in being long.. or short any of the momo stocks. I did make a recent exception with TWTR of course.. with a brief LONG position for earnings, which worked out rather well.

If I had to state a preference.... I'd go with Twitter without any doubt.. that would appear to have vastly better earnings potential. 

Wednesday 18 February 2015

BAC - struggling financials

Despite the broader market close to historic highs, the financials are relatively struggling. Bank of America (BAC) settled lower by a rather significant -2.1% @ $16.28. Near term outlook offers further weakness to the price gap zone in the $15.50s.

BAC, daily

BAC, monthly


*I remain broadly bullish the financials, of which BAC would be my primary stock.

Suffice to say, it was not the best of days for BAC, but still... it could merely be in the process of a minor retrace to the gap zone from a few weeks ago - in the mid $15s.

Long term, I am seeking a monthly close in the $18s.. .and that should clarify a hyper-bullish move to the $30 threshold within the next year or two.

Tuesday 17 February 2015

GDX - weak gold... weak miners

With precious metals prices starting the week on an especially negative note, the miners were naturally significantly impacted. The ETF of GDX settled lower by -3.3% @ $20.56. Near term outlook is bearish for the metals... and thus miners.

GDX, daily

GDX, monthly


Little to add.

Same old story... broader weakness in the precious metals impacts the mining stocks - regardless of main market strength.

New multi-year lows are expected in the metals, and thus GDX looks set to take out the low from early November.

Friday 13 February 2015

TVIX, UVXY - a second weekly decline

With equities continuing to push higher, the VIX was naturally still cooling. The 2x bullish VIX instruments of TVIX/UVXY saw net weekly declines of a very significant -16.7% and -19.2% respectively. Near term outlook is for continued broad equity strength.. with the VIX going sub-teens.

TVIX, daily

UVXY, daily


*first, an update on the VIX, which saw a net weekly decline of -15.0% @ 14.69


*there is certainly some uncertainty in the near term with the EU meeting next Monday, but it looks likely that Greece will do as their German masters order.

Even if the VIX can briefly spike next Tuesday to the 17s, it won't likely last. The sp'2100s look due, which would lead the VIX to resume the melt lower... and fall to the 12/11s by early March.

As for TVIX/UVXY, the decay remains as ever a real problem for anyone holding more longer than a week or two.

Thursday 12 February 2015

TSLA - lousy earnings, grossly mispriced

Whilst the main market saw further gains, Tesla (TSLA) opened sharply lower (intra low $193.28), settling -4.6% @ $202.94. Despite a daily reversal candle, outlook is weak after earnings which were simply lousy. Market is projecting 2015 earnings of (roughly) $2... which offers a 'bargain' PE of just 100.

TSLA, daily


To be clear, I like the company... the innovation from TSLA is pretty inspiring, but Q4 earnings plain sucked. Net cash outflow was dire, and more funds from existing shareholders look likely to be requested within the next year or two.

In terms of price, TSLA looks grossly over-valued... even if you really admire the green tech, and what will no doubt be further tech development in the years ahead.

On no basis can a PE of 100 be justified. Hell, even 25 - which would be almost 50% above the market average stock valuation, would be questionable.

Fair value... for 2015......... $50.

Of course... Mr Market... will likely push the current price higher. After all, where else is all that QE money going to go?

*as an aside... just consider... AAPL.. PE 10.... vs. TSLA 100.

There are often times when this market grossly misprices any given company... AAPL and TSLA are indeed polar opposites.

Wednesday 11 February 2015

AAPL - underlying strength

Whilst the main market saw some moderate weakness, there was notable strength in Apple (AAPL), which broke a new historic high, settling +2.3% @ $124.86. Near term outlook is bullish, but AAPL could be briefly held back by main market weakness.

AAPL, daily


Little to add from previous posts.

AAPL remains grossly mis-priced, and should be roughly double what it currently trades at.

Broader trend remains very powerful.... and in some ways.. all that is missing is for AAPL to be added to the Dow later this year.

Tuesday 10 February 2015

RIG, SDRL - drillers remain out of favour

Whilst Oil prices saw another swing to the downside, there was renewed downward pressure as Transocean (RIG) was downgraded by Credit Suisse. RIG and Seadrill (SDRL), settled sharply lower by -6.3% and -6.0% respectively. Near term outlook is bearish.

RIG, daily

SDRL, daily


The daily moves are pretty interesting... but reflect on the following two nightmarish monthly charts...

RIG, monthly

SDRL, monthly

Seen on the bigger time frame... the drop from summer 2014 has been effectively apocalyptic. There is NO clear sign of a turn/floor yet.

Indeed, if Oil breaks a new cycle low <$43 - which seems highly probable, then the drillers will likely break new lows.

*I have ZERO interest in being long RIG/SDRL until the summer, but given another 5-8 months... they will most certainly be on my long term buy list.

Monday 9 February 2015

AA - a second major daily decline

Alcoa (AA) saw the second major consecutive daily decline, settling -5.6% @ $15.64. The 200dma looks set to be lost, with next key support at the Oct' low of $13.66.

AA, daily


Suffice to say, two strong down days, and the important $18 threshold is now looking a long way up.

It won't take much weakness in the broader market to help knock AA under the 200dma. It would seem the mid $13s are due within the very near term.

Friday 6 February 2015

GDX - miners smacked lower into the weekend

With precious metals seeing some of the strongest daily declines of the year, the gold/silver mining stocks were naturally on the slide. The miner ETF of GDX settled lower by a very significant -5.5% @ $21.33. Next support is the $20 threshold... and then $18s into early March.

GDX, daily


Not surprisingly, precious metals are seeing renewed downside.. with a new multi-week down cycle now underway. The miners are thus naturally following... and GDX looks set to fall into the spring, if not across the summer.

There remains high possibility that GDX could be cut in half across the next six months or so.

Most bearish outlook remains...

GDX, weekly

Regardless of any further broader market strength, if the precious metals continue to weaken, then the miners will no doubt follow.

Thursday 5 February 2015

BTU - remaining broadly weak

Despite higher by a very powerful 23% so far this month, Peabody Energy (BTU) remains broadly weak, having been effectively destroyed across the last four years. Even a move to the mid teens this year will mean little to those who been resolutely long since the $69s of April 2011.

BTU, daily

BTU, monthly


The sixth consecutive daily gain, but STILL within a broader down trend from the last key lower high of May 2014.

*I have high confidence in the long term viability of BTU. It remains one of the larger coal miners, and should survive the next recession.

For the moment though... despite the ongoing bounce, I have ZERO interest in being long the stock. A key multi-year floor in commodities looks more likely this summer (along with Oil and the precious metals). For now... BTU is one to watch... and wait.

Wednesday 4 February 2015

DIS - jumps into hyperspace

With unquestionably superb Q4 earnings, Disney (DIS) jumped sharply higher, settling at a new historic high, +7.5% @ $101.30. Regardless of any near term profit taking (or via renewed market downside), Disney looks set for broad upside across the year.

DIS, monthly


Suffice to say... superb earnings.

With Avengers'2 due in May.. and Star Wars'7 in December, Disney Corp' has two of the worlds biggest movie franchises.

Absolutely bullish... UItron... and Sith ;)

Tuesday 3 February 2015

TWTR - building momentum ahead of earnings

With the main market higher for a second day, Twitter (TWTR) was also on the rise, climbing a very significant 6.2% @ $39.79 (intra high $40.19). Near term outlook is bullish, with a rather obvious gap zone.. for which it to jump into on viable 'better than expected' earnings data - due at the Thursday close.

TWTR, daily


Suffice to say... a strong day of gains, not least helped by a calmer and more confident equity market.

Best guess.. TWTR to be trading in the 45/47 zone by the Friday close.

Monday 2 February 2015

RIG, SDRL - drillers catch a bid... at least for today

With Oil prices seeing some follow through from the Friday gains, the energy stocks were on the rise. Transocean (RIG) and Seadrill (SDRL) settled higher by a very significant 6.0% and 10.1% respectively. However, Oil probably has not floored in the $43s (35/30 seems viable)... today's gains won't likely last.

RIG, daily

SDRL, daily


Suffice to say... a strong day for all energy related stocks.

Yet... unless you think Oil has somehow put in a key multi-year floor in the $43s.... the energy stocks look set for renewed downside into the spring/summer.

*I have ZERO doubt about long term profitability of RIG and SDRL, but for now... I am not in the least bit interested until Oil has fallen into the mid/low $30s.