GDX - net monthly declines

Despite the precious metals seeing net monthly gains, the mining stocks were back on the slide. The ETF of GDX saw a net monthly decline of -2.5% @ $19.60. The broader trend from 2011 remains bearish, with GDX set to break the Nov'2014 lows at some point this summer/autumn.


GDX, daily

GDX, monthly

Summary

Suffice to say... there is little reason for any of the Gold bugs to hold the view that a key floor is yet in.. whether for the precious metals themselves.. or the related mining stocks.

With the USD set to break a new multi-year high (>DXY 100.7) this summer, commodities will be under renewed downward pressure.

If Gold $1000, then GDX could still lose another 35/45% from current levels... before year end.
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*I will be looking for a key floor in the metals/miners later this year.

CHK - falling with Nat' gas

Whilst the broader market saw a day of moderate weakness, there were significant declines in most energy stocks, as Oil/Nat' gas prices fell. Chesapeake Energy (CHK) settled -4.7% @ $14.06. Downside to the $12/10 zone looks highly probable this summer.


CHK, daily

CHK, monthly

Summary

To be clear.. I am VERY bullish for CHK in the longer term - along with Nat' gas (and even Oil) prices, however, the giant down wave from summer 2014 is seemingly not yet complete.

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*I will consider going long a number of energy stocks - inc' CHK, in the late summer/early Autumn.. at which point the market - along with energy prices might have floored.

INTC - battling to hold above the 200dma

With the main market seeing borderline sig' gains, there was notable strength in Intel (INTC), which settled +1.9% @ $33.73. There will be strong resistance around the $35.00 threshold. Regardless of any weakness this summer/autumn, the longer term outlook is extremely bullish into the $50s.


INTC, daily

INTC, monthly

Summary

*the first decisive daily close above the 200dma since early March
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Suffice to add, regardless of any main market weakness this summer/autumn, the long term outlook for INTC looks absolutely bullish... set to challenge the historic high of $55.45 (Aug'2000).

Such a level is clearly going to take at least another 12-18 mths to reach, and that is assuming the broader market can accelerate as the US fed raises rates.

A monthly close under the old breakout level of $25 looks unlikely for... years.

*INTC is one of my top 3 tech stocks... and also of the Dow.

ANR, BTU - digging toward hell

With the broader market closing significantly lower, and energy prices pressured by a strong dollar, the coal miner stocks were under extreme pressure. Alpha Natural Resources (ANR) and Peabody Energy (BTU) settled lower by -8.9% and -6.1% respectively. Short, mid, long term outlook is.. dire.


ANR, daily

BTU, daily

Summary

Not much to add from the many posts across the last few years.

Coal miners remain under severe pressure as the US Governments 'war on coal' continues.

The terrible trio of Arch coal (ACI), ANR, and Walter Energy (WLT) all look set to disappear in the coming year or two.
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*I am 'moderately hopeful' that BTU will manage to survive across the longer term.. but even though the stock is utterly destroyed... I have ZERO interest in considering even a speculative position at this price.. or time.

I would consider a spec' position in the late summer... by then, BTU could easily be in the low $2s.

TVIX, UVXY - new lows, renewed horror

With equities breaking new highs this week, the VIX continued to cool. The 2x lev' bullish VIX instruments of TVIX and UVXY settled lower by a rather horrific -15.4% and -13.1% respectively. Near term outlook is for continued equity upside, with VIX likely to remain subdued at least into mid June.


TVIX ,daily

UVXY, daily

Summary

*first, an update on the VIX, which saw a net weekly decline of -2.0%.

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Relative to the VIX, the 2x lev' instruments saw some rather severe downside.

At some point this summer/autumn the VIX is going to see a new multi-week up wave. Right now, the low 20s look viable primary target.. but typically, such levels won't hold for more than a few days... if hours.

Broadly, long VIX trades via TVIX/UVXY remain inherently pointless for holds much beyond 3-5 trading days.

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*UVXY saw a reverse split recently.

I am bemused as to why Velocityshares have not yet done the same to TVIX, at least on the order of 1 for 20.

BABA - battling toward $100

Whilst the broader market closed moderately mixed, there was significant strength in Alibaba (BABA), which settled higher by a significant 3.6% @ $94.00. Near term outlook is bullish, with the giant $100 threshold viable before end month.


BABA, daily

Summary

BABA has been a bit of a mess lately.

Just before earnings it broke below the critical $80 floor... but then jumped back above.. and now looks set for the psy' level of $100.

If the broader US (and China market) continue higher for another few months, BABA should be able to not only break >$100, but hold above it.

**some of the equity doomer bears can whine all they like about BABA - not least the 'Chinese aspect' of it, but BABA is a highly profitable company, and looks set to grow for some years.

DAL, UAL - airlines encountering turbulence

Whilst the broader market saw a day of minor chop, there was very significant weakness in the Transports. Delta Airlines (DAL) and United Continental (UAL) settled severely lower by -5.6% and -10.2% respectively. Near term outlook is bearish, with Transport stocks performing badly, despite Oil prices remaining relatively low.


DAL, daily

UAL, daily

Summary

From a pure price perspective, we saw some rather signficant technical breaks today, on what was extremely heavy sell side vol'

First, DAL, closing below the 50dma... with an intraday test of the 200dma
Second, UAL, a decisive break of the downward channel... taking out the 200dma.

UAL looks set to fall further, at least to the mid $52s. If correct, that should equate to DAL also losing the 200dma, and declining to $41/40 within the near term.
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*I have long term confidence in both DAL and UAL, but in terms of long term holds, I favour DAL, being far more stable, in terms of price.. and as an overall company.

RIG, SDRL - falling with Oil

With WTIC Oil prices settling lower by 3.9% @ $57.99, energy stocks were under pressure. The oil/gas drillers of Transocean (RIG) and Seadrill (SDRL) settled lower by a very significant -5.9% and -3.9% respectively. Near term outlook is bearish.. with Oil set to decline to the 56/54s.


RIG, daily

SDRL, daily

Summary

Energy stocks are closely tied to price action in Oil.

With WTIC having ramped from the March low of $42s to the recent high of $62.58, a retrace of the bounce is very natural. First support is the weekly 10MA... currently around $55.
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*I have high confidence in RIG and SDRL across the longer term, but both look highly vulnerable across the summer/early autumn.

BTU - the shear utter horror

Whilst the broader US equity market broke another pair of new historic index highs, there was notable weakness in the coal miners. Peabody Energy (BTU) closed lower by a rather severe -8.6% @ $3.92, the lowest level since July 2002. Outlook is for continued... horror.


BTU, daily

BTU, monthly

Summary

It is incredible to reflect upon the fact that in early 2014, BTU was a $19 stock.. although that in itself was a huge drop from the 2011 'secondary commodity peak' of $69.76.

Today's new multi-decade low for BTU of $3.86 was a mere 18 cents above the all time low (July 2002) of $3.68.

BTU has a 'fair chance' of surviving across the longer term, but still... the market is not in the least bit confident about the outlook for 2016.

For the moment... trend remains starkly bearish... and BTU looks headed for the $2s later this year.

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A special note on the 'trio of doom'

Arch Coal (ACI), Alpha Natural (ANR), and Walter Energy (WLT) all remain on life support... I doubt any of them are listed much beyond this year.

Clearly, the US Govt's 'war on coal' continues to see great success.

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*on no basis am I interested in being long ANY of the miners (Gold, Silver, Coal.. or even Uranium) until the autumn.. at which point the main market might have seen a sig' correction.

BAC - downside before rate hikes

Bank of America (BAC) is currently higher by 2.7% this month, but broadly, the stock has been stuck since the initial drop in January. The financial stocks are unquestionably set to explode higher if the Fed raise interest rates, but as ever..  that is something many have been seeking for the last few years.


BAC, daily

BAC, monthly

Summary

*BAC is one of the infamous 'holy trinity' I highlighted at the start of the year. Ironically, it seems that I gave one the kiss of death - Alcoa (AA), whilst Ford (F), remains broadly subdued.
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After a rough January, BAC has been broadly choppy, and is clearly stuck under $18, which is a rather key threshold.

Right now, the $18 level is around 10% higher. Considering recent price action, it would seem BAC will remain stuck under $18 until the Fed raise rates.

Of course, if the Fed fail to have confidence to initiate an attempt to at least semi-normalise rates to 2-3% (across the next 2-3 years), then BAC will have even more trouble breaking >$18 than it currently is.
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*I will have eyes on picking up BAC in the late summer.. not least if the broader market has seen some sort of sig' retrace/correction, on the order of 7-10%.. at least back to sp'2000.. if not the mid/low 1900s. Most bearish outlook is for the $14s by late summer, although that won't be easy.. even if the market is briefly spooked by something.

DISCA - broadly weak

Whilst the main market saw rather significant gains, there was continued weakness in Discovery (DISCA), which settled -0.1% @ $31.40. Large price structure is a bear flag, which has arguably already been broken under.. summer downside target is $25/22.


DISCA, daily

DISCA, monthly

Summary

A marginal net daily decline, and with the large bear flag - from January, having been broken.

If the main market sees a sig' retrace/correction of 7-10% this summer/early autumn, DISCA will surely lose the $30 threshold, and continue lower to 25/22.

*I am long term bullish Discovery comms', and will keep a close eye on it across the summer.. seeking to be long in late summer.. somewhere in the mid/low 20s.

GDX - miners rising with the metals

With precious metals closing net higher for the second consecutive day, the mining stocks were similarly on the rise. The ETF of GDX settled higher by a significant 2.4% @ $20.78. Near term outlook is mixed, as the broader trend in the metals remains weak.


GDX, daily

GDX, monthly

Summary

Despite the current gains, the miners - along with the precious metals, remain relatively close to the lows from last November.

*under no fair outlook can I see Gold having put in a key multi-year floor @ $1130. My target remains the $1000 threshold, and if that is eventually hit, then the miners will be at least somewhat lower than current levels.

For the moment, I remain content to watch the miners, and have no interest in going long until late summer/early autumn.

RIG, SDRL - rising with Oil

With WTIC Oil back above the $60 threshold, energy stocks were notably strong today. The Oil/Gas drillers of Transocean (RIG), and Seadrill (SDRL) settled higher by a very significant 3.3% and 5.1% respectively. Near term outlook is bullish into June, but there will be strong resistance at the declining 200dma.


RIG, daily

SDRL, daily

Summary

To be clear, I have been seeking a bounce in WTIC Oil into the summer, and we've already traded in the low $60s. Oil still looks set for the 65/67, possibly $75 before the next turn lower.

Perhaps RIG/SDRL - along with the broader market, will become maxed out when Oil gets stuck within the secondary target zone of $67/75 in June/July?

From there.. it is merely a case of whether RIG and SDRL will break the lows of mid March. Right now... new multi-year lows look a little unlikely.
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*I have no interest in being long energy stocks until a sig' retrace lower in the main market (and Oil).. and that might not be the case until Sept/Oct.

Of the two companies, I favour RIG over SDRL, but both look good for the longer term.

FCX, TCK - weak copper miners

Whilst the broader market saw moderate weakness into the close, there were significant declines for the copper miners. Freeport McMoran (FCX) and Teck Resources (TCK) settled lower by -1.4% and -3.9% respectively. Near term outlook is bearish, before renewed upside into June/July.


FCX, daily

TCK, daily

Summary

*first, an update on Copper, monthly

Copper - like Oil and many other commodities, is seeing a multi-month bounce.. but the big $3 threshold will not be easy to break/hold.

Deflationary downside for the summer would be the low $2s... along with Gold $1000 and Silver 12/10.

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As for FCX and TCK, FCX is clearly the superior stock, but now its vulnerable not only to weak Copper prices, but Oil prices - as it has a sig' Oil/gas subsiduary.
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*I have ZERO interest in going long ANY of the miners (Gold, Silver, Copper, or Coal) until the autumn... at which point Gold should be around $1000.

TVIX, UVXY - falling into the weekend

With equities building strong gains on a Goldilocks jobs number, the VIX was crushed back into the 12s. The 2x bullish lev' instruments of TVIX and UVXY saw net weekly declines of -2.6% and -1.5% respectively. Near term outlook is for continued equity upside, which will keep the VIX subdued into June.


TVIX, daily

UVXY, daily

Summary

*first, a reminder on the VIX, which despite the Friday decline, saw a net weekly gain of 1.3%.

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Little to add.

Equities look set to battle higher into the sp'2140s.. if not the 2160/80 zone.. as early as mid June.

The big VIX 20 threshold looks out of range until at least the FOMC of June 17'th.
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As for TVIX and UVXY.. the week over week... month over month horror show.... continues.

TSLA - valuation remains... crazy

Whilst the broader market saw some moderate gains, there was particular strength in Tesla Motors (TSLA), which settled +2.8% @ $236.99. Near term outlook is bullish as Mr Market appears to want to buy to at least $260, which appears easily viable by mid June.


TSLA, daily

Summary

*daily candle was a super bullish engulfing candle.. bodes for broader upside into early June.
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Suffice to say... Q1 earnings came in better than the market had expected.

Yet..  TSLA is still losing money of course.. quarter after quarter... after quarter.

Mr Market being what it is... can't help but still have underlying faith in the company... and there is unquestionably a great deal of 'momo chasing' still going on in this particular stock.

Since TSLA is still posting losses, it doesn't have a PE at all.
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*I have never traded TSLA (long or short) not because the company isn't innovative or even inspiring (as it is)... but on any basis, the current valuation is just plain crazy.

I simply can't see why any 'normal' person would want to buy a company that is still completely unable to turn even a modest profit, offers no dividends, and will probably be asking for further capital - whether via new shares.. or more corp' bonds.

Fair value: $20.. and that is probably being overly generous.

CHK - falling on lousy earnings

With the main market in a somewhat bad mood for a second day, there was notable weakness in Chesapeake Energy (CHK), settling -7.1% @ $14.73. Near term outlook is bearish, with mid term viable downside to a new multi-year low of $10.


CHK, daily

CHK, weekly

Summary

Q1 earnings came in better than the market expected, but then the headline EPS of 11 cents (4 cents expected), is to be carefully treated.

There was an actual nasty 'real' loss of -$3.5bn or so, although CHK claims that is a 'one off'.

In any case, with Nat' gas prices as they are, CHK is battling just to hold annual EPS of around 50 cents.

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If the main market can see a sig' retrace lower this summer (of at least 10%), then CHK looks set for further downside to at least the psy' level of $10.

*to be clear, I have long term confidence in CHK, but not at this price... but more so... not at this time.

BABA - unable to hold the floor

With the market opening a little weak, Alibaba (BABA) was struggling from the open.. and quickly lost the critical $80 threshold (intra low $77.77), settling -1.3% @ $79.54. Near term outlook has now flipped to bearish, and the door is open to the 70/68 zone... with earnings due this Thursday morning.


BABA, 60min

BABA, daily

Summary

*I was considering BABA as a viable long-earnings trade, however, with the loss of the $80 threshold, outlook is now bearish into earnings.

As a secondary rule, I do not short individual stocks whilst the broader market is trending higher...so I can't short BABA... on what is a clear break of core support.

Too many trading rules?
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As for BABA itself, the loss of the $80 threshold is a huge deal, not least ahead of earnings. Is Mr Market starting to quietly allude to bad news coming?

As things are, it would seem the market will sell BABA lower on earnings.. rather than somehow magically turn things around.. mere days after today's key break.
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Bearish short/mid term.
Bullish long term.

BABA is one to watch.. across the summer.

DISCA - a giant bear flag

Whilst the main market closed moderately higher, there was notable strength in Discovery (DISCA), which settled +1.9% @ $33.37. However, price structure is a very large bear flag since the Feb' low of $28.71. There is viable downside to the 25/22 zone this summer.


DISCA, daily

DISCa, monthly

Summary

*to be clear, I am fundamentally bullish about the company, which remains profitable, with a very sound long term outlook.

However, price structure is what it is... and if the main market sees any kinda of sig' retracement this summer, there is little chance that DISCA won't take out the Feb' low.. and slip to the 25/22 zone.

On any basis, I would be looking to go long DISCA later this summer... on any hit of 25/22s.

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**Discovery have earnings early Tuesday

BABA - battling to hold the floor

With the main market climbing into the weekend, Alibaba (BABA) saw some chop, settling -0.2% @ $81.15 (range 82.25/80.12). BABA is clearly battling hard to hold the critical $80 threshold... under which there is nothing but empty air to the IPO price of $68. Earnings are due early next Thursday.


BABA, 60min

BABA, daily

Summary

Suffice to say... unlike the overpriced momo nonsense of AMZN, TSLA, FB, and even NFLX, BABA is at least a hugely profitable company.

Price action since early March has been one of solidifying a core floor of $80.00.

If the market likes earnings next week, first upside target is the gap zone of 91-97. The giant $100 threshold would be a valid target on any break above declining trend/resistance.. which next Thursday will be $87.

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*I will consider going long BABA (as an earnings play) next week. However, on any basis, if BABA were to lose the $80 threshold.. it would bode VERY badly for Thursday earnings.