BA - leading the Dow lower

Whilst the broader market ended the month moderately mixed, there was notable weakness in the airlines. Boeing (BA) settled lower by a very significant -2.4% @ $126.15. Next support is the price cluster zone of 122/120. A break of the Feb' low of $101.27 looks due... if main market rollover.


BA, daily

BA, monthly

Summary

BA - along with AAPL, DIS, and INTC, is one of the key Dow stocks that I see as highly important in providing an early warning of broader market trouble.

For the moment, the main market remains stuck under the May'2015 high. So long as that holds, there is high threat of renewed downside, with a far more dynamic move to the sp'1600/1500s.

Were that the case, BA would take out the Feb' low, and proceed to around $90, if not the mid $70s.

For now, that could understandably be seen as 'crazy talk'. 

Technically though, such bearish targets remain valid.

TVIX, UVXY - a fourth net weekly decline

With US equity indexes seeing a significant net weekly gain, the VIX remained very subdued. The 2x lev' bullish instruments of TVIX and UVXY saw a fourth consecutive net weekly decline, decaying by -19.2% and -19.6% respectively.


TVIX, daily

UVXY, daily

Summary

*first, an update on the VIX, which saw a net weekly decline of -13.7%

--
As for TVIX and UVXY, whilst the VIX remains stuck in the mid/low teens, the underlying issue of decay is causing serious problems for those holding across multiple weeks.

The month of June does offer VERY high threat of renewed equity downside (if only to the mid sp'1900s), with an associated spike in volatility.

On any basis, the VIX remains on the very low end of the cycle, and so TVIX/UVXY have a fair chance of sig' upside across the coming month.

Long term of course, both will see further reverse splits.. as is inevitable for almost all leveraged instruments.

RIG, SDRL - unable to hold early gains

With WTIC oil flirting with the $50 threshold, energy stocks opened broadly higher, but it was notable that many saw rather strong daily reversals. The oil gas drillers of Transocean (RIG), and Seadrill (SDRL), settled lower by a significant -1.9% and -7.8% respectively.


RIG, daily

SDRL, daily

Summary

Little to add from a few days ago.

Price action remains broadly weak. This morning was just another classic instance of sig' opening gains, but then the sellers reappeared.

Of the two companies, SDRL is more vulnerable, and I would be surprised if it survives into year end.

INTC - bullish breakout

With the broader US equity market closing broadly higher for a second day, there was similar strength in most tech stocks. Intel (INTC) settled higher by a significant 1.1% @ $31.39. The net daily gain made for a clear breakout from narrowing price action that stretches back to the December high of $34.98.


INTC, daily

INTC, monthly

Summary

Suffice to add, INTC is now one of the most bullish stocks out there.

Equity bulls merely need a break above the March high of $32.47. If that is achieved, its open air to the high $34s.

On any fair basis, any price action above $32.50 would be strong evidence against the broader bearish outlook.
--

*I like INTC for the long term, but would only see INTC as a valid long, ifchasing it on a break >$32.50.

If instead, the main market rolls over again, INTC is set for much lower levels... the giant monthly cycle would offer $20 by late autumn. For now, that can (understandably) be seen as mere crazy talk.

GDX - miners falling with the metals

With the USD continuing to climb (+0.4% in the DXY 95.60s), the precious metals were pressured lower, and that naturally impacted the related mining stocks. The ETF of GDX settled lower by a rather powerful -5.5% @ $22.46. There is strong price cluster support in the 21/19 zone.


GDX, daily

GDX, monthly

Summary

So, a pretty sig' daily decline, and the monthly candle sure ain't pretty.

Broadly though, its highly notable that GDX remains some 80% above the Jan' low of $12.40.

Even a decline to the 19s wouldn't do much to damage the massive multi-year break of trend that occurred a few months ago.
-

I remain broadly bullish the gold/silver miners... unless spot Gold prices <$1170.

RIG, SDRL - drillers under pressure

With oil closing significantly lower (but still relatively close to the $50 threshold), the oil/gas drillers of Transocean (RIG), and Seadrill (SDRL), were naturally on the slide, settling -2.9% and -3.1% respectively. Mid term outlook remains bearish, as both companies look extremely vulnerable to disappearing entirely.


RIG, daily

SDRL, daily

Summary

RIG: recent price action is pretty messy, but is broadly still leaning weak, holding well below the 200/50 day MAs.

SDRL: almost back to the April low of $2.70.

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Of the two, SDRL is the most problematic, and I'd be extremely surprised if this company is not on the pink sheets by the autumn.

TVIX, UVXY - cooling into the weekend

With the VIX still yet to show any sustained/significant upside power, the 2x lev' bullish volatility instruments of TVIX and UVXY cooled into the weekend, with net weekly declines of -7.6% and -7.7% respectively.


TVIX, daily

UVXY, daily

Summary

*first, an update on the VIX, which saw a minor net weekly gain of 1.1%

The VIX remains broadly subdued, as despite the market sliding from the high of sp'2111 to 2025, the style of price action is very choppy... and that hasn't inspired any fear in the mainstream.

Underlying MACD (blue bar histogram) is set for a bullish cross within 2-3 weeks, and that will offer the first realistic opportunity for powerful VIX upside.

As ever though... VIX tends to spike very quickly... and almost as rapidly... cools.

--
As for TVIX and UVXY, it could be argued they are trying to make a floor, but if VIX doesn't break into the 20s within a week or two.. they are going to merely decay further.

Broadly.. the US equity market looks highly vulnerable to the third major down wave since summer 2015. The big unknown is just how high that might drive the VIX... just the high 20s... or far higher... to the 40/50s - as seen last August.

BA - losing altitude

With the main market remaining weak, Boeing (BA) saw particularly significant weakness, settling lower for a third consecutive day, -2.2% @ $128.09. Next support is the 122/120 zone. If the main market unravels this summer/autumn.. the Feb' low of $101.27 will not hold.


BA, daily

BA, monthly

Summary

Suffice to add, BA has experienced a wild ride across the last year.. having imploded from $148 in Nov'2015 to $101 in Feb'... but then a hyper rebound to $136 in late April.

BA is highly vulnerable to renewed downside, and if the broader market implodes (if briefly) to the sp'1600s at some point this year, then BA will lose the giant psy' level of $100.

The bigger monthly chart is offering primary downside to 90/89... and secondary support of 75/74.

GDX - miners cooling with the metals

With the precious metals closing significantly lower, the related mining stocks were similarly under strong downward pressure. The ETF of GDX settled lower by a rather powerful -7.9% @ $23.57. However, the broader trend remains bullish... even if the 21/19 zone is tested.


GDX, daily

GDX, monthly

Summary

Clearly, a rough day for the mining stocks, but broadly...  the primary trend from the Jan' low of $12.40, remains intact.

Today's declines in the precious metals were due to a rallying USD.. which itself was a result of renewed threats from the Fed' that a rate hike in June is possible.
--

*I remain of the view that the Fed won't raise until Q4... if at all this year, not least as the market will be under pressure across June.

.. and we know the Fed won't raise rates if equities are on the slide, yes?

AMZN - what a bargain, yes?

With the broader market closing broadly lower, there was similar weakness in Amazon (AMZN), which settled -2.2% @ $695.00. Near term outlook threatens the $650s, where the 50dma will be lurking in early June. If the main equity market gets smashed this summer... the Feb' low of $474 will not hold.


AMZN, daily

AMZN, monthly

Summary

*special highlight for the monthly chart... if AMZN can close May <659, that will make for a red candle, with a VERY bearing topping spike.

If that turns out to be the case.. it bodes for massively lower levels this summer.
--

Suffice to add... AMZN is one of the few remaining momo stocks that hasn't been smashed lower by the increasingly intolerant and demanding equity market.

The current valuation is clearly insane... with even more conservative analysts still projecting an overly generous PE in the 70s.

--
I will highlight what might become an infamous lunch time moment on clown finance TV...

Ms. Stephanie 'I have to chase AMZN at $700' Link. She did note at the time AMZN was valued on the high end.. , but that she felt compelled to get involved around the $700 threshold.

Compelled... indeed.
--

*to be clear, I like the company... superb service (does anyone not use AMZN these days?).. but from a pure valuation perspective.. AMZN could fall to $350/300, and it'd still be arguably over-valued - relative to its current minuscule net profit margin of around 1%.

I shall be watching AMZN across the summer for purely entertainment reasons.

I have ZERO intention to short it... as its a momo stock.. and they are overly problematic to trade.

AAPL - short term bounce

Whilst the broader market closed significantly higher, there was particular strength in Apple (AAPL), which settled +3.7% @ $93.88. Next resistance are the $97s... with powerful resistance around $103. The low $70s look a very valid target for the summer.


AAPL, daily

AAPL, monthly

Summary

Nothing falls in a straight line... and AAPL is not surprisingly seeing its first decent up day since late March.

Broadly though.. the stock is continuing to build a series of lower highs... and lower lows.

The fact AAPL has already taken out the Aug'2015 low of $92.00 is testament to the fact the stock is technically broken.

A return to the $80s looks an easy target by end May/early June, and even if the main market only cools to the low sp'1900s in June/July, AAPL will be highly vulnerable to the $70s, not least after Q2 earnings in July.

TVIX, UVXY - struggling with subdued volatility

With the VIX remaining broadly subdued, the 2x lev' bullish volatility instruments of TVIX and UVXY saw net weekly declines of -6.1% and -5.2% respectively. Near term outlook offers some upside, as the VIX is set for the upper teens.


TVIX, daily

UVXY, daily

Summary

*first, an update on the VIX, which saw a minor net weekly gain of 2.2%.

--
As for TVIX and UVXY,  considering equity price action, and the broadly subdued VIX, it was not surprising to see the leveraged instruments still close net lower on the week.. despite moderate Friday gains.

Right now... the upper daily bollinger for TVIX is around $4, and for UVXY in the $17s. If sp'2020s next week, that will be the first big zone of natural resistance.
--

*my broader equity outlook is for the first opportunity of sustained/significant downside no earlier than late May.. and the same applies to the VIX.

VIX 30s.. and perhaps far higher still seem due, but clearly, for those holding across multiple weeks, it remains a pretty tough time.

--
yours truly remains long the VIX via TVIX. The notion of closing out from what remains a VIX in the low teens, seems ludicrous. I hold.

AAPL - breaks the August 2015 low

Whilst the main market saw a day of swings, there was sustained and significant weakness in Apple (AAPL), which settled -2.4% @ $90.33. The break of the Aug'2015 flash print low of $92.00 is very important, and opens the door to the $70s this summer.


AAPL, daily

AAPL, monthly

Summary

Suffice to add, market sentiment is increasingly negative towards the tech behemoth that is AAPL.

Regardless of any short term bounces, the $80 threshold, but more so... the $70 fib retrace level appears a very valid target within the next few months.

DIS - post earnings trend break

Whilst the main market closed significantly lower, there was more powerful weakness in Disney (DIS), which opened sharply lower (intra low $100.62), and settling -4.0% @ $102.29. Near term outlook offers further weakness to the 98/96 zone.


DIS, daily

DIS, monthly

Summary

Suffice to say... underlying EPS/revenue was broadly fine, but they were a fractional miss from what the market had been expecting.

In terms of price.. there is a clear trend break.. and its notable DIS was trading in the $99s in Tuesday AH.

Further weakness to the 98/96 zone seems due in the near term.

More broadly, DIS looks vulnerable to the 80/75 zone.
-

To be clear... I like DIS (how can you not like the company that owns the two greatest film franchises - Star Wars and the Marvel universe?).  For the moment though.. with the main market still vulnerable to a 20% drop this summer/early autumn to the sp'1600s, DIS remains one I shall merely watch.

GDX - miners rebounding

With the broader equity market broadly higher, and precious metals managing moderate gains, the gold/silver miners were back on the rise, with the ETF of GDX settling +3.6% @ $24.37.  Broadly, Gold looks set to break above the $1300, and that will likely equate to GDX 28/30.


GDX, daily

GDX, monthly

Summary

Suffice to add... we're seeing a great many short term significant swings... but broadly, the breakout from January is comfortably holding.

Even a retrace to the $22/20 zone would do nothing to damage the massive bullish breakout.
-

If Gold $1400/1500s this summer, GDX 35/40... and frankly, that doesn't seem an overly bold target. What is pretty amazing is that the miners have - as a collective, doubled in value since the start of the year... and there is a lot of 2016 left to go!

CHK, FCX, RIG - commodity related stocks smashed

Whilst the broader equity market saw a day of minor chop, there were pretty severe declines in most commodity related stocks. Chesapeake Energy (CHK), Freeport McMoran (FCX), and Transocean (RIG), settled lower by a very powerful -10.7%, -10.8%, and -7.1% respectively.


CHK, daily

FCX, daily

RIG, daily

Summary

As has been the case for many weeks... it remains notable that the 'junk'.. 'trash' - or whatever you want to call them, stocks remain highly vulnerable.

Today.. with commodities under pressure - not least as the USD climbed for a fifth consecutive day, the related energy/mining stocks were severely impacted.

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CHK, FCX, and RIG remain on my disappear list.. and I'd be very surprised to not see at least one, if not two of these companies on the pink sheets by the autumn.

TVIX, UVXY - pressured by the subdued VIX

Despite equities closing net lower on the week, the VIX failed to display any sig' upside power. The 2x lev' bullish VIX instruments of TVIX and UVXY saw net weekly declines of -9.9% and -10.3% respectively, coming close to breaking last week's low.


TVIX, daily

UVXY, daily

Summary

*first, an update on the VIX, which saw a net weekly decline of -6.2%.

Seen on the giant weekly cycle, the VIX has a realistic opportunity for a bullish cross in the last week of May, with viable upside to mid/upper 20s.

--
As for TVIX and UVXY, it was a lousy performance, but then.. the VIX had failed to push upward, even with the sp'500 breaking last Friday's low of 2052.. to a new cycle low of 2039.

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*yours truly remains long the VIX - via TVIX.  Even if there is further downside to the sp'2000/1990s, that might only push the VIX to the 19-21 zone, which itself might equate to TVIX just 20/25% higher from current levels... offering the 4.00/4.25. A break back into the $5s looks out of range in the current cycle.

TSLA - post earnings depression

Whilst the main market saw a day of minor chop, there was notable weakness in Tesla (TSLA), which settled lower for a third consecutive day, by a very significant -5.0% @ $211.34. Next support is the 200/195 zone, below that.. the $150/140s, which do seem probable this summer.


TSLA, daily

TSLA, monthly

Summary

TSLA is really struggling as Mr Market is increasingly impatient at the notion that vehicle production is still going to take a few more years to reach 300-500k vehicles a year.

A further capital injection seems a given... and that will likely come via a share issue.

However, if the main market does eventually break to the sp'1600/1500s this summer/autumn, such a share issue will be off the menu until 2017.. at which point Mr Musk will be asking for new money from almost anyone.
-

I really like the company, highly innovative, an industry leader, with a superb product line, but TSLA just doesn't make money.. and won't likely be making any significant profit for another 4-5 years.

BA, DAL, UAL - airlines diving

Whilst the main market closed broadly lower, there was notable weakness in the airlines. Boeing (BA), Delta (DAL) and United (UAL) settled lower by a rather significant -1.2%, -3.5%, and -3.3% respectively. Near/mid term outlook is bearish, although if oil/fuel prices remain at/below current levels, that will help keep operating costs under control.


BA, daily

DAL, daily

UAL, daily

Summary

Suffice to add, BA has seen a clear break of the rising trend that stretches back to February.

DAL continues to struggle, having fallen almost 20% since mid April. Next support is the 40/39 zone.

UAL is seeing rather severe weakness, having been unable to clear powerful resistance in the $61s. Next support is the 44/42 zone.
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If the broader market implodes to the sp'1600/1500s this summer/autumn, then the airlines will be dragged lower, even though low energy/fuel prices will help them to a significant extent.

CHK, FCX, SDRL - smashed junk

Whilst the broader US marker closed broadly lower, there were severe declines in the 'usual junk suspects', with Chesapeake Energy (CHK), Freeport McMoran (FCX), and Seadrill (SDRL) settling lower by -12.1%, -11.4%, and -9.7% respectively. Mid term outlook is bearish for the trio.


CHK, daily

FCX, daily

SDRL, daily

Summary

Suffice to add... as it always the case.. any degree of market decline will see the 'junk' stocks get smashed lower.

CHK, FCX, and SDRL all remain on my disappear list, and considering the broader macro-economic picture, it would be extremely surprising to not see at least 1 or 2 of the trio implode completely before year end.

STX - continuing to implode

Whilst the main market started the month on a broadly positive note, Seagate (STX) continued to implode - after a recent lousy earnings report/outlook, settling -6.0% @ $20.47. The psy' level of $20 looks unlikely to hold, with next supports of $15, and then the $10/7 zone.


STX, daily

STX, monthly

Summary

Seagate has had a nightmarish time since late 2014 (when the 'old leader' - Transports maxed out), imploding from $65.08 to a new low in the $20s... the lowest level since summer 2012.

--
To be clear, I like the company... great products (I prefer STX or Samsung drives for data storage), but as a stock, this is an ongoing train wreck.. based on real fundamentals where global demand is seriously weakening.

STX should be fine for the super long term, but it does look vulnerable to being ground much lower. If sp'1600/1500s.. STX would likely be somewhat close to the psy' level of $10.

One to watch.. as an important stock in the tech sector.