GDX - broadly churning

With the precious metals of gold and silver closing the month net lower, the related miners were naturally dragged lower. The gold miner ETF of GDX settled the day/week on a moderately positive note +0.5% at $22.07, but that still resulted in a net monthly decline of -2.7%.


GDX, weekly

GDX, monthly

Summary

Since the February high of $25.71, the gold miners have broadly churned. There have been fractional (and brief) breaks of core rising trend in both May and June. Such breaks certainly should concern the gold miner bugs.

What should be clear...a big break is due. Which direction will the break be?

Well, I sure don't own a time machine, but commodities can't fall forever. At some point we'll see a push upward.

Interestingly, one indirect bullish indicator for Gold/Silver - and the related mining stocks, is Copper, which is sitting close to the key $2.70 threshold. If copper can break/hold $2.70, it would be subtly suggestive that gold and silver will eventually follow.

AMD, MU, NVDA - short term weakness

Whilst the main market settled broadly weak, there was more significant weakness in semiconductor stocks, with Advanced Micro Devices (AMD), Micron Technology (MU), and Nvidia (NVDA) settling -4.8%, -2.4%, and -3.3% respectively. Near term outlook offers further weakness into early July.


AMD, daily

MU, daily

NVDA, daily

Summary

Suffice to add, it was a very bearish day for tech stocks, especially those involved with producing CPU/GPUs.

Near term targets...

AMD - the 12.00 to 11.50 zone.
MU - 30.00/29.50.. where the 50dma is lurking
NVDA - the 50dma, 135/34

Even if the lower end of those targets are hit, it will do ZERO damage to core rising support/trend, that stretches back to early 2016. 

--
For the record, I'm especially bullish Micron Technology, on a pure valuation basis. Earnings - as issued in AH, were better than reasonable. Once the main market floors, whether sp'2400.. or 2350/40s... MU is a valid term buy.

yours.. running on a very efficient Nvidia GPU.

X - strong gains for US Steel

Whilst the main market closed broadly higher, there was particular strength in US Steel (X), which settled +4.6% at $22.57. Near term outlook offers some cooling - along with the main market, but an eventual move to at least the $24.00 threshold is due in July. Things turn bullish for the mid term >$28.


X, daily

X, monthly

Summary

If main market has another wave lower in the near term (as seems probable), X will surely at least be pinned back to some extent.

Broadly though, the US market remains super strong, and X should trade to the lower end of the big price gap by mid July.

--
Something of note today, July $24 call buyers in X

Its interesting that the call buyers were choosing the $24 strike, which is my first soft target.

--
I like US Steel for the mid term, but the more cautious bulls will simply wait for a few daily closes back above the 200dma, currently at $27.85.

JD - short term weakness

JD.com (JD) struggled across the day, settling -5.5% at $40.69. Near term outlook offers the 38s, where the 50dma is lurking, along with a partly unfilled gap. Mid term outlook remains bullish, with first soft target of the psy' level of $50.00.


JD, daily

JD, weekly, 4yr

Summary

JD is a company I've only recently started tracking. It can be looked upon as something of an Alibaba (BABA). Unlike BABA though, JD is yet to generate a net profit...

Key stats: https://finance.yahoo.com/quote/JD/key-statistics?p=JD
--

Suffice to add, Monday saw it break a new historic high of $44.18, but it saw some intraday swings, settling with a black-fail candle. Such candles lean to the equity bears... and today saw it confirmed.

Near term offers further sig' weakness to the $38s, the 37/36s on a stretch.

So long as the sp'2400 threshold holds, JD should then resume upward to hit $50 by late summer.

ARNC - producer of flammable products

With the market becoming aware that Arconic (ARNC) produced the cladding used on the burnt out Grenfell tower in London, the stock opened sharply lower (intra low $22.59), settling -4.1% at $24.28. Near term outlook is very bearish, with at least a re-test of this morning's low.


ARNC daily

ARNC, monthly

Summary

Frankly, considering the severity of the recent Grenfell tower fire, its almost a wonder that Arconic - now named as the company who produced the flammable product that covered the tower, didn't drop more today.

For yours truly in the north west of the London metropolis...

Looking to the south west, just two of the towers cladded in Arconic products, that have both failed emergency safety tests. Both towers - along with at least 58 others, will need to be stripped, and eventually re-clad. There are around 600 clad towers in England, and its possible >500 might be affected. Exactly who is going to pick up the tab for that (roughly $3 million a tower) is yet to be decided. Indeed, it will likely be argued within multiple courts, and such a decision might easily drag out for some years.

Ohh, and consider this... its not just a UK problem, its an issue across many countries.

Arconic announced today they will no longer sell its product for us in 'high rise' buildings.

see: http://www.bbc.co.uk/news/uk-40409981
--

No doubt this story will eventually fade for Arconic, but its not one the UK - and especially London populace, will forget about for many years to come.
--


The technicals...

Today's candle was a very strong hollow-red reversal type, managing to settle above the 200dma. Generally, those are indicative of a key floor. However, considering the seriousness of the product problem, and the fact the story will likely run for months to come, further weakness can be expected in the short and mid term.

The next big support is the psy' level of $20.00. The bigger monthly cycle is offering the 17/16s, which do seem a threat by the autumn, not least if the main market eventually experiences a basic retrace of 5%.

Unquestionably... bearish ARNC

GDX - a mixed week

It was a mixed week for the Gold miners, with the ETF of GDX, settling higher for a third consecutive day, +1.7% at $22.75, which made for a net weekly gain of a very significant 3.1%. Near term outlook leans bullish, but things only become clear with a break and hold >$24.00 or <$22.00.


GDX weekly

GDX daily

Summary

Suffice to add, it was a mixed week.

Its notable that GDX saw another fractional break of core rising trend - that stretches back to Jan'2016, but managed to claw back upward across Wed-Friday.

A major move is coming as price action is increasingly tight, with price structure that could be seen a bull flag from late February, or as a giant bear flag from the Dec'2016 low.

Best guess? Mid term, I still see an eventual break to the upside. Although frankly, anyone who regularly checks the CRB index should realise commodities have had a dire year so far.

INTC - having technical problems

Whilst the main market remains close to historic highs, Intel (INTC) has been notably weak, settling lower for a third consecutive day, -0.6% at $34.36. The mid term bullish trend from summer 2015 has been decisively broken. The last line in the sand for the bull maniacs are the $32s.


INTC, daily

INTC, monthly

Summary

First, just reflect on the fact that whilst the Nasdaq is trading very close to recent historic highs, the tech giant of Intel really is struggling. Seen on the bigger monthly chart we have a very clear break of trend that stretches back almost two years.


So... what now?

The break of rising trend is suggestive of further near term weakness to the $33/32s.

Things would turn extremely bearish with any price action in the $31s.

Best guess: The $32s become near/mid term support, with a whipsaw upward after earnings. Mid term target is a monthly close >$38.00 (before year end), which will then offer a challenge of the Aug'2000 historic high of $52.10 in late spring/summer 2018.

Yes, $52.20 is a long way up, but its a valid scenario, unless the main market breaks its mid term upward trend from early 2016.

AMD - mainstream bullish chatter

Whilst the main market settled moderately mixed, there was powerful strength in Advanced Micro Devices (AMD) which settled +10.6% at $13.98. Near term outlook offers a touch of cooling - not least if sp'2415/00, but broadly, the stock is set to break above the Feb'28th high of $15.55. From there, its a straight run to the psy level of $20.00.


AMD, daily

AMD, monthly

Summary

Q1 earnings were a marginal miss, although the outlook was still positive. The downgrade - by none other than the infamous squid of GS, helped to grind the stock down to (almost) hit the 200dma in the upper $9s.

Since the May 3rd low of $9.85, price action has been very choppy, but leaning upward. We have a series of higher highs and higher lows. On any basis... its bullish.

Near term outlook does threaten some cooling, but anything <$12.00 - where the 50dma is lurking, looks out of range.

Next earnings are due July 31st. If they come in just marginally 'better than expected', the stock will be well into the 16/17s.

*for the record, if there is one company I think AAPL might buy.. it'd be AMD.

CHK, RIG - ground lower with energy

Whilst the main market closed broadly weak, there was powerful downside within the energy sector. Chesapeake Energy (CHK) and Transocean (RIG) settled lower by -1.6% and -4.2% respectively. Near term outlook is bearish, as WTIC looks vulnerable to the $40/37 zone.


CHK daily

RIG, daily

Summary

Suffice to say, with WTIC having cooled from a May 25th high of $52.00 to the $42s, its no surprise to see the broader energy sector struggle.

The mid/small tier stocks like CHK and RIG are naturally seeing more powerful declines.

Short term, WTIC to $40/37 zone seems probable, which will no doubt knock another 5-10% off CHK and RIG.

Unlike early 2016 though, the long term survivability of CHK and RIG is not in any doubt.

X - holding the May low

Whilst the main market closed broadly higher, there was more powerful strength in US Steel (X), settling 3.2% at $20.80. Near term outlook does threaten some weakness, but the May low of $18.55 looks comfortably secure. First soft upside target is the $24.00 threshold.


X, daily

X, monthly

Summary

US Steel was one of the key 'Trump trades', effectively doubling up from Nov'2016. Yet... most of those same stocks were subsequently ground all the way back to where they started.

Near term outlook is choppy, leaning weak.. not least as the main market looks moderately vulnerable.

First soft upside target is the $24.00 threshold. Things really only turn bullish with a break back above multiple aspects of resistance.. not least the 200dma. For clarity, the bulls need to see >$28.00.
--

*same outlook applies to AKS.

GDX - difficult week for the miners

With Gold and Silver seeing a second consecutive week of declines, it was a rather bearish week for the Gold mining stocks. The sector ETF of GDX settled the day -0.2% at $22.06, which made for a very significant net weekly decline of -3.4%. Price action is setting up for a major break.


GDX weekly

GDX daily

Summary

With the fed raising rates, the precious metals saw another wave lower, resulting in sig' net weekly declines. Not surprisingly, the related mining stocks followed.

Note the daily bearish engulfing candle on Wednesday for GDX. Opening gains - ahead of the rate hike, were powerfully reversed. The Thurs/Friday declines confirm what was indeed a key reversal day.

Further, its notable that GDX went sub $22 on both Thursday and Friday, which was a borderline break of core rising trend. Keep in mind we saw a marginal break of trend in early May.

If the May low of $20.89 is closed under... it would bode exceptionally bearish.

Near term outlook has to be bearish, as the commodity sector remains broadly weak.

AMD - falling towards the 200dma

Whilst the main market closed moderately mixed, there was further significant downside in Advanced Micro Devices (AMD), which settled -2.3% at $11.50. A break below soft rising support - around the $11.00 threshold, will offer a test of the 200dma, currently in the $10.40s.


AMD daily

AMD monthly

Summary

Suffice to add, AMD - along with most other tech stocks, saw a massive reversal last Friday. The Monday bounce was weak, and has been fully negated.

Further weakness to at least $11.00 seems due, with a viable test of the 200dma in the mid $10s within 1-3 days.

Mid term.... still bullish, and seeking a break above the Feb'28th high of $15.55 by late summer.

CHK, RIG - energy stocks whacked with oil

With WTIC oil seeing very significant weakness to the $44s, there was natural powerful downside in some of the mid/smaller tier energy stocks. Chesapeake Energy (CHK) and Transocean (RIG) settled lower by -4.9% and -5.1% respectively. Near term outlook is bearish, as WTIC looks highly vulnerable to $40/37.


CHK, daily

RIG, daily

Summary

CHK: a reversal of the Mon/Tuesday gains. Near term outlook is weak. There really isn't much support until the $4.25/4.00 zone.

RIG: like CHK, also fully negating the Mon/Tuesday gains. Near term outlook is very bearish. The Feb'2016 low of $7.66 is just about within range.. not least if WTIC $40/37.

--
To be clear, unlike early 2016, neither companies 'survivability' looks in any doubt. For the moment though, the broader energy sector remains deeply unloved, and for the near term (at least).. there is zero sign of that ending.

NVDA - continued significant swings

Whilst the main market closed moderately higher, there were significant swings in Nvidia (NVDA), which saw an intra low of $145.65, but settled +0.9% at $151.40. First big support is around 130/125. Any price action <120 looks out of range unless the sp'500 sees a daily close under the 50dma (soon 2390s).. which seems unlikely.


NVDA daily

NVDA monthly

Summary

Suffice to add, recent earnings for Nvidia were 'reasonable'.

In terms of price, the run from the April 13'th low of $95.39 to the June 9th high of $168.50 was unquestionably insane.

Outlook is for short term weakness, but mid/long term hyper-strong. Many seem resigned to the $200s, whether before year end or early 2018. Some are starting to think about the 500s.. even >$1000.

*A few of you might be aware that Cramer was recently touting an Intel '1987' analogy, which would equate to NVDA $10500.

GE - boosted by the CEO exiting

Whilst the main market closed moderately mixed, there was very significant strength in General Electric (GE) which settled +3.6% at $28.94. Critical support at the $27.00 threshold recently held, and with a change of leadership, GE is accelerating back toward the $30s.


GE, daily

GE, monthly

Summary

I have been highlighting lately - both publicly and privately, that GE is 'one of those stocks that the equity bulls MUST see resume back upward to have confidence in the broader bullish outlook'.

A fair few others out there (such as Josh Brown, regular on CNBC) also recognised how the low $27s needed to hold.

GE saw a low on May 18th of $27.10, with a key marginally higher low of $27.16 on May 30th.

Mid term target: by year end, $31/32, with 33/34 best case.

By late spring/early summer 2018, the $37s will top of the channel.
--

GE remains HUGELY important to the broader bullish case, and whether you trade it or not, its an important one to watch.

GDX - miners digging upward

Gold came close to the $1300 threshold this week, and despite some cooling into the weekend, it was a bullish week for the related mining stocks. The sector ETF of GDX settled Friday -1.6% at $22.84, which made for a net weekly gain of 0.3%. Mid term outlook remains bullish.


GDX daily

GDX weekly

Summary

Suffice to add, the miners are getting close to breaking above key resistance, that stretches back to the Feb' high of $25.71.

A key variable is the USD, which saw a bearish break of the mid term upward trend in April. Further cooling to the DXY 93/92s seems probable this summer, which will help to give the metals - and related mining stocks, an extra kick to the upside.

I am bullish the precious metals, and by default.. the related mining stocks.

DIS - the mid term cooling continues

Whilst the main market saw a day of chop, there was significant weakness in Disney (DIS), which settled -1.5% at $104.32. Since the April 27th high of $116.10, DIS has steadily cooled by around 11%. Near term outlook offers powerful support at the 200dma in the $103s. The most bearish outlook offers 101/100, before resuming upward.


DIS, daily

DIS, monthly

Summary

Suffice to add, Disney is unquestionably soundly based. Recent earnings were better than 'reasonable'. Some are still overly obsessed with viewership/earnings from ESPN, but its only just a part of a grander money making machine.

Indeed, it remains important to keep in mind that Disney owns the two best franchises in the world... Marvel and Star Wars. Both are hugely profitable, and run by teams they are literally drafting out movies and TV series for  DECADES to come.

Technically, Disney is long term bullish, but remains firmly stuck under the August 2015 high of $119.51. The key 10MA is currently being tested in the $104s.

If the main market is upset Friday (perhaps dragging into Monday), then further weakness to $101/100, before having a better opportunity to conclude the cooling from late April.

I am mid term bullish Disney to the $130s, which is now around 25% higher.

AMD, MU - strength in semi-conductors

Whilst the main market saw a day of minor chop, there was notable strength in tech, with Advanced Micro Devices (AMD) and Micron Technology (MU), both settling higher by 2.9%. The mid term outlook for both is extremely bullish, and both are valid takeover targets.


AMD, daily

MU, daily

Summary

AMD: has struggled, not least after it was downgraded by GS. Short term.. there is resistance into the mid $13s. Today's daily candle was spiky from resistance at the $13.00 threshold. Mid term outlook is bullish to at least $20.00, and I'm highly inclined to believe AMD is a prime takeover target for AAPL.

MU: Micron has already proven itself with its most recent earnings. Valuation is low, with a forward PE of a bizarrely low 6. Basic short term upside target is $35/36. Any price action >$37 will offer 45/50.. whether by year end, or spring 2018, it should make little difference to those long.
--

yours Bullish tech.

GDX - climbing with Gold and Silver

Whilst the main equity market saw a day of moderate swings, there was notable strength in the precious metals of Gold and Silver. The Gold miner ETF of GDX settled higher by a rather powerful 4.7% to $23.82. The Feb'8th high of $25.71 is on the menu this summer.


GDX, daily

GDX weekly

Summary

The daily close above the 200dma should be seen as something of a bonus today.

Seen on the bigger weekly cycle, price action has been increasingly tight since February.

Price structure is arguably a large bull flag. It will be provisionally confirmed with a break >24.30, the $25.80s (above the Feb' high) would make it decisive.

yours truly remains leaning bullish the metals (especially Gold), and the related mining stocks.

X - holding the key low

Whilst the main market settled moderately weak, there was notable strength across the day in US Steel (X), which settled +3.7% at $21.01. The May 18th low of $18.55, is more secure with each day. First soft upside target is the $24.00 threshold.


X, daily

X, monthly

Summary

It has been a horrific few months for US Steel, with the stock imploding from a Feb'21st high of $41.73, to a May 18th low of $18.55.. a monstrous drop of -55.5%.

There are many reasons, not least that the market has whacked many of the 'Trump trades' lower across the spring.

Mid term outlook is bullish. However, the 'cautious' will wait for a break back above the 200dma... around the $28.00 threshold. Of course, that is a very significant amount higher. The bold will simply be long, with a tight stop... no lower than $18.55.

TVIX, UVXY - the VIX-long trade remains dead

With the VIX settling the week at 9.75, it was another bearish week for the 2x leveraged bullish VIX instruments, with TVIX and UVXY, both seeing a net weekly decline of -4.1%. The mid term outlook is for continued declines, as the VIX-long trade remains dead.


TVIX, daily

UVXY, daily

Summary

Its been some considerable time since I've highlighted the VIX instruments. Part of the reason is I'm just more interested in other things. The main reason though... since last summer, the VIX-long trade is effectively dead.

Some years ago, VIX 16/15s would have been historically low. Today, we're regularly seeing the 9s. Does anyone seriously think the 8s or 7s aren't possible this summer?
-

TVIX and UVXY have a number of inherent problems, not least futures rollover costs, but even more so.. the issue of statistical decay.

To me, the VIX-long trade is dead, and will likely remain dead across the summer. Sure, an equity retrace of 5% or so, is quite probable this Sept/Oct, but nothing much more than that. Would that even be enough to merit a brief test of the key 20 threshold? Perhaps, but Sept/Oct is a fair few months away, and for now, anyone trying to be long volatility is arguably just wasting their time, never mind the money.

Yours truly has not been long VIX since July 2016, and has little belief that a VIX-long trade is merited until at least late spring 2018.

CAT - implications for the main market

Caterpillar (CAT) started the month on a fractionally positive note, settling +0.2% at $105.65. The May settlement >$100 confirmed the hyper-bullish April close of $102.26. Technically, $100 is now core support, and by default, further upside of 25/30% looks probable before this has 'all played out'.


CAT, daily

CAT, monthly

Summary

I've little to add on the actual company. The aim of this post is not really about CAT, but the implications for the broader market.

Lets start from the unquestionable technical premise that $100 was multi-year resistance. We saw CAT fail to clear it in 2014, and the stock was then effectively cut in half, as commodities broadly imploded into early 2016.

CAT then clawed back upward to Jan'2017, when once again it got stuck in the $98s, with a few months of chop.

A massively key event then occurred in April, a break through of $100, and it held into end month. May has confirmed April's close.
--

$100 is now core support. The break above $100 offers a very basic $10 of upside to $110. More broadly, if you assume that $100 will hold in the next major market fall of 30%, then CAT has to least climb to $130, in order that $100 is not broken in the next down wave.

Even if you assume the gains in the main market/Dow will only be half of those of CAT, we're looking at around 15% of main market upside.