Thursday 15 March 2012

Relentless Low-Vol' Melt-Up...Continues

Urghh, another day that was not only dull, but it was another dose of pain for the few bears that remain.


The uptrend continues - although momentum is very slowly reducing (at current rate, will take 2-4 months to go negative cycle).

Transports, daily - yesterday was a small tease for the bears

There had seemed a slim possibility that the small move yesterday was the start of something. Clearly, today's action was very bullish. The next target remains making a new high in the 5500s.

VIX - daily....churning in the 15s

Nothing much can be gleaned right now from the VIX. The cycle momentum looks possibly flooring, but it could just as easily churn in the low teens for weeks to come..even months. Only a break over 19 would suggest anything remotely bearish for the main indexes is possible.

Awaiting the weekend

Well, the only marginally interesting aspect today was AAPl. $600...but closing at 585. Dare I note, but Cramer on clown channel made a good point. If you just divide the price by 10, and look at it that way, the move from 35 to 60 is really not that extreme. We have indeed seen plenty of stocks over the years double and triple up in months. Considering the PE (12/13), AAPL could indeed hit $1000 - and still only be 'average value' compared to rest of the market.

OPEX Friday, not expecting anything other than a repeat of today.

*Ohh, and one note on the 'doom chatter' out there. Much of it is valid, in the arguments they make about possible black swans - whether an Iranian conflict, or a EU implosion, yet as the last few days have again shown....the market can simply ignore the threat of any of it,...for a very very long time.


AMZN - which way will it break?

AMZN looks set for a decisive move, one way or the other.

AMZN - daily cycle, momentum suggest lower

AMZN - weekly, bearish targets

A few weeks back in the first of my 'fair value' series, I noted AMZN as a great company for the longer term, but it has real problems right now with profit margins that are too thin.

So, which way? With SP' already around the 1400 level, AMZN has largely failed to participate in this recent up cycle. AMZN could easily be putting in a bearish pennant right now, and if we do break below 175, then the next level is 150.

The bulls could justifiably suggest that AMZN will at least back test the broken trend/channel -as high as 220 in the coming months. If Sp'1450/1550, then such a target would be very viable. The weekly MACD momentum (blue bar histogram) has been crawling higher for many months now, but it is still in a negative cycle, and could just as easily start slipping lower.

$100 would be unthinkable to many, but it is my baseline 'fair value' target -everything else remaining the same, and it is certainly the target to aim for, if $150 fails to hold.

Thursday Outlook - A Confusing Mess

Today has made things a little more interesting. Yesterdays stupid JPM inspired ramp really dismayed even the most perma of bears. Even talk of AAPL to $1000 seemed almost everywhere. Is this a sentiment hysteria peak, just like May 2011, or April 2010?

IWM - Daily,  still stuck in the low 80s

The R2K index is a real mess. We are still stuck at recent highs. Today's close was pretty bearish, but in the scheme of things, its not enough to get excited about.

Bears MUST see IWM fall under 78 to confirm that some sort of short term top is in. Right now, 78 is still a full 4pts lower - that is around 5% off the index. Considering the low vol' melt-up that we're still in, a 5% fall (just to have a chance at further falls) is asking a lot.

Arguably, bears need to see a day when the SP' is -30/35pts. Anything in the realm of 15, even 25pts is just no good, since the intra-day retraces are usually at least 10/15pts.

SP' daily - a higher high, is '5' complete?

SP', along with the DOW, and Nasdaq have all put in higher highs this week. Would that make for a minor'5 wave complete? It is very confusing, not least when both Transports and the R2K - both important leaders, are very much suggesting underlying weakness.

Right now, only with a close under the recent low of 1340, can the bears get excited for late March and into April. The 1340 level certainly looks a long way down right now.

NYSE - weekly, also a mess

Bears need a break under 8000, and a further move under the October channel/trend of 7900. Even then, there is very strong support at the 7800 level.

Thursday outlook

With opex this Friday, things could - and should, get more choppy in the remaining part of the week. Where will the marker makers want to pin the indexes? How about sp'1370. That is the 10MA, it'd make for a reasonable pull back, and would leave both bulls and bears alike wondering what is in store for next week. A Friday VIX close of around 17.50/18 would similarly be at a level which would maximise trader uncertainty.

Goodnight from the city!

Rising $ - Metals/Miners lower

The Dollar is most definitely rising, it is kinda strange that few commentators out there seem to have noticed.

UUP weekly...rising momentum

UUP is one great way to play the $. Its a very slow moving ETF, non-leveraged, so at least it does not suffer too much from statistical decay.

*in the grander picture, it is important to note we could easily just be putting in a giant bear flag on the dollar. Unless we can punch through, say above the UUP 23.50 level, the overall outlook could still be said to be bearish.

Implications for the Metals...and the miners

If the near term (1-3 month) UUP outlook is correct, then both metals and miners will be under SEVERE pressure in the coming weeks and maybe across much of the summer.

GLD - on the edge

It could be said GLD is merely in a bull flag - which would be true, however, it looks like todays action is suggesting GLD will challenge the 150 level. If that fails..then 140...and then 120 - within months.

SLV - already broken

SLV is - as usual, weaker than Gold. Despite the fact that underlying momentum looks like it has turned, it is still deeply in negative territory, and it'll likely take all of 2012 to get close to going positive cycle again.

The Miners are in serious trouble

GDX - Daily, about to break support

GDX daily chart is arguably oversold, but it is now on the edge of breaking the recent low. A break into the high 40s..should open up a 20% move lower.

*Tim Knight on Slope of Hope seems to be more focused on GDX than anything else lately - especially as it relates to his infamous analogue.Can the miners really lose 50% in the near much-touted 'doomster wave'?  Certainly, if Sp'1000, then GDX should at least briefly break into the high 30s..

GDX - the bigger perspective, monthly, 2 year outlook

We have a VERY good ceiling in place, and we are without question in a state of rollover since last winter. Primary target zone is somewhere around 40, maybe as low as 30. It would seem unlikely we can break below 30, baring some serious deflationary wave - and we know the Bernanke would want to launch QE3 if that looks likely.

The miners remain my favourite stocks, they are real companies that do actual 'real work'. In the long run, mining stocks - especially the bigger ones, look like the best long term holds. Yet, it is pretty simple, in the immediate term....

If $ UP, then metals weak...and if that is the case...then the miners will get whacked!

more later..maybe

   the worlds biggest 'Gold Rush' and 'Bering Sea Gold' fan.  ;)