Jan 25-29, 2010
For the annotated chart of $XLF, please go here.
XLF
Price closed down 76 cents for the week at $14.18, slightly below the neutral zone and right above the main trend line on price (~$14.15).
Momentum: RSI closed the week at 38, the floor for up trends. RSI is now as oversold as it has been in 9 months. Watch to see how RSI interacts with 38. A close below 38 signals the up trend is in danger. On the other hand, a positive reversal could develop between the current low and the mid-December low if price/momentum reverses here.
Volume: Heavy short term distribution last week.
Volatility: Average. No squeeze play on.
Last Week's Outlook: Generally bullish. Should price break to new highs, expect resistance at ~$16.50. Price double bottomed at that level in 2002, and $16.50 served as bottom-top resistance in the 2008 downtrend.
Next Week's Outlook: Technically, we are at a crossroads. Watch RSI and price to determine whether this is a test that does not kill the up trend but makes it stronger, or whether the up trend is done for now.
Sunday, January 24, 2010
$$ Weekly Tech Report
Jan 25-29, 2010
For the annotated chart of $SMH please go here.
SMH
Price closed at $25.67, down $1.26 on the week. SMH has now corrected 10% over the last 2 weeks. Price violated trend line support (now a dashed line) and closed between the neutral zone and the bottom Keltner Channel (50,4,25).
Momentum: The bearish divergence in late December/early January foretold the correction over the last 2 weeks. RSI dropped to 34, below the floor for up trends. As long as RSI operates below the bear divergence line, we usually expect either downtrend action (lower highs/lower lows) or consolidation. Note that the RSI is more oversold at $25.67 than it was at any prior price low on the chart, providing a glimmer of hope for a new positive reversal in the RSI and a new trend line on price.
Volume: Heavy short term distribution last week.
Volatility: ADX hovered at 21 last week while Std Deviation climbed to its 125-day average. No squeeze play is on.
Last Week's Outlook: We finally got a pull back. Pull backs can be excellent mid-trend entry points. The up trend still looks strong - there is nothing yet to indicate the up trend has changed into a downtrend. Watch to see how price interacts with its trend line as well as potential top-bottom support. In addition, watch how RSI interacts with the floor for up trends (i.e. 38), as well as if a long term positive reversal develops in the RSI.
Next Week's Outlook: Instead of mid-trend entry, the pull back wreaked technical damage, violating the neutral zone, trend line support, and the RSI floor for up trends. The picture is cloudy - wait for clarification.
For the annotated chart of $SMH please go here.
SMH
Price closed at $25.67, down $1.26 on the week. SMH has now corrected 10% over the last 2 weeks. Price violated trend line support (now a dashed line) and closed between the neutral zone and the bottom Keltner Channel (50,4,25).
Momentum: The bearish divergence in late December/early January foretold the correction over the last 2 weeks. RSI dropped to 34, below the floor for up trends. As long as RSI operates below the bear divergence line, we usually expect either downtrend action (lower highs/lower lows) or consolidation. Note that the RSI is more oversold at $25.67 than it was at any prior price low on the chart, providing a glimmer of hope for a new positive reversal in the RSI and a new trend line on price.
Volume: Heavy short term distribution last week.
Volatility: ADX hovered at 21 last week while Std Deviation climbed to its 125-day average. No squeeze play is on.
Last Week's Outlook: We finally got a pull back. Pull backs can be excellent mid-trend entry points. The up trend still looks strong - there is nothing yet to indicate the up trend has changed into a downtrend. Watch to see how price interacts with its trend line as well as potential top-bottom support. In addition, watch how RSI interacts with the floor for up trends (i.e. 38), as well as if a long term positive reversal develops in the RSI.
Next Week's Outlook: Instead of mid-trend entry, the pull back wreaked technical damage, violating the neutral zone, trend line support, and the RSI floor for up trends. The picture is cloudy - wait for clarification.
Tuesday, January 19, 2010
$$ Weekly Energy Report
Jan 19-22, 2010
For annotated charts of $OIH, $UNG and $USO, please go here.
1. OIH
Price closed down $2.63 for the week at $130.19, about halfway between the neutral zone and the outer Keltner Channel (50,4,25). Price recently made a new 15-month high but the breakout failed to ignite. Price remains well above the trend line (~$116).
Momentum: Still watching for any bearish divergence to develop from last week's momentum peak going forward. In addition, looking for any positive reversal to develop. Up trend looks strong.
Volume: Turning towards accumulation after a 2-month breather.
Volatility: We saw the squeeze play work perfectly as price broke out of its consolidation pattern to gain nearly 12% two weeks ago. But now Std Deviation is at a 2-month high, and ADX is at a 9 month high. We may be in for some consolidation as volatility returns to normal.
Last Week's Outlook: Now that OIH has broken out to the upside, the question becomes when to take profits. Watch for bearish divergence between price and momentum when price is at or near the outer Keltner Channel.
Next Week's Outlook: Price could go either way here. Given that the volatility spool appears played out, tighten stops in case of a correction back to the neutral zone.
2. UNG
Price closed down $0.17 for the week at $10.24, but remains in the Keltner (50,1,25) neutral zone. Price has consolidated in a range of $9.78 to $10.96 over the last 22 trading days. Should price start to climb, there is bottom-top resistance at ~$12 (July bottom became a September-October top).
Momentum obeys all the down trend rules (RSI range 62 and below; negative reversals, bull divergence at bottoms). If the bull divergence lines stemming from the old momentum lows are broken to the downside on RSI, the downtrend could accelerate.
Volume: Heavy distribution picture but some short term accumulation last week.
Volatility: With Std Deviation tagging its lower Bollinger Band and ADX under 20 for 2 weeks, the squeeze play is on.
Last Week's Outlook: UNG looks to be consolidating in a range with declining volatility. Be on the alert for a break out. Given the overall picture, any potential break out is likely to be downwards.
Next Week's Outlook: UNG could break out either way soon. Be prepared.
3. USO
Price closed down $2.53 for the week at $38.40, back in the neutral zone. Price is well above the current trend line (~$36), but failed to make a 12-month high last week when it had the chance.
Momentum: RSI corrected hard last week to 45.5. Watch to see if RSI 38 holds - the floor for up trends. Also, watch to see if a short term positive reversal develops in %B compared to the December 21 low (i.e. %B makes a lower low, but price makes a higher low. See dashed lines for an illustration).
Volume: Heavy short term distribution last week.
Volatility: Std Deviation and ADX began to contract last week. No squeeze play.
Last Week's Outlook: With resolution to the upside, we'll see if USO can now push past the $41.50 barrier which has held for 13 months.
Next Week's Outlook: USO failure to beak $41.50 and return to the neutral zone clouds the picture. Watch for a potential positive reversal in %B, and whether RSI 38 holds.
For annotated charts of $OIH, $UNG and $USO, please go here.
1. OIH
Price closed down $2.63 for the week at $130.19, about halfway between the neutral zone and the outer Keltner Channel (50,4,25). Price recently made a new 15-month high but the breakout failed to ignite. Price remains well above the trend line (~$116).
Momentum: Still watching for any bearish divergence to develop from last week's momentum peak going forward. In addition, looking for any positive reversal to develop. Up trend looks strong.
Volume: Turning towards accumulation after a 2-month breather.
Volatility: We saw the squeeze play work perfectly as price broke out of its consolidation pattern to gain nearly 12% two weeks ago. But now Std Deviation is at a 2-month high, and ADX is at a 9 month high. We may be in for some consolidation as volatility returns to normal.
Last Week's Outlook: Now that OIH has broken out to the upside, the question becomes when to take profits. Watch for bearish divergence between price and momentum when price is at or near the outer Keltner Channel.
Next Week's Outlook: Price could go either way here. Given that the volatility spool appears played out, tighten stops in case of a correction back to the neutral zone.
2. UNG
Price closed down $0.17 for the week at $10.24, but remains in the Keltner (50,1,25) neutral zone. Price has consolidated in a range of $9.78 to $10.96 over the last 22 trading days. Should price start to climb, there is bottom-top resistance at ~$12 (July bottom became a September-October top).
Momentum obeys all the down trend rules (RSI range 62 and below; negative reversals, bull divergence at bottoms). If the bull divergence lines stemming from the old momentum lows are broken to the downside on RSI, the downtrend could accelerate.
Volume: Heavy distribution picture but some short term accumulation last week.
Volatility: With Std Deviation tagging its lower Bollinger Band and ADX under 20 for 2 weeks, the squeeze play is on.
Last Week's Outlook: UNG looks to be consolidating in a range with declining volatility. Be on the alert for a break out. Given the overall picture, any potential break out is likely to be downwards.
Next Week's Outlook: UNG could break out either way soon. Be prepared.
3. USO
Price closed down $2.53 for the week at $38.40, back in the neutral zone. Price is well above the current trend line (~$36), but failed to make a 12-month high last week when it had the chance.
Momentum: RSI corrected hard last week to 45.5. Watch to see if RSI 38 holds - the floor for up trends. Also, watch to see if a short term positive reversal develops in %B compared to the December 21 low (i.e. %B makes a lower low, but price makes a higher low. See dashed lines for an illustration).
Volume: Heavy short term distribution last week.
Volatility: Std Deviation and ADX began to contract last week. No squeeze play.
Last Week's Outlook: With resolution to the upside, we'll see if USO can now push past the $41.50 barrier which has held for 13 months.
Next Week's Outlook: USO failure to beak $41.50 and return to the neutral zone clouds the picture. Watch for a potential positive reversal in %B, and whether RSI 38 holds.
$$ Weekly Stock Report
Jan 19-22, 2010
For annotated charts of $SPY and $QQQQ, please go here.
1. SPY
Price closed down 93 cents for the week at $113.64, well above the main trend line on price (~$109.50). I have drawn a dashed line showing an old positive reversal trend line that was violated in late October, but served as support in December and may serve as support again. Finally, there is top-bottom support at $111.
Momentum: Bearish divergence developed in the RSI last week. Watch whether that bear divergence line serves as resistance. If RSI punches through that line to the upside in the next couple of weeks, the up trend could accelerate. Overall, the up trend looks very strong.
Volume: Rising short and medium term accumulation.
Volatility: SPY spent most of December in a squeeze pattern, with Std Deviation below its long term Bollinger Band (125,1.5) and ADX hovering below 15. After forming a squeeze base, Std Deviation and ADX are now starting to rise which could easily power a nice rally.
Last Week's Outlook: SPY seems to have broken out of its consolidation pattern powered by increased volatility and strong accumulation. I expect SPY to exceed its outer Keltner Channel soon.
Next Week's Outlook: Look to enter on a positive reversal (lower low in momentum but higher low in price) which develops at a support level. Should SPY break to new highs, expect overhead resistance at ~$121.
2. QQQQ
Price closed down 70 cents for the week at $45.85, remains well above the main trend line on price ($43.50). I have drawn a dashed line showing an old positive reversal trend line that was violated in late October but may serve as support. In addition, there is potential top-bottom support at ~$44.50 (in up trends old tops often become future bottoms).
Momentum: Short term bear divergence has appeared on both RSI and %B forecasted last week's correction. Overall, the up trend appears strong. It obeys the up trend range rules (RSI 38+), with positive reversals at corrections and bearish divergence at tops. These are hallmarks of up trends.
Volume: Short, medium and long term accumulation starting to rise.
Volatility is falling after the mid-December breakout, but no squeeze play yet.
Last Week's Outlook: Given the bearish divergence at the outer Keltner Channel, we are due for a pull back soon.
Next Week's Outlook: Look to enter on further pullback to support, especially if a positive reversal develops (momentum makes lower low, price makes higher low).
For annotated charts of $SPY and $QQQQ, please go here.
1. SPY
Price closed down 93 cents for the week at $113.64, well above the main trend line on price (~$109.50). I have drawn a dashed line showing an old positive reversal trend line that was violated in late October, but served as support in December and may serve as support again. Finally, there is top-bottom support at $111.
Momentum: Bearish divergence developed in the RSI last week. Watch whether that bear divergence line serves as resistance. If RSI punches through that line to the upside in the next couple of weeks, the up trend could accelerate. Overall, the up trend looks very strong.
Volume: Rising short and medium term accumulation.
Volatility: SPY spent most of December in a squeeze pattern, with Std Deviation below its long term Bollinger Band (125,1.5) and ADX hovering below 15. After forming a squeeze base, Std Deviation and ADX are now starting to rise which could easily power a nice rally.
Last Week's Outlook: SPY seems to have broken out of its consolidation pattern powered by increased volatility and strong accumulation. I expect SPY to exceed its outer Keltner Channel soon.
Next Week's Outlook: Look to enter on a positive reversal (lower low in momentum but higher low in price) which develops at a support level. Should SPY break to new highs, expect overhead resistance at ~$121.
2. QQQQ
Price closed down 70 cents for the week at $45.85, remains well above the main trend line on price ($43.50). I have drawn a dashed line showing an old positive reversal trend line that was violated in late October but may serve as support. In addition, there is potential top-bottom support at ~$44.50 (in up trends old tops often become future bottoms).
Momentum: Short term bear divergence has appeared on both RSI and %B forecasted last week's correction. Overall, the up trend appears strong. It obeys the up trend range rules (RSI 38+), with positive reversals at corrections and bearish divergence at tops. These are hallmarks of up trends.
Volume: Short, medium and long term accumulation starting to rise.
Volatility is falling after the mid-December breakout, but no squeeze play yet.
Last Week's Outlook: Given the bearish divergence at the outer Keltner Channel, we are due for a pull back soon.
Next Week's Outlook: Look to enter on further pullback to support, especially if a positive reversal develops (momentum makes lower low, price makes higher low).
Monday, January 18, 2010
$$ Weekly Financials Report
Jan 19-22, 2010
For the annotated chart of $XLF, please go here.
XLF
Price closed down 28 cents for the week at $14.94, right on the top border of the neutral zone and well above the main trend line on price (~$14.10). I have drawn a dashed line indicating an old positive reversal trend line on price. While that trend line was violated, it still may serve as support.
Momentum: The picture of a solid uptrend. The RSI has obeyed up trend range rules (38+). We have seen positive reversals at rising bottoms and bearish divergence at tops, both of which are hallmarks of up trends. Finally, we recently saw trend acceleration to the upside when an old bear divergence resistance line was broken.
Volume: Rising short and medium term accumulation.
Volatility: Average. Std Deviation hugs its 125-day average, and ADX has crossed above 20. No squeeze play on.
Last Week's Outlook: XLF seems to have broken out of its consolidation pattern powered by increased volatility, strong accumulation, and trend acceleration after breaking old bear divergence resistance in the RSI. I expect XLF to exceed its outer Keltner Channel soon. If it does, look to take profits when new bearish divergence develops between price and momentum.
Next Week's Outlook: Generally bullish. Should price break to new highs, expect resistance at ~$16.50. Price double bottomed at that level in 2002, and $16.50 served as bottom-top resistance in the 2008 downtrend.
For the annotated chart of $XLF, please go here.
XLF
Price closed down 28 cents for the week at $14.94, right on the top border of the neutral zone and well above the main trend line on price (~$14.10). I have drawn a dashed line indicating an old positive reversal trend line on price. While that trend line was violated, it still may serve as support.
Momentum: The picture of a solid uptrend. The RSI has obeyed up trend range rules (38+). We have seen positive reversals at rising bottoms and bearish divergence at tops, both of which are hallmarks of up trends. Finally, we recently saw trend acceleration to the upside when an old bear divergence resistance line was broken.
Volume: Rising short and medium term accumulation.
Volatility: Average. Std Deviation hugs its 125-day average, and ADX has crossed above 20. No squeeze play on.
Last Week's Outlook: XLF seems to have broken out of its consolidation pattern powered by increased volatility, strong accumulation, and trend acceleration after breaking old bear divergence resistance in the RSI. I expect XLF to exceed its outer Keltner Channel soon. If it does, look to take profits when new bearish divergence develops between price and momentum.
Next Week's Outlook: Generally bullish. Should price break to new highs, expect resistance at ~$16.50. Price double bottomed at that level in 2002, and $16.50 served as bottom-top resistance in the 2008 downtrend.
$$ Weekly Tech Report
Jan 19-22, 2010
For the annotated chart of $SMH please go here.
SMH
Price closed at $26.93, down $1.59 on the week and right at its 50-day EMA in the neutral zone. Trend line support is expected at $26.50 next week. Note that there is potential "top-bottom support" at ~$27 and ~$26.50. Top-bottom support simply means that in up trends, corrections (i.e. bottoms) tend to find support at previous tops.
Momentum: The bearish divergence foretold last week's correction. RSI dropped to 44, just 6 points above the floor for downtrends. Note that the RSI is more oversold at the current price of $26.93 than it was when price bottomed the week of December 14 and the week of November 16. In other words, despite greater downward momentum (lower low in the RSI), price has yet to go lower than those prior lows. The uptrend is getting tested. If it survives the test and price reverses back up before making a lower low, this is a bullish development.
Volume: Short and medium term averages show accumulation, while long term average is flattening out.
Volatility: ADX fell from 27 to 21 last week while Std Deviation remained unchanged. Volatility is average. No squeeze play is on.
Last Week's Outlook: Still waiting for a pull back. I would not be surprised to see SMH exceed the outer Keltner Channel before correcting back towards the neutral zone.
Next Week's Outlook: We finally got a pull back. Pull backs can be excellent mid-trend entry points. The up trend still looks strong - there is nothing yet to indicate the up trend has changed into a downtrend. Watch to see how price interacts with its trend line as well as potential top-bottom support. In addition, watch how RSI interacts with the floor for up trends (i.e. 38), as well as if a long term positive reversal develops in the RSI.
For the annotated chart of $SMH please go here.
SMH
Price closed at $26.93, down $1.59 on the week and right at its 50-day EMA in the neutral zone. Trend line support is expected at $26.50 next week. Note that there is potential "top-bottom support" at ~$27 and ~$26.50. Top-bottom support simply means that in up trends, corrections (i.e. bottoms) tend to find support at previous tops.
Momentum: The bearish divergence foretold last week's correction. RSI dropped to 44, just 6 points above the floor for downtrends. Note that the RSI is more oversold at the current price of $26.93 than it was when price bottomed the week of December 14 and the week of November 16. In other words, despite greater downward momentum (lower low in the RSI), price has yet to go lower than those prior lows. The uptrend is getting tested. If it survives the test and price reverses back up before making a lower low, this is a bullish development.
Volume: Short and medium term averages show accumulation, while long term average is flattening out.
Volatility: ADX fell from 27 to 21 last week while Std Deviation remained unchanged. Volatility is average. No squeeze play is on.
Last Week's Outlook: Still waiting for a pull back. I would not be surprised to see SMH exceed the outer Keltner Channel before correcting back towards the neutral zone.
Next Week's Outlook: We finally got a pull back. Pull backs can be excellent mid-trend entry points. The up trend still looks strong - there is nothing yet to indicate the up trend has changed into a downtrend. Watch to see how price interacts with its trend line as well as potential top-bottom support. In addition, watch how RSI interacts with the floor for up trends (i.e. 38), as well as if a long term positive reversal develops in the RSI.
Sunday, January 10, 2010
$$ Weekly Metals Report
Jan 11-15, 2010
For annotated charts of $GLD, $SLV and $GDX, please go here.
1. GLD
Price gained $4.06 on the week to close at $111.37, breaking out of the Keltner Channel (50,1,25) neutral zone but well short of the outer Keltner Channel (50,4,25) at $115.73. Trend line support sits at $108 and rising.
Momentum: The mid-December correction obeyed the 38-80+ RSI range rule for up trends. RSI closed Friday at 55.81, about 5 points shy of the bearish divergence resistance line from the late November momentum peak. If RSI can break through this bear divergence resistance, there is a decent chance for an acceleration of the up trend.
Volume: Strong short term accumulation last week with a background of long term accumulation is a sign of trend resumption.
Volatility: Std Deviation fell below its 125-day average last week and then hooked upward. ADX continues to fall from its late November peak, but has yet to cross under 20 and may not do so. No squeeze play, but plenty of volatility up side.
Last Week's Outlook: Positive. I would not be surprised to see GLD resume its up trend soon. Should the trend line on price fail, all bets are off.
Next Week's Outlook: Having resumed its up trend, GLD has some room to run. Watch for resistance on the RSI at the bear divergence line, and on price at the 116-118 level.
2. SLV
Price: SLV gained $1.61 last week (9.7%) to close at $18.15. SLV broke out of the neutral zone, and sits halfway between the neutral zone and the outer Keltner Channel (50,4,25). Upside resistance is expected at the $18.90 - $19.10 level. If broken, the next resistance zone is $20.40-$20.75.
Momentum: The mid-December correction obeyed the 38-80+ RSI range rule for up trends. The bullish divergence between price and %B correctly forecasted an end to the late December correction.
RSI closed the week at 62.14, sneaking above old bearish divergence resistance from the September momentum peak. 62 is also the ceiling for downtrends, and stocks that consolidate often bounce between 38 and 62. Therefore, it will be important to watch if RSI continues to rise above 62, confirming the up trend and the bear divergence break out.
Volume: Exceedingly strong recent accumulation against the backdrop of long term accumulation confirms the bullish picture.
Volatility: We saw a squeeze play develop early last week as Std Deviation dropped to a multi-month low near its lower Bollinger Band (125, 1.5) with ADX ranging between 15 and 20 for the last 2 months.
Last Week's Outlook: SLV does not look as strong as GLD right now. If GLD resumes its uptrend, however, SLV should follow.
Next Week's Outlook: SLV actually outperformed GLD last week. The up trend looks strong. Watch for new bear divergence between price and momentum at or near the outer Keltner Channel for short term profit-taking.
3. GDX
Price closed up $3.63 at $49.84 for a gain of 7.9% last week. Price has barely broken out of the neutral zone, and is about $4.50 shy of both the outer Keltner Channel (50,4,25) and the early December price peak. Trend line support is at ~$46.75.
Momentum: The mid-December correction obeyed the 38-80+ RSI range rule for up trends. RSI closed the week at 58.29, and needs to break 62 to confirm the uptrend. If RSI fails to break 62, GDX is at risk for correction and/or consolidation. Old bear divergence resistance hovers at ~65. If RSI can break through that resistance line, it's all systems go.
Volume: GDX finally had some short term accumulation last week after a month of significant distrubution.
Volatility: GDX developed a squeeze play last week with Std Deviation at a multi-month low near its bottom Bollinger Band (125,1.5) and ADX ranging between 15 and 20 for three months. There appears to be a lot of stored up volatility waiting to pop.
Last Week's Outlook: GDX does not look as strong as GLD right now. If GLD resumes its uptrend, however, GDX should follow unless the general market tanks.
Next Week's Outlook: GDX looks strong and could rise another several dollars in the coming weeks given the pent up volatility and the distance to the outer Keltner Band/prior price peak.
For annotated charts of $GLD, $SLV and $GDX, please go here.
1. GLD
Price gained $4.06 on the week to close at $111.37, breaking out of the Keltner Channel (50,1,25) neutral zone but well short of the outer Keltner Channel (50,4,25) at $115.73. Trend line support sits at $108 and rising.
Momentum: The mid-December correction obeyed the 38-80+ RSI range rule for up trends. RSI closed Friday at 55.81, about 5 points shy of the bearish divergence resistance line from the late November momentum peak. If RSI can break through this bear divergence resistance, there is a decent chance for an acceleration of the up trend.
Volume: Strong short term accumulation last week with a background of long term accumulation is a sign of trend resumption.
Volatility: Std Deviation fell below its 125-day average last week and then hooked upward. ADX continues to fall from its late November peak, but has yet to cross under 20 and may not do so. No squeeze play, but plenty of volatility up side.
Last Week's Outlook: Positive. I would not be surprised to see GLD resume its up trend soon. Should the trend line on price fail, all bets are off.
Next Week's Outlook: Having resumed its up trend, GLD has some room to run. Watch for resistance on the RSI at the bear divergence line, and on price at the 116-118 level.
2. SLV
Price: SLV gained $1.61 last week (9.7%) to close at $18.15. SLV broke out of the neutral zone, and sits halfway between the neutral zone and the outer Keltner Channel (50,4,25). Upside resistance is expected at the $18.90 - $19.10 level. If broken, the next resistance zone is $20.40-$20.75.
Momentum: The mid-December correction obeyed the 38-80+ RSI range rule for up trends. The bullish divergence between price and %B correctly forecasted an end to the late December correction.
RSI closed the week at 62.14, sneaking above old bearish divergence resistance from the September momentum peak. 62 is also the ceiling for downtrends, and stocks that consolidate often bounce between 38 and 62. Therefore, it will be important to watch if RSI continues to rise above 62, confirming the up trend and the bear divergence break out.
Volume: Exceedingly strong recent accumulation against the backdrop of long term accumulation confirms the bullish picture.
Volatility: We saw a squeeze play develop early last week as Std Deviation dropped to a multi-month low near its lower Bollinger Band (125, 1.5) with ADX ranging between 15 and 20 for the last 2 months.
Last Week's Outlook: SLV does not look as strong as GLD right now. If GLD resumes its uptrend, however, SLV should follow.
Next Week's Outlook: SLV actually outperformed GLD last week. The up trend looks strong. Watch for new bear divergence between price and momentum at or near the outer Keltner Channel for short term profit-taking.
3. GDX
Price closed up $3.63 at $49.84 for a gain of 7.9% last week. Price has barely broken out of the neutral zone, and is about $4.50 shy of both the outer Keltner Channel (50,4,25) and the early December price peak. Trend line support is at ~$46.75.
Momentum: The mid-December correction obeyed the 38-80+ RSI range rule for up trends. RSI closed the week at 58.29, and needs to break 62 to confirm the uptrend. If RSI fails to break 62, GDX is at risk for correction and/or consolidation. Old bear divergence resistance hovers at ~65. If RSI can break through that resistance line, it's all systems go.
Volume: GDX finally had some short term accumulation last week after a month of significant distrubution.
Volatility: GDX developed a squeeze play last week with Std Deviation at a multi-month low near its bottom Bollinger Band (125,1.5) and ADX ranging between 15 and 20 for three months. There appears to be a lot of stored up volatility waiting to pop.
Last Week's Outlook: GDX does not look as strong as GLD right now. If GLD resumes its uptrend, however, GDX should follow unless the general market tanks.
Next Week's Outlook: GDX looks strong and could rise another several dollars in the coming weeks given the pent up volatility and the distance to the outer Keltner Band/prior price peak.
$$ Weekly Energy Report
Jan 11-15, 2010
For annotated charts of $OIH, $UNG and $USO, please go here.
1. OIH
Price broke out of both the neutral zone and the symmetrical triangle consolidation pattern to finish the week up $13.92 at $132.82, slightly above the outer Keltner Channel (50,4,25). Price made new 15-month high and remains well above the trend line (~$115).
Momentum exceeded the RSI 62 level to the upside, confirming the uptrend and closing at a 20 month momentum peak of 74.51. We'll be watching for any bearish divergence to develop from this momentum peak forward.
Volume: Strong short term accumulation last week.
Volatility: Std Deviation crossed its 125-day moving average and ADX has expanded from 13 to 22 in the last week. We saw the squeeze play work perfectly as price broke out of its consolidation pattern to gain nearly 12% last week.
Last Week's Outlook: Wait for the triangle to resolve itself before making any move.
Next Week's Outlook: Now that OIH has broken out to the upside, the question becomes when to take profits. Watch for bearish divergence between price and momentum when price is at or near the outer Keltner Channel.
2. UNG
Price closed up $0.33 for the week at $10.41, but remains in the Keltner (50,1,25) neutral zone. Price has consolidated in a range of $9.94 to $10.96 over the last 17 trading days.
Momentum recently flirted with the RSI 62 boundary for downtrends, and the ceiling held which is bearish. The 45-day average on RSI has climbed to 49.89 which is essentially neutral. Recently, price made a double top between Dec. 28 and Jan. 6, but both RSI and %B made lower highs on Jan. 6 vs. Dec. 28. This is usually bearish. Finally, there is bullish divergence stemming from the early September low. If the bull divergence lines are broken to the downside on RSI, the downtrend could accelerate.
Volume: Heavy distribution picture.
Volatility: Std Deviation is approaching its bottom Bollinger Band (125, 1.5) while ADX crossed below 20 making a 2-month low. We could be entering squeeze play territory.
Last Week's Outlook: Negative.
Next Week's Outlook: UNG looks to be consolidating in a range with declining volatility. Be on the alert for a break out. Given the overall picture, any potential break out is likely to be downwards.
3. USO
Price closed up $1.65 for the week at $40.93. Price is currently halfway between the neutral zone and the outer Keltner Channel (50,4,25). Price is well above the current trend line (~$36), and just 53 cents away from making a 13-month high.
Momentum: RSI broke through the 62 ceiling for downtrends last week, closing at 67.95 and confirming the up trend.
Volume: Heavy short term accumulation picture.
Volatility: Std Deviation finished the week well above its 125-day average, while ADX climbed above 20 last week for the first time in 2 months. No squeeze play, but there is no indication that the volatility explosion is over.
Last Week's Outlook: Consolidation until the symmetrical triangle resolves.
Next Week's Outlook: With resolution to the upside, we'll see if USO can now push past the $41.50 barrier which has held for 13 months.
For annotated charts of $OIH, $UNG and $USO, please go here.
1. OIH
Price broke out of both the neutral zone and the symmetrical triangle consolidation pattern to finish the week up $13.92 at $132.82, slightly above the outer Keltner Channel (50,4,25). Price made new 15-month high and remains well above the trend line (~$115).
Momentum exceeded the RSI 62 level to the upside, confirming the uptrend and closing at a 20 month momentum peak of 74.51. We'll be watching for any bearish divergence to develop from this momentum peak forward.
Volume: Strong short term accumulation last week.
Volatility: Std Deviation crossed its 125-day moving average and ADX has expanded from 13 to 22 in the last week. We saw the squeeze play work perfectly as price broke out of its consolidation pattern to gain nearly 12% last week.
Last Week's Outlook: Wait for the triangle to resolve itself before making any move.
Next Week's Outlook: Now that OIH has broken out to the upside, the question becomes when to take profits. Watch for bearish divergence between price and momentum when price is at or near the outer Keltner Channel.
2. UNG
Price closed up $0.33 for the week at $10.41, but remains in the Keltner (50,1,25) neutral zone. Price has consolidated in a range of $9.94 to $10.96 over the last 17 trading days.
Momentum recently flirted with the RSI 62 boundary for downtrends, and the ceiling held which is bearish. The 45-day average on RSI has climbed to 49.89 which is essentially neutral. Recently, price made a double top between Dec. 28 and Jan. 6, but both RSI and %B made lower highs on Jan. 6 vs. Dec. 28. This is usually bearish. Finally, there is bullish divergence stemming from the early September low. If the bull divergence lines are broken to the downside on RSI, the downtrend could accelerate.
Volume: Heavy distribution picture.
Volatility: Std Deviation is approaching its bottom Bollinger Band (125, 1.5) while ADX crossed below 20 making a 2-month low. We could be entering squeeze play territory.
Last Week's Outlook: Negative.
Next Week's Outlook: UNG looks to be consolidating in a range with declining volatility. Be on the alert for a break out. Given the overall picture, any potential break out is likely to be downwards.
3. USO
Price closed up $1.65 for the week at $40.93. Price is currently halfway between the neutral zone and the outer Keltner Channel (50,4,25). Price is well above the current trend line (~$36), and just 53 cents away from making a 13-month high.
Momentum: RSI broke through the 62 ceiling for downtrends last week, closing at 67.95 and confirming the up trend.
Volume: Heavy short term accumulation picture.
Volatility: Std Deviation finished the week well above its 125-day average, while ADX climbed above 20 last week for the first time in 2 months. No squeeze play, but there is no indication that the volatility explosion is over.
Last Week's Outlook: Consolidation until the symmetrical triangle resolves.
Next Week's Outlook: With resolution to the upside, we'll see if USO can now push past the $41.50 barrier which has held for 13 months.
$$ Weekly Financials Report
Jan 11-15, 2010
For the annotated chart of $XLF, please go here.
XLF
Price closed up $0.82 for the week at $15.22, the highest close since October. Price is just 40 cents shy of the outer Keltner Channel (50,4,25) and well above the main trend line on price (~$14.05).
Momentum: RSI made a 4 month momentum peak at 68 last week. In so doing, RSI finally broke through an old bearish divergence line which was serving as resistance. When it did, price accelerated upwards 5% last week. In addition, RSI broke through the 62 level which is the ceiling for downtrends, thereby confirming the up trend after 2 months of consolidation.
Volume increased this week as evidenced by the skyrocketing short term accumulation average.
Volatility: XLF spent most of December in a squeeze pattern, with Std Deviation below its long term Bollinger Band (125,1.5) and ADX hovering below 20. Price broke out on December 21, traded sideways through the holiday, and spiked up last week. Std Deviation and ADX are now starting to rise which could easily power a nice rally.
Next Week's Outlook: XLF seems to have broken out of its consolidation pattern powered by increased volatility, strong accumulation, and trend acceleration after breaking old bear divergence resistance in the RSI. I expect XLF to exceed its outer Keltner Channel soon. If it does, look to take profits when new bearish divergence develops between price and momentum.
For the annotated chart of $XLF, please go here.
XLF
Price closed up $0.82 for the week at $15.22, the highest close since October. Price is just 40 cents shy of the outer Keltner Channel (50,4,25) and well above the main trend line on price (~$14.05).
Momentum: RSI made a 4 month momentum peak at 68 last week. In so doing, RSI finally broke through an old bearish divergence line which was serving as resistance. When it did, price accelerated upwards 5% last week. In addition, RSI broke through the 62 level which is the ceiling for downtrends, thereby confirming the up trend after 2 months of consolidation.
Volume increased this week as evidenced by the skyrocketing short term accumulation average.
Volatility: XLF spent most of December in a squeeze pattern, with Std Deviation below its long term Bollinger Band (125,1.5) and ADX hovering below 20. Price broke out on December 21, traded sideways through the holiday, and spiked up last week. Std Deviation and ADX are now starting to rise which could easily power a nice rally.
Next Week's Outlook: XLF seems to have broken out of its consolidation pattern powered by increased volatility, strong accumulation, and trend acceleration after breaking old bear divergence resistance in the RSI. I expect XLF to exceed its outer Keltner Channel soon. If it does, look to take profits when new bearish divergence develops between price and momentum.
Friday, January 8, 2010
$$ Weekly Stock Report
Jan 11-15, 2010
For annotated charts of $SPY and $QQQQ please go here.
1. SPY
Price closed up $3.13 for the week at $114.57, just 56 cents shy of the outer Keltner Channel (50,4,25) and well above the main trend line on price (~$109). This is the highest weekly and daily close since the current up trend began in March of 2009.
Momentum: RSI made a 3 month momentum peak at 68. There exists some long term bearish divergence on the RSI between the current momentum peak and the September momentum peak. There is some short term bearish divergence between Price and %B. Overall, the up trend looks very strong.
Volume increased this week as evidenced by the rising short term accumulation average.
Volatility: SPY spent most of December in a squeeze pattern, with Std Deviation below its long term Bollinger Band (125,1.5) and ADX hovering below 15. After forming a squeeze base, Std Deviation and ADX are now starting to rise which could easily power a nice rally.
Last Week's Outlook: The consolidation pattern could last awhile. Not a horrible time for entry, although I'd prefer to wait for a pullback. Overall, the picture remains bullish.
Next Week's Outlook: SPY seems to have broken out of its consolidation pattern powered by increased volatility and strong accumulation. I expect SPY to exceed its outer Keltner Channel soon.
2. QQQQ
Price closed up 80 cents for the week at $46.55, a high for the up trend that started in March of 2009. Price continues to hug the outer Keltner Channel (50,4,25), and is well above the main trend line (~$43.25).
Momentum: The up trend is strong. Short term bear divergence has appeared on both RSI and %B which, combined with price at the outer Keltner Channel, could forecast a normal correction coming soon.
Volume shows short term accumulation last week.
Volatility: QQQQ showed classic signs of a squeeze play in the first half of December, with Std Deviation hugging its bottom Bollinger Band (125,1.5), and ADX well below 20. We got a breakout from the low volatility consolidation pattern late during the week of December 14, and QQQQ has gained ~6% since the breakout.
Currently, Std Deviation is above its 125-day average, and ADX has climbed from 14 to 23. Volatility appears average.
Last Week's Outlook: Prudence suggests waiting for a pull back before entry.
Next Week's Outlook: Given the bearish divergence at the outer Keltner Channel, we are due for a pull back soon.
For annotated charts of $SPY and $QQQQ please go here.
1. SPY
Price closed up $3.13 for the week at $114.57, just 56 cents shy of the outer Keltner Channel (50,4,25) and well above the main trend line on price (~$109). This is the highest weekly and daily close since the current up trend began in March of 2009.
Momentum: RSI made a 3 month momentum peak at 68. There exists some long term bearish divergence on the RSI between the current momentum peak and the September momentum peak. There is some short term bearish divergence between Price and %B. Overall, the up trend looks very strong.
Volume increased this week as evidenced by the rising short term accumulation average.
Volatility: SPY spent most of December in a squeeze pattern, with Std Deviation below its long term Bollinger Band (125,1.5) and ADX hovering below 15. After forming a squeeze base, Std Deviation and ADX are now starting to rise which could easily power a nice rally.
Last Week's Outlook: The consolidation pattern could last awhile. Not a horrible time for entry, although I'd prefer to wait for a pullback. Overall, the picture remains bullish.
Next Week's Outlook: SPY seems to have broken out of its consolidation pattern powered by increased volatility and strong accumulation. I expect SPY to exceed its outer Keltner Channel soon.
2. QQQQ
Price closed up 80 cents for the week at $46.55, a high for the up trend that started in March of 2009. Price continues to hug the outer Keltner Channel (50,4,25), and is well above the main trend line (~$43.25).
Momentum: The up trend is strong. Short term bear divergence has appeared on both RSI and %B which, combined with price at the outer Keltner Channel, could forecast a normal correction coming soon.
Volume shows short term accumulation last week.
Volatility: QQQQ showed classic signs of a squeeze play in the first half of December, with Std Deviation hugging its bottom Bollinger Band (125,1.5), and ADX well below 20. We got a breakout from the low volatility consolidation pattern late during the week of December 14, and QQQQ has gained ~6% since the breakout.
Currently, Std Deviation is above its 125-day average, and ADX has climbed from 14 to 23. Volatility appears average.
Last Week's Outlook: Prudence suggests waiting for a pull back before entry.
Next Week's Outlook: Given the bearish divergence at the outer Keltner Channel, we are due for a pull back soon.
$$ Weekly Tech Report
Jan 11-15, 2010
For the annotated chart of $SMH please go here.
SMH
Price closed at $28.52, up 60 cents on the week, just 30 cents shy of the outer Keltner Channel (50,4,25) and well above the main trend line on price (currently ~$26 and rising).
Momentum: Last week's short term bearish divergence turned into this week's short term positive reversal, as RSI made a lower low compared to last week's RSI low, while price made a higher low compared to last week's price low. Overall, the up trend remains strong having obeyed the RSI up trend range rules for the last 9 months.
Volume: Short and medium term averages show accumulation, while long term average is flattening out.
Volatility: ADX has risen from 15 to 27 over the last month, while Std Deviation hugs its 125 day moving average. Volatility is average. No squeeze play is on.
Last Week's Outlook: The up trend looks strong. Waiting for a pull back.
Next Week's Outlook: Still waiting for a pull back. I would not be surprised to see SMH exceed the outer Keltner Channel before correcting back towards the neutral zone.
For the annotated chart of $SMH please go here.
SMH
Price closed at $28.52, up 60 cents on the week, just 30 cents shy of the outer Keltner Channel (50,4,25) and well above the main trend line on price (currently ~$26 and rising).
Momentum: Last week's short term bearish divergence turned into this week's short term positive reversal, as RSI made a lower low compared to last week's RSI low, while price made a higher low compared to last week's price low. Overall, the up trend remains strong having obeyed the RSI up trend range rules for the last 9 months.
Volume: Short and medium term averages show accumulation, while long term average is flattening out.
Volatility: ADX has risen from 15 to 27 over the last month, while Std Deviation hugs its 125 day moving average. Volatility is average. No squeeze play is on.
Last Week's Outlook: The up trend looks strong. Waiting for a pull back.
Next Week's Outlook: Still waiting for a pull back. I would not be surprised to see SMH exceed the outer Keltner Channel before correcting back towards the neutral zone.
Saturday, January 2, 2010
$$ Weekly Tech Report
Jan 4-8, 2010
For the annotated chart of $SMH please go here.
SMH
Price is between the neutral zone and outer upward channel. Price is well above the trend line.
Momentum: The correction ending in early November obeyed the 38-80+ RSI up trend range rule. The RSI 45-day average is nearly 60. Price recently made a 4 month momentum peak, then gave a small bear divergence signal.
Volume: The distribution picture of October and November has turned into an accumulation picture.
Outlook: The up trend looks strong. Waiting for a pull back.
For the annotated chart of $SMH please go here.
SMH
Price is between the neutral zone and outer upward channel. Price is well above the trend line.
Momentum: The correction ending in early November obeyed the 38-80+ RSI up trend range rule. The RSI 45-day average is nearly 60. Price recently made a 4 month momentum peak, then gave a small bear divergence signal.
Volume: The distribution picture of October and November has turned into an accumulation picture.
Outlook: The up trend looks strong. Waiting for a pull back.
Friday, January 1, 2010
$$ Weekly Energy Report
Jan 4-8, 2010
For annotated charts of $OIH, $UNG and $USO, please go here.
1. OIH
Price remains in the neutral zone. Price made a peak in mid-October, and has since drifted sideways down with lower highs and lower lows. Price remains above the trend line.
Momentum breached the RSI 38 uptrend floor in early December, and has since failed to exceed 62 on the upside. The 45-day average is hovering at 50.90, which is essentially neutral. As best shown on %B, there was a recent negative reversal where momentum made a higher high vs. mid-November, but price made a lower high. This has combined with the positive reversal trend line on price to produce a symmetrical triangle.
Volume: The Accumulation Distribution averages have turned negative.
Outlook: Wait for the triangle to resolve itself before making any move.
2. UNG
Price remains in the neutral zone and near the trend line.
Momentum has recently flirted with the RSI 62 boundary for downtrends, establishing a long term negative reversal (where momentum makes a higher high, but price makes a lower high). The 45-day average on RSI has climbed to 48.56 but is still bearish. Bullish divergence stemming from the early September low. If the bull divergence lines are broken to the downside, the downtrend could accelerate.
Volume: Heavy distribution picture, with the 3-day average bumping up against the 21-day average early last week. In a downtrend, this can provide an excellent shorting opportunity.
Outlook: Negative.
3. USO
Price is barely above the neutral zone and well above the old up trend line. Price looks to be peaking at a new down sloping trend line, forming a symmetrical triangle.
Momentum: RSI breached the 38 floor for up trends, dropping to 30 the second week of December. This created a positive reversal trend line on price vs. the low in late September. More recently, RSI seems to be stalling at 62, the ceiling for downtrends. In so doing, RSI is making a negative reversal compared to the mid-November high, which allows us to draw a down sloping trend line on price.
Volume: Recently, the 21-average has crossed below the 55-average. What had been a picture of accumulation now looks to be one of distribution.
Outlook: Consolidation until the symmetrical triangle resolves.
For annotated charts of $OIH, $UNG and $USO, please go here.
1. OIH
Price remains in the neutral zone. Price made a peak in mid-October, and has since drifted sideways down with lower highs and lower lows. Price remains above the trend line.
Momentum breached the RSI 38 uptrend floor in early December, and has since failed to exceed 62 on the upside. The 45-day average is hovering at 50.90, which is essentially neutral. As best shown on %B, there was a recent negative reversal where momentum made a higher high vs. mid-November, but price made a lower high. This has combined with the positive reversal trend line on price to produce a symmetrical triangle.
Volume: The Accumulation Distribution averages have turned negative.
Outlook: Wait for the triangle to resolve itself before making any move.
2. UNG
Price remains in the neutral zone and near the trend line.
Momentum has recently flirted with the RSI 62 boundary for downtrends, establishing a long term negative reversal (where momentum makes a higher high, but price makes a lower high). The 45-day average on RSI has climbed to 48.56 but is still bearish. Bullish divergence stemming from the early September low. If the bull divergence lines are broken to the downside, the downtrend could accelerate.
Volume: Heavy distribution picture, with the 3-day average bumping up against the 21-day average early last week. In a downtrend, this can provide an excellent shorting opportunity.
Outlook: Negative.
3. USO
Price is barely above the neutral zone and well above the old up trend line. Price looks to be peaking at a new down sloping trend line, forming a symmetrical triangle.
Momentum: RSI breached the 38 floor for up trends, dropping to 30 the second week of December. This created a positive reversal trend line on price vs. the low in late September. More recently, RSI seems to be stalling at 62, the ceiling for downtrends. In so doing, RSI is making a negative reversal compared to the mid-November high, which allows us to draw a down sloping trend line on price.
Volume: Recently, the 21-average has crossed below the 55-average. What had been a picture of accumulation now looks to be one of distribution.
Outlook: Consolidation until the symmetrical triangle resolves.
$$ Weekly Stock Report
Jan 4-8, 2010
For annotated charts of $SPY and $QQQQ, please go here.
1. SPY
Price remains above the neutral zone and above the trend line.
Momentum: The 45-day RSI moving average is well above 50 at 57.89, indicating a strong uptrend despite the fact that RSI has displayed a tight range between 50 and 60 for nearly 2 months. Recently, an old bear divergence line was broken -- often this produces an acceleration of the uptrend but not here. Yet.
Volume: Accumulation/distribution is relatively flat, with the moving averages bunching together. This type of bunching can produce an explosion either way. The 21-day average remains slightly above the 55-day average.
Outlook: The consolidation pattern could last awhile. Not a horrible time for entry, although I'd prefer to wait for a pullback. Overall, the picture remains bullish.
2. QQQQ
Price has stalled at the outer Keltner Channel (50,4,25), and remains well above the trend line. Normally, it's better to enter near the trend line, or near/within the neutral zone.
Momentum: RSI broke through old bear divergence in making a recent 3-month momentum peak, but made new bear divergence in doing so. The 45-day average exceeds 60. RSI has not dipped below 38 for the entirety of the 9 month chart. All of this depicts a strong uptrend.
Volume: Regarding the averages, 3 > 21 >55 which suggests a healthy uptrend, but not usually the correct time to enter.
Outlook: Prudence suggests waiting for a pullback before entry.
For annotated charts of $SPY and $QQQQ, please go here.
1. SPY
Price remains above the neutral zone and above the trend line.
Momentum: The 45-day RSI moving average is well above 50 at 57.89, indicating a strong uptrend despite the fact that RSI has displayed a tight range between 50 and 60 for nearly 2 months. Recently, an old bear divergence line was broken -- often this produces an acceleration of the uptrend but not here. Yet.
Volume: Accumulation/distribution is relatively flat, with the moving averages bunching together. This type of bunching can produce an explosion either way. The 21-day average remains slightly above the 55-day average.
Outlook: The consolidation pattern could last awhile. Not a horrible time for entry, although I'd prefer to wait for a pullback. Overall, the picture remains bullish.
2. QQQQ
Price has stalled at the outer Keltner Channel (50,4,25), and remains well above the trend line. Normally, it's better to enter near the trend line, or near/within the neutral zone.
Momentum: RSI broke through old bear divergence in making a recent 3-month momentum peak, but made new bear divergence in doing so. The 45-day average exceeds 60. RSI has not dipped below 38 for the entirety of the 9 month chart. All of this depicts a strong uptrend.
Volume: Regarding the averages, 3 > 21 >55 which suggests a healthy uptrend, but not usually the correct time to enter.
Outlook: Prudence suggests waiting for a pullback before entry.
$$ Weekly Metals Report
Jan 4-8, 2010
For annotated charts of $GLD, $SLV and $GDX, please go here.
1. GLD
Price has retreated into the Keltner (50,1,25) neutral zone from the peak in early December. The neutral zone can be an excellent entry opportunity depending on the momentum and volume pictures.
Momentum: The recent correction obeyed the 38-80+ RSI range rule for uptrends. The 45-day RSI moving average remains well above 50 which is bullish. The early December peak provided bearish divergence which portended the recent correction. If the correction does not kill the uptrend, the bear divergence can make the uptrend stronger. Finally, the correction has provided an intermediate term positive reversal in the RSI, where momentum made a lower low vs. late October, but price could not make a lower low. As a result, we draw a new trend line on price connecting these important lows.
Volume: There has been recent short term distribution in a picture of long term accumulation. The 21-day average is well above the 55-day average. The 55-day average is sloping up nicely. And the 3-day moving average has fallen below the 21-day average. This type of set up usually provides an excellent mid-trend entry point, especially when combined with a positive reversal in the RSI.
Outlook: Positive. I would not be surprised to see GLD resume its uptrend soon. Should the trend line on price fail, all bets are off.
2. SLV
Price has slipped below the neutral zone, just barely.
Momentum: The recent correction obeyed the 38-80+ RSI range rule for uptrends. The 45-day RSI moving average is hovering at 50.24 which is essentially neutral. The RSI shows bearish divergence which portended the recent correction. If the correction does not kill the uptrend, the bear divergence can make the uptrend stronger. The correction has not provided a positive reversal in the RSI. There is, however, some bullish divergence between price and %B which could forecast an end to the recent correction.
Volume: There has been recent short term distribution in a picture of long term accumulation.
Outlook: SLV does not look as strong as GLD right now. If GLD resumes its uptrend, however, SLV should follow.
3. GDX
Price remains in the neutral zone.
Momentum: The recent correction obeyed the 38-80+ RSI range rule for uptrends. The 45-day RSI moving average is hovering at 50.30 which is essentially neutral. The RSI shows bearish divergence which portended the recent correction. If the correction does not kill the uptrend, the bear divergence can make the uptrend stronger. The correction has not provided a positive reversal in the RSI.
Volume: There has been significant short term distribution in a picture of long term accumulation.
Outlook: GDX does not look as strong as GLD right now. If GLD resumes its uptrend, however, GDX should follow unless the general market tanks.
For annotated charts of $GLD, $SLV and $GDX, please go here.
1. GLD
Price has retreated into the Keltner (50,1,25) neutral zone from the peak in early December. The neutral zone can be an excellent entry opportunity depending on the momentum and volume pictures.
Momentum: The recent correction obeyed the 38-80+ RSI range rule for uptrends. The 45-day RSI moving average remains well above 50 which is bullish. The early December peak provided bearish divergence which portended the recent correction. If the correction does not kill the uptrend, the bear divergence can make the uptrend stronger. Finally, the correction has provided an intermediate term positive reversal in the RSI, where momentum made a lower low vs. late October, but price could not make a lower low. As a result, we draw a new trend line on price connecting these important lows.
Volume: There has been recent short term distribution in a picture of long term accumulation. The 21-day average is well above the 55-day average. The 55-day average is sloping up nicely. And the 3-day moving average has fallen below the 21-day average. This type of set up usually provides an excellent mid-trend entry point, especially when combined with a positive reversal in the RSI.
Outlook: Positive. I would not be surprised to see GLD resume its uptrend soon. Should the trend line on price fail, all bets are off.
2. SLV
Price has slipped below the neutral zone, just barely.
Momentum: The recent correction obeyed the 38-80+ RSI range rule for uptrends. The 45-day RSI moving average is hovering at 50.24 which is essentially neutral. The RSI shows bearish divergence which portended the recent correction. If the correction does not kill the uptrend, the bear divergence can make the uptrend stronger. The correction has not provided a positive reversal in the RSI. There is, however, some bullish divergence between price and %B which could forecast an end to the recent correction.
Volume: There has been recent short term distribution in a picture of long term accumulation.
Outlook: SLV does not look as strong as GLD right now. If GLD resumes its uptrend, however, SLV should follow.
3. GDX
Price remains in the neutral zone.
Momentum: The recent correction obeyed the 38-80+ RSI range rule for uptrends. The 45-day RSI moving average is hovering at 50.30 which is essentially neutral. The RSI shows bearish divergence which portended the recent correction. If the correction does not kill the uptrend, the bear divergence can make the uptrend stronger. The correction has not provided a positive reversal in the RSI.
Volume: There has been significant short term distribution in a picture of long term accumulation.
Outlook: GDX does not look as strong as GLD right now. If GLD resumes its uptrend, however, GDX should follow unless the general market tanks.
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