Tuesday, May 31, 2016

Crude oil: Bulls remain comfortable, while bears have to roar!

Crude just hit a significant resistance at 49.2.Now it's time for decisions

Bears NEED oil to come down and FAST.They need to see oil breaking down support at 46.5 ASAP.Next support 42.5
Bulls on the other hand are in a more comfortable position.They just need oil to stay above 46.5 for as long as possible.Ideally bulls want crude to stay afloat for a couple of weeks.Than a move towards 43-44 will be just a confirmation of the current upmove

Friday, May 27, 2016

Energy sector (XLE): Make it or Break it!

Back in November 2015 we correctly predicted the upcoming for that time XLE lows at around 52 (Energy stocks (XLE) about to bounce and head south) and then again in February this year we suggested that XLE was a buying opportunity at around 56$(Energy Sector Equities (XLE): A buying opportunity).

So what's the current situation?
Currently XLE approaches a VERY significant level at around 67$.

Bulls need to see XLE breaking above 67 (even temporarily) towards the resistance zone of 71-74.In this case the formation of an Inverted Head and Shoulders formation is very possible, leading XLE much higher

On the other hand if XLE fails to break above 67 then the road towards 52 or even towards 41 is wide open.

To deal with the above situation we have already started to take our profits from XLE off the table

Wednesday, May 18, 2016

Treasuries Cup and Handle revisited

About two moths ago we noted (Treasuries (TLT): Double top or cup with handle?) the possibility of the treasuries ETF -TLT- forming a cup with handle which is a very bullish pattern.Today we can see that the aforementioned pattern is still evolving.We believe that the handle will soon breakout pushing TLT to move higher (and subsequently SPX to plunge)

Wednesday, May 11, 2016

Friday, May 6, 2016

Copper revisited:Towards its bottom

Earlier this year (Taking Copper down to CHINAtown) we presented the following pathway for Copper:

Now let us see an update of the previous chart:

We are very happy to see that Copper followed to the point our projected pathway.We believe that copper will end its current bear market at around 1.5

Gold-SPX Ratio revisited:Another proof for Gold's bull case

Early this year (Gold:SPX ratio persistent RSI divergence and lessons from the past) we suggested an imminent break out of Gold:SPX ratio in favor of gold. Quoting our mid- January post (right at the beginning of current gold's upmove):"We believe that Gold will outperform SPX for the next couple of years.As we note to the following chart of Gold:SPX ratio,during the last three years of Gold bear market back in late 90's there was a massive divergence between RSI and price.This divergence lasted about 3 years before the start of the massive gold bull run from 1999-2011.Similarities with these days are obvious: Again a huge divergence on RSI and a rounding bottom of Gold:SPX. 3 years since the beggining of the current divergence will be on spring-summer 2016"
Now you can clearly see the breakout of Gold:SPX ratio.Another proof of the current solid bull market for gold.Next target (and obvious resistance area) for the ratio will be the 200 SMA .

Thursday, May 5, 2016

Gold and GDX ready for a pause until year end

Gold and gold miners (GDX) are in a bull market (It's official: Gold miners are in a bull market!). Currently gold and miners have probably concluded wave I and are now on their way to corrective wave II (traditionally summer is a weak period for gold). We expect an ABC flat type of correction that will last until the end of the year and bring gold and GDX towards 1180 and 19 respectively (around 0.5  fib support line of the recent upmove). We expect gold to slightly overperform GDX during this correction.A deeper correction towards 0.618 fib level (1150 for gold and 17.5 for GDX) cannot be excluded. 

Wednesday, May 4, 2016

SPX: A plunge towards 1225 level starting at summer-autumn?

Our current view on equity markets remains bearish.
In the following charts we demonstrate our preferred scenario (based on fractal patterns) for the next couple of days , weeks and months.In the next couple of weeks we believe that market will move between 2040 and 1870. We expect a crash type of event for equities to ensue around late summer - autumn

 We believe that a quick plunge towards 1225 level is within reach. Around 1225 level lies the 0.618 fib of the entire bull since 2009 and a very old support trendline (since 1975)