Year in Review. The short version.

The fed influences market sentiment, period, end of story.

I'm not talking about outright manipulation or the plunge protection team, I'm saying that the big money, the money that matters and the big flow; their sentiment, is influenced by the fed. Which in turn drives the shorter term direction of the market. Some hacks on Twitter call this lazy thinking, it's not. It's simple. Play the game they play and you'll do just fine out there.

Another year in the books and double digit returns for the broad markets. If everything is so peachy, then why is the fed funds rate still in emergency mode at 0%? The macro theory is frozen in time as long as those rates never rise. The fed knows this, so can ZIRP remain around for many years more? I saw a long term chart of rates dating back to like 1800 and it showed periods where rates were near zero for l0-14 years. I'm just spinning the wheels here, but i wonder what debt to gdp was during those times lol. If anyone has any data on this shoot it my way! So with rates locked at zero the fed thinks they'll be able to slowly raise rates just so they have ammo to lower them when equities make the heaven forbid correction.
My advice for investors in 2015 is micro thinking, the broad markets are garbage but there are pocket of value still out there, just need to do some digging.
I am not capitulating on my macro views, time is on my side and buying the broad markets up here at these levels won't produce great returns over 10 year period. Maybe if the equity markets get a bloody correction and a good and healthy one, maybe I'd resume my allocations.

I was wrong in 2014, and that just gave me more time to accumulate. I anticipate another choppy, non directional move in 2015 in the precious metal arena with modest gains when all said and done.

The theory continues to be; resumption of the bull market in tandem with a strong dollar will be the tell. I want to see the PMs and gold rise together similar to the start of this market in  1999. On top of that the big $$ will be sidelined until 1400 is taken out and held.

Until then. I remain on course.

No charts on this review.  Will post a chart attack update early in the new year.

Have a Happy New Year.

Market is Talking

Time to begin looking for the exits in the domestic equity markets. Something is a 'brewing.   I have a slew of data and back up supporting my current view of running for the hills; if you haven't already. The move in oil and the recent price action in the commodities market (oil down 40% or so in 3 months),  the past few days in the precious metals market ; -10% then up 15% in silver in 3 days. The market is giving its signals; (what's left after the Fed has taken every other signal away).  Seasonally speaking; December is very rarely a 'crash/correction/pull back' month; positioning, year end, bonuses, etc. Money managers won't go making large changes or take on any additional positions that aren't in a confirmed uptrend.  I think the individual investor can make some excellent moves during this time because we are not constrained by SEC reporting, holdings and meeting quarterly benchmarks. 

I'll be posting more charts over the next two days or so on here;

For starters; on my India call; check out the visual of these ratios: stockcharts.com (type them in; or copy and paste)

ewz:eem
rsx:eem
indy:eem
fxi:eem
eza:eem

Which one looks better? That's right. Get long, get strong. BTFD.

To be continued:

Still listening

The markets are quiet. Investors have been lulled back to sleep after the bear raid. The low volume melt up has been astonishing and yet again record setting. The megaphone (topping) patterns I've been watching are quite astonishing. (Target of pattern is 1740 on SPX). Stay alert. These same patterns are apparent in the Dow and more or less Nasdaq .The R2K is rolling over in its own manor as well. Stay alert.

http://www.zerohedge.com/news/2014-11-12/sentiment-charts-bullish

Check that out as well.

While the easy way is to follow the crowd; because the crowd is usually right; for a period of time. At some point one needs to ask themselves what is more important; preservation of capital or return on capital.

Another good read on the current markets and the over used word ; polar vortex.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/11/12_Massive_Volcanic_Eruptions_Wreaking_Havoc_On_The_World.html


My market views:

I'm still bullish on the miners. That is my bias and my theory where I believe significant value lies. I continue to say accumulate. I don't see any major sustainable moves higher to begin until gold is above 1400. I've said this many times and I still continue to see that as the level that will entice big money back into this market.

I'm still bearish the broad markets. The risk reward is not there to be long unless your a money manager forced to meet your benchmarks (article attached). It makes sense.

I'm still bullish on India big time. With Modi's presidency and the growing middle class. You have to be long time accumulator of Indian shares.

I'd like to begin buying these nat gas related shares on dips. (EOG).


Still believe the market is topping here which will take some more time to mature. Signs continue to mature.


The quality over crap ratio (LQD:HYG) continues to trend higher since the turn of this year.

It's been noted that when Dow outperforms; the ending stages of a bull market are nigh.

Step back and listen...to the market.

The bear case hasn't changed for me. Nothing has changed from what I have been posting and talking about in regards to the fundamental flaws of the forecasts the equity markets are depicting.  For now, I'm listening to what the market is saying;

Case Study: Action around the 200dma

2008: Market participants were well warned

2010- 200dma flattening after having a hissy fit QE1 was ending.

2011 Debt Downgrade

2012- QE2 ending? (I forget)

#Levitation of 2014. The plunge through the 200dma on 3 large distribution days.  The flattening of the 200day is most likely going to take us through the year into next year possibly. Trading ranges will be defined by percentage band above/below the 50/200.

With that in mind; sit tight and be prepared for volatility as the liquidity shows up around the 200 and participants begin to jockey for next direction.

For the archives

Eric King:  “Art,when I asked you last Thursday if the early signs of selling could develop into some more serious you issued what turned out to be an astonishingly accurate warning:

“We are heading toward a potential retest of the area around 1,925 on the S&P.  We stopped in that approximate area last Thursday, and again before the most recent bounce yesterday.  So if we get down there and we 

test it and fails, we run the risk of a kind of cascade effect (of selling) at that point.”

Eric King continues:  “Sure enough, Art, the stock market began to hemorrhage to the downside after 1,925 broke on the S&P.  That break is what has led to a series of down days where all hell seems to be breaking loose.  Is there another major level you are now watching?”

Cashin:  “If 1,790 - 1,800 gives way on the S&P, that could create another cascade of selling to the downside.  That area giving way would be the equivalent of the 1,925 break on the S&P and that would bring in more waves of selling.

It's a very, very nervous market.  This morning (Wednesday) you had ISIS and Ebola, and you had Greece suddenly back in the center stage as the weak man of Europe.  The Greek market lost the equivalent of 1,000 points on the Dow.  And then at 8:30 you ended up getting all kinds of weak data here in the United States and that created some major selling that the market was ill-prepared for.

And interestingly, one of the other things that has been a negative is that oil has been in near free fall now, but by 9:45 in the morning oil made it back to the plus side.  So the market tried to rally but then late in the day Texas West Intermediate Crude looked like it was going to break below $80 and that took the Dow down to the low of the day.  We bounced back because oil has now stabilized.”

Eric King:  “Art, when you see the kind of panic that was happening earlier today, were those some forced liquidations that were taking place, or was that aggressive short selling?  What caused that massive tumble in stocks earlier today?”

Cashin:  “The rumors around were that some of the hedge funds had to liquidate some positions.  Some hedge funds had positions that were oil-related.  That caused a problem.  But some of them were on the wrong side of the trade in the bond market and so you had a panic by traders and investors to get to safety.  The 10-Year bond traded below 2 percent in one of the more stunning moves I've ever seen.  I've been doing this for over 50 years and that was truly one of the more stunning moves I've seen in my career.”

Eric King:  “Art, I don't remember anything like that in the bond market.  You said it was one of the more stunning moves.  Have you ever seen anything like that before in the bond market?”

Cashin:  “Borderline, but not quite exactly.”

Eric King:  “What was your take as the only two safe havens seemed to be the bond market and gold?  In 2008 we saw the gold market tumble as the global stock markets plunged, but now the new idea appears to be that maybe it's not such a good idea to be short gold.”

Cashin:  “Gold is a natural safe haven in times of crisis.  When there is panic people tend to move toward gold and the dollar but the flight to the dollar certainly did not happen today.  But they sort of made that move by going into U.S. Treasuries.”

Eric King:  “Have we seen the top in the stock market or do we have to wait a little bit?”

Cashin:  “You have to wait a little bit.  Tops are an evolving process, so we'll have to see.  Stocks came back from the abyss earlier today, so we will have to wait and see.  If they take out today's lows over the next several days you could get a cascade effect (of selling).  I would advise the (KWN) readers to keep their eyes and ears on the oil price.  If West Texas breaks $80, we might have some problem

Ratio Update

I am bullish on the emerging markets over domestic markets. I think money will flow here. Keep an eye on this ratio to watch the flows. Any break of the below noted levels will suggest otherwise.  

Epic volume in this ratio: gdxj:gld....Clearly some serious changing of the guard happening. Must monitor this ratio closely to determine the future of this sector.

Why would money managers want to be in investment grade over junk bonds if they didn't see problems ahead? This ratio has flashed the yellow warning flag since 12/31/2014 just as gold did on the same day. Now look at the ratio. Exploding higher with no stopping in sight.  Watch this closely for signs of stopping. 

One of my favorite ratios to monitor; $VIX:$SPX....Got the buy signal well ahead of this pull back in equities. I have personally been swinging UVXY since this signal.  I will be looking for exhaustion in the vix and this ratio before to signal a stoppage in the equity slaughter. However; it could get ugly. so lets stay day to day. 

Miner Update

To any frequent readers; sorry for the infrequent amount of posts on my thoughts of the market. A very fun and eventful summer followed by a busy fall of moving, commuting then moving again. Enough about me; lets get straight down to business.

My last post noted a few of my months going into the final stretch of the year.

Let's just start with my favorite asset class that I am an accumulator of; the miners.

Taking a severe beating; but nothing has changed from my stance; they are the most volatile asset class in finance that I've seen; outside of weekly options.

On a technical level; there is nothing positive to note. The charts are a disaster; select names are at oversold levels never seen before, sentiment is absolute atrocious. The only way these names recover is from buyers stepping up to the plate. I keep saying in these writings that the big money won't move into the sector until gold is over 1400. Until then, you have to have conviction and patience.

Look at the volume on this next chart and ask yourself; wtf is going on. There is some serious changing of hands going on here in the volume that can be seen in the ratio; long GDXJ; short gold.  Do you want to be a retail muppet and sell low? Or do you want to accumulate stocks like the smart money? I for one; am part of the latter. And time is on my side. I will continue to buy the dips.
.

Small caps: Please revist the below link; tooting my horn a bit here; but its worth the short read that it is. I will be looking for bounces to add to my short in IWM. 

#Winning 

Stop loss on IWM shorts: 2 weekly closes over 20 week EMA. Will end up being around 115; see chart. 

Will post more over the weekend, right now I'm working on a shotty internet connection waiting for comacast to be installed (p.s. a company i want to buy on any major market sell off; they have a monopoly on this market and began 2 year contracts; guaranteed revenue). For now, follow me on twitter @mattdubz86  I post a lot of trade ideas and market updates there as well. 

Shout out to Natixis, some of the best mutual funds on the market; but I'm iffy on the entire financial system's structure right now and the confidence in central banking. I'll be monitoring the underlying markets of this mutual fund looking for a place to park cash for the long haul once this next shake out happens. 

As the month turns...

QQQ - remains in bull mode until a weekly close below 97.40

IWM - neutral. consolidating or topping. 108 (112 is 200EMA) to 120 trading range until one or the other is broken.

SPY - Well, we know the CB's are actively involved in trading SPOO's and intervention in the equity markets is part of the Fed's wealth effect plan. They think that if people see markets higher they will go out and spend. How baffling is that; intervening in the free capital markets to try and induce consumption. When the tide goes out; we'll see who has been swimming naked.  Also just observing the 200EMA vs. the 200SMA.

GDX - Over 27.50 and we'll have momentum to the upside. I'm an accumulator here. But safer play is to just wait for the market to confirm.

GDXJ- Over 45; same as above. 18+ months of basing.

GOLD - Best described by this tweet. Courtesy of +Eyal Kidron   Wait for a new directional move.

Commodities - Long DJP for a counter trend move back to 38+  Confluence of : (200day SMA) (20/40EMA) as well as the positioning of the underlying basket of the DJP are all setting up for a move higher. 

EEM - Long and strong; with a close eye.

Volatility - wise to have a small position here. IMO at least; for what that's worth. Any morning you could wake up and have a volatility shock; whether it geopolitical, or just a psychological level in the Dow/S+P breached to downside can send price of protection higher. With volatility, you need to anticipate the move or be in and out very quickly as it occurs. VXX/ ZIV work both ways nicely.

Thoughts going into final stretch of the year

The July- August Summer doldrums took the broad equity markets to new highs on laughable volume. New highs are new highs. Confidence reins supreme until one day it doesn't. I prefer to accumulate undervalued, unloved sectors of the market in anticipation for future moves.

"Buy when everyone is selling, hold when everyone is buying"


The next few charts and thoughts will be on the gold/silver mining complex, gold/silver, commodity complex (DJP ETF tracks the CCI/CRB index), long bonds and volatility. In a nut shell; get long the aforementioned asset classes going into the home stretch of the year.

Gold/Silver and the Shares:

. These asset classes I prefer to accumulate using the dips in core accounts. The rallies and dips can be traded for sure; but with the noise in the daily movement in the gold market has we transition from bear to bull can be daunting and confusing. Keep your eye on the prize.


The Long Bond: Do you really think the Fed can raise rates? GTFO; I don't think they can or will; neither does the Bond market.

Volatility; Art Cashin warned that low volume melt up summers going into September do not favor the bulls. Volatility is going to pick up IMO has the real money comes back from their summer vacations. Combined with the low volume ramp; we have a slew of geopolitical scenarios that can ignite at any time. A small position in Vol is a pretty good idea to protect core accounts.

(Got long Vol at the red circle)

Nasdaq/S+P : Eyeing possible topping formations that may lead to..dare I say...a correction greater than 6%! Heaven forbid. 

Buy the bloody Dips

Not in the broad indices though.

I'm going to keep posting examples like this fine specimen. The market is going to have no choice but to move these loathed stocks higher if companies keep pushing down costs and gold stays flat/up. This is what we seen over the past few quarters. Then once gold finally breaches 1400 and people aren't so afraid anymore of the constant taunt of lower prices from the some of the big banks, you're going to see these stocks climbing fast out of a deep dark 2+ year bear market.

Feature Stock of the Week (GTAT)

The fundamentals tell the story, the charts and technicals help tell it.

This post on GTAT will be purely technical. (comments on the charts). Enjoy.

 Starting out with the Monthly lense:

Daily:

Weekly:

Monitoring Developments

This weekends post will focus mostly on the usual, gold and gold stocks.

Other notes that are not on the chart above are that I'm watching are:

- the fact that Friday's power close brought us also above the 50SMA (a highly watched moving average).
-Monthly indicators are all in buy signals.
-Above the 3 monthly EMA's I use.
- The last time we had a move higher, it was stair stepping, which was then returned by the bear with the elevator down. This time I'm noting different bull patterns; aligned with where the monthly indicators are positioned....is this time different? Will we break and close over that march high and run the 55. I think so.



It doesn't surprise me that the negative short term technical are being ignored and seeing dip buying show up when you'd least expect it. To me, this shows that smart money has eyes on the longer term big picture for this depressed and left for dead sector.

I will do my monthly review as we turn the calendar into August next weekend. For now, we have a big data dump next week.


Here's an opposite view point of mine for comparison:

http://thedailygold.com/weakness-ahead-miners/

Looks like he did his charting prematurely on Friday based on the candles shown on his charts. We'll see who is right. I could see my bull flag making one more leg down, which is why I am monitoring this development closely.

nine teen seventy somethang

Funny how that song would come on as I'm reviewing some charts. (Reference to 70s correlation):

(Citi analyst Tom Fitzpatrick sent King World News four incredibly important charts)

Then you have the ratio of gold stocks to gold. You want to own miners when this ratio is outperforming. Today's close was nice to see the dip being bought into Friday and into big gains in the broad market. 

Steady F***ing Eddy

Steady Eddy; for any new readers; is the 30 weak moving average. A few weeks ago we had a fake break below it and a break back above on the big 3% day which I tweeted about as we crossed 1285. Anywho; the second chart is the Gold to Silver ratio. My two beliefs are this; we won't get the sustained rally I'm waiting for until gold is over 1400 and the gold to silver ratio is in a confirmed down trend. (i.e. Silver outperforming gold).  We are getting there. I'm an aggressive trader; so I'll take the risk of entering set ups and trades before the trend is confirmed. Stop losses and position sizing are ESSENTIAL as an aggressive trader. 

And just remember, the bigger picture is suggesting much higher prices; so to see the reversal and dip buying action shouldn't come as a shock. I did book some gains and am going to be re-entering in larger size going forward. 

Check the prior posts for the longer picture, to lazy to post the hyperlinks on this one. 

Alright, enough of the miners/gold.

The short on the Biotechs has been playing out exceptionally well.

Everything needed for further downside is in place by what I see. I used today's morning random fucking bounce back to fill the down gap to add to my short.

When what I see goes how I see, I never have enough money or size on. #Trading #Patience

We should revisit the QQQ's and the Spoos. But I know where they are going, and it's down. I just can't even imagine what foolish dip buying could happen with those two. So for now, i'll just monitor day by day to see what kind of levels we can crack through.

Taking advantage of others fears and scooped some vol products in the premarket today. Turned out I timed that well.

Stay tuned for more, expecting more risk off tomorrow.

Caution Warranted

As long as gold is below 1400, I continue to believe there will not be a sustained move in the miners. The rallies and dips will be worthy of trading.

Buy the dips, be patient. After a nice run up in the miners, a 50% retracement of recent gains is not out of the ordinary.


I'm long BIS in the meantime (IBB inverse). Yellen has given me a boost to the downside. Watching some set ups and patterns right now. If and when 250 breaks in IBB, I have targets on the charts where the fan lines meet the fib lines which meet the moving averages. 247, 243, 236. .. 236 is my ultimate target; it would end up being where a confluence of HSR, fib lines, fan lines and moving averages all line up together. (i.e. where the most liquidity will be).

Scroll down and read some of the prior posts.

The strength in the miners/precious metals isn't a shock.

Reminder from my first missives from April.

Reminder for R2K from April

Happy 4th of July

A chart to ponder as Arthur blows through the North East.

Just because I'm bearish doesn't mean I don't love our country. Proud to be an American. Stock market and the country we live in don't need to go hand and hand. A major correction or stock market crash won't stop our country from being the best it can be. That's what people need to understand when stocks crash or correct. It's not the end of the world, life goes on! Corrections/crashes will lead to evolution in other industries or sectors of the economy and our daily lives.

Enjoy the weekend everyone!

Focus Stock of the week (SLW)

This is just a daily view of SLW. If we see a push over 27 this stock has legs for days.

I'll add a bit more to this post from different time views as we go.

Steady Eddy is Back in Play

Fake out below the 30Week Moving average; when I was watching this live; I tweeted that 1285 was the swing pivot on the day gold rose 50$ (3%). That swing pivot was also the 30 week. (wink wink).

Monitoring Gold to Silver ratio; if this ratio begins a steady new downward trend; then, game on.

Based on where the monthly indicators are on gold/silver mining stocks; I think this ratio will trend lower and silver will take the lead.

The green light to buy the dip is at hand; with a caution warning until 1400 is crossed.

Reminder from May 4th.

Reminder from March 3rd

@Mattdubz86

I post a lot of charts/ideas/rants on Twitter that are worthy of checking out. Most of the content I bring to the table doesn't end up on this blog. Would never recommend Twitter stock, but the means of communicating data and information is amazing. Check me on there.

And continue to BTD in the miners!

Miner Update (Pun intended)

My continued belief is that a sustainable new bull market in the miners without the crazy swings won't come until gold is steadily over 1400. With that in mind; lets have a look at the charts after a stellar few weeks in June.

Reminder from May 4th.

Reminder from March 3rd


The long view:

Looking to add; the gap up on Thursday adds an intriguing area to watch. Could be a breakaway gap; in the event this gap isn't filled early next week; ideally by end of day Monday. Then i'll be looking to add. I'm leaning more towards a breakaway gap just because of the larger picture positioning. But the market is always in the mood to mind **** you. So pay attention.

200SMA Halts Miner Rally

Time for a pause in the rally, or a ripper through 200SMA. A scan through a select group of names I follow across gold/silver miners large, medium or small cap. For the most part, they are all seeing a pause at/below/above 200SMA. Use the volatility in this sector to your advantage, they fall out of love very fast when momentum halts, BTFD.

Technically speaking...We closed OVER the 200SMA....

60 min GDX view

Weekly technical positioning

Bonus Charts: IAG

Miners

Don't forget about these guys.

All technical lenses are looking gorgeous. (Daily/Weekly/Monthly)

I had to leave my recent platform, so the charts will look a bit different going forward.

Let's just talk levels for a minute here, I wrote about 23.07 on GDX being a major tipping point and I thought we'd go straight down to December lows if that broke. Well when it broke, we dipped to 21.93. So any orders to to go short made a quick dollar when that broke. We are back over 23.07 and technically speaking, things are looking quite nice.

Baring another smash down in the metals themselves, we are a GO to buy the dips.

Other indicators I use from time to time are also giving buy signals; so hold on to your pants here and stay alert and don't forget about the miners. "Use the volatility, don't let the volatility use you", A quote from Rick Rule that I've taken very seriously in this sector during this past year+.

In Like Flynn

Daily Lens

Bullish:

• Back in the channel.
• MACD in boss mode. 
• RSI >50 sloping upwards.

Bearish:

• Declining volume
• Nose bleed Stokes
• 50 crossed 100.

When the head and shoulders top didn't pan out, it's been a strong rally higher. A failed technical pattern is probably one of the stronger momentum trades/signals I've noted. 

NFP tomorrow and no POMO.

Reminder of macro indicators rolling over:

• NYSE new highs not confirming market new highs.
• Margin debt 2 month consecutive readings lower.
• 30 year yields vs SPX divergence
• USDJPY (carry trade) monthly MACD has crossed, the trend is weakening. 

http://www.financialsense.com/contributors/cris-sheridan/tracking-peak-corporate-profits

BONUS CHART: GDX

Quick Recap

            I don't see much available upside room on the daily bars coming into Draghi and NFP.  There will be no QE out of Draghi tomorrow coupled with a 2.5BLN POMO. That leaves us NFP which won't really matter either way unless its a huge miss or huge beat; there is no POMO scheduled for NFP Friday; again. Interesting. Makes me think that NFP will be in-line/beat as the FED must know what the data is ahead of time when making the POMO schedule.

IWM-short
QQQ- neutral/ready to get short

GC- No idea what this thing is going to do short term; technical indicators are at extreme low levels on daily and weekly; so any big dip from here should most certainly be bought.

Thu, Jun 5, 2014	Fri, Jun 6, 2014	Outright Treasury Coupon Purchases	08/15/2021 - 05/15/2024	$2.25 - $2.75 billion
Mon, Jun 9, 2014	Tue, Jun 10, 2014	Outright Treasury Coupon Purchases	02/15/2036 - 05/15/2044	$0.85 - $1.10 billion

6/4/14:

6/3/14:
^