Thursday, November 13, 2014

Shits n'Giggles: Gold Miners (GDX), Semi-conductors (SOXS), Mid Cap Bear (MIDZ), Natural Gas (UNG), and Daily China Bear (YANG)

Looking at various of my own charts and those of others (particularly Anthony Evans on another cycle of bearishness I feel is upon us. Just this morning a 'Decision Point' article was posted on Stockcharts showing the presence of a small 'price top' on the 10 minute charts.

Price has been consolidating in the wider market with an expected descending transition in the next week or two. A lot of bearish ETF'S are currently holding at critical support levels and any close below this support would invalidate my hypothesis, so these are speculative but worth a look over the next ten trading days or so. Here are some choice picks:

Giggles: Mid Cap Bear 3X (MIDZ)
During the last fall back in October small-cap stocks had been taking the biggest hit and had been declining for some time before the wider market caught up. Now it seems like it's the turn of the mid-caps. My MACD indicators have begun to pinch on the longer term periods (13,34) and my shorter term MACD indicators are already moving positively.

Giggles: Daily Semiconductor Bear 3X (SOXS)
Another bearish ETF that has found support at it's lowermost line after having broken out of a long term declining channel. Very speculative as the EMA's are bearishly oriented. This is why I feel another week or two will be required to establish market direction for the coming medium term period. My longer term indicators haven't crossed over yet. First I'm going to share a chart from Notes from the Rabbit Hole who recently showed a topping pattern in the Semiconductor Index:

Notice also his MA(50) and MA(200) lines are beginning to converge. To take advantage of this one needs to look at SOXS which like MIDZ is showing some near-term cross over potential on the long term MACD indicators. My StochRSI indicator is also in the oversold area and has begun moving up. The EMA's on my chart are far apart and therefore I'd label this as speculative, but something is setting up.

Giggles: Daily China Bear 3X (YANG)
Another bearish ETF that is also showing signs of promise however unlike the above two it  seems to have formed a large ascending channel having broken out of it's long term descent back late September. The EMA's are close to being bullishly positioned.

Giggles: Gold Miners Index (GDX)
The same applies to GDXJ, NUGT, and JNUG as it does for GDX. Gold has been toxic for some time and I have maintained a bearish position since the end of summer. I really wanted to wait until I had felt that the dust had settled. I don't think gold is going to fall to $990 but some more 'false starts' between now and it's ascent is strong possibility. GDX has currently bounced off of a long term support line (I've provided long term and short term views). Taking into consideration gold's current overall pattern and GDX I'm beginning to think that the fall in gold has run it's course. I am removing my "sell" signal for gold. Let's watch this closely and seeing a bottoming pattern begins to develop.

Giggles: Natural Gas (UNG)
Weather is expected to be getting very cold with a renewal in chatter regarding the Polar Vortex.

UNG was a little over enthusiastic and moved outside the Keltner channels early in the week and has been retracing ever since. I expect a bounce to occur off of the EMA(13) or EMA(34), more likely the latter. The MA(144) continues to decline setting up an imminent cross over.

Jakob Richardson © 2014