Tuesday, May 31, 2016

Gold Miners (GDX): Well This Is An Interesting Development

I recently noticed this little gem while changing my charts over to non-logarithmic scaling. Gold Miners (GDX) have put in a little bullish declining wedge with a long/buy signal appearing on the RSI(5). Don't for one second think this means things are turning around for gold but rather that this is a small blip in an otherwise downward trajectory.

Monday, May 30, 2016

Week in Review: U.S. Dollar ($USD UUP), Energy (XLE), Biotechnology (XBI), Emerging Markets (EEM), Russia (RSX), and Financials (XLF)

This past week has been a little rough with weekend on-calls at the hospital and e-Portfolio's due soon so that's the reason for not writing much lately. My apologies, but not a moment too soon as some interesting developments have occurred in the last 72 hours. The U.S. jobs report (if I recall correctly) came in a little more disappointing than people were expecting and despite this Mrs Yellen signaled the possibility of a June rate hike.

My theory now with this "warning shot" of possible June rate hikes means a lot of what happens over the next few months depends on what happens to the U.S. dollar as any rate hike in the Dollar makes things more expensive.

U.S. Dollar: $USD UUP
My call of a bullish declining wedge some time ago was bang on and we have since seen a breakout. Near-term upside exhaustion has meant we have seen a bit of a pull-back and I expect this to continue for the coming week. Support should be at EMA(34) at the most but now a downward channel has appeared which has indicated to me that any break above the channel resistance line should take us to 97.75. The proximity of the U.S. dollar to this resistance line is playing out in other equities as I shall demonstrate below.
Energy: XLE
Energy has been in a great ascending channel and has a good run since the beginning of the year. Unfortunately though a second tap on the lower channel support line has gone in while simultaneouslybeing rejected at an upward horizontal resistance line of $68.00. It's currently stuck in a condensing pattern that's perilously close to the edge of the channel. Things seem pretty bearishly set-up for Energy.
Biotechnology: XBI
This head-and-shoulders pattern hasn't quite played out the way I imagined but it too hasn't been able to make any significant headway so getting over-bough near term on Wednesday. I expect XBI to continue in this horizontal pattern for now.
Emerging Markets: EEM
EEM has now come into contact with a resistance line forming a suspected declining wedge. This might go all the way back to wedge support line. The real question in the long run though is, "will this breakout above $35.50?
Russia: RSX
I continue to be quite bearish on Russia and the reason I think stems from the possibility of a poor set-up in the Energy market. It's come into a great deal of resistance in the $17.50 area and now a declining triangle has appeared.
Financials: XLF
Slope of Hope was the first to comment on this I believe and then I began noticing it too. We have a strong ascending channel which already has a second tap on the support line plus rejection over-head at $23.80 which we have to see a move above in order for the pattern to continue. Like Energy (XLE) we are quickly running out of space on the channel for this move to happen.

Easy There Big Fella'

Here are five reasons to temper your enthusiasm on gold stocks right now

Gold stocks have been on an absolute tear this year, with some, such as Kinross (K/TSX) or Richmont (RIC/TSX) up more than 100% in the first five months of the year. Smaller company shares have risen, generally, even more. Investors and fund managers are falling all over themselves trying to buy into the sector. Of course,…

Friday, May 27, 2016

Daily News Roundup: If I had a dollar for every time a person over 40 told me my generation sucks, I'd have enough money to buy a house in the economy in they ruined.

Business & Finance:
Yellen says Fed hike probably appropriate in "coming months" (Bloomberg)
Banks are revived as fears over referendum recede (The Telegraph)

Commodities:
Battle inside OPEC eases as Saudi Oil strategy finally pays off (Bloomberg)
Commodities hit by oil and metal falls amid flat pre-holiday trading (The Telegraph)
World's biggest LNG buyer becomes seller as gas glut builds (Bloomberg)
Brazil seeks to ease oil exploitation rules (Hellenic Shipping News)

International Affairs:
Brexit and Remain camps are misleading voters, MPs say (Bloomberg)
North Korea linked to breach of global banks in first known case of a nation hacking just to steal (Financial Post)
Cracks show in German support for Russia sanctions (Wall Street Journal)
America's president plays the Vietnam card (The Economist)

Environment:
Harnessing solar and wind energy in one device (Energy Harvesting Journal)
India's installed solar capacity reach 6,000 MW in 6 years (India Times)
The lean, green bike washing machine (Man of Many)

Art & Design:
Terradyne Gurkha RPV civilian edition (Hi Consumption)
SUP Hydrofoil (Bless This Stuff)
Nerf N-Strike Elite Terrascout drone blaster (Uncrate)
2017 Nissan GT-R Nismo (Uncrate)

Wednesday, May 25, 2016

The Emerging Emerging's And (Possibly) The Most Hated Rally In History?

Earlier this past weekend I dropped China ETF (FXI) as a strong long/buy as a very nice bullish declining wedge was going in. Sure enough this week a strong breakout has occurred.  There's a gap that needs to be filled at $33.00 which I expect it to given it's strength so far, but now FXI finds itself in a declining channel with higher low in place. Can it break the upper resistance line at $34.00?
Emerging Markets ETF EEM is in a disimilar pattern to FXI over the same period (an expanding megaphone), but like FXI it also has some very strong overhead resistance at $35.50 while making a nice bullish declining wedge just beneath the resistance line. Could this turn into an ascending triangle that breaks out above $35.00? Could this summer have one of the most hated rallies in history? Please read this excellent article at EnergyandGold.com

Tuesday, May 24, 2016

Moly Makin' Moves

China Molybdenum plans to raise $2.8b

China Molybdenum Co Ltd, the country's largest manufacturer of the soft metal widely used in industry, has revealed plans to raise as much as 18 billion yuan ($2.8 billion) via a share placement. CMOC shares rose 5.3 percent to close at HK$1.59 (20 cents) on Monday, following the share placement announcement, as the benchmark Hang Seng…

Monday, May 23, 2016

A Bold Contrarian Trade

The last bulls standing: Not everyone is urging investors to sell in May and go away

This week's investor groupthink came courtesy of the American investment banks, a number of which turned bearish on U.S. stocks at around the same time. From Goldman Sachs to Bank of America Merrill Lynch to Citigroup, analysts were making calls this week urging investors to sell in May and go away - maybe even go away…

Currency Corner: Australian Roo (FXA), British Pound (FXB), Emerging Markets (CEW), European Euro (FXE), Swiss Franc (FXF), Chinese Yuan (CYB) and the U.S. Buck (UUP)

No commentary this evening for Currency Corner, but I will say that the strength in the U.S. Buck has really put a dent in the rise most currencies had been enjoying until recently. The Buck is a little oversold so the second waves will go in with a small retracement.

Australian Roo: FXA
British Pound: FXB
 
Emerging Markets: CYB 
European Euro: FXE
Swiss Franc: FXF
U.S. Buck: UUP
 
Chinese Yuan: CYB

Sunday, May 22, 2016

Week In Review: Biotech (XBI), China (FXI), Consumer Staples (XLP), Europe (VGK), Russia (RSX), Small Caps (IWM), and Transport (XTN)

We have just finished a dull and dreary options expiration week that left a lot to be desired, but looking at the charts for next week there are some plays that should be examined closely. Most notably Biotechnology appears to be putting in a head-and-shoulders pattern and the Small Caps appear to be putting in a second bounce meaning a modest rise should be seen throughout the week (I'm apprehensive about how far).

Biotechnology: XBI
As I said above a head-and-shoulders pattern appears to be playing out with resistance at $54.50 (a good stop point in case it breaks out). Please watch this closely!
China: FXI
China appears to be putting in a bullish descending wedge which I wish I had picked up sooner. First resistance appears to be $34.50.
Consumer Staples: XLP
Interesting developments have been occurring in bell-weather Consumer Staples on the daily charts. A bearish EMA crossover appears imminent while it simultaneously appears to be putting in a bear flag. Upward resistance is at the crossover point (about $52.80) in case this bounces up but divergences abound on the MACD indicators.
On the weekly chart a massive ascending bearish wedge has appeared while crossovers and RSI sell signals have appeared.
Europe: VGK
Europe is a bit of a puzzle at the moment. EMA's are about to bearishly crossover yet a buy signal on the RSI(5) appeared. What I think may be happening is a half-hearted bounce will occur with a lower high going in. The overall trend however is downward for Europe, so be careful buying VGK.
Russia: RSX
Russia does not appear to be in a good place at the moment. A bearish declining triangle has appeared and long-term divergences are still present on the MACD and Trix indicators. In addition to this the EMA's appear to be about to bearishly crossover. RSX is a strong short/sell.
Small Caps: IWM
Despite having a poor showing last week I think IWM will surprise us with a bounce upwards. A buy signal has appeared on the RSI(5) and a divergence on the MACD are suggesting this. Please use $109.00 as your 'stop.'
Transport: XTN
A second bell-weather in the market is Transport (XTN) which also appears to have put in a buy signal on the RSI(5) just as the EMA's have crossed over bearishly. Upward resistance is at $44.00 and $45.00 but it will be important to gauge the market next week with the moves XTN makes.

Saturday, May 21, 2016

Gripped Capital Markets Stuck In Paralysis Force Gold Higher

Rate-hike anxiety driving gold higher is no 'dead cat bounce'

Will they, or won't they? Speculation of when the Fed might increase interest rates is so ubiquitous you should have no trouble finding support for any opinion you prefer in order to justify your own action or inaction in putting value at risk. As Michael McKee said on Bloomberg radio Thursday morning, it's a binary choice.…

Daily News Roundup: Push yourself. Do 15 push-ups instead of 10. Eat a whole cake instead of one slice. Burn your ex's house down. I believe in you.

Business & Finance:
G7 warns on global growth outlook (Bloomberg)
Canada's bank earnings to take hit to cover toxic oil loans (Financial Post)
The Fed ruins summer: America's central bank picks a poor time to get hawkish (The Economist)

Environment:
New solar plants generate floating green power (New York Times)
World's largest wind farm will be operational next year (EVWind.es)

International Affairs:
Finance chiefs unanimous in denouncing "brexit" as wrong choice (Bloomberg)
Authoritarian impulses, marketing saviness: Trump presidency would be a looming disaster (Financial Post)
Greece is "very close" to debt deal, says Pierre Moscovici (The Telegraph)

Commodities:
Lithium rich nation risks getting left behind in Tesla-led boom (Bloomberg)
Oil declines as June contract expires, paring weekly rally (Bloomberg)

Art & Design:
At least there will be fewer mice - the Lego Big Ben set (Hi Consumption)
Uuni 2s pizza oven (Bless This Stuff)
Lamborghini? Check. Batmobile? Check. (Man of Many)

Tuesday, May 17, 2016

American Dollar (UUP) Breaks Out

It took a while for the long bullish declining pattern to work out and it even briefly experienced a severely oversold period at the beginning of May but it has now resolved and broken out. I got a lot of heat on SlopeOfHope.com for seemingly ignoring that the long term downtrend is down, the EMA's have crossed bearishly and no one seems to the Buck lately. In no way am I suggesting this is the beginning of a huge bullish uptrend, this is merely a near-term move upwards. My medium and long-term predictions are still downwards (to follow in a later article). Please don't ignore that a great divergence emerged on the MACD(13,34,0) recently so this move up will need time to play out.

The Chinese Are Now Zirping

Debt-for-bond swap quickened to lower local govts' burden

A clerk counts yuan bills at a bank in Huaibei, East China's Anhui province. [Photo/IC] China has accelerated debt-for-bond swaps for local governments, adding more than 2 trillion yuan ($306.7 billion) since the start of the year, more than half of last year's 3.2 trillion yuan, reported the Economic Information Daily on Friday. Of the total…

Monday, May 16, 2016

Biotechnology (XBI): Options Week Ramp Up

A buy signal has just appeared on the RSI(5) for the Biotechnology Index ETF XBI and occurring just a week before options expiration week. Please be careful as a head and shoulders pattern is beginning to appear with upper resistance at around $54.00 if this pattern comes to pass.

Sunday, May 15, 2016

Or Does It?

Oil Price Outlook Brightens

Global oil markets are heading toward a balance despite a faster-than-expected rise in Iran’s oil output, the International Energy Agency said in its latest oil market report released Thursday. In its monthly update, the Paris-based agency said that strong demand growth, coupled with falling production in the U.S., Canada, Nigeria and Ghana, would result in a…

Saturday, May 14, 2016

My Roomba Beat Me To A Piece Of Popcorn I Dropped On The Floor. This Is How The War With The Machines Begins.

World's first robot lawyer now working on U.S. insolvency cases

Baker & Hostetler, a U.S. firm, has announced that it will be employing IBM's AI ROSS, billed as "the world's first artificially intelligent attorney," in its 50-lawyer bankruptcy practice. ROSS was designed to read and understand language, postulate hypotheses in response to questions, and do research and generate conclusions complete with references and citations. ROSS also…

Thursday, May 12, 2016

And The Acquisitions And Mega-Mergers Begin In The Precious Metals Market...

Goldcorp Inc makes first move into Arctic with $520 million deal to buy Kaminak Gold Corp

The $520-million sale of Kaminak Gold Corp. marks yet another success for mining entrepreneur Eira Thomas, whose companies have been on a major winning streak of late. "I'm really fortunate that I've had the opportunity to be involved in some terrific projects," Kaminak's chief executive said in an interview. Ms. Thomas, 48, is known as the…

Wednesday, May 11, 2016

Agriculture Seems To Be Poppin' And Lockin'

Glancing at commodities this evening Agriculture Fund DBA seems to be putting in a bullish ascending triangle. If resistance at $21.30 can be broken, look out above! Long-term MACD indicators look very bullish with the KST and PMO indicators both ascending positively.
Come to think of it Commodities ETF (DBC) has had a good run of late and similar to DBA if it breaks above $14.50 the next stop is $15.00. Long-term MACD and indicators PMO and KST are also ascending positively.

Natural Gas (UNG) Prices Latest Casualty From Fort McMurray

Canadian natural gas prices hit lowest level on record as Fort McMurray fires curtail demand

Canadian natural gas prices are the latest casualty of Fort McMurray wildfires, falling this week to their lowest level on record. Alberta's natural gas demand fell to its lowest level in a year, after oilsands facilities in Fort McMurray were shut down by a raging fire that forced the evacuation of the entire town. Oil producers…

Tuesday, May 10, 2016

Daily News Roundup: Scariest Thing To Come Out Of The Middle East Is Algebra

Business & Finance:
Bank of America strategist warns of imminent vortex of negative headlines to send U.S. stocks plummeting (Bloomberg)
U.S. stocks cap biggest rally in two months as commodities rebound (Bloomberg)
Eurozone recovery wilts as sugar rush fades, deflation lurks (The Telegraph)

International Affairs:
Obama to be first sitting U.S. President to visit Hiroshima (International Business Times)
Saudi Arabia looks to bring in billions of foreign dollars by planning stock market reforms (Financial Post)
Greek bond yields drop to year low as investors cheer success of crisis talks (The Telegraph)

Commodities:
Amid low oil prices and crude rout, Russian executive warns of Cartel's collapse (International Business Times)
Encana said to weigh sale of western Canadian shale assets (Bloomberg)
Big oil abandons US$2.5 billion in U.S. Artic drilling rights after crude prices plummet (Financial Post)
The U.S. natural gas export boom means pipelines an LNG (Forbes)

Environment:
Nissan unveils new power system where electric cars feed energy back into the grid (The Telegraph)
France's Total eyes renewable energy (AFR)
China's total wind power generation to triple by 2030 (Renewable Energy Focus)

Art & Design:
The 50 most influential gadgets of all time (Man Of Many)
The 15 coolest buildings in the First British Architects' International Prize (Bloomberg)
The Rad Mini electric folding bike (Hi Consumption)
Diamond Atelier BMW Mark II Series Motorcycle (Uncrate)

Sunday, May 08, 2016

McMurray Saves The Price Of Oil But Spells Doom For The Canadian Economy

More oilsands production shutdown as Fort McMurray fire continues to rage, knocking one million barrels offline

CALGARY - The raging wildfire burning through vast areas in and around Fort McMurray has forced more nearby oilsands companies to shut down their operations and forced staff and output reductions at more far-flung facilities in northern Alberta. Oilsands production shutdown from Fort McMurray wildfire another blow to sector Suncor, Royal Dutch, Syncrude, Husky and Connacher…

Saturday, May 07, 2016

European Index (VGK): Slippin'

I long while ago I identified an ascending bearish wedge in the European FTSE Index ETF VGK and on Wednesday of this week it broke down. My short/sell signal was beautifully positioned (at around $50.50) and timed (and rare win for me lately) and since then both EMA's have developed negative slopes and are moving downwards. Our first port of call will be $47.50, a low put in back in October of last year however the question then becomes where do we go from there? Will this break down further or will it be out second stop in a five or seven wave down-pattern? Whatever happens take some of the shorts off the table at $47.50 but the long-term indicators have all crossed over bearishly so we could be in for an extended decline.

Friday, May 06, 2016

U.S. Dollar (UUP): Biding It's Time, But Not For Long

This has been a call that I'm much more proud of but the bullish declining wedge in UUP is still holding strong even though it moved briefly beyond the support line after being a little oversold (this was about five sessions ago). It has since come back to the EMA(34) where we have witnessed a pause and a closing-in on the final resistance line of the descending wedge. An excellent long/buy signal has appeared on the MACD and when it breaks out the 38.2% Fibonacci retracement is $24.77 with 61.8% retracement at $25.28. I don't see the U.S. dollar going much further than the 61.8% level as a double top has been put in with nothing but a long-term decline to look forward too.

Thursday, May 05, 2016

Daily News Roundup: Or is it?

Business & Finance:
FTSE 100 snaps three-day losing streak as oil rallies after Canadian wildfire disrupts production (The Telegraph)
Why does nobody seems to care that Trump is threatening to blow up the global trade order (Financial Post)

Commodities:
China's great commodity bubble loses air before it can burst (Bloomberg)
How Tesla is shaking up metals markets (Wall Street Journal)
Russian Ruble gains with oil as data shows global glut abating (Bloomberg)
China funds mega Yamal LNG project (GT Review)

International Affairs:
Premier of Turkey resigns (Bloomberg)
Is Greece weeks away from another debt crisis? (The Telegraph)
America has never been so ripe for tyranny (New York Magazine)

Environment:
New record set for world's cheapest solar panel, now undercutting coal (Bloomberg)
Chinese firm to build solar power plant in Iran (Tasnim News)

Art & Design:
Jannarelly Roadster (Bless This Stuff)
The gold skull armchair, for the maniac in you (Man of Many)
The Barisieur coffee alarm clock (Uncrate)
Cannaseur: The Weed Humidor (Cool Material)

Tuesday, May 03, 2016

The Case Against Devaluation And Why It Slows GDP

All the supposed benefits of a cheaper dollar? They aren't actually true

In 2010, Brazil's Finance Minister, Guido Mantega, coined the phrase "currency war" when he complained about the "cheap" Chinese yuan. Mantega claimed this gave China an unfair trade advantage. As he put it to the Financial Times, "we're in the midst of an international currency war, a general weakening of currency. This threatens us because it…

Monday, May 02, 2016

Clive's Corner: Despite The Breakout, Gold And Silver Seem Burnt To A Crisp




The situation is paradoxical – gold and silver have broken out upside despite already extreme COT readings, yet the dollar has still not broken down. This setup continues to warrant caution, yet if the dollar should break down from its potential top area and drop hard, gold and silver will go into a vertical meltup – and here we should not forget the tight physical supply situation. In the last update we expected gold and silver to drop due to the COTs extremes, but they have done the opposite resulting in even greater extremes, which in silver’s case are “off the scale”.

On gold’s 1-year chart we can see that after a two-month trading range, gold has at last broken out upside from it, and appears to be starting another upleg, although the large gap between the moving averages and the COT extremes give cause for concern. Momentum (MACD) has taken a sharp upward break from a low level and looks positive.
The reason that gold stalled out where it did can be seen on the 6-year chart below – it was at the top of the broad channel shown. Now it appears to be breaking out of this channel and best case over the intermediate term is a run at the key resistance level shown.
Latest COTs continue to look scary and do not reflect the sharp rally of the past 2 days, since the data is for last Tuesday, so the real readings are even higher. By themselves these levels warn of a reversal soon.
Click on chart to popup larger clearer version.

On the long-term Hedgers chart we can see that while even more extreme readings have been reached in the past, it is now approaching them, and on only one occasion during the period covered by this chart were such readings not followed by gold going into retreat, in 2005.
Click on chart to popup larger clearer version.
Chart courtesy of www.sentimentrader.com

Gold stocks continue very strong, and appear to be approaching the end of the current strong upleg, and it looks likely that that GDX will make it to about $27.50 before the current upleg is exhausted, but higher still if the dollar breaks down soon…

Now we look at the dollar which is at a critical juncture. It is perched right on critical support and at the lower boundary of a channel so could turn up here, which is what COTs suggest may happen soon. Yet the action in gold and silver suggests an imminent breakdown, and if it does finally breach the key support, it could go into a cascading decline, since the breach of this support will signal the onset a bearmarket and trigger wave after wave of selling that drives it lower and lower. If this happens, then clearly gold and silver could go into meltup mode, despite the already extreme COT structure.
The dollar Hedgers position is much improved, but not to an extent sufficient to prevent further decline.
Conclusion: What happens now hinges on whether or not the not the dollar succeeds in holding above support. COTs and other factors like the silver to gold ratio suggest that gold and silver are close to topping out, and that the dollar will stage a short-term recovery. However it does look like gold and silver are beginning a major new bullmarket phase, and are destined to go much higher after some needed consolidation/correction, which means that the dollar is forming a major top, even if it stages a recovery over the short to medium-term. This bullmarket in gold in silver will be amplified by the continued dilution in the purchasing power of fiat and the tight physical supply situation in the metals.

End of update.