Thursday, June 30, 2016

Gold Miners (GDX): Looks Like It's Just About Had Enough (For Now)

We all know I've had problems in the past identifying ascending bearish triangles in the past with Gold Miners (GDX) but I like the look and feel of this one. We've had a lot happen in the last week, but more importantly this week we've had a bounce and an ascent in the market that no-one can really explain. None of my indicators look like they're turning over so this forecast is based purely on a chart pattern, but something next week must precipitate a flight to the U.S. dollar to allow this to happen and it makes me wonder what it could be. In the meantime, GDX looks like a great short/sell at the moment but with some upside still possible before it turns around.

Wednesday, June 29, 2016

Back From The Dead, But How (And Why)?

The 'storming' recovery of the FTSE 100 defies understanding, but British banking stock still battered

The U.K.'s FTSE 100 has rallied back from the post-Brexit market crisis for the second day, rising 3.6 per cent to 6360 and claiming back all of its losses and more since the U.K. voted to leave the European Union last week. "The contrarian nature of markets has never been more apparent than in the past…

Tuesday, June 28, 2016

Volatility (VXX): New Acending Channel Or Bear Flag?

I'll admit I'm having a bad month (and probably a bad year) so passion and irrational exuberance got the better of me and I entered a VXX trade yesterday and got burned today. Who came me blame though? EMA(13) just crossed bullishly over the EMA(34) and remains above it today, albeit barely. Volume has increased tremendously in VXX recently with my MACD(13,34,0) indicator just crossing into positive territory two days ago. Long term indicators are also beginning to show a changing perception towards volatility and risk which I think is a fabulous development as the market in general has become far too complacent and laissez-faire towards relaxed central bank policy.
After the rapid rise that started in the beginning of June VXX today ended right at the EMA for support which leads me to think, if we see a further breakdown of this support tomorrow I think a bear flag has formed but if there is a recovery from today's fall (for reasons I am not entirely clear if I'm honest) than we can probably postulate a new ascending channel has formed.

Monday, June 27, 2016

Holding At Support Or Already Broken: Small Caps (IWM), Semiconductors (SMH), and U.S. Treasuries (TLT)

Well, the unthinkable has happened...

Small Caps: IWM
Since January Small Caps ETF IWM has been in an ascending channel that broke down on Friday after the news. EMA(13) is poised to cross-over the EMA(34) bearishly. Support areas at $112 and $109 were easily snapped with the next support at $106.
Semiconductors: SMH
Semiconductor ETF SMH is currently holding at the channel support line with it's EMA's imminently ready to cross-over bearishly. Not much exists in the way of support between now and $51.25 should it breakdown (highly likely). 
Treasuries: TLT
U.S. Treasury ETF TLT is now in the process of completing the final stage of a massive cup-and-handle pattern. Support at $132 (which was mentioned in a previous post) was found upon which we have now witnessed it's rapid ascent. Treasuries are very bullishly aligned at the momet.

Sunday, June 26, 2016

Daily News Roundup: The Key To Slicing Onions And Not Crying Is To Not Form An Emotional Attachment To Them

International Affairs:
Britain sailing into a storm with no-one at the wheel (The Economist)
Brexit: Chaos was predicted and now chaos has ensued (The Economist)

Business & Finance:
Ambrose Evans Pritchard: The sky has not fallen but we face years of hard labor (The Telegraph)
Brexit: America's next headache (The Economist)
Scotland's second chance to steal London's financial crown? (Bloomberg)
Brexit: The contagion spreads (The Economist)
Pound's loss seen as just the beginning with U.K. turmoil (Bloomberg)
Post Brexit mayhem spread across all sectors (Financial Post)
Pound traders re-group after Brexit no-one envisioned (Bloomberg)
Leading bosses press the Government to secure access to European single market (The Telegraph)

Commodities:
Gold soars as investors seek safe haven from Brexit fallout: Trajectory of gold is even higher (Financial Post)

Environment:
Solar power to grow six-fold by 2030 as Sun becomes cheapest resource (The Standard)

Art & Design: 
The Aston Martin Vanquish Zagato (Hi Consumption)
The MIA commuter bike (Bless This Stuff)
Rastaman: The eco-friendly turntable (Man of Many)
The Green Hell: Mercedes AMG GT-R (Uncrate)

Friday, June 24, 2016

Britain Has Taken A Giant Leap Backward Towards Destruction And Anarchy

Brexit upends global markets as stocks and pound plunge

Global financial markets are in chaos as the decision by Britain to leave the European Union has sent investors fleeing from risk and into any safety they can find. The initial rush out of stocks and other risk assets began in Asia overnight, where the Nikkei 225 Index plunged 7.9 per cent - its steepest one…

Thursday, June 23, 2016

Natural Gas (UNG): Cup-And-Handle Forming?

With everything else going on in the world at the moment I thought it would be refreshing to show something different, Natural Gas (UNG). UNG has had a wonderful rise since the beginning of June, climbing about 33% in that time. After spending the preceding two months creating a nice bottoming pattern it appears that a cup-and-handle pattern has developed. We are currently in the handle stage with a sell signal appearing on the RSI(5) so once the RSI and stochastic indicators retrace a bit, UNG will be a very strong buy.

Wednesday, June 22, 2016

Repost: Something Wicked This Way Comes

Gold Market Update

While the long-term outlook for gold could hardly be better, the short to medium-term outlook deteriorated substantially last week, with an important chart reversal on Thursday that was not negated by Friday’s bounceback, latest COTs coming in very bearish with record readings, and the $5,000 an ounce gold crowd hawking their wares more aggressively than ever – it’s not they are necessarily wrong, it’s just that they are naturally most vocal at tops, when they can suck in the most hopefuls.
As you may know, we have not been raving bullish on gold in recent months, largely because of the offputting COT structure, and this was not an unreasonable stance given that gold has only risen by about $20 from its early March highs as we can see on its latest 6-month chart below. Last Thursday was an important day for gold; in the early trade it advanced to new highs, but reversed violently intraday to close well down on the day on high volume, leaving behind a classic “shooting star” reversal on its chart. As we can see it didn’t reverse where it did by chance – it reversed right at the restraining upper boundary of the pattern that has formed over the past several months – and it is now becoming increasingly clear that this pattern is a flat-bottomed broadening formation. These patterns are normally bearish in purport, although the price sometimes leaps out of the top of it and spikes before reversing and dropping hard. This interpretation is supported by the latest COTs, which look horrendous, it has to be said, which we will now take a look at.

The latest COTs show a dramatic surge in Commercial short and Large Spec long positions over the past two weeks to new record extremes. This is viewed as an outright bearish setup, especially given the price pattern that we have observed on gold’s chart above, and Friday’s bounce is viewed as providing the valiant and experienced trader with an an ideal shorting setup.
Click on chart to popup a larger clearer version.

The latest Hedgers chart shows positions now at a wild bearish extreme, and remember, this is not my interpretation – it is the cool and objective interpretation of www.sentimenttrader.com who are responsible for the red bearish dotted line on this chart. If you are a trader long the sector, and are not worried by this, then I am sorry to say it, but you are a fool.
Click on chart to popup a larger clearer version.
Chart courtesy of www.sentimentrader.com
The latest gold Optix, or optimism chart, likewise sounds a warning bell, with optimism spiking to an extreme reading that has immediate bearish implications.
Click on chart to popup a larger clearer version.
Chart courtesy of www.sentimentrader.com

What would be the most likely cause of a drop in the price of gold soon? Why of course it would, as ever, be a rally in the dollar. What are the chances of the dollar rallying? – pretty good actually, as we will now see…
On the 3-year chart for the US dollar index we can see that it has stabilized above strong support towards the lower boundary of a giant rectangular trading range, with a potential base pattern forming in recent months.

On its 6-month chart it looks like the dollar index may be working on completing the Right Shoulder of a Head-and-Shoulders bottom. If so, a sizeable rally is brewing.

The latest US dollar Hedgers chart makes for interesting viewing. This chart shows that Hedgers’ positions have been steadily improving since the dollar peak over a year ago, following the strong runup, and they are now closing in on being outright bullish – and we should note that the dollar doesn’t have to wait for that to happen to start rallying.
Click on chart to popup a larger clearer version.
Chart courtesy of www.sentimentrader.com

While the latest US dollar optix chart shows readings still in middling ground, they are on the bullish side of middling…
Click on chart to popup a larger clearer version.
Chart courtesy of www.sentimentrader.com

Why should the dollar rally after suffering so much abuse at the hands of the Fed and big banks in recent years? – important reasons are not hard to find. In the first place, the Fed may have been abusing the dollar, but most of the rest of the world has now followed suit, with many Central Banks around the world striving to outdo the Fed. The European Union and Japan in particular have evolved into masters of outdoing the Fed. Another big reason is that global markets are now in the late bubble stage, and this includes bonds, stocks and Real Estate, and are increasingly unstable, so that various “black swan” events could trigger a general crash, like the Fed stubbornly raising rates later this year in the face of an already crumbling economy. Finally, like it or not, the US dollar remains the global reserve currency, and US elites intend to keep in that way, as Russia is now finding out at the point of a gun.
If you agree with what is set out here, then what options are open to you? – these are many and various depending on your personal situation and current investments. If you have done well out of the recent sector rally you should consider taking all or partial profits, or hedging with options. If you are a latecomer you should beware of getting sucked in at this stage, this is especially the case given that many investors already appear to have forgotten just how fast this sector can drop when sentiment changes. If you are an experienced trader who has just turned up on the scene you may want to consider taking advantage of the current setup by shorting the sector using inverse ETFs or options.
A final important point is that if the Brexit vote results in Britain leaving the EU, it could potentially unleash a financial tsunami that sees markets crash and gold, silver and other commodities taken down as the dollar soars. It is impossible to say which way this vote will go. The ordinary voting public are being subjected to heavy and relentless and also carefully contrived propaganda by the mainstream media, who are controlled by the elites who are obviously pro the European Union and it remains to be seen whether they can be herded like sheep into voting in the desired manner, as the Scots were, when they succumbed to scaremongering about the consequences of becoming independent. Europe is falling to bits, evidenced by the dead-end desperation of negative interest rates which itself is sluicing capital into dollar denominated investments, and Britain leaving will only hasten its demise, as other countries will be emboldened by this and want out too, so it’s small wonder that the dollar index would soar as it is comprised about 57% of the euro.
It is understood that this update will not exactly make me popular with goldbugs, but I am more interested in trying to be right than popular.

End of update.

Tuesday, June 21, 2016

Like A Mind Without Direction

David Rosenberg: The world is stuck in a rally without a cause and that is worrying

Last week certainly was an interesting one. "Brexit" polls shifted towards the "leave" camp in a fairly decisive way, before the horrible murder of a pro-EU member of the British parliament sparked a relief rally in the markets that continued on Monday, as the balance of odds appeared to move sympathetically back to the "stay" camp.…

Technology (XLK): Something Is Beginning To Worry Me

I mentioned this one this past weekend and the condensing triangle is continuing to hold but strangely while it is within the ascending wedge (very bearish). What is most worrisome though is the size and breadth of the ascending wedge, almost a year old and covering a huge price rise. While it is still within the condensing triangle room is quickly running out for XLK to go anywhere except down. Right now it's holding at the final support line but XLK is looking like a strong short/sell at the moment. Be careful though, that just because the wedge breaks down doesn't mean the condensing triangle pattern won't also continue to play out laterally before also deciding which direction to take (most likely also down in my opinion). XLK is currently coming out of a short-term overbought phase so a bounce is expected here to about $44.25 before we see some real movement.

Monday, June 20, 2016

Has Oil Reached An Infletion Point? Not If Janet Has Something To Say About It!

Why oil's next move depends on the U.S. Federal Reserve

It has been a great year for commodities and especially crude oil prices, which have rebounded 96 per cent off of their January lows. The majority of oil's gains were posted in March and April with a flat but volatile environment since then leaving many wondering if we have finally reached an inflection point. Not surprisingly,…

Week In Review: Energy (XLE), Financials (XLF), S&P (QQQ), Treasuries (TLT), and the British Pound (FXB)

Unfortunately there isn't much to report this week as next promises to be one of the most volatile in a quarter century due to the impending Brexit vote Thursday night. As a result most stocks and equities have assumed condensing triangle patterns, so depending on the vote outcome trends could go either way.

Energy: XLE
I'm personally of the belief that Energy has had a good run since the beginning of the year and looked ripe for a medium-sized retracement until I noticed a small descending wedge. I think the overall trend is down but still positioned to be taken advantage of. The remainder of summer should see an increase as summer time is bullish for crude oil.
Financials: XLF
Financials ETF XLF is at an extremely interesting juncture at the moment. Support has been found at $22.40 and a second touch to the channel support line has been made, but will it bounce? Additionally if failure does occur it appears a bullish declining wedge is developing.
S&P: QQQ
The sell signal that we found on the RSI(5) at the beginning of June has led us to our current place, however even with QQQ being short term oversold it looks like this still has farther to fall. The EMA's seem poised to bearishly cross downwards but the current trading range QQQ is in makes it look like a bull-flag, so confusing signals are being sent. Support should take place at about $104.00. 
Treasuries: TLT
Treasuries have had a great run after having developed a cup-and-handle-pattern but last week started to creep outside the Keltner Channel. TLT is currently oversold on the RSI(14) with several other indicators also crossing over, and given the events taking place next week I expect Treasuries to go down so as to calm the markets. Support is just below $134.00.
British Pound: FXB
Let's just get through this! The Pound is currently in a strong downward channel with final support at around $136.00 on FXB. If after Thursday a lower high goes in FXB is going to be a very strong buy. I expect for the balance of the week for there to be a lot of downward pressure.

Sunday, June 19, 2016

"What A Difference Five Little Business Days Makes"

Brexit and China are making waves in ETF world

There were three noteworthy developments that affected the ETF space this past week. Here's a look at what was making news: Interest Rates The U.S. Federal Reserve's interest rate decision ended-up a non-event. An extremely poor May non-farm payroll had already done the job, killing the probability of a June hike ahead of the Fed's decision.…

Brexit: Prepare For One Of The Most Volatile Weeks In 25 Years

Brexit concerns, monetary policy and geopolitics underpin continuing gold rally

Brexit concerns are driving a big run in gold, but they aren't the only factor underpinning the rally. Gold rose above US$1,300 an ounce this week, reaching the highest level since August 2014, as fears that Britain could vote to leave the European Union intensified. The key futures contract closed at US$1,294.80 on Friday, up 22…

Friday, June 17, 2016

Gold Miners (GDX) Goin' For A Break

I haven't made the best calls with Gold Miners (GDX) but recently an ascending bearish wedge I identified was hit perfectly yesterday on the lower support line. Sell signals have also appeared on the daily and weekly of the RSI(5) indicator. As always I expect GDX to climb a bit higher before finally coming down, probably to around $23.50 to $24.00.

Thursday, June 16, 2016

Daily News Roundup: I'm sorry, but you have three disease related to stress and another two for handling it so poorly.

Business & Finance:
Shanghai Disneyland - the £3.8 billion park that just opened with Disney's largest castle (Business Insider)
Swiss on alert for turmoil as Brexit probability rises (Bloomberg)
China dumping more than Treasuries as U.S. stocks join fire sale (Bloomberg)
Traders everywhere brace for what could be the most volatile 24 hours for markets in a quarter a century (Financial Post)
Pound could fall sharply on Brexit says Bank of England Mark Carney as he accuses Vote Leave of 'fundamental misunderstanding' (The Telegraph)

Commodities:
HSBC: Gold will explode if Britain votes for a Brexit (Business Insider)
Russia, Venezuela discuss oil production freeze (Reuters)
Solar's great and so is wind, but we still need nuclear power (L.A. Times)

International Politics:
MP Jo Cox has been shot and stabbed - Breaking News (Business News)
Putin's reliance on U.S. commerce has never been greater (Bloomberg)
Near-daily food riots in Venezuela are alarming the whole region (The Economist)

Environment:
South Africa has huge wind potential, says Nordex (BD Live)
Solar and wind energy's stunning cost falls to continue (Renew Economy)

Art & Design:
Lego VW Beetle (Hi Consumption)
Edge Dominos (Bless This Stuff)
Snowboarding on sand dunes (Man of Many)

Wednesday, June 15, 2016

China's Growth Blunted By Overleveraged Debt

IMF official warns China of corporate debt risk

A jogger runs on the Bund after a rain with the skyline of skyscrapers and high-rise buildings in Shanghai. [Photo/IC] China 'making progress' in economic transition, but high corporate borrowing could spell trouble China is making progress on its economic rebalancing, but rising corporate debt could pose risks to growth in the medium and long term…

Tuesday, June 14, 2016

Market Still Anxious, German T-bill Continues To Fall

Jittery Investors Drag German Bond Yield Below Zero

Yields on Germany’s 10-year sovereign bonds plunged below zero for the first time on record Tuesday as uncertainty surrounding global economic growth and the future of the United Kingdom in the EU fuelled demand for perceived safe havens. The negative yield shows that investors are willing to accept a guaranteed loss in order keep their money…

Volatility Pops Going Into 2-day Fed Meeting

Readers will remember from this weekend that I was vacillating about a position on VXX, the Volatility Index ETF. Yesterday it broke out of it's bullish wedge big-time with VXX climbing 14.80%. On the short-term indicators this is now horribly over-bought so I expect some calm over the coming days in order to produce a proper buy signal, but the message here is that we are on the cusp of a new leg up in volatility. We've just had a cross-over in the TRIX and KST indicators which are reliable long-term indicators as well as divergence on the MACD(13.34,0), so the rounding bottom in VIX must be acting as support now.

Monday, June 13, 2016

Brexit Fears Sending A Shudder Through The Markets

Tokyo stocks tumble on Brexit fears

Bangkok (dpa) - Japanese shares fell around 3.5 per cent on Monday as uncertainty continued to hang over Britain's referendum on its European Union membership. The benchmark Nikkei 225 Stock Average lost 582.18 points or 3.51 per cent to stand at 16,019.18. The broader Topix index was down 46.18 points or 3.47 per cent at 1,284.54.…

Another Up-Leg For The U.S. Dollar (UUP)?

I've seen stranger things, but combined with the current geopolitical and economic picture figuring out the direction of the U.S. dollar (UUP) has become quite a challenge. Some time ago I posted the downtrend with a predicted reversal in May but was admonished by readers on Slope Of Hope.com for not appreciating the bearish EMA crossover and recent strength in gold. I stuck by my prediction which turned out quite profitable and UUP was rejected on the upside by a channel resistance line at around $24.80.
Now where do we go? UUP appears to have made a wide ascending channel setup by the low in May at the high on the 1st of June, but what I've also noted is the possible creation of a large descending wedge. Descending triangles often have a positive break upwards which might be in response to future increasing interest rates, so the timing seems appropriate. Will the UUP be rejected at around $24.60 with a breakout later in the year, or will it be sooner in June or July which appears to be the setup now?

Sunday, June 12, 2016

Week In Review: Volatility (VXX), Europe (VGK), Financials (XLF), Healthcare (XLV), Semiconductors (SMH), Small Cap (IWM), and Technology (XLK)

Next week is going to be a very interesting week with a verdict coming in on a rates-increase. The theme for next week is the resolution of all these bearish ascending wedges, most of which began their breakdown Friday. If I hadn't been on-call this past week at the hospital I would be a rich man with all the collapses currently occuring!

Europe: VGK
By far the most depressing chart on this weekend's list VGK has broken down from a long-term ascending channel that began back in January. This is a very bearish development.
Financials: XLF
I really wish I had caught this sooner  but an ascending bearish wedge in Financials has just broken down. Support can be found around $23.00 and $22.60. Support should be found somewhere along my proposed support channel line at $22.40 to $22.60.
Healthcare: XLV
There was a firm rejection at $72.50 this past week. XLV is currently in a channel that already has two hits on the lower support line which I don't think will hold. We should eventually see a breakdown.
Semiconductors: SMH
Another chart I wish I had been paying closer attention to. A very aggressive ascending wedge broke down on SMH Friday with support appearing at $55.00.
Small Cap: IWM
Another ascending wedge break down while also being rejected at $118.50 (which I called and tweeted earlier in the week). This is pattern is within an ascending channel with two hits on the lower support line which I think will also break down. Quite a bearish development has begun.
Technology: XLK
I hadn't appreciated XLK until recently but there is a massive ascending wedge going back a year on it with a smaller condensing triangle also developing. You can break either direction with a condensing triangle, but while it's within a bearish wedge I am leaning towards a move downwards.
Volatility: VXX
This has been a puzzlement as several declining wedges have appeared without a single bullish break upwards. What's put me off of VXX was the move Friday was a little too strong so I'm content watching it for now.

Saturday, June 11, 2016

Well D'uh! Gold As An Inflation Hedge.

Soros, Druckenmiller tout gold as primary defence against weakening currencies, recession

George Soros has never shied from prescribing advice in pursuit of what he embraces as his role as investment guru. His publishing is prolific, and he has no qualms when it comes to backing his influential forecasts with large bets with his own money. This is, after all, the man who netted US$1 billion betting against…

Don't Know How Long This 'Bright Spot' Will Last

View from Calgary: Oil above $50 rare bright spot at Global Petroleum Show this week

As oil breaks the $50 barrier, Calgary's annual Global Petroleum Show shows signs of economic slump. Geoffrey Morgan reports from Calgary…

Running Out Of Energy (XLE, USO)

Energy has had a grand run for the last six months since the powers-that-be allowed for a retracement in crude to occur after the market-share-debacle/punishment for Syria/Ukraine thing took place between Saudi Arabia, the United States and Russia. However, I have pointed out for the last two weeks or so a massive bearish ascending wedge developing across energy markets and the time for a further decline in said markets is upon us.
A sell signal on the RSI(5) for the weekly XLE chart has emerged which  has reaffirmed my short/sell prediction. XLE was also firmly rejected at $70.00 with an expected retracement to $64.00.
This massive bearish wedge has also appeared in the Crude Oil ETF (USO) which I have also been watching for some time now. We are rapidly running out of room in both patterns and without a huge move up I expect that we will see some fluctuations in the near future.

Friday, June 10, 2016

Daily News Roundup: There Must Be Some Way This Victimizes Me

Business & Finance:
Buying Junk shows EU is getting desperate (Bloomberg)
The weather predicting technology behind $62 billion Monsanto bid (Bloomberg)
TSX has biggest drop in six months, Wall Street slides as energy shares drop with oil (Financial Post)
Bank of Russia cuts interest rates (Wall Street)

International Affairs:
Schaeuble: Europe is bracing for Brexit (Bloomberg)
Obama endorses Clinton (The Economist)

Commodities:
Some people are betting Oil will surge above $100 (Bloomberg)
Oil downturn to wipe out a quarter of North Sea jobs (The Telegraph)
Another Natural Gas finding off the coast of Egypt (Jewish Press)
Russia tops Saudi Arabia as world's top oil exporter (RT)

Environment:
Solar installations overtaking all other conventional energy sources in the U.S. (Market Watch)
Paris Agreement set to boost wind turbine sales, according to Moody's (Clean Technica)

Art & Design:
RoBattle Combat Robat (Hi Consumption)
Home brewing kit (Hi Consumption)
Sony glass sound speaker (Bless This Stuff)
Jaguar's 2017 F-type (Man of Many)

Wednesday, June 08, 2016

Biotechnology (XBI): Weak Sell Signal Put In

Biotechnology's (XBI) trend of the last few months has been quite puzzling. Last half of 2015 it took a general beating (in contrast to the general market) and also in contrast to the general market since the start of the year it has been ascending gently. I haven't decided if this is an ascending wedge but it is currently coming up on a resistance line in place since January. Coincidentally a weak RSI(5) sell signal has been put in with Stochastics bearishly crossing over. At the very least support should be at the EMA(34) and with that maybe a proper wedge may go in. Please have a tight stop at around $60.00 because the market is paradoxically bullish and XBI may break away with it.
Overcoming the $60.00 would be a huge "buy" signal, by the way. Serious resistance was put in back in mid-August and repeatedly in October with intermediate lows. Surpassing this level would signal a brand new leg-up

No Live-Long-And-Prosper Here: U.S. Fed In A No Win Scenario

The U.S. Fed is facing a Kobayashi Maru - so best to bet on gold

Friday's disappointing U.S. non-farm payrolls number highlights what RBC Capital Markets considers the Federal Reserve's Kobayashi Maru. Drawing on the similarities to the infamous no-win scenario that was part of training in the Star Trek universe, Canadian equity strategist Matthew Barasch admits he has no idea what the Fed will do. However, he noted that harsh…

Powerhouse Suncor Finances At Discount

Suncor Energy Inc signs $2.5 billion bought deal, plans to boost Syncrude stake

In one of the year's largest equity financings, Calgary-based Suncor Energy Inc. has signed a $2.5-billion bought deal for the sale of 71.5 million shares at $35 a share, which represents a discount of $1.50, or 4.1 per cent, to Tuesday's closing price of $36.50. On the day the shares were up by 68 cents. Suncor,…

Tuesday, June 07, 2016

Commodities: Agriculture (DBA), Gold (GLD), Natural Gas (UNG), and Crude Oil (USO)

Since Yellen's dovish speech several commodities seem to be making interesting moves. Most continue to be within patterns that were identified some time ago, with the exception of Agriculture (DBA), but without a big bullish move some time in the near future this patterns may resolve bearishly.

Agriculture: DBA
DBA looked to be putting in a large bearish ascending wedge but this recently broke up big-time! Similar moves have been noticed in wheat and sugar. This is a very bullish development and DBA looks to be a long-term buy. After this impressive move however some horizontal action is likely before it continues upwards.
Crude Oil: USO
A massive ascending bearish wedge remains the go-to-pattern for Crude Oil. Without a significant move very soon this is going to have to break downwards. Crude is still a strong short/sell, but only if very tight stops are in place in-case it does magically break upwards.
Gold: GLD
Interestingly gold made a jump up and paused exactly where my channel resistance line was drawn. The question now is, how much will it retrace? Only when the issue of interest rates and the U.S. dollar resolved will we get a clearer picture. I would advise remaining on the sidelines for now as some short-term overbought indicators need to be worked off.
Natural Gas: UNG
UNG was stuck for a long time in a very tight horizontal channel until suddenly about three sessions ago it jumped upwards. This is a long-term bullish development and I believe finally we are seeing the beginning of a bottoming pattern with bullish moves upwards.