CCJ, INTC and GOOGL added to a couple Semi’s bought on Friday to take a shot on a bounce. Got to buy the bulls’ fear and pukage, right?
These are against a diminishing list of shorts and are not recommendations because dudes, the bull has temporarily ceased operation if not ended.
The real focus shifts to the gold sector for increasingly positive fundamental reasons as we have been gauging in NFTRH.
 Adding the daily view of GLD-SPY from this morning’s NFTRH ETF update. I’d say some progress is being made here as GLD-SPY threatens to join several other indicators in a macro phase. The trend is still down, but this is impulsive stuff.
For all you gold vs stock market sports fans, here is the big picture view of gold measured in S&P 500 units. Though the stock market is making bearish technical signals and indicators are flashing a counter cyclical warning, the best that the Gold-SPX monthly chart can say at this moment in time is that MACD is getting interesting, RSI has a positive divergence and momentum to the downside by a Rate of Change (ROC) is slowing down.
The macro is changing in a big way, but we continue to note the poetic justice that would be satisfied if gold fills the 2008 ‘fear gap’ before resuming a bull market vs. SPX. Given the damage that the US market is incurring, this could be satisfied with one final plunge with gold declining faster than the SPX or it could happen by other means. Or it could not happen at all if MACD furthers its signal.
But it looks like we are grinding around, leaving one macro phase and entering another in the coming months.
A long-time subscriber has a great nickname for gold stocks and gold stock investors. That nickname is Club Misery. Comfy US stock market bulls, so well tended by Big Daddy’s policy for so long are starting to wake up and feel just a tiny bit of it now too. Yet there is an embedded confidence in place that was not there even 2 years ago when we began to note real indicators for coming strength. The bulls now think…
Daddy Momma will weaken the dollar, create more credit and do what ever it takes to get me comfy again! Frankly, I am not used to discomfort. I am simply going to click the heels of my ruby slippers and await more seed corn to devour because I am set in my thinking now. I watch CNBC and Jeremy Siegel is resolute and smirking (now that’s confidence!) and the other guys sound a little cautious short-term but even Jeff Saut does not question this secular bull market. Maybe I am not so miserable after all.
And do you know what? Our dullard bull here could be right. Personally, I find no need to define this other than a satisfying disturbance to a robo market that drifted ever upward on policy and then on momentum to over valuation. My big picture fundamental view is that it is and has been bogus with respect to real fundamentals (not the PE’s and growth metrics all built upon destructive policy that they talk about incessantly in the mainstream financial media), but that policy’s windmills can keep turning longer than you can tilt at them.
So for me, if this has been a market top I’ll be happy. If it is a big buying opportunity in the making, I’ll be happy because the damned thing is now trade-able both ways and the macro is moving. There will be opportunities aplenty going forward and I don’t just mean long or short the stock market. Too much to go into in one post, but I now declare Robo Market dead. It is still a FrankenMarket however, as it has been since I began my public writing journey a decade ago.
Anyway, here’s the venerable one… the headliner of headliners, Mr. Dow making his lower low today and introducing himself to the other Club Members. I expect a savage market bounce back soon, but as noted in an NFTRH+ update earlier, these breaks of trends can be considered like scouts for what may still lay ahead on the near to medium term. Doing the work of identifying support and resistance levels in service to being prepared is going to be fun. Robo this.
I have only traded GOOGL long previously and see no reason to be greedy here. I am taking a profit on a short before it hits the old S/T bottoming pattern (shaded) that I had used as a bullish marker previously. This is the chart from Friday that showed the break down.
Add the SPX and the NDX to the lower low (to August) sweepstakes. The Dow is starting to feel mighty lonely. Bounces will most assuredly come, but for a trade at least we are on bear trend rules in the US stock market.
 My apologies, the SPX is not at a lower low. Razor thin though it may be, it maintains a higher low right at the key SMA 200.
For your viewing pleasure here are some of the uglier items littering our fine and sound financial markets, so organically rising on natural fundamentals these last couple of years. Here are some stocks…
And a couple indexes…
Now, the bears have seen this movie before. For instance, the DOW made a lower low last October and what did it do? It ripped shorts’ heads off into year-end. But still, there sits the venerable S&P 500 below the August low.
Here one conjures up the charts that I shall not brow beat you with again (for this week anyway ) that show S&P 500 in utter lock step with policy effects and having well-outpaced corporate profits into over valuation. One also looks around and sees a landscape littered with charts that look like the first 3 above.
We have been following the DJINET by this weekly chart in NFTRH. Today it’s breaking the trend line after a couple previous attempts. Go have a look at perhaps my favorite company in this whole wide world, internet king Google. It’s chart sucks.
 A reader kindly advised that MCHP has warned not only on itself, but on the entire industry, with a problem being China. Sounds good, except that I spoke directly with my Semi Equipment industry contact, who had differing information from the early cycle Equip. guys (details have to be reserved for the NFTRH update that followed). This was the same contact whose information got us on the Semi→ISM→Jobs continuum beginning in January of 2013. Lots to make sense of going forward.
Folks, here we go. The Semiconductor index, which was our leader post-2012 is finally testing the 560 breakout area. This could well be the decider between bull market failure (less favored, for now) and a next big leg up. We’ll let shorter-term technicals decide. But this is very important…
 For reference, here is what it looks like on a daily chart. If anyone knows of any news in the industry, please use the Contact link above. Meanwhile, I’ll scrounge around too.
Checking back in on the view of a post-2012 leader, the semiconductors with a monthly chart of the SOX.
We had noted for months that the index was creeping up the top of the Bollinger Band for the first time since before its epic blow off in 1999. This month it is falling away from the top of the BB with the monthly EMA 10 right there as would-be support. If it were to drop to the middle of the BB however, that would constitute a test of the long-term breakout.
Could Facebook and its 37 forward PE fall back here? If you look closely you can see it making a hint to lose a wedge line (still above the MA 50 though). Support is noted at around 72.
I know this is a stock of a highly critical company allowing scores of regular people you pretend are your friends to show pictures of their food and make stupid political statements, but still. The chart is not the greatest.
The Russell 2000 obviously has an ugly topping pattern. It has long since nudged to a lower low to the August low and now has eased below March and January. If it holds below the line this thing will be in a bear trend. The bears should hope that TA geniuses do not come out and blow horn the DEATH CROSS!!! of the MA’s 50 and 200, which is a Red Herring. The chart is bearish enough without the help of that hype.
Anyway, RUT was a leader to the upside on this most intense bull market phase, which has been the post-2012 period and that leader is starting to lose its bull market.
Continue reading Market Leaders Abdicating