Tuesday, November 25, 2014

Nov 25 - NUGT/ GDX poised for another leg up - SPY/QQQ continue to show strength

NUGT could start the next leg up despite supposedly bad news in wake of the strong GDP report.   A next upmove could bring it to 18-19 range. GLD has been consolidating for a while which is giving confidence to the mining sector.  UUP interestingly down for the second day in the row, although trend is up , could be the short term pullback as it could be a false breakout.

SPY and major indexes shrugged off the potential sell signal and for now looks like consolidation. My SDS position not moving and not unexpectedly slightly underwater.  As the week progresses, the thin volume will not do the position any favors.

At close, exited the SDS position because of the thin volume and historically bullish 1 1/2 days ahead and flipped long to SSO with an eye for rest of week.

Sunday, November 23, 2014

Nov 24 - Chance of consolidation/ reversal coming in SPY

Friday although gapping up big, printed a black reversal candle with higher volume near the upper Bollinger. This has been a pretty good signal to go short for 1-3 days but heading into the shortened week this may be a less reliable signal.  So there exists this is a short term 'blow-off' top that would lead to some long-awaited correction or consolidation.  Went short via SDS at close on Friday with a modest position because the risk of a big move up on Monday would be probably limited.

The HYG/ SPY short setup discussed earlier in the week is still not there yet.

Gold miners continue to consolidate in a bullish manner and possible the next leg up happens within a few days.  On the other hand, GLD could be in a rising wedge though.  It has been pretty good about dropping upon hitting the upper trendline so will be watching to see if this turns into just a channel in next week or two.

Thursday, November 20, 2014

Nov 20 - Equities rebound strongly, GLD recovers

Major indexes showed strength recovering from a gap down.  In strong bullish trends these outsized gaps often present very good risk to reward for gap fills.

The short set up looks like its a week away if and when the negative divergence in HYG / SPY appears.  Problem with this is that it runs into December which has very strong seasonality behind it.   Until then the longs continue to have the upper hand and continuing to squash weakness by rapid (or rabid) buying.

GLD bounced well today and seems to be primed for more upside.  On the good side, UUP appears to set up to slip down some with a CCI and black reversal candle and FXE looks to rebound with a decent amount of positive divergence.  On the down side, GLD still stuck underneath serious resistance and will need to clear it to continue moving up, otherwise GLD could bounce right down and continue its long term slide.

Wednesday, November 19, 2014

Nov 19 - Equities weakness

A very unexpected slide in equities and metals triggered my stop in NUGT at 15.25.  I wasn't expecting any big moves until after the release of FOMC notes so this is surprising.  The speed of the move down and its fairly strong volume made me lean towards waiting to see how the day plays out before considering jumping back in.

HYG continues to slide also and I will continue to monitor to see if the negative divergence increases.

Update:  Back in NUGT at 15.50 and watchful of FOMC minutes coming up soon

Monday, November 17, 2014

Nov 17 - Short set up SPY

IWM: SPY set up that triggers on bearish MA cross and negative divergence between IWM and SPY.  Looks like it could trigger later this week or next week.  This is similar to the HYG: SPY set up posted earlier.

Nov 17 - NUGT blasting off, potential for 50%+ move

In at 12.33 and looking for a lot of upside here as precious metals seem to be stabilizing.  1st target around 18

Nov 17 - More consolidation and HYG may bounce

Early weakness and defensive sectors leading along with DIA/ SPY while the risk indexes QQQ IWM lag.  HYG may bounce here and will be interesting to see if HYG makes a lower high and SPY makes a higher high to set up negative divergence.

Sunday, November 16, 2014

Nov 16 - Market correction upcoming?

HYG tends to lead intermediate up and down moves recently.  It has been showing considerable weakness last few days with stronger volume.  As SPY/ HYG divergence intensifies, i.e. lower high in HYG and higher high in SPY, very possible the market pulls back some.

SPY 1 yr frame looks like we are exhausting here and I am leaning towards some sort of consolidation for a few weeks before going higher.

Friday, November 14, 2014

Nov 14 - GLD long

Very strong spike with good volume in GLD.  Will be interesting to see if this is just a short squeeze or buyers materialize behind this.  The weekly looks fairly promising now having printed two hammers in a row.  The general weakness in the indexes such as SPY/ QQQ is helping funnel off some action into precious metals.

Wednesday, November 12, 2014

Nov 12 - Melt up continues, is GLD basing for a move up or consolidation for move down?

Today exhibited very bullish behavior although gains were small and SPY was slightly red.  IWM and QQQ led today making this a risk-on day.  QQQ in particular looks primed for a strong move up as it has been consolidating for a week.  SPY issued a hollow reversal candle combined with a black VIX which is pretty bullish.  The yellow areas in the SPY chart show that every day in the last 6 mo we have seen next day upside.

GLD continues to bounce within a zone and has the potential to have a decent bounce especially with Yellen speaking tomorrow.  The bad news of QE is already out but if there is hint of interest rate rises being delayed, the bears could find the need to hit the exits quickly.  Generally speaking, I am still inclined to see a bounce rather than a move down from here because it seems there are still too much bearishness in the public and within the last week, a lack of conviction pushing prices down further.  That having been said, it only takes one big down day to set things in motion for the intermediate term.

Tuesday, November 11, 2014

Nov 11 - Gold settling, indexes continue to grind up

Gold looks like it may test broken support now resistance and perhaps bounce over it.

The indexes continue closing bullishly and QQQ looks primed for a move out of consolidation.  If it can make another solid close, it might have eliminated the chance of an island reversal which I was considering earlier.

As before, we continue to be very overbought but the tape continues to reflect aggressive buyers on dips.

Sunday, November 9, 2014

Nov 9 - GLD potential bear trap

Not totally unexpected but futures took a major u-turn before Friday's open and I went flat after being heavily short right after the open.  Around midday switched to a modest long.  I think there's a high possibility of more upside because the short trade could have been extremely crowded and more of a bear trap than true breakdown.  Although I was betting on a breakdown, I was highly suspicious on the downward movement's force since we broke long-time support a couple weeks ago.

There has been a huge amounting of reporting that gold will fall further on financial media.  Also this set up was almost too similar to what happened in 2013.  In 2013, the drop caught everyone by surprise whereas this time many were expecting to track the 'triple bottom' level and its potential breakdown.  Too many people bearish and too clear of a set up.  In addition, there was no volume or push on the down moves.

Although I am looking long term to short gold, waiting for a better opportunity when bears have felt more pain and the goldbugs get renewed confidence.  The ideal situation would be for the weekly frame to become overbought on stochs/ CCI.  That typically has been a very high % short bet in the past.

As of now, tracking 2 possibilities, the first being another u- shaped bounce into Dec/ Jan and then back down and effectively breaking support or a stronger one that verifies a triple bottom with gold moving up into next year.  There is also a third possibility that this squeeze was a very temporary one and gold actually confirms the setup for a major move down but I currently have that as a remote possibility.

Thursday, November 6, 2014

Nov 6 - More consolidation

Closed IWM short at cost and waiting to see how this consolidation plays out for a long position.   GLD continues to consolidate yesterday's drop and still holding a very large short position.  Monitoring the position carefully as we are seeing a lot of 'predictions' by mainstream financial media that precious metals will drop a lot further.  I am wondering how crowded this trade is now.

Wednesday, November 5, 2014

Nov 5 - IWM short

Took another stab after a more promising black reversal candle was printed.  Across the indexes seeing gaps up only to see things drift down.  Would be good to see things consolidate here for a week or two for a more up into the holiday season.

Tuesday, November 4, 2014

Nov 4 - Exited IWM short EOD

Still looks like the market wants to grind up.  The selling volume was too light for the last two days to stay in and the market recovered fairly well printing a hammer.  Although very overbought on the daily, still possible for more upside based on strength of intraday action.

Sunday, November 2, 2014

Nov 2 - All time highs and a bit overextended, short IWM

Entered a mid sized position short of IWM Friday EOD.  Very oversold on daily and 60 min time frame and printed black candle over Bollinger.  VIX also looking to reverse on Monday.  Gold and precious metals continue to slide.  I am hoping that the proliferation of breakdown posts over the internet doesn't turn the short trade into a crowded one.  There may be too many people 'expecting' a big downslide including myself.

May 15 - Closed out IWM puts for +120% and picked up DAL and HD Jun calls

I'm going to let the market do its thing this week and probably stay away from new positions until Friday unless something very good pop...