No post tonight as I am heading out early today for a weekend vacation. I will post on Sunday night.



DT

There is a school of thought out there that correlates rising commodity prices to the increased supply of global paper currencies. As the world keeps printing paper, the underlying currency is devalued. There is no way to print more gold of course, therefore the only true currency (gold,etc) is being scooped up. The issue right now, is the world is just starting to increase their own rates as the US is supposedly wrapping up it's own rate hikes. So, if Japan begins a string of rate increases and China decided to strengthen their currency, then the US will have an issue. The dollar will weaken unless the Fed keeps raising rates. But if the Fed raises too much, then it could derail the economy. So, the real issue for the fed, is not fighting inflation, but keeping the falling dollar propped for political reasons without bringing down too many things. If you look at the dollar as it related to gold, you will see that gold rises when the dollar falls. So what is the rise in gold telling us? That is the million dollar question.

Here is a chart showing the dollar. The dollar is at a crossroads here needing to hold the blue trendline in order to maek another attempt at the red horizontal trendline.
Here is a chart of the ten year. Clearly, it has broken out.
Here is a chart showing the relationship between the dollar and gold over the past three years. It's pretty clear that gold and the dollar have an inverse relationship and the dollar is currently falling.

Here is a chart of the SP500. It looks like it is headed lower, but already stochastics and cci are oversold.

Here is the Nasdaq chart. Finding support near here but MACD just crossed over.

I have been thinking oil would pull back around here, and the OIH etf looks like it is expecting the same thing. OIH reached it's near term target and looks like it will pull back a little. I would expect that the next pivot point will be a great entry leading up to hurricane season.

No individual stocks tonight. Good Luck,

DT

Sorry but I won't be able to post my regular update tonight. Pretty ugly day today, but there were some good shorts out there. It also seemed like all the traders fixed on a few stocks like BDCO. Look for stocks that held up today for potential long entries when we get the bounce in the next couple days.
Good Luck,

DT

I saw a lot of weakness today in some pretty good stocks. Some of the shorts I posted yesterday worked out real nice such as WSO,FFIV, and BBD. There is a chance we get a bounce tomorrow off Alcoa's nice start to the earnings season. Also, some of the indices are oversold on the hourly charts and are at support. Of course, people could take this as an opportunity to take profits on their materials holdings, so be careful tomorrow.

There was a divergence on gold and silver stocks from the actual commodity as happened a few weeks ago. Gold and Silver finished higher while the underlying stocks finished lower. When this last happened we had a quick bounce in the stocks and then they dragged the commodity lower. I will be watching to see what happens this time.
Here are a few charts that look interesting for tomorrow.
MVK is trading a tight consolidation. Watch for a break over the recent highs.
TRN has held above the breakout area and may find support here.
AKS may do well if basic materials runs tomorrow.
AL was running higher after hours and looks like they will gap over resistance.
ENG formed a doji near support although the drop was pretty steep.
EGY briefly cleared resistance and closed right at horizontal resistance. I think it will breakout soon.

I am also still watching everything I posted last night for long and short setups as some are still in a good spot.
Good Luck tomorrow,

DT

Here are the missing charts from last nights post. The analysis remains in last nights post.
















I forgot this one last night. A reader asked for an update on SMSI. This stock looks bullish, but looks like it will consolidate some of these ains here. I would expect it to drift back to the ascending trendline while the indicators work off some of the overbought readings.

Good Luck,

DT

I'm having problems uploading graphics again to blogspot. I will try again later tonight or in the morning. With the strong reversal on Friday for all the indicies, I didn't see too many charts breaking out of bases. While I saw a lot of charts breaking down, I also saw a lot of stocks that held up pretty well. I took a lot of profits last week in reducing my exposure, but I am not jumping in to a bunch of shorts yet either. In reviewing the indicies this weekend, I'm not convinced that we are ready for a sharp reversal just yet in the Nasdaq and Russell. Since these are the market leaders, I will try an wait for confirmation from them. Here are the stocks I will be posting charts of. Another thing I've been seeing is a LOT of weakness in Biotechs and Pharmaceuticals. Also, it looks to me like Oil Service stocks will pull back over the next few days and consolidate recent gains.

IRIX:Very powerful move and finding support near 12.
UBB: I think some of these latin banks are hurting with the rising ten and thirty year.
BBD: Same as above
WSO:Broke support and may be headed to 60.
CLDN:Doji above previous resistance is not bad considering Fridays overall action.
GWR:Not a strong break of resistance, but held up when markets were falling back.
NWRE:They keep trading up to resistance but haven't broken out yet. Keep an eye for the eventual breakout or pullback.
TMI:Has been closing positive despite some profit taking.
VIVO:Very volatile stock has been consolidating above previous breakout level.
ALDA: One of the few stocks to break resistance friday.
PMTI: Looking pretty weak
BOOM: Gave back some gains Friday but as long as it hold the trendline near 37.50 the should be ok.
MNST: Another one of the few stocks to break resistance Friday
FFIV: Might be breaking major support here and if Nasdaq does confirm a pullback then FFIV will be a great short.

I will try my best to get the charts out, but feel free to pull up the charts on your own tonight to see if your analysis lines up with what I'm saying above.
Good Luck,

DT