Next Big Trade In Search Of Bull Markets

21Jul/140

Cameco Breaks Above The 200-Day Moving Average On Volume

Uranium stocks had a nice start to the year, then had a big pullback that negated a potential Stage 2 breakout.  But if you look at longer term charts of uranium stocks you will see that their last major bull market ended all the way back in 2007.  In 2010 of course they started to initiate another bull market but the Fukushima disaster terminated that bull market in early 2011.  So uranium stocks are still very much a contrarian market, and with solid fundamentals with global uranium supplies not sustainable at current prices according to many analysts.  Today Cameco had a very bullish move back above the 200 day moving average on heavy volume, and it closed right at the highs of the day.  These uranium stocks have nice long Stage 1 bases that could easily launch a real Stage 2 uptrend.

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21Jul/140

Tweets, Headlines, and Charts for 2014-07-20

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20Jul/140

Stage Analysis Report

Notable items in the markets from last week:

  • Gold had it's first down week in 7 weeks last week.  I see a lot of bearish commentary on gold from various analysts currently, with some even predicting new lows still.  I think new lows for gold are extremely unlikely, given the fact that some mining stocks are now up over 100% from their bottom in December 2013.  In a transition period from bear to bull market it's not uncommon to see people scared of pullbacks early in the bull market because they are still conditioned by the previous bear to be scared.
  • Three great examples of strength in the gold stocks that I've mentioned previously are RGLD, TAHO, and SWC.  If gold were really that vulnerable here why would these stocks be acting so well?
  • The general markets had a big bounce back on Friday from the Thursday pullback.  Taking a look at something like IBB you notice that it held the 200 day moving average a few months ago and is now trying to hold the 50 day moving average.  If it continues to hold I think you have to be bullish on the market.
  • I see a lot of bears in the general market currently or disbelief that this rally can continue.  Previously I was thinking that if leading stocks couldn't get going again then the bears had a good case but stocks like AMZN and FB did start moving higher again last week.  So if we see more positive action in the leaders I think the bears have to wait a while longer.

For more information on Stage Analysis and how it's used check out this page.

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19Jul/140

Tweets, Headlines, and Charts for 2014-07-18

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18Jul/140

Tweets, Headlines, and Charts for 2014-07-17

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17Jul/140

Tweets, Headlines, and Charts for 2014-07-16

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16Jul/140

Camera On A Stick, Or Coal?

GoPro and coal have nothing to do with one another.  But I think they are about as far at the opposite end of sentiment and valuation spectrums as you can get.  GoPro (camera on a stick) is a cool device but is it worth more than most of the major U.S. coal producing companies, combined?  You can add up the market capitalization of Alpha Natural, Arch Coal, Walter Energy and combined it is much less than GoPro by itself.  When I think about how the market can hate one sector and punish it to oblivion and fall in love with another sector and bid stocks up to insane valuations based on pipe dreams it makes the efficient market hypothesis possibly the dumbest and most hilariously wrong theory ever invented.  But that makes it fun to trade against people that are confused into believing markets are actually efficient.  Getting back to coal though coal is still in a Stage 1 base, having produced multiple fake breakouts on the way down.  The current base is the biggest one yet though and it looks like coal stocks have finally hit a trough from which eventually they will get out of, and probably in a big way.  But you still have to wait for a clean Stage 2 breakout and see a pickup in volume to have the possibility of a real Stage 2 uptrend.  I'm still watching coal stocks for the eventual turnaround even though most people would rather watch camera on a stick.
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16Jul/140

Tweets, Headlines, and Charts for 2014-07-15

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15Jul/140

Commodities Re-Test Their Stage 1 Base

It's do or die time for commodities.  In classic Stage Analysis what we're seeing right now is a retest of a Stage 1 base that formed over multiple months in 2013.  Commodities then broke out of that base in early 2014 but are now retesting the base which is typical in a Stage 2 uptrend.  This retest is kind of a mixed bag in my opinion, because agricultural commodities are acting extremely weak and putting in new lows.  Energy is looking weak too.  Precious and base metals are probably the strongest portions of the commodities complex currently.  Which is interesting because they lagged at the beginning of the year and now they are leading.  So the resolution of this test should help determine whether commodities are in a new bull market or going back into a Stage 1 consolidation.

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15Jul/140

Tweets, Headlines, and Charts for 2014-07-14

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14Jul/140

Gold Stocks Hold Their Ground

GDX held up rather well today with gold down 2.40% for the day.  GDX was only down 2.64% and many leading gold stocks were down less than gold.  GDXJ was down over 4% but SIL the silver miners ETF was only down 3%, not much more than silver.  Impressive relative strength against gold.  This is the type of action you'd expect in a gold bull market, not in a bear market.  In a bear market the gold stocks would get trashed with gold down this much.  Also palladium was barely off for the day.

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