NFTRH; Market Update on US Indexes and a Word on the Gold Sector

Another quick snapshot of the US market.  It was a perfect hit of the channel bottoms and support levels.  While I remain intermediate-term bearish the markets that stance only firms up if lateral support (as shown below) is lost.

us indexes, daily chart

If you are wondering why there are no NFTRH+ updates about shorting, it is because I don’t see setups for it in the indexes.  Indeed, there were long setups (bottom patterns) for the two stocks highlighted last week, but not for these indexes.  Even the Semi stocks I am short (LRCX, AMAT and now MKSI) are more about a negative fundamental view than technicals, although the SOX did take a technical hit today.

sox daily chart

If the market bounces at support a short setup (for those who are bearish and do that sort of thing) could come about with a bounce of, for example, SPX to its moving averages at 2050 to 2065 or SOX to its MA’s at 667.  Or SOX could continue to weaken along with other former momo leaders (like RUT) while players run like lemmings to the venerable Dow and S&P 500 to temporarily paint those tapes.

If on the other hand the market fails support here, we get a bigger bear signal and for me personally, more conviction about shorting.  That is where ‘short the bounce’ setups would start coming into play.  Much like ‘buy the pullbacks’ in up trends, new down trends can be traded that way.

I covered my short against TQQQ and held the healthcare related stocks, although I had to obey the ‘stop’ on XLV, as I was too heavily involved in the sector.

Moving on, here is what the bearish broader items (weekly charts) look like.  Bounce or no bounce, this stuff is bearish.  Notice how TRAN doesn’t even have any recent support and RUT is threatening to go that way too.

us stock indexes, weekly charts

Add in another bad ISM report to go with the bad SEMI data and we have the makings of the counter-cyclical environment I have been parroting about for years now.  Not until the armor of confidence cracks in the inflated stock markets and economy will the gold sector be ready.  So I found it interesting that the gold sector went opposite this other stuff today.

It’s only one day and 2016 is going to be a long year.  But plans appear to be on track as of now.  The plan is for a bounce or more in the precious metals and increased net shorting on broad markets (when support is lost and setups are presented).