alice

NFTRH; US Stocks, Energy & Gold Sector

With the way I have felt post-flu, simpler is probably better since I have been incapable of complex thought processes.  So going with that theme, it does not get much simpler than this view of SPX breaking the short-term downtrend channel per the chart we used in a previous update to show the then-intact channel.  I covered my SPY short this morning, taking a loss.

spx

Similarly (although more sloppily), Russell 2000 is above its channel as well.  I gave this one leeway and kept short on the 1st break that held below the March high.  But today I am taking the loss and moving on.  I am long stocks and managing risk with cash for now.

rut

The Energy sector dutifully dropped the day after NFTRH 440’s positive analysis, thereby giving a buying opportunity (green shaded area).  It then bounced and today is hitting the SMA 50 and breaking a trend line.  So far… not bad at all!

xle

And then there is the gold sector, which played me pretty good in forcing me to cover a short on JNUG.  But nothing has been accomplished technically yet, because HUI is still dealing with resistance at the SMA 50.  What’s more, a bullish phase (instead of just a bounce) is not indicated until/unless Huey clears the February high.  I am remaining very patient here, and very lightly positioned.  I may try again from the bear side or very possibly, will just leave it all alone.  Coming events will dictate.

hui

The main point is, however, that a cross of the February highs that holds would be a longer-term buy signal.  So what if we miss a few points from here to there?  It would leave plenty of long-term upside still to go.  The other ‘buy’ opportunity would be upon a failure of 195 and ensuing downside.  But you don’t just buy gold stocks because they are going down.  You only buy them if a fundamental rationale is in play, and with the strong stock market, that is not the case.  So I’d love to see a gold miner washout that comes with signs of a stock market top.

Bottom Line

Long only in stocks because that is what the market is instructing.  Within this are several of the usual stocks we’ve noted.  They tend to be larger and less speculative.

Energy looks good, but we have called the commodity sector on a ‘bounce only’ until it proves otherwise.  So is Crude Oil in an ill-fated bounce?  Will the Energy sector care?  To be determined.  Meanwhile, it’s a good profit already.

Gold sector is as it has been; not ready and not yet having chosen a direction as HUI sandwiches between the SMA 50 and the key support at 195.