Silver Miner Component Stocks-HL

I just went through the silver miners and found 1 stock that stood out above the rest, HL (Hecla Mining).

 Here's HL (green) compared to SLV. HL had a much bigger price advance then SLV, but also topped out earlier.

 HL is at a multi-year support/resistance level (currently support). Note the advancing volume on the last advance, this is healthy volume behavior that is rarely seen over the last 2-3 years.

 Surprisingly, 3C looks very strong on the daily chart.

 The hourly chart shows a positive divergence through most of June, currently n a leading position.

 The 15 min chart is also in a leading positive position.

The rule of thumb with triangle consolidations is to look for 5 points of contact before a breakout, we have 5 and HL s very close to a breakout.

I think the risk/reward equation is pretty good for HL here, even if you were to buy now and have a stop around $7.00. Position sizing can keep the risk below 2% of portfolio.

Tomorrow I'll bring you some gold miners

Closing Stats

Once again we have another day with a dominant Price/Volume relationship and once again it is Price Up/Volume Down, which wasn't so much of a problem yesterday, but considering today's advance, I really think volume should have picked up. This is one reason I would much preferred to see a pullback today then the volatile choppy EOD trade this afternoon.

The NYSE components came in at 3122 close up/volume down, in second place 1790 close up/volume up-that may be the silver lining so to speak. In the other two relationships, 1720 stocks closed down inclusive of rising and falling volume.

The Dow-30 saw 21 close up on declining volume and 5 close up on heavier volume-there were 4 decliners.

The NASDAQ 100 had 62 stocks close up on falling volume and 30 stocks up on rising volume with a total of a mere 7 decliners.

The S&P-500 299 close up on falling volume and 142 close up on rising volume, there were 50 decliners.

Finally the Russell 2000 had 1029 close up on falling volume and 336 up on rising volume with a total of 462 decliners.

The late day trade was starting to break down, but a rumor about MSFT sent the stock, AAPL and tech in general higher in to the close.

Considering the rumor (Steve Balmer is stepping down) is totally unconfirmed, this almost seemed like a "juice the market into the close" scenario. As I said earlier in the afternoon, higher trade would have me skeptical, especially considering the market's overall volume which has fallen for the last two days in to a market advance that looks a lot like short covering, which it obviously isn't at this point.

The lack of pullback in this move and the lower volume is most likely due to High Frequency Trading, short covering would see a rise in volume and we really haven't taken out an important technical level yet, except for the NASDAQ 100 and R2K, but since the other averages are not trading in line with them, short sellers will still have their doubts until confirmation is seen.

I'd like to see a pullback of some consequence, followed by an advance by all the major averages through resistance. If this happens, and Greece will be a big part of the if, we'll need to check the breakout for confirmation and make sure it's not a hollow or false move. Tomorrow will most likely be one of the most important days of the year.

Miners Trading System Signal

Nothing has changed tonight, NUGT advanced nearly 3% today and looks like it's putting in a base. Miners have underperformed the physical for quite awhile, however with the changes in OTC trade and investors starting to look for ways to buy gold (essentially) at a discount, the miners make sense and this may be why we are seeing some bottoming action.

Silver Miners as a groups did well today with a 1.77% advance for the 13 stocks n the sub-industry.

The Gold miners came n at 1.35% as a group consisting of 48 component stocks.

Just from looking at the sub-industry charts, it looks like the silver miners may outperform the gold miners, I don't know why, but that's what the chart looks like, still the gold miners look good as well.

I may have to test the miners system using silver miners.

 Today's signal and worth noting is the signal line (average) in red is now moving up, another apparent bullish development for the group.

 As for NUGT specifically, here's Time Segmented Volume, it is used the same way and very similar to 3C. Note the recent positive divergence in an area that looks to be a base.

 3C shows the same signals on the daly chart.

This is a closer look (15 min chart) at the area that appears to be a base forming on the daily chart.

I had some problems last night with a watchlist of miners that was way too big and included non-silver/gold miners, now that I have that under control, I'll be looking at specific names to see if there may be some nuggets so to speak.

You'll be the first to know!

VRML

Take a look at VRML-it's speculative, but showing a strong chart.

USO Update

I think the decision to release crude from the Strategic Petroleum Reserve was an opportunity. I just can't see the rationale in the decision and t seems the market feels much the same.

 USO 60 mn positive divergence

 USO 15 min positive divergence

And a 10 min positive divergence with confirmation.

It would seem to me that USO has some upside over the short to intermediate term, should Iran/OPEC announce cuts, watch out above.

Market Perspective...

At 1:27 with the SPY trading at $129.27, I showed you the volatility squeeze in the Bollinger Bands that suggested a highly directional move was coming and said, "A move up would be highly suspect at this point."


That's not because I don't think the market has what it takes to break out, in fact I think it has what it takes to break out and bounce-obviously Greek events tomorrow will be influential, but here's the longer term charts of the SPY, which I have shown you (particularly in to the pullback).

 SPY 60 min

 SPY 30 min

SPY 15 min


My comments were more specific about today in which financials are underperforming and volume is exceptionally low for such a move. The market looks as I said, "Stretched". There's nothing wrong with a pullback in an uptrend, it wrings out the excesses, prevents overbought conditions and keeps the trend healthy.


I'd rather see a pullback as long as it holds up technically, maybe holds around the 50-bar m.a. on a 5 min chart or so.


I'd prefer not to see the market try to break through support on an already extended move, there needs to be a local base that it can stage the breakout attempt from.


All in all, the market hasn't added much, currently at $129.36 as  write this, I'd gladly accept a pullback and a base to attempt a breakout, then a $.09 gain.

Current SPY trade...


The TICK Index is starting to move south. 

TICK Index

The TICK Index is showing us something akin to churning in the market.

 In the white box, the TICK Index has seen volatility pick up, hitting the lows of the day around 1:30

Meanwhile the SPY is seeing a volatility squeeze, look at the width of the Bollinger bands earlier today vs. the current reading. The tightening of market volatility with the TICK index getting more volatile is usually a sign of churning, in this configuration typically  strong hands dumping shares to weak hands.

Treasuries

Today it was the 5 year's turn. The bid to cover was 2.59, coming in well below the average, the indirect bidders, just like yesterday backed off again, only taking down 37.6% and the yield surged.

A quick look around the Treasury complex shows trouble in just about every part of the curve.

Here are a few examples:

 This is a 2 year bear ETN so the 2 years are looking bad

 Here's the 7-10 year-looking bad

The 1-3 year looking bad

This is TBF, a 20 year bear so the 20 year is looking bad.

This is all pretty recent, but it seems the obvious question of "who will be the buyer?" with QE2 winding down, has moved from a question to action.

Some possible plays include:

Long TBF (20 year short ETF)

Long TBT (20 year Ultra short)

Long PST (7-10 year Ultrashort)

Long DLBS (Long Bond Bear)

and that's about it as far as ETFs with any volume unless you want to short some of the long ETFs if you can.

I'll take a closer look at these tonight, but the last two auctions have certainly seen a change in perception. 

SPY Update

 The daily chart of the SPY looks pretty bullish from a price perspective, closing in on resistance, but I think the lack of volume and the fact Financials are lagging (there's not broad sector participation) is indicative of nervousness about the Greek intermediate austerity vote expected tomorrow. The market seems to be n a very cautious mood.

 Here's the 50 bar m.a. on a 5 min chart, which the SPY has been reacting with very well, a pullback below the average would likely reflect the nervousness about the Greek vote which will dominate trade this week, thus my Sunday night warning "Be nimble"

 Volatility is choking up right now, which is often indicative of a directional move, I'm guessing that move will be down from what I'm seeing, meaning the market looks overstretched and there isn't financial sector participation. A move up would be highly suspect at this point.

And 3C has shown pretty good confirmation today, it's now in the negative.

For short term traders, you might consider a quick trade with something like SPXU, SDOW or SQQQ, but you need to be nimble and I'd certainly use a trailing stop.

Market is looking a little over-extended

 AAPL looks ready for a break

 The Q's are looking the same, AAPL is the most influential stock on the NASDAQ 100

 XLE which has been supporting the S&P is at a gap resistance area

 And it too looks like it's in need of some rest

XLK-Technology is starting to show fatigue as well.

Market Sentiment

I rarely watch CNBC, usually only when I'm waiting to hear the FOMC policy decisions. I did use a video of Cramer on Wall Street Confidential telling Aaron Task how he use to manipulate the markets as a fund manager. That was a good interview and Cramer even said, "I'd never talk about this on my show". One thing he said that I think is a pretty accurate insight is, "The market's aren't about value, they're about perception" or you might say, sentiment.

Interestingly, today the market s behaving pretty well considering Consumer Confidence missed and declined by about 3+ points. As an aside, the CC numbers were out before 10 a.m., so when we talk about embargoes being broken, someone clearly leaked the CC number this morning so yes, it does happen, usually we don't hear about it though or get the information, today was an exception.

Here are the major averages.

 DIA has filled the gap it was having some trouble with and is headed toward the breakout level.

 On 6/21-6/22 I was saying the market wasn't ready to breakout and needed a pullback and there needed to be signs of positive 3C divergence during the pullback. Well we got the pullback the next day and this 15 min chart of the DIA shows the pullback was a healthy one.

 The NASDAQ has gone ahead and broke out. Volume wasn't special, but we do have a breakout there.

 And the hourly chart of the QQQ pullback

 The SPY has filled the gap as well and is close to the breakout area, even with financials lagging the market severely.

 Here's the SPY pullback

 As  mentioned, the S&P is up, if it weren't for energy, I don't think that would be the case.

 Financials are at 0% on the day, a major S&P component. Energy has made up for financials poor performance today.

And technology is doing well today, lifting the NASDAQ.

We'll have to see if there was enough accumulation to push through resistance for the Dow and S&P.

As a side note, keep an eye on CSUN, it's doing what was expected and is about $.08 off our target zone.

BCRX Follow Up

Did you set an alert for BCRX? I mentioned BCRX as well last night with a trigger for a potential long trade around $3.90, it has just broken through that level.

 BCRX daily chart with local resistance at the $3.88 level. This entry is also based on a swing trade method for entering long trades. We look for the daily price candle that has the lowest low/lowest high, which was yesterday and go long when price breaks above the signal candle's highs (above $3.88).

 Here's an hourly chart showing the breakout this morning. I'd like to see volume pick up a bit.

Here are some other potential stops, around $3.80 or below the breakout level of $3.88 for a tight stop. ADX, a trend indicator, looks constructive as it is moving up from the 10 area. ADX tends to become overbought with a turn down below 40.

CSUN Follow Up

CSUN is another long trade set up that I mentioned last night, you may recall the overall pattern looks bullish, but CSUN was showing indications of a pullback which is actually better for a long position, less risk, and a better entry point.

 Here's the daily chart, which looks like it's putting in a short term bottom after a substantial decline.

 Last night I said to expect a pullback, the false move is one of our best timing indicators and this morning was no exception. Note the false move in the red square box making new local highs, but it promptly failed as 3C shows.

 Here's the bigger picture on an hourly chart, there's a nice positive divergence that looks like it can support a decent move higher after a pullback.

I used a 50 bar moving average on a 60 min chart as the potential pullback area because CSUN has traded well around the average. Note also that RSI gave a negatively divergent signal on this morning's false move up. Watch for a pullback around $1.90 and we'll take a look at CSUN n that area as a potential long trade.