We have a small correction this week, but is it enough to bring down from over bought conditions? I was right about last week that a correction could be there near term, but before we get a significant level it went on its way up again.
Intermediate
SPY Weekly
The weekly SP 500 chart is filled with freaking bearish signals. The MACD is still showing that divergence. RSI looks toppy. The area of 95.44 looks a possible first target. Carl Swenlin seems to spot a rising wedge in the SPY, which have bearish implication.
EEM Weekly
Ditto for the emerging markets. The retest of the trend support looks to be significant, but a bubblish behaviour might be brewing. I think it has the capacity to go higher, but the higher it goes a bigger correction in the intermediate term awaits us. Very likely to go non-directional as well.
GDX Weekly
What a week for the GDX, missed all the shit rally here since i decided not to play with anything in USD until i get the rates right. What cause this massive climb is any body’s guess. but man does the picture on the weekly chart looks good.
A divergence at the RSI, Stochastic turning up and the MACD histogram moving to positive territory. I am tempted to get into this. However, this is gold equity we are talking about and in contrast to the SPY picture it makes it difficult for me to make what of this.
Short Term
SPY Daily
i like to think that a successful bounce off the 26 day MA bodes well for short term. The good thing is that it isnt at overbought level.
EEM Daily
Putting $36.50 behind them should be the catalyst for a nice short term rally. MACD looks good.
GDX Daily
In all honesty i have no freaking idea that it will break up this way. So how do we play this now? Right now its flirting with a important resistance. It might fail or breach it but i am not gonna guess here. The weekly picture tells me that it is probably gonna succeed. Perhaps a flag formation will be form here. Anticipate the success and failure of it and make the play accordingly.
Summary
Alot of nice bullish short term scenario. lets hope it turns out to be a good trading week.
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