As we adjust our master ETF market portfolio we have for the most part been on the sidelines the last few weeks, selling certain positions or keeping remaining positions on a tight leash. We have tweaked some of our internal working portfolios but didn't enter any new positions because we are waiting for a new SELL, WAIT - BUY signal to set up.
However last week issues plenty of signals that need to be reviewed. Our spreadsheet is almost finished and will contain comments that we aggregate from other sources to comlement the mechanical signals given by our cloudcatcher and candlestick analysis.
PRECIOUS METALS
Both GLD and SLV (our proxies) have edged slightly higher.
GLD - Current signal - HOLD
SLV - Current signal - HOLD
GDX - Current signal - HOLD
All precious metals are currently the strongest positions. These are also confirmed by bullish chart pattern developments.
GLD is above the clouds with solid support between 840 and 810.
Silver is in neutral territory right now with support near 12. Closing above the
cloud will be a major milestone given how thick the cloud is.
GDX is also well on it's way to repairing the damage. It just closed above the cloud
since early last year.
Despite bullish looking chart patterns, we are still cautious because we are looking at a potential market reversal by some promenant technicians. As the Elliot Waver's say - we know when the reversal is nigh by listening to politicians and declaring that the worst is over. Take this quote this weekend :
If you have positions in any minors it would be wise to keep maintaining your stops. Because we operate on a weekly pattern recognition basis your stops will protect you from sudden and violent losses. We use SmartStops.com whenever possible. We expect GDX to suffer more from any broad market reversal.
BASE METALS
For the sector we are currently using DBB which tracks copper, aluminum and zinc. The chart is simular to copper only. It did flash a sell warning alert this week.
The bearish kicking pattern is highly reliable. Given the context we are in a probable sell or close stop is recommended.
We still have a ways to go to repair damage, but clearly we bottom was made back in march (when our system triggered a buy signal). The good news is that as time continues the resistance levels will drop and we'll be in neutral territory later this year.
ENERGY
DBE is our energy index (oil, gas, etc) and it also has flashed a highly reliable signal, the bearish dark cloud cover pattern.
Frankly this one has been a tough one - since natural gas was having trouble for so long and continues to drag this one down. Once we exit we will most likely switch to crude exclusivly until natural gas stabilizes. On the other hand we did have a position in DXO - which is basically a double leveraged USO. USO also has signaled a sell alert. At this time we believe these alerts will turn into actual sell signals. So a good time to prepare to take profits, or tighten stops.
XLE is flashing a sell alert warning. Week signal but coinciding with the market and with a reaction in crude.
Natural Resources - Water
PHO has been in a buy mode since late march and had rallied very nicely. This week is flashed a sell alert warning, courtesy of the bearish engulfing pattern, which is of medium reliability.
What a nice bounch since March! Our system picked this up end of March. The good news is this reaction will be occuring as the cloud descends, setting us up for a more bullish set up later.
SPECULATIVE
FAZ issued a buy alert this week. It's too early to tell if this alert is the real deal as the signal is not strong, but should the market roll over this will be a screaming buy.
Summary - Just as many of these ETF's signaled buy alerts at the end of march, these are now flashing sell alerts. Because of the markets run up in the past 8 weeks along with other factors we believe we'll all see solid sell signal by the end of the week on many of these funds we've just reviewed (except gld and slv)
Therefore prudence is definitly your best friend, and more opportunities will come to those who are alert.
