Despite breaking down below the 10 and 40-week moving averages a few weeks ago, ETFS Physical Palladium Shares ($PALL) is still holding on, and could potentially offer a low risk entry point on a close above the 10 and 40-week MAs, above $71.
$XOP has established one higher swing low within the base on 11/19 and potentially a second higher swing low if Monday’s low can hold. It will be important for $XOP to close above the 50-day MA, as this would also result in a break of the daily downtrend line.
Although financials reversed into the close along with the S&P 500, our position in the Direxion Financial Bull 3x ($FAS) from a Nov. 14 entry at 78.70 remains in good shape. Like the S&P 500, a short-term pullback should find support at the rising 10-day MA. The 20-day EMA is sitting at 85.76, which means that its already above the highs of the last base at 80.58. It’s a bullish sign whenever a major moving average climbs above our entry point in a trade, as there is more support to defend our entry, which in turn allows us to be more patient with the action.
Per our holiday schedule, today’s report will be an abbreviated version with no commentary. We have updated the excel graphics of the watchlist and open positions section above. Please note that we have two new buy setups on the stock watchlist in $MDCO and $BLMN. $MDCO is a buy limit order (not a buy stop), which means we are buying on weakness IF the price falls to our trigger.
Leadership from the small cap index returned on Tuesday, with the Russell 2000 posting a 0.9% gain while the S&P 500 and Dow Jones were basically flat. The S&P 500 and Dow Jones have stalled out the past two sessions and may need a few days of rest before pushing higher.
Monday’s gap down in Market Vectors Gold Miners ETF ($GDX), produced a new 52-week low for the year. Gold stocks and gold have been incredibly weak in 2013, and we expect the trend to confine with at least one more selloff to test prior lows of 2008, around $18.
We like the price action in $TBT over the past few weeks, as it held support at the test of the downtrend line in mid-November. We look for $TBT to hold above the 50-day MA as it chops around for a bit to digest last week’s movement.
The daily chart show the price action breaking above the short-term downtrend line last Friday, and pulling back to that line this week, which we call testing the backside of a downtrend line. A breakout above the current range highs could potential lead to a breakout above all-time highs at 26.90 from 2008. Our detailed entry, stop, and target prices are listed in today’s watchlist above.
The chart below shows the NASDAQ’s relative strength line vs the S&P 500. The RS line is already below the 50-day MA (while price of NASDAQ is still above), and has also made two lower highs and two lower lows, signaling a trend reversal in relative strength.
One ETF that will definitely need several more weeks of base building is the Guggenheim Solar ETF ($TAN), which has seen a pick up in volatility the past few weeks after a 50% run up from its last base breakout.