Before the Bell May 18

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Tickers discussed: SPY QQQ IWM FB AAPL AMZN GOOGL MSFT NFLX TSLA  Commodities GLD SLV GDX SIL

Before the Bell  is premarket prep for active traders. The note provides detailed stock market technical analysis focused on the indexes and FAAMGs. Key levels and trading locations are provided, along with trading plans and timely commentary to keep you on the right side of the trade.

Earnings 

Although we are on the downside of earnings mountain, still plenty to keep us busy. Lots of retails names to note: WMT, HD, TGT, KSS, M

Companion Video 

The video is a detailed technical review of the indexes and FATMAAN names. All the key trading levels are identified along with commentary and trade plans for each ticker. Trade ideas are also discussed.  Run the video at 1.25x to reduce run time.

Find the Video  HERE

You can’t print Commodities

Commodities hold a special place in the asset world. Unlike Equities, Bonds, Bitcoin, SPACs, and US Dollars you can’t print them.  And because you can’t print them, they are not subject to arbitrary debasement.  They are the ultimate example of an asset that rigorously follows the supply / demand curve. After a 10 year bear market headlined in the beginning by over-production and massive capital destruction we are now at the end of the bear market cycle and entering a new commodity bull market.  As inflation fears grow and as both re-opening demand and new demand makes itself known, commodities are on the move. As shown in the graphic, commodities are outperforming most if not all benchmarks.  Graphic via FINVIZ

As some of the parabolic advances begin to correct in such things as $LUMBER and $CORN, I think it would be wise to be ready to buy the dip.  As purchasing managers around the world wake up to the fact that their are supply shortages all over the place for raw materials, they will go into panic buying mode to stockpile whatever they can get their hands on.  I think pull backs will be short-lived.  I am long Copper, Coffee, Sugar, Oil, Gold and Coal via various instruments

Commodities Big Picture – The Move is just beginning

Here is the 20 year chart of the Commodity index which is comprised of approx. 50% oil and 50% everything else.  The big take-away is 2 fold.  1. We were in a 10 year bear market for commodities. 2. Price is breaking above the downtrend line and above 10 year lateral resistance.  This thing is just getting started.

Precious Metals make a big Move

The precious metals complex is benefitting from crashing real yields (  10yr bond yield  –   10 yr Bond Break evens ) , a falling US Dollar, and a wobbly crypto market.  With inflation fears picking up and bond yields not moving much,  real yields are falling.  This combined with a weak Dollar are providing tailwinds. Something that would give caution to the trade is if  10 yr yields take off again toward 2% and / or the $USD takes off higher.

GOLD  – $GLD

While a case can be made for GLD being a bit extended on the daily chart, when you look at the weekly chart, more perspective can be gained.  Taking out $172.50, if it can hod through the end of the week would be significant as the level represents a noteworthy VoP resistance level. Also notice the PPO on the Weekly. Putting in a bull cross. A break above the zero line would put momentum in its bullish regime along with RSI.  Active traders can drop down to the 60min chart but for others with a longer timeframe, I favor buying either a consolidation or dip if we get it and look out to the mid to late summer Call strikes and let this grind higher in the background.   On Gold Futures, the next OH targets are $1875 then $1922.

Gold Miners – $GDX

I see 41.5 and then $42.5 as the next targets if price can clear and hold $39.50. I am expecting a pause / pull back here soon but that said, the RSI and PPO are both in their bullish regimes so the technicals are supporting a continued advance at this point.

 

 

Silver Weekly – $SLV

Price has been chopping between 20.5 and 27 for a year in what looks to me like a giant bull flag.  A weekly close above $27 would open the door for a moonshot into the mid to high $30’s on a measured move basis.  Looks like a powerful set up if we get the breakout.

S

Silver Miners – $SIL

The silver miners have been in a trading range between $39 and $50 for a year. A break and hold above $50 would target a move to $61 on a measured move basis. If you got a pull back into $46 it would be a nice entry back at the daily pivot. Tough to buy it here in no man’s land unless a potential $2 pull back doesn’t scare you.

INDEX CHARTS

A detailed walk-through of the levels and trading strategy for the indexes is given in the video ( link above) . The static charts are provided for reference. The FATMAAN names are also reviewed in the video along with trade ideas and other charts of interest.

SPY 2 hour

SPY 30 min

QQQ 2 hour

QQQ 30 min 

IWM 2 hour

$IWM 30 Min 

 

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