This is shaping up to be a very important and a very interesting day for the precious metals and the mining names. With oil inventories putting pressure on U.S. oil prices in general, it remains to be seen if oil's impact presses other commodity prices lower -- in particular, the precious metals. [more]
My intermediate-term pattern work in U.S. Steel (X) argues strongly that last week's low at 51.33 ended the correction off of the January 3 high at 61.18. If proven accurate, that means the price structure held the top of its 8-month rounded base-like accumulation pattern ahead of another powerful upleg.
Notwithstanding the intense volatility exhibited by X on a regular basis, my near-term work also indicates that the upmove off of last week's low at 51.33 exhibits the requisite form indigenous to the start of a new upleg.
With the foregoing in mind, I will remain long X unless and until 51.33 is violated, otherwise looking for a new upleg that propels prices to new post-July highs above 61.18 towards 65.00.
My near-term work shows Apple (AAPL) at very overbought levels for the most recent upleg from the Dec 31 low at 321.31 to today's new all-time high at 346.64. My pattern work has identified the next optimal swing target window at 346.40- 349.60 for a peak and the initiation of a correction in AAPL.
Of course, with 350 just above my next measured objective, and because many research analysts on the Street have 350 as their current 52 week target, let's not be surprised by a pop to 350. In fact, a 1% overshoot of my target will take AAPL to 352.50, which is just 1.8% above the price as we speak.
Putting all of this together, we get an optimal target zone of 349.00-352.50 prior to the onset of a correction. Lastly, AAPL earnings are due out next Tuesday after the close. If the stock remains overbought, and still bouyant into next Tuesday's close, then a sell-the-news set-up -- and a potential lower buying opportunity -- will be in place.
This morning's announcement by the Bank of China to allow U.S. trading firms and individuals to open accounts (in its NY branch) to buy and sell yuan might have signaled a significant move by Chinese authorities to let the currency both freely trade and to allow market forces to push its value higher -- to avert criticism prior to the China Premier's visit to Washington next week. [more]
The enclosed hourly chart on the Proshares Ultrashort Oil & Gas ETF (NYSE: DUG) represents what I think is the final downleg of the larger bear phase from the July 2010 high at 78.27 to the Jan 3 low of 36.47. If 36.47 happens to represent the low for the move, then we will need confirmation on a sustained climb above 38.08, which should trigger upside follow-through to 39.70-40.20 quickly thereafter.
Conversely, inability of the DUG to hurdle 38.08 before it presses back beneath today's low at 36.85 will argue that the pattern needs more base-building work prior to a sustained recovery rally period.
My longer-term work on Amgen (AMGN) argues very strongly that the massive coil formation that has been carved out since the March 2008 low at 39.16 is morphing into a major base-like pattern that has the set-up and the potential to propel the stock to test its multi-year resistance at 65.00-66.50, possibly on the way to 70.00 thereafter. [more]
The big picture that is evolving in the SPDR Gold Shares (NYSE: GLD) shows that yesterday's high at 139.00 represented the third failed attempt to hurdle and sustain above 139.00 during the past eight weeks. Today's sharp gap-down open and downside follow-through (so far) leaves behind a triple peak that is putting increasing pressure on the Nov-Jan support line, which cuts across the price axis today at 134.75. [more]