Thursday, May 29, 2014

Disconnect with stocks and bonds

I can't shake the feeling we've done this before...oh that's right, because we have done this before.  And inevitably one of these two markets are gonna be proven wrong and will reconnect with the other.  And every single time it's been stocks that are wrong and correct to meet back with the bond market.  It's never different this time.   As the market chugs higher and we get new trading signals to go long stocks, just keep this in mind for the big picture.  Keep your stops tight and be ready to bail if things turn south.  

-Jonathan M Mergott

Wednesday, May 28, 2014

Not a time to be buying gold

We are simply looking at this from a trading standpoint.  What is the market saying right now, and it's saying gold is not the thing to be buying, so find something else to do.  Hold your gold positions, but dont try to trade this.  A lot of things to talk about later, like the rally in the NASDAQ, that has saved it from certain disaster,  but we will get to that later, just know the path of least resistance for stocks is once again higher and for gold is lower, take that into consideration in everything you trade.

-Jonathan M Mergott

Tuesday, May 20, 2014

Nasdaq situation not improving

Wanted to highlight the daily nasdaq chart today, which is not improving at all.  I have mostly been keeping my eyes on gold and the gold miners and the nasdaq as I feel that these sectors will tell us where things are going.  If the nasdaq begins to break down, we can be certain the Dow and the SPX will follow.  In the event stocks break down, we can also be pretty sure gold will move higher either as a reaction to the move lower, or it will foreshadow the move in stocks by going higher prior to a nasdaq break down.   There is nothing of interest to note on the gold stocks, which are just drifting aimlessly, so let's look at the nasdaq. ..

Bulls are keeping things afloat as it dips near 4000, but there is no momentum to push it higher than the 4150-4200 area.  Price is butting heads now with the down trend line from the top of the head back in March.   Pressure is mounting and there must be a resolve soon so watch closely.   We will likely see a break lower in the next week or two and have a good opportunity to short the nasdaq with a target around 10% lower .

-Jonathan M Mergott

Tuesday, May 13, 2014

NY Gold show 2014

This Mon and Tues was the NY gold show at the Marriott Marquis in Times Square.  Couple of notes:  The attendance was non-existent, both from the visitors standpoint and the presenters and miners standpoint.  Nobody cared, we had Jim Sinclair speaking and a former presidential candidate and no one cared.  This was a forum for gold bugs in the financial capital of the world and no one cared.  The miners who were there consisted of 1 or 2 majors, and about 6 or 7 penny stocks desperate for financing. The other 10 booths were for newsletters and coin dealers.  If that doesn't say something LOUDLY about the gold market I don't know what does.  Anyway, as it states in my profile, I work as an investor relation consultant for Jim Sinclair and Tanzanian Royalty Exploration.  I know Jim has a big following so I took video of his speech at the gold show this year.  I'm not just saying this because I work for him, (I technically work for the company) but Jim is unbelievably intelligent and successful, and if you have ANY money invested at all, it is worth it for you to spend 15 min to listen to what he has to say about the economic world around us. Here it is parts 1 and 2.

part 1

part 2

-Jonathan M Mergott

Wednesday, May 7, 2014

Stock Market is starting to look scary

This post will be less talk and more charts, so lets get down to it.  Through out the charts, take notice of the divergence in the indicators vs price.

Common theme; price has been consolidating and indicators are headed lower, and getting close to the point where they are in correction territory.  We have not yet gotten a signal from the moving avgs rolling over yet, but everything else is setting itself up for a break lower so far.  On to the SPX, which has a similar picture...

Same picture essentially other than hitting slightly higher highs this year, which the Dow failed to do.  Now lets move on to the NASDAQ, which is a completely different picture, although equally as ugly looking.

Now this looks nothing like the other two.  We can see while the other two indices seem to be reaching a point where they are unable to move higher, therefore leaving the alternative as a possibility of there next move, the NASDAQ has already shown significant weakness, and it has translated in the form of a head and shoulders top, with a neckline at the 4000 level that has been holding so far.  We can also see the divergences in RSI and MACD that are present in the other two, are much more pronounced in the NASDAQ.  MACD has already crossed down hard below the zero line and has rallied meagerly almost back up to the zero line, but looks like it will fail to break above it before it heads lower again.  This crossover will likely coincide with a break in price below the 4000 neckline that has held up so far.  A break of such will likely be what triggers the other indices to begin to collapsing as well.  Pay close attention to the NASDAQ over the next few weeks, because it will likely spell out where all stocks are going to be headed in the near future.

-Jonathan M Mergott

Friday, May 2, 2014

One day a trend does not make...especially when that one day is Job's Friday

Exactly as the title implies, I wanted to just note a few things:

a)  Reaction to an unbelievable unemployment rate (And when I say unbelievable, i mean NO ONE is buying this BS) in the stock market is non-existent Dow down 18, SPX up 28 cents, NASDAQ up 5 at the time of writing this.

b) The metals and the miners are having a very nice day, but as I said this really amounts to nothing.  This COULD spark some momentum to get things moving from here, that remains to be seen, but as we stand it's meaningless.  The only meaningful thing that can be gathered is that customary move lower in the days leading to the Job's report has been very muted, and with this rally coming after,
 it MAY mean downside pressure has been exhausted.  Let's watch carefully, we should see a break one way or another very soon.

Some charts...

-Jonathan M Mergott