Commodities Countdown

My Chartlist Reads Like A Mystery Novel

Each week I roll through my charts preparing for my Commodities Countdown Webinar. For this week's webinar, I could not be more pulled in different directions.

Which bookshelf should I be staring at? Below we can see The Time Thief, evermore, blue moon, Marked, Betrayed, Chosen, Ink Exchange, The Longing, and Change of Heart. Those titles represent the emotional swings we experienced this week! They make pretty strong Stock Market references for traders being whipsawed daily and weekly.

Then we have the books I've come to rely on in my career. Those all seem to be fighting this sideways market. The $TSX is breaking out to new highs. The US market is making a series of lower highs. The Summation Indexes are breaking down. The Bullish Percent Indexes are positioned for a breakdown. The % of stocks above the 200 DMA are breaking below the levels that usually mark a significant pullback for equities. Commodity charts are ripe for big moves, but the US Dollar Chart looks like they are about to be crushed.

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Fence Sitting - Webinar Skim 2016-10-21

When we read about the stock market, Jesse Livermore has some of the more memorable quotes. "It was never my thinking that made the big money for me. It was always my sitting."

Well, here we are fence sitting but I am positive that is not what he meant. The market is making small losses but no real sell off. Recently we made three-month lows but no real follow through. Crude is hovering at $50 whereas Gold is trading between $1250-$1270.

Earnings pops-and-drops seem particularly acute this time around. However, the big names like Microsoft, Alphabet, and Facebook are doing well and pushing to new all-time highs.

For the Commodities, there was no real strong directional change this week. Below is the West Texas Crude chart ($WTIC). It stayed above $50 for the second week in a row.

Gold fired up on Tuesday, only to retreat by Friday. It closed the week $10 higher. We do have a positive MACD crossover from a low level. We could see a rally from here as the gold miners briefly started to outperform the metal. It is something to watch.

I spent a good portion of the webinar renewing the Solar stocks. Here is an example of First Solar (FSLR). These stocks are tremendously volatile both directions. Note how well they respond when the SCTR has given them up for dead and then they start to re-emerge. For those that like to bottom fish, there may be an opportunity on some of the solar names.

The webinar lays out the broader perspective on more of the solar stocks. Here is the Commodities Countdown webinar recording from Thursday, October 20th. 

Commodities Countdown LIVE! with Greg Schnell - 2016-10-20 17:00 from StockCharts.com on Vimeo.

Webinar // $CRB Commodities 0:00 // Energy 15:00 // Industrial Metals 20:00 // Precious Metals 24:00 // Ag 31:00 //Autos 37:00 // Foreign Indexes 38:00 // Solar Stocks 42:00 // Q&A 52:00//


 You can click on this link to watch it in a new browser window. Commodities Countdown Webinar 2016-10-21.

Enjoy your weekend.

Good trading,
Greg Schnell, CMT, MFTA.

Dollar And Yen Snap Trend Lines - Webinar Skim 2016-10-06

There is a general theme this week that I want to tie a bunch of charts together with. A lot of the charts from today started their rally with the lows of late January and early February. Now it seems like this uptrend is being threatened on many of the charts. Even if they don't all change direction on the same day, it is important to note that we could be looking at a major investor rotation away from some of the trends that have been with us most of the year. Two of the most notable trend lines that snapped this week were the British Pound and the Japanese Yen. However, Gold, Oil, Natural Gas, the US Ten Year bond, and many other charts are changing or testing meaningful 6-month trend lines.


I'll start with the Yen ($XJY). The Yen has been tucked in a trading range for the last two months. While this week's action was still within the trading range, a couple of technical signals fired. First, the uptrend line was broken. Secondly, the 65 SMA in green was also broken. Both had been meaningful support for the currency. Looking at the zoom box, this week's price action actually rolled the 65 SMA over and it now is sloping down. Typically the Nikkei ($NIKK) strengthens when the Yen weakens. This may cause the Nikkei to move higher out of the trading range it has been in for the last two months and it could break out meaningfully from the 8 months of resistance around the 17000 level shown in blue.  Notice the Nikkei changed trend around the end of January. I have placed two circles on the currency chart. The Yen broke out above the trend line in December, pulled back and then started to move higher. That major change in the Yen happened while the US market came under heavy selling pressure from the end of December to February 10. Now we are on the other end of the trend. 

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The Bank Review Three Months After Brexit - Part 2

This is a continuation of the article: "The Bank Review Three Months After Brexit"  Click on the link to read it first.

In hindsight, Brexit injected fear into the market and the market has rallied hard for three months. Let's zoom in on some of the banks close to the issue.

HSBC is one of the world's largest banks residing in the UK. With an SCTR ranking of 86.7, it is in the top quartile for large-cap price performance now. We can see the highs of $49 and $48 in 2013 and 2014 have created a ceiling for the stock but this level is a long way away from the current price. HSBC really jumped off the 4-year lows. As the stock is at a major resistance level, this is an important test for the stock. So far the stock broke out to a new high above $38.24 but then failed to hold it. That is not a positive. 

Continue reading "The Bank Review Three Months After Brexit - Part 2" »

Bank Review Three Months After Brexit

This article was first published on June 27, 2016. All of the charts have been updated to check our progress.


Since the sub-prime financial crisis, there has been a lot of discussion about Too-Big-To-Fail, Bank Stress Tests, and Central Banks using unique tools to try and keep the market on an even keel. One of the problems in the world is the deeply indebted government entities. What makes that issue unique is our global commercial banks own government debt as AAA debt to support their loan book. The assumption is that sovereign nations can always raise taxes to get paid back. 

One of the keys to recognizing the Financial crisis in 2008 was that the banks started showing lower lows and lower highs while the indexes tried to make higher highs. Something seemed wrong.

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Commodities Totter on the Teeter-Totter - Webinar Skim 2016-09-15

Commodities continued their pullback this week. The problem is that a lot of them have been teetering on support. This week marks a break in my optimism. First, Crude oil finished the week at the uptrend line. On the webinar, I used the close rather than the intraday lows. The bottom line, oil needs to hold here.

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The Yield Swing Takes The Energy Market With It

As the 10 Year Yield ($TNX) broke out of its trading range, it injected volatility into the market between Friday and Wednesday. Until this starts to settle down, it is likely that we see wide price swings each day affecting a lot of the asset classes. In the near term, this range at 17.5 may hold but the highs for the year are around 20.0. The 200 DMA at 18.0 could also provide some upside resistance.

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