S&P 500 Monthly Chart, Andrews pitchfork

Here explains Andrew's pitchfork better that I could : Here



This can potentially explain why the market is currently finding resistance at this level.  However, this market has been relentless and therefore more interested in mining stocks.  

Platinum new 52 Week High, Gold makes a move as well

All metals had a really good move today, above is Gold and Platinum.   Silver was the strongest by far.

Yesterday I suggested that the pull back was favorable as today you can see why.  The pull back gave this stock a lot more room to run today.  4.60% increase putting my 21 strike call options in the money.   The technicals look strong, however the stock is overbought and the MACD histogram is still having higher ticks.   Expect a retest of the 20 MA with in a month or so.  At that point we could see stronger buy pressure.

Not in as good shape as IMG.TO but YRI.TO Yamana Gold is looking good from a technical stand point and with gold continuing its upward movement breaking of the 50 day MA would be very bullish.  However, the bollinger band is right above it providing stronger resistance.  Currently I am sitting on call options for 12 strike on this stock as well.

PTM.TO  I am expecting to move tomorrow.  Platinum is making new 52-week highs, and the stock bounced from the 50 MA late on Feb 8th.  MACD has just had a positive tick, however stock is over bought.  My current strategy will be take 2/3 profits at 2.49, and pick up some silver or small cal oil plays.

With Oil being so high over the last quarter I expect producing small cap oil companies to do relatively well. Will be looking into small caps and posting potential stocks that are potentially tradable.

IMG.TO IAMgold makes a new 52 week High, mutli year high stands at 21.95

This stock has made a new 52-week high.  Next major resistance is the mutli year high of 21.95, which occurred in the fall of 2009.

Gold was very strong this morning.

PTM.TO update, IMG.TO call options

The MACD cross over has occurred, expect a positive tick on the histogram tomorrow.  

I have highlighted 3 areas of similar formation and similar location with respect to the 20 and 50 MA.  Twice before the current price action, once the price got above the 20 MA, the price just hovered for a couple of days on top of the 20 MA before taking off.  This is my expectation for this stock.  The first price objective is the bollinger band and over head resistance which will be around 2.49-2.50.  From there a test of the recent highs could be likely.  The reason I am liking this stock is that if if can get above the 3.00 mark it is in uncharted waters, with platinum potentially looking to test its 2007-2008 highs of 2200.

IMG.TO is IAMGOLD corp.  I entered into a spec trade using Call options expiring next week at 21 strike price.  I expect that the move up in gold is not complete yet, I don't think it will last to long but if there is a 20-30 increase in gold over the next couple of weeks, this stock is poised to break to new highs. I would not normally buy at a bollinger band but this pull back today is actually beneficial to my trade as the bollinger band will continue to increase and there is more room for this stock to move over the next few days.

Stock market..... not much I can say about it.  It is just continuing its relentless climb higher.  Why? not really sure.  There are no fundamentals behind this move, earnings were mixed and the market has not had a major correct to provide a buying opportunity.  There are a lot of people out there that remain bullish because of the technicals which is great, but no doubt there is a major top coming up.  You don't want to be caught with a gap over a stop loss.  The metals have corrected, hence why I am more confident trading small cap mining companies as they have actually proven there is a bottom to their recent move. 

Platinum ahead of Gold, PTM.TO expectations

Comparing other mining companies (gold/silver) such as SSB, AXR, EDR,  PTM has some more room to run based on the Slow Stochastics.  These are all on the TSX.

MACD: not displayed but the cross over looks like it will happen this upcoming week indicating a "buy" signal.

As gold and silver are working their way up through decently heavy resistance areas, Platinum has made the highest high since the recent financial crisis in 2008.  Therefore there is potential for platinum to have a nice run over the next few weeks before a correction to retest that 20 Day MA

GOLD jumps, Mining stocks follow. Review of AXR.TO

Lets start off putting the gold jump into perspective.

From the lows to the highs $30 move in a very short period of time.   Gold and other Precious metals are interesting for a couple reasons, they are a fear hedge and inflation hedge.  The current situation in the middle east is continuing to degrade as citizens are revolting.  A lot of people are saying that food inflation is partly to blame, as prices of rice for example are near there recent highs looking to breakout further.
The dollar also jumped today, strange as gold usually moves inverse to the dollar.  It is my expectation that the dollar will still get a bid when the stock market finally wakes up to the reality, however, unlike 2008 PMs will also get a bid sooner.  Any major sell off in the PMs space will be an incredible buying opportunity.  I was reading an opinion on Zerohedge which had an interesting note:

"While many wake up in cold sweats with the memories of 2008’s commodity crash and the concurrent U.S. dollar rally fresh in their minds, these nightmares are misplaced.  The U.S. dollar has been hyper-inflated since 2008 and the only thing that has kept commodities under wraps has been the absence of a sudden and violent mobilization of those dollars into real goods."

This is game theory, what does the prisoners dilemma teach us?  Always cheat.  if not you are going to be caught on the wrong side of the game.  As the US dollar strengthens, why wait for the dollar to weaken again before purchasing real goods?  Inflation in Cotton for example.

Website Reference

The scary thing about this chart is I could show you similar charts for almost all commodities (minus Nat Gas as it is a special case, Shale!!!).  Corn, Rice, Wheat, etc.

In North America only 10-15% of disposable income is attributed to Food, however in emerging economies this figure is closer to 50-70%.  Hence food riots are occurring around the world.  Once this inflationary pressure reaches our shores it will be to late for most people to prepare for especially fixed income retirees and people will lower incomes.

Looking at that cotton chart should really make most of you reading this think a bit more about real inflation and just like the wealth trickle down effect governments always mention, inflation is exactly the same.  We haven't seen it yet.... but no doubt it is coming.

Anyways less doom and gloom and more Mining Stocks!!

Today we have seen a nice pop in the AXR.TO, current holding a position in this stock.  So my mindset previously was to setup a Cover Call on this at $8.00 for a premium of 0.75, however, Ask prices have only be at 0.55 and I am unwilling to sell an option for that price.  I may be reconsidering the cover call depending on next week as I do expect this stock to pull back however more upside is likely until 7.25 ish. My enter was at 6.60 and it seems like I could hold this stock for a bit longer.

An alternative is to dump the stock probably next week, in anticipation of a pull back.  The technicals are signally that a potential pull back is likely but with silver / gold prices finally on the move, I wouldn't want to pull the plug to early. 

Slow stoch is overbought, the 50 MA and bollinger band is at 7.20ish just above which should be relatively strong resistance, and the MACD is about to challenge the 0 Level.  However, the histogram which indicates short term momentum has had growing strength. 

My 1-2 month prediction for all stocks I have been following AXR.TO, SSB.TO, PTM.TO, EDR.TO, FVI.TO (also a nice pop today), FR.TO is the following.

There is a potential that they are currently in a wave 3 to the upside. Which means a low risk trade would be waiting for a small correction, an either attempting to pick the bottom if you wanted to be more aggressive or wait for the high which we are in the progress of making gets taken out.  Enter after this high with a stop loss directly under it.  The risk would be minimal and if I am correct you have just entered into a wave 3 of a wave 3, which typically would be an extremely strong move.  If I am wrong you get stopped out almost immediately.  This is going to be my plan going forward and I will post specific trades as this up move dies out and we see a small wave 2 correction within the greater wave 3 unfold.

S&P 500, gets above 1300.

Rumors of QE3 are kicking around.  It appears that the Debt ceiling will need to be raised by the end of March.  Will more of the same continue to keep markets up?  Time will tell, however, there is divergences now on the MACD and Slow Stoch where momentum is making lower lows, while price action is making higher highs.  So just be cautious and keep a tighter then normal stop loss to avoid being caught on another 2% drop.  On the Bull's side, the S&P 500 has closed about 1307, which is a new mid term high.  If the market consolidates above the 1300 mark, more upside could be in the works. 

Either way I am back trading mining companies as many have now retracted 50% of their strong move over the last 4-6 months.  My plan is to write covered call options for April contract.   It is my expectation that these companies will range for a couple of months, but any pop over the next couple of weeks could provide a high premium for my current ranging outlook.

Interesting to note Platinum is the strongest metal so far, so I have a small position in PTM.TO, which is currently trading at 2.30.