ISO, Energy top and miners
Indeed, it shouldn't be ruled out that the top for energy has been seen this year. Saudi Arabia could get control of its terrorism situation and there not be any disruptions to their pledge to curtail prices with whatever production is needed....Iraq could smoothly transition into a more peaceful place, the summer could be cooler than anticipated, supply of gas could be greater, or the world economies could slow quicker and more than anticipated, curtailing rising demand for energy...Maybe too the flattening of the yield curve will so derail the carry trade that money for commodity speculation will dry up...
I think the end of June is key...Iraq, OPEC supplies, interest rates and a bullish jobs report ought to all be factored in to the extent they are restraints to energy and a boost to the dollar....then we'll see..
Keeping an eye on similarities to the 2000-2001 run in energy....We saw a peak in May (a double top) followed by a 12.5% correction in the DXE, followed by a very strong run to September.
stockcharts.com[m,a]daclyyay[d19990609,20010609][pc50!b20][vc60][iUb14!La12,26,9]&pref=G
this year we peaked a little earlier...a similar decline would take the DXE all the way back to 450...Given its close right on 20 and 50 emas with indicators all a mess, I suspect a fall to 475 is well within the relms of reasonable expectations....
stockcharts.com[m,a]daclyyay[pc50!b20][vc60][iUb14!La12,26,9]&pref=G
On the HUI a hard leg down from here would take the index to key fib 50% retrace numbers and pretty significant support in the 150 area....170-175 shaping up as key in the short term...
stockcharts.com[m,a]waclyyay[df][pc40!b10][vc60][iUb14!Ll14]&pref=G
There's little to suggest getting aggressive in either group is warranted at this particular point, momentum and trend hardly being favorable...A couple of more weeks at least of Cash being King very likely.... |
