Below are charts with the bearish intensity scores for the most bearish stocks on Twitter for the week and month ending 10/15/13.
Below are charts with the bearish intensity scores for the most bearish stocks on Twitter for the week and month ending 9/17/13.
Precious metals stocks came back to the most bearish stocks on Twitter list this week. Energy stocks like Exxon Mobile (XOM), Chevron (CVX), and Occidental Petroleum (OXY) are also a leading theme. With Dow Chemical (DOW) and Caterpillar (CAT) added to energy and precious metals it appears that my concern from last week continue and basic resources make up the the largest group of the bearish stocks. This could be an early warning about a resumption of the downtrend in the economy or deflation. Below are charts with the bearish intensity scores for the most bearish stocks on Twitter for the week and month ending 8/6/13.
We’re finally starting to see some hopeful signs for gold (GLD) and gold stocks (GDX). In our last update we mentioned that the chasing of precious metals by traders had stopped and that we’d finally got some capitulation in sentiment (calculated from the Twitter stream). This was the first thing we were looking for in order to create an environment where gold could create a durable low. Now we have our second piece of good news. Twitter sentiment for GDX is signaling that it is ready to attempt a counter trend bounce. This signal is created by the positive divergence between smoothed sentiment and price which subsequently broke above the prevailing down trend in sentiment (green line on the chart below). Volume on the recent low compared to the April low is also suggesting that GDX is trying to bottom. The high volume sell off in April forced weak holders of GDX to capitulate. In addition, it caused fear even among long term holders. This relieves some of the overhead
We haven’t done an update on gold and gold stocks since the end of February. The reason for this is that their charts have been broken. As technicians we look at price, volume, trend, strength, sentiment etc. to help us determine the likely path of a security. But, when price breaks down hard it skews the chart pattern so badly that the most important component for technical analysis (price) becomes of little value (other than the obvious message that the stock is broken). As a result, all we can do is wait for enough time to pass for the stock to reassert a readable pattern. Finally we’re starting to see a trickle of information from precious metals charts. In early February when GLD was trading above 160 and bouncing against the underside of its short term down trend line we gave up almost all bullish hope for the metal. By the 13th of February we stated that if GLD traded back down to 150 that “GDX will almost certainly break
The list of stocks above had the most Bullish Intensity on Twitter during the last week. Below are the Monthly scores.
It’s make or break time for gold (GLD) and gold stocks (GDX). We mentioned last week that we weren’t very optimistic for precious metals based on the extended down trend, the break of medium term up trend lines, and the consolidation of GDX below a longer term down trend line. GLD has held up better, but it now appears that it is resuming its downtrend. We mentioned that if $160 was broken then $150 would most likely be back in play. Well, $160 broke yesterday and today we got a close below it again. Meanwhile GDX in in the $41 area visiting the lows from last July. This just isn’t a good situation for precious metals shares. If GLD revisits $150 then GDX will almost certainly break below $39 in a very sharp and very ugly way. There are a few positives. GLD is still above the up trend line from last May’s lows. Smoothed Twitter sentiment for GLD has a small positive divergence with price (even though the
A few weeks ago we did an update on Gold (GLD) and Gold Stocks (GDX) where where stated that it was critical for them to hold their trend lines from the May 2012 lows. Well GLD has held the trend line, but GDX has not. We’re getting concerned that gold stocks are going to renew their down trend. We’ll give the negatives first, then move on to the positives (or what might better be called a sliver of hope). We already mentioned GDX breaking its most recent up trend line. Now there’s more bad news in that GDX has also broken back below the downward sloping trend line that goes back to the August 2011 highs. It is now consolidating below that line. When GDX broke and consolidated above it we thought the worst was over for precious metals. Now that it’s consolidating below the odds favor a resumption of the down trend. The break of both trend lines brought with it very negative Twitter sentiment that shows the backs
Gold (GLD) is currently being compressed in a triangle between two intermediate term trend lines. One is upward sloping from May and the other has a downward slope that began in October. The apex of the triangle will be reached within a few months so it won’t be long until we finally get a longer term direction for precious metals. During late August and early September of 2012 both GLD and precious metals shares (GDX) broke above a downward sloping trend line that began in late 2011. The fact that GLD and GDX have both held above those trend lines to the point where they have been eclipsed by new intermediate term uptrend lines (which started in May) bode well for a break to the upside. Although GLD has only corrected by 13% while GDX has corrected by 20% from the October highs, both of them have retraced approximately 60% of the rally out of the May lows. This is about the maximum retracement that most securities make if
Over the past few months we’ve noticed a pattern that has a fairly good track record for making trades based on our Twitter Sentiment indicator. That pattern is a divergence from price that is followed by a break in a trend line that has been confirming the move in price. We’ll use GLD as an example to illustrate the pattern, then we’ll do an update on the prospects for gold and gold stocks. On the chart below you’ll notice that over the two month period of June and July 2012 that GLD was in a minor down trend. During that time period Twitter sentiment confirmed the down trend by painting lower highs (it was in fact confirming the downtrend that began in February). However, in late June, smoothed sentiment for GLD recorded a very low reading followed by a higher low as price was compressing in a triangle. That provided a set up where all we needed was a break above the confirming downtrend line on smoothed sentiment as a