Cluster Of Pain

The bulls better start getting their ducks in order. We are now in a seasonally bullish week and instead of sticking it to the grizzlies we’re still stuck in the 1400 – 1430 cluster of pain. For almost two months the 1430 mark has effectively served as a brick wall and if Santa can’t lift us over it then we are probably looking at some grim candles at the beginning of 2013.

The volume hole has shifted slightly and is now centered near 1423. If you count out the quick stab lower in November then it’s clear that the cluster of pain spans between the 1440 and 1430 mark. And the current cluster was preceded by another one which spanned between 1425 – 1460. So obviously everyone is worn out and that’s usually when surprise moves happen, be on your guard.

Short term we’re back at the 100-hour SMA. Technically we can play the sides here as usual – the bulls do have a seasonal home advantage plus it seems that the 100-day SMA is holding up thus far. Mrs. Market seems to be in a crappy mood and wants to inflict as much pain as possible. Having said that however let’s not forget that emotions are for suckers and it usually when most folks give up and walk away that we’re seeing big surprise moves. A breach on the hourly panel may be a good way to hitch a ride higher, so let’s work with that.
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Here’s a goodie for you equities addicts: Alcoa is looking pretty interesting right now – it has climbed a pretty solid diagonal trend line and is now facing the moment of truth in the form of its 100-day SMA. Also notice that it’s below a weekly NLBL and the 25-week SMA. A push higher from here would probably get things going just nicely.

Cameco – already pushed above its 100-day SMA and is still fighting resistance on the weekly side. I think a long here with a stop below the 100-day SMA is worth a shot. May take some doing but it’s looking positive – bring some patience and a loose stop.

I still think silver is looking very interesting here. Either daily and weekly support holds up and we push higher or we trigger a stacked sell signal, which would be equally profitable. The key seems in what happens here on the short term side. You can play that 25-hour SMA for your entries – to the up or downside.

Things are slightly shifted on the natgas side but I maintain that we may see a big move here soon. Interestingly the 100-hr and 100-wk SMAs are lining up right now and that makes for a great ST entry with potential medium term implications. The daily panel suggests we hold here – of course if we drop below the daily then we have a great short signal. Once again the key for a good entry is in playing the ST panel – I’m currently long with a stop below the SMA.

Cheers,