Major market indexes churned their way to new highs by mid-week before tailing off into Friday's close. The downside damage, at least from an index perspective, was minor, as the NASDAQ Composite, NYSE Composite, S&P 500, Dow, and Russell 2000 Indexes all remain above 10-dma support.
The calm surface of the major market indexes, however, masks some of the turmoil seen among individual stocks. Semiconductor equipment makers went down in flames on Friday after Applied Materials (AMAT) missed on earnings Thursday evening, sending the stock gapping through 200-dma support. AMAT's semi equipment cousins KLA Corp. (KLAC) and Lam Research (LRCX) sold off in sympathy with both triggering short-sale entries along prior left-side highs in double-top style and 10-dma/20-dema support.
Big-stock telecom Cisco Systems (CSCO) reported earnings Wednesday after the close and broke down on Thursday, triggering short entries at the 10-dma and 20-dema before bouncing off the 50-dma on an intraday basis. On Friday it presented an optimal short entry as it broke back below the 20-dema and then slashed through 50-dma support on heavy selling. Rallies into the 50-dma would present short-sale entry opportunities from here so can be watched for.
The Mining - Metal Ores industry group now ranks #1 among the 197 O'Neil Industry Groups as it takes assumes a pronounced leadership role. In cases where leading mining stocks and their associated sector ETFs test 10-dma support as they build short flag formations with volume drying up, long entries may present themselves using the 10-day line as a selling guide.
Big-stock institutional favorites among the gold miners have been buyable on low-volume pullbacks to support. Here we see Agnico-Eagle Mines (AEM) pulling into 20-dema support and rallying off the intraday lows on Friday as volume declined, while Barrick Mining (B) continues to press to 52-week highs after reporting earnings last week. Newmont Corp. (NEM) posted a VDU pullback to the 10-dma on Thursday and then shook out at the line where it was in a VDU long entry position using the 10-dma as a selling guide. All three names remain well above recent breakout levels.
Gold and silver continue to consolidate with gold now working its way through a 17-week base with tight weekly closes over the past several weeks. Silver posted an MAU&R long entry at the 10-dma and 20-dema on Friday which can be implemented using any silver ETF, such as the iShares Silver Trust (SLV) or the Sprott Physical Silver Trust (PSLV), for example.
We have seen silver miners Coeur Mining (CDE), Hecla Mining (HL), and Pan-American Silver (PAAS) launch higher after reporting earnings the prior week, putting them in extended positions. First Majestic Silver (AG) reported earnings on Thursday morning and shook out hard at its 10-dma and 20-dema to post an MAU&R. AG reported earnings of 11 cents, handily beating the three-cent estimate, while missing slightly on revenue estimates which increased 94% over the same quarter a year ago. Endeavour Silver (EXK) reported earnings on Wednesday morning with a three-cent loss vs. estimates of a one-cent profit but revenue came in at $85.3 million, surpassing the consensus estimate of $81.48 million by 6.67% and increasing by 46% vs. the same quarter a year ago. Like AG, the stock posted a deep MAU&R at the 50-dma before rallying to regain 10-dma/20-dema support where it remains potentially buyable using the two moving averages as selling guides. If silver prices continue to rally, it is likely that these stocks will eventually follow the group higher.
Buenaventura Mines (BVN), which is now developing copper mining projects in addition to its current portfolio of silver and gold mines, posted a pocket pivot at the 10-dma on Friday. This is a continuation pocket pivot following last week's breakout and actionable as a long entry using the 10-dma as a selling guide.
Bitcoin ($BTCUSD) reversed hard on Thursday as it briefly posted a new all-time high before getting slammed into 50-dma support on heavy selling volume. Since then, however, volume has diminished sharply and it is now showing VDU action at the 50-dma as selling volume dries up. This could serve as a potential long entry position using the 50-day as a tight selling guide.
We discussed crypto-miner turned Data Center infrastructure provider IREN Ltd. (IREN) as a name to watch as it held tight just above the 10-dma. On August 7th, the company announced it was shifting its focus towards data center infrastructure services, likely accounting for why it has held up better than other crypto mining stocks. On Thursday, IREN came in to test 10-dma support and rallied on volume to post a pocket pivot and then repeated the trick the next day. This becomes actionable as close to the 10-dma as possible using the line as a tight selling guide.
The Market Direction Model (MDM) remains on a BUY signal.