COAL STOCKS TAKE A POST-ELECTION HIT -- SILVER MINERS ETF HOLDS UP, BUT COEUR D ALENE TUMBLES-- GOLD MINERS ETF HOLDS ABOVE CHART SUPPORT -- DOW AND NASDAQ FALL BELOW 200-DAY LINES
CONSOLIDATED ENERGY AND PEABODY TUMBLE AFTER ELECTION... A couple of recent market messages showed new buying taking place in coal stocks. Two of the stronger stocks in that group were Consolidated Energy (CNX) and Peabody Energy (BTU). Unfortunately, those two coal leaders tumbled on Wednesday along with the entire group. Chart 1 shows BTU gapping sharply lower on Wednesday in heavy trading. In so doing, the stock also fell back below its 200-day average. It is now testing its September peak at 26. Chart 2 shows CNX also gapping lower on Wednesday in heavy trading. Although I had speculated that rising coal stocks were partially caused by a stronger Chinese market, it appears that they were also rising in hopes of a Romney victory.
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Chart 1
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Chart 2
COEUR D ALENE MINES TUMBLES, WHILE SILVER WHEATON HOLDS FIRM... Last Thursday's message showed two silver stocks hitting 52-week highs. One of them held up okay, while the other didn't. Chart 3 shows Coeur D Alene Mines (CDE) tumbling on Tuesday after a very disappointing earnings report. The stock is now testing its 200-day average. That's obviously very bad chart action. Chart 5, however, shows that Silver Wheaton (SLW) has held up much better. That helps explain why the silver mining group help up as well.
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Chart 3
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Chart 4
GOLD AND SILVER MINERS STILL LOOK POSITIVE... Stocks tied to gold and silver continue to do well. Chart 5 shows the Global X Silver Miners ETF (SIL) still consolidating within an uptrend (see circle). The SIL is finding support at its 50-day average. (Silver Wheaton is the biggest stock in the SIL). Chart 6 shows the Market Vectors Gold Miners Index (GDX) holding above chart support along its June peak. It also remains above its 200-day average. An upturn from here would be positive for gold miners and the metal itself. The GDX/SPX ratio (below Chart 6) shows relative strength in gold miners since July.
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Chart 5
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Chart 6
DOW AND NASDAQ FALL BELOW 200-DAY LINES... The stock market has taken a negative turn since Tuesday's election results. The Nasdaq is the weakest of the major stock indexes. Chart 7 shows the Nasdaq Composite falling below its 200-day average and chart support drawn along its June peak. Chart 8 shows the Dow Industrials also trading below its 200-day line. A Friday close below that long-term support line would be even more negative. Finally, Chart 9 shows the S&P 500 in the process of testing its 200-day line. Needless to say, a decisive close below that support line would be another warning sign for the market.
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Chart 7
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Chart 8
