Dec 16 – Friday

Friday review:

SPX WKLY DEC 12 – This looked like a temporary top forming.

SPX Dec 14 – The markets started to drop a bit, but  on the 15th they turned higher agin, so…

SPX – Back to the weekly chart and so far it still looks like a temporary top could be forming.

With the recent break out and after remaining strong, a pull back could be a place to look for buying opportunities.

USD – The USD broke out higher and still looks strong.  We see slight divergence forming. With this break out, the dollar gets a new measured move target of near $106, and $115 possible on the weekly chart, if the dollar forms as right translated. If it forms as L.T. – It could be preparing to drop into an ICL, the timing is right for that too.

WTIC – Oil has been pulling back in an orderly manner, and many energy stocks ( And the XLE & OIH) have done the same.  They remain bullish looking, lets take a look at a few of them.

I have been discussing WPX for a while, because it is acting well in this consolidation. It broke out and has held up well, but this could also drop to the 50sma, based on the stochastics & MACD cross. It may just continue sideways, but this is in an uptrend and could be a good buying opportunity ( Now or soon, depending on your trading style).

NOG – I sold my position in NOG a few days ago, but it is holding up nicely on the 13 sma. When I see a stochastics that is still overbought and OIL possibly consolidating, I would say that NOG could just bull flag here or even drop to the 50sma in an a-b-c type pull back.  That means that it might not be ready to buy yet, unless one wanted to buy with a stop below the 50sma. I do like the set up and sector at this point.

AREX –  I have been pointing out AREX, and it is doing what I think many of them will do.  It is consolidating and looks to be preparing for higher price in the future. It held the 10sma for a while, and now reversed off of the 20sma.

REI 2 Charts – Yes, that should say 2016 on the chart. It has been a nice run at a glance, but you can see that the dips in the past have been multi week dips (Tough to buy & hold & boring at times). This is a bullish stock( $4 to $13 in 2016)  and those dips are just part of the bullish run higher. It is at the 50sma ( possible support).

REI WEEKLY –  $11.00 looks like possible support in an uptrend.

NADL – This is a controlled low volume pull back and remains bullish.  This doesn’t look like much of a run, but it did just run from under $2.5 to $5  in 1 month.

So you may want to check on your Energy list and see if the energy stocks that you follow are also pulling back in a nice low volume orderly manner ( OAS, WLL, ETC).  With the surge that Energy had after the election results in the U.S., they may be setting up as good buy opportunities.

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GOLD, SILVER, MINERS

I mentioned in yesterdays report what I am looking for in this sector. I really need to see a reversal this week, so that the weekly charts show the potential of an ICL. I am going to do a bit more research for the weekend report, but I will discuss a few things for the Friday trading day too.

GOLDEN BULL – I need to reiterate that Gold had a stellar bull run in progress right up into November 3 ( Elections in the U.S. are Nov 4th).  It is from the time of the election results that we see a drop and that drop slowly became quite ugly. It no longer fits the description of a normal 50 – 61.8% drop.

CAN THIS RECOVER?  Yes it can, but at this point in “Time”, we have to be open to the idea that the changes that we have seen could be longer lasting than anticipated. I am still holding some Miners, and some have held up while others are stopping people out.  If we get a sub par bounce, I will just probably sell and move to another sector for trading. 

** At this point, I need to restate something. I have repeatedly mentioned that traders have various styles and abilities. Also circumstances.  Some are in front of a screen, others are not.  So some traders will try to buy each reversal before it is confirmed to “catch the lows”, other conservative ones should wait until GOLD crosses the 10sma and then puts in a ‘confirmed’ swing low. I have admonished no leverage , unless you are a very experienced trader in front of your screen all day. Gold HAS NOT crossed the 10sma and put in a confirmed swing low.  Now look up at the 2 Gold charts posted above  again. In that last month, I have received (just a couple) emails that stated, ” I am all done trading. This is brutal and I need to stop trading for a while”.  I do understand that frustration, because Gold has been bleeding down day after day, but even at that, the above chart is not death dealing unless one is over-invested, using leverage, or not trading according to the proper style that would best serve them  (Waiting for the confirmed swing low). PLEASE be careful or do not use leverage and hang on hoping for a pop. Even JNUG / NUGT can cost 20% a day on that position.  I also have others emailing saying  ” I hope this drops further! I have been patiently waiting and this is great! I can’t wait to buy this dip.”  You see how sell offs can affect us depending on our positioning.  I own Miners, and understand the frustration.  I do believe that we should get a relief rally soon.  Looking at the above drop from November, it wouldn’t take much to recover that too. Lets continue on…

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GOLD WKLY – This is my line in the sand for now. And you have to think that we will get a good size bounce from these oversold conditions, and I would expect the threat of inflation to reinvigorate this bull, but I dont want to be a ‘perma-bull’ in a market that could be dying. I will explain more in the weekend report.

GOLDs 30 minute chart put in the lows as I was watching it yesterday. Let’s hope they hold after 8:30 a.m. eastern time, when Gold often accelerates in its trading

GDX – possible ‘abandoned baby’  if we gap open Friday and do not close that gap. At the very least, it looks like a reversal candle. Higher price Friday will give us a nice Weekly candle.

NAK –  This is a stock that many are becoming interested in now. I have been tracking it since it was 30 cents, and it just continues to act correctly.  With this in mind, please remember that “Acting correctly” involves a good size or prolonged correction at times, like we saw here from the AUGUST highs to October lows.  looks great now, but those were tough times for those of us in the BUY & HOLD crew.

That said – NAK continues to act well. This ‘square’ may play out like the November ‘square’

 So that is where we are at . Friday will speak to us and I will be listening for the weekend report.  NO MATTER WHAT, we should be getting a bounce at the very least soon, and it will be time to ride or unload some positions. 

 TRY NOT TO GET OVERLY DISCOURAGED with the discouraging weakness in Gold & miners.  It can change direction quickly, or we will change direction.  Gold has been breaking down since the election, and this is the line in the sand.  We WILL make good trades in the future, even if it has to be in another area.  In the meantime, ENERGY and METALS like CLF, VALE, FCX, AKS, etc, etc, could be pulling back and ready to offer us an upside run of their own.  I wanted to mention quick trades in Shipping stocks, but I do not dare to for the sake of possible pain and suffering,  but TOPS, DCIX, GNK, DRYS, etc are at it again. Pure speculation.  I recommend you do not trade them, especially extended ones, if you are not a very experienced trader sitting in front of your screen every minute that you can be.  I will cover a little additional trading thoughts after signing off here. Enjoy your Friday, pray for a reversal in Precious Metals, and have a great weekend.  Thanks for being here, as always!

~ALEX

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ALEXs PICK – Along with TGB, WRN has been a nicely performing Copper pick. I believe that like NAK, these could just be BUY & HOLD for the longer term traders. I believe this based on weekly charts and current price action.

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WRN DAILY CHART #1 –  I traded this last spring. This might drop to the 50sma, depending on what Copper does, but it also is in an area of support similar to this past June.

WRN WEEKLY CHART #2

TGB pointed out near 50cents

The run to almost $1.00, and it is now pulling back again. I’m watching for another entry.

TGB – Again, the big picture looks good as long as Copper is bullish.

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By request.  I was asked to look at a few Biotech stocks like HALO, LJPC, CELG, etc.  and give my opinion.  To begin with, I looked at the IBB and XBI, and they are “O.K.” – they are under their 50sma on a daily, so they are rather neutral to me at this point, but a push above the 50sma would help. Let’s look at the weekly charts.

XBI WEEKLY–  I am somewhat neutral on the weekly chart, because it did POP a few weeks ago, but it could continue to drop from here, like it did in October. The low risk entry was in Oct at the weekly 200ma, but this dip may be worth watching for another sign of strength.

IBB – This looks better, because it is sitting on support. It broke down ( to tag the trend line) and recovered on its Oct Pop, which was a high volume sign of strength.  So next, let’s look at the stocks that I was asked to look at.

JUNO CHART #1 –  Actually, I do see a reversal at the lows, but this stock has performed miserably, and I cannot say that this is a sign that that will change. Breaking from a wedge, this could pop and run for a quick trade, it may even run to the 50sma, but it is risky when you are dealing with Biotech and potential bad news.  Something slammed this in November, and whatever that was could still be present. Please look at the daily chart below and the weekly chart that follows.

JUNO CHART #2 – All time lows, no support. Yes, this could bounce and tag that break down at $24, but just be aware that this is not ‘low risk’ until it recovers the lows. This is a weekly break down with no support below price.

LJPC CHART #1 – This Pharma stock had a very strong run in Sept, but gave all of those gains back. It then did a shake out & recovered, but the 50sma is pinning it down.  It is oversold and at support, so it  ‘Could” be bought here at recent support with a stop right below, and hope that it breaks above the 50sma.  It ‘could’ be bought when it breaks out above the 50sma with a stop below the 50.

LJPC CHART #2 Weekly – One thing to note is that past break outs went sideways for weeks, so this could break out now and run, or it may break out and drift. 

HALO WEEKY – I just  dont like HALOs patterns. Yes, it can run after this pull back, but this is a weekly chart and it pops and drops a lot. It isn’t oversold, so it could drop to support again. In other words, it is currently near the top of a trading range too.

CELG –  This is the best pick of the litter. It is expensive, but it could run higher after this break out. This is actually a large consolidation in the big picture. In 2016, CELG started near $120, and is currently $117, but it may be breaking out for a better run in 2017.

Conclusion:  I am not particularly fond of this sector, but there are some trading possibilities there. It does make sense that if Gold and Miners continues to struggle, we’d look elsewhere, so I understand the desire to find better set ups.  We will continue to do that here, and some of the trades in Energy and Metals have worked out.  TGB, WRN, NADL, NOG, PACD, etc are a few mentioned since November that have been very good trades, but focusing on a bottom attempting to be put in place for Miners has been distracting.  The Precious metals sector has been acting differently as of late. We are at the line in the sand for Miners and I will have more on this in the weekend report.