Was That A Curve Ball?

Judging by the intensity on that pitchers face?  I’d say he’s throwing some heat, maybe a fastball.   When it comes to Metals and Miners , however, I think many  were  fooled the recent action  and in that case  you may hear them say,  “It really  threw me a curve ball! ”   Understandably , the past few years in Metals and miners have been ugly for the bulls, but there were definitely a number of factors that helped us here at Chartfreak to navigate the recent lows, and identify that this was NOT a break down.   Its slowly  becoming clearer to all that  Miners were telling the story and Metals were not forming a bear flag as some suspected.  Metals have been  putting in some constructive lows.   The move higher might become rather swift  at this point too , and I’ll show you what I mean in this report, but the real question is… Are these rallies going to last?  Or should we be alert to future downside?  We’ll address that too.  To the Charts!!

First the general markets. please read this chart .

Not much has changed in my thinking about the possibilities for the general markets going forward, lets review…

Actually, nothing has changed since yesterdays report really. We have sideways chop still. The SPX, NASDAQ and DJIA  have not been able to hold their 50sma . I see weakness internally,  but IWM & IWC  are fairly steady. It (SO FAR)  still fits my theory going forward for Small Caps and Micro Caps , we may have some nice trades, many of our former leaders are looking to consolidate and sell down .  I mentioned  GOOG, AMZN, TSLA, MSFT etc  as having lower highs & lower lows recently.

SPX  2 1/2 yr – Quick glimpse.  TECHNICALLY weakness below the 50sma is weak , but this chart shows no MAJOR DAMAGE  (yet) . Direction is obviously not clear here.

SPX  1+ yr –   just observations.  Couldn’t reach the peak this time like last spring = sideways consolidation? (new channel drawn ) Occasionsally we break the blue line and reverse back inside ( magenta circles) .  This breaking down  is becoming more frequent &  we could do that here in a selling spree. I do see weakness in QQQ, SPX, DJIA. 

NASDAQ ( weak, but not abnormal yet.  Are we really just near the lows?  Needs to recover soon or could break down.  may also CHOP like we have seen already.  Tough to trade.

So if the VIX breaks out higher,  we will likely get a sell off. Unable to re-gain the 50sma is concerning. I see weakness that could end in another sell off.  If the VIX turns down, maybe buyers will step in and the Sideways Chop continue? Time will tell.

IWC , IWM , & RUT –  See the difference?    again nothing really changed, these are stronger after a 1 yr consolidation. I am now seeing slight weakness internally in these too , so caution is prudent for now. If trading, use stops!

Allow me to just show you 3 great charts from yesterday  (there were still plenty) . This is why I wonder if we saw a 1 yr consolidation in small caps , and now they’ll run,  and QQQ,SPX,DOW will consolidate in chop.

ELNK WKLY

BBW Wkly (Huge vol for a weekly with only 1 day)

FEYE – I mentioned this as a BUY last week & posted a daily chart , it is a great set up. This was last Friday, it went higher yesterday amidst the selling.

We have been riding Miners for quite some time.   A few have asked for my targets , and I have said ,  “At this point I am not selling out completely, because in this type of rally, you can get extreme moves that go beyond targets.”   I showed some charts of that.    Some have been taking profits and I applaud that, I am happy to see some lock in gains.  Still others  might rotate holdings –  sell something extended and try a set up that looks like a lagger playing catch up.  SO I have tried to provide newer possible low risk entries on Laggers, but these MIGHT have a  higher risk of under-performing. Lagging for a reason,  but also I have seen that old saying “All turkeys fly in a wind storm” or “All ships rise in a rising tide”  Something like that.  SO I will provide those , but they are not for everyone –

Please dont take them all as an  Ace-In-The-Hole Alex recommendation.   SOME may best left for active traders in front of a screen.

First –  Review why am I not selling now? (Yet)  I’ve mentioned how this looks similar to 2012 and This was 2012,  where to sell & buy back?

If GDXJ  breaks out, we might put in a DCL like this , similar to the above chart 2012  DCL sideways type move.  (Honestly..no one really knows , I am just sharing thoughts & possibilities based on past actions under similar circumstances).

Of course, There is a time coming up and I will address that soon.  Any that are concerned can sell positions that drop below the 10sma at this point  (loose stop – trailing stop?)

 lets look at possible set ups

IMPORTANT HERE – This is not a high risk lagger. This is a great set up  I.M.O.

SILVER –  my indicators show that it could explode now

USLV 3x SiLVER  ( I use different settings for a 3x, but it says the same)

I never recommend 3x ETFs ( but I use them). If I am helping you to trade, I would like to limit your risk, but if you look at this USLV…it was a buy yesterday. It could explode. The choice is yours : )

A few set ups

Goro ( I bought after the break of the 50sma  – it is slow moving.) held the 10sma,   now Goro  may be ready again.

With SILVER ready to go… I mentioned yesterday  SSRI & PAAS.  I hope some bought it.

 SSRI should run to $9 minimum.

EXK (Silver) If silver moves,  EXK may move in sympathy.  2 charts also recommended yesterday

  First mid day yesterday.

EXK

AXU  – (SILVER) Higher risk?   Cheap.   Has done nothing but BASE OUT.  Moved above the 50sma yesterday.   Could be a buy here.  Good for a watch-list, it may surprise, its a good base.

ANV close up  (recommended yesterday )

ANV AGAIN

AUY – I posted & recommended this JAN 5…still valid as it has slowly moved higher,  now above the 50sma

Note:  JUST HEARD that they did a private placement.  This always drops price.  : (     It is set to open at $4.40 ish.  That is still above the 10 sma & 50sma.   Anyone who bought on my recommendation  should be fine, but you MIGHT want to sell and enter another stock?  This is the risk that I mentioned in the last few reports when individual companies do this to raise money, it lowers the stock price , often for days/weeks.  I’d watch if it holds above the 50sma. Not a buy, but it may recover with GOLD/ SILVER move higher.

As mentioned before,   I will not have a report WEDNESDAY morning, I will be away.  I am thinking that nothing will change anyways,  or you know what to look for anyways.   Miners and metals are bullish and can run higher or pullback to their 10sma as time goes on.  The Markets …I am watching the VIX, The 50sma , and individual stocks to get a “feel’ for the health going forward.

  Soon I want to  post a Lesson on selling.  Why have I been riding these Miners so long  (Shown above ) , it has been the right thing to do so far, but there will be a time to sell.   I repeat that Some could “lighten up ” now  if they want to lock in profits,  no shame in taking $$ off the table.     As we approach the cycle high in Miners, we could drop to the 10 or 50sma, however  Metals seem to just be getting going.   Its a tough call.   Couldn’t Miners extend with them?   Get Overextended? Yes.  When do we take profits?  again, ANYTIME you want..nothing wrong with closing a position, or 1/2 positions  to lock in gains.  When will I be looking to sell? Maybe I can do a quick lesson on that next.

As always, thanks for being here, I appreciate all of you and I hope at this point I’ve been able to help you in your recent trading.  In the future , trust me that here will be stale times, when trades are more risky or seldom found, Patience will be needed then.  It may get boring at that time , so its the better trades like this that can make for some good gains knowing that  we may need to be more  patient at other times.

Best wishes!

~ALEX