Friday , one last day in the trading week. ‘Friday reports’ are often not necessary, unless something has changed. For the most part , Tuesday ,Wednesday, and Thursdays report still apply , but there are a few noteworthy developments , and today we have JOBS REPORT FRIDAY , released at 8:30 A.M. Eastern time , so let me just cover a few things.
I posted this yesterday
I had been shorting the blue arrows and selling 1/2 at the lows. It was fun while it lasted , but I said I was closing that position, some things looked different…
This was yesterday – watching the Magenta line & Now the overhead blue line after Jobs report, but the RSI broke out higher and volume is increasing, so that has a bullish look to it. This consolidation has been tricky with all the weak stocks breaking down ( MSFT, INTC, YHOO, BABA, etc as mentioned). Time will tell.
We bought ENERGY , and I pointed out a live chart of OIL as this BULLISH possible sell off in yesterdays report.
It broke out, this is live now ( 7 a.m.)
I’m still adding on pullbacks since many of the energy stocks have great upside potential if OIL doesnt break down further. As always – HONOR YOUR STOPS! Things happen fast at lows and volatility is normal.
GOLD & MINERS
A few days ago I thought that we may have seen the daily cycle low in Miners, but it was pretty short for GOLD ( still a possible DCL, but shorter than recent dcl’s). I mentioned in yesterdays report that I would love for GOLD to break those recent lows at $1252.10 and recover. That could become the DCL . We are still in this triangle consolidation. ( Will the Jobs report push it ?)
This chart was used recently for GDX.
Well, we started to break out higher yesterday, but volume was , in my opinion, pathetic. If we break out higher above Jan 20 highs and volume remains light, I am out . This was yesterday.
AND GDXJ also, as I watched it from a different view at NOON time. I hated that volume.
Lets see if the JOBS report moves SPX, QQQ, GDX GOLD etc one way or the other.
Nothing has changed in my view of Energy stocks. Some rocketed higher yesterday, some even sold down , because they had already moved higher, and some went up 16% and then pulled back to “only” up 8%. Is that bad? Normal? is it O.K.?
Yes, its o.k. , if you look back at our recent run in Miners, you can see days like that at lows, but price eventually went higher.Lets look at a few things.
I recommended NADL as a lagger. If it gets above $2, it has a lot of room to run. Here is how I look at it. I want to say that it is NOT a guarantee, but these set ups have Great potential and risk/ reward is in your favor with a base like this.
GDP – I own and recommended a few days ago as a “lagger” . It shot up yesterday and also pulled back 1/2 way.
I posted this in the comments yesterday during that pullback intra-day. Buying opportunity?
And this is GDP WKLY. Different perspective.
I don’t want to get overly excited and wildly speculative, but if OIL goes to a normal $70 in time, GDP has always run up very well out of lows and wkly MACD crosses. This could double ( X ) with a mere bounce. USE & HONOR STOPS!
If any are buying a position and holding for a while to see how things paly out, keep this in mind. Coming out of the lows, Price doesnt always go straight up. You may watch one stock go straight up from $2 to $7 while yours goes up 2 days, down the next . Up 2 days , down 2 days. Frustrating ? maybe. Something wrong? No. LOOK at GST. Thats how they can move.
Look at the 3 day pullback to the 20sma Jan 28-30 after rejection by the 50sma. Still bullish.
Thats it for Friday, not much has changed but the January Jobs Report could move things. I didnt like the Miners volume, so maybe we get a surge today and break higher, or give it up and that was a fake move with light volume. I am watching NATGAS…I am starting to see a glimmer of bullishness there. The markets look poised to break out higher too. Jobs report Juice or poison?
Stay tuned, Stay Alert, Honor Stops, and Stay Frosty! Thank You all for being here and have a great weekend!
~ALEX
TEST 
Learning Obedience ?
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“If we break out higher above Jan 20 highs and volume remains light, I am out.”
So, Alex, not even waiting to see 1240 and possible reversal? ICL idea ended?
Hi Jonathan, Not sure you understand what I was saying, let me review.
In the report, I said I would like to see GOLD break down first and put in a reversal under $1252.10. (See the black GOLD chart in the report). We may be doing that now.
GDX , yesterday had light volume as it climbed higher. I was saying if GDX (continues higher) breaks out HIGHER above Jan 20 highs with light volume, I will sell it.
Right now, GOLD could drop & recover and GDX may dip down to the 20sma and reverse higher. If it does that, I think many shorts will short it . If it recovers higher under those conditions, volume will likely grow with short cover and buying the break out.
SO right now, all things are in play unless Gold doesnt recover by next week. (Gold is also still well above the 50sma).
hope that helps?
Very much so, many thx indeed Alex
Reversal or bust!
yes, that volume on the miners did look quite interesting. I would assume we would still get a 3rd cycle rally at some point. If we were to start from lower levels do you still see from experience a higher high Alex?
Hi Shermo
Yes, I hope todays gap down in GDX reverses higher with loads of volume & breaks higher. Thats a perfect scenario, and GOLD has a lower low, so today if it reverses, would be the DCL likely for Gold.
Alex, as a general question where do you put your stops? Is a 3% loss below entry safe enough to to get faked out of your position? Do you like market stops or a trailing stop?
Hi Bill.
It honestly varies in many ways. EX: Buy above the 50sma, I expect it may get tested, stop a little below the 50sma.
ENERGY…they move A LOT. I try to buy at a level tht I expect s a low, and then I keep a looser, mental stop usually to avoid stopping out.
Other times a tight stop , because I added a 2nd position on the way up. Maybe I bought the lows 1/3 position. Then above the 50sma 1/3 position then it runs up and pulls back a bit & I add another 1/3 —I am raising my first stop under my second buy. Then I raise that stop under the 3rd buy later (To lock in gains if stopped out).
SO it varies, but if I buy a good low risk set up near lows, tighter stop. And energy swings like miners so its tougher .
Sorry if thats a little hazy , I guess it varies. THINK IN TERMS OF….How much can I afford to lose here without getting emotional. Larger positions lose more on 5% drop than a small position , etc so that affects things too.
a $10,000 position losing 5% , different from $2000 position losing 2% , different from $20,000 position.
good stuff 🙂
Alex, thoughts? Things always seem to go deeper and take longer than a person thinks is reasonable. A lot of my miner positions have still not stopped out but I’ll probably need to see some kind of reversal heading into close to hold on to them.
I am watching the daily charts . Touch with Miners because we MIGHT have started a 3rd dcycle & they can be weak. Many thoughts ,but I wont know until the close.
GOLD ( & GLD) could be about to form a daily cycle low ? Timing is right and look at the 50sma for GLD. Price right on it and filled a gap. HUGE drop changes sentiment & shorts pile in (Short cover rally would be nice) .
GDX – if THIS WAS THE DAY 6 OF THE 3RD DCYCLE…we’d have a LONG WAY TO GO (JDST / DUST) BUT MUST WAIT. iF GOLD DOES A DAILY CYCLE LOW and zooms higher, GDX/GDXJ could double top. (Volume is heavy in the GDX selling tho)
Look at GDXJ with only a 34sma and a 50sma. Interesting.
I Just need to be patient here & see how things go. I want to buy JNUG soon, but that may not be the right move. SO I am going to lunch for an hr (Mostly in Energy) and see what it looks like later : )
in my opinion alex i think we are hedding for a new ICL and with rise of rates this summer we could see gld below 1000
Anythings possible, just not set up that way (yet)
I bought a little DUST early and stopped out, small gain. I’m in NUGT now. Looks like the bottom is in at 16.06. I’m expecting a close above 17.30 then I’m out for the weekend.
Looks like you are making a very nice call. So far, so good. 🙂
Got stopped out of NUGT, but because I raised stops every day still made money. Gold and miners not looking healthy IMO because of prospect of higher interest rates sooner than later. Banks now starting to look interesting.
Seems to me govt bonds are saying no rate rises for ‘ever’. I appreciate this week they’ve pulled back but doesn’t seem sustained reversal.
Hey Wishful
Good for you as far as raising stops and locking in some profits. I know you were likely up A LOT more yesterday and its a bummer giving it back, but also if the selling continued….better of grabbing some gains than handing it all back.
Alex, That was an amazing fakeout Yesterday at the close in GDX. Breaking the trend line to the up side, only to have this washout Today. It recovered for a while but now down almost to a double bottom for the day. I suspect more downside on Monday! Your Thoughts? Have a great weekend.
Bill…. I got out yesterday when Alex wrote: “We are getting a small break out in GDX/GDXJ guys/Gals : ) ( I hate the light volume however)” You know Bill, I thought Geurt get out, so I did and sold the NUGT @ 18.25 and the JNUG @ 35.40
ALEX…. This was excellent timing, many…. many Thanks.
Wish you both a very good weekend.