Stacking Up
I really like the way things are stacking up, it seems that some nice opportunities are approaching. Lets look at some charts and you’ll see what I am talking about.
I just want you all to know that while this pattern is quite trade-able now , it is also very likely to play out as a drop when it reaches the apex. It is a BEARISH WEDGE, and I am not recommending many long positions at this point because of it. Anyone who wants to can trade it at the Tops & Bottoms ( SQQQ or TQQQ, UPRO, etc ), but it’s getting tight . It has been very reliable.
NASDAQ
SPX– You look at this weekly and it is strictly following this pattern since I mentioned it a month ago. This is as of today. I believe this is a warning and people I hear being interviewed on CNBC just think we are going much higher. “Buy the dips”
Let me review my thoughts on OIL quickly again. They have not changed. My thoughts are that OIL has bottomed. I have said , “All bottoms look different”. ” Bottoming is a process” , so I do not expect a huge ramp up everyday, but slowly you should see a bottom form and then a rise higher in price. Remember GOLD & GDX in Nov? They meandered near the lows and made people nervous , then they took off upside in the 2nd daily cycle. Oil may do that.
So as a review.
Friday MARCH 20- I had been calling for a shake out, break of the lows and recovery. I pointed out this Friday March 20. The reversal lows were in.
Recently I showed that in the past , OIL crashed and “Bottomed” for 3 months in 2008-2009. I said I think we can expect that now, and that would mean JAN/FEB/MARCH , so APRIL could be telling for OIL. Look at that ramp up in 2009 in the chart below.
Nothing has changed.
In the weekend report I pointed out that Fridays selling made some nervous /uneasy ( not necessarily here….I read other blogs). It is emotions that cause this, 1 day down and people want to go short and call it a failure. The charts make it clear, so I posted this , specifically showing that
1. A one day drop has happened before early February
2. Dropped a little further the next day (Orange arrow)
3. Reversed higher on the 10sma, so I said to watch fro that today .
OIL today – just what I mentioned could happen (so far).
Some energy stocks are looking very good, others may be lagging. I think that ‘If’ or ‘when’ oil does have a ramp up like in 2009 (Say just a bounce to $70’s) they will move higher. For now , if you are in a lagger and dont like it, find another that is holding up or trending higher.
Look at these, these are some of my favorites because they have begun trending or show strength ANV, ALJ, VLO, TSO, MPC, GNE, GPRE, CDXS, and I like BAS, EXXI, & SZYM a lot , even though it is slow to action ( it is bio-fuel). I will post 2 examples below:
ANW – consolidating for a long time, but bullish
GNE & ALJ have just trended higher this yr (Slow & steady)
$NATGAS – is back near lows, I have mentioned the possibility that it also double bottoms the way OIL did. I think it is bottoming too.
So thats my take on ENERGY . Patience is rewarded in the long run if the charts can be correctly interpreted. We’ll have to see how this plays out. XLE did re-gain its 50sma Monday with XOM & CVX pushing higher.
METALS – this is going to be a great area to trade soon. The %-gains can be very profitable in this time period. I am trying to be patient to allow the charts to tell the story, not my bias (which is that the ICL is still ahead). The C.O.T. is Bullish , and the DOLLAR looks like it wants to drop, so that would imply higher Gold prices. Hmmm.
GOLD / SILVER / MINERS – also playing out exactly as I thought, however they haven’t made it clear if the ICL is in . Is this a 1/2 cycle dip? Or will we just drop like OCT 2014? lets review.
$GOLD- before we even rallied I called for a rally , tag the 50sma , and drop.
We have that , and doesn’t it look JUST LIKE October in the Orange box?
1. Rally up
2. Tag the 50sma
3. Start to drop & tag the 20sma here (blue arrow).
4.notice Gold went sideways for 3 days in Oct from here : (
5. Watch to see if this wants to do an A-B-C up, or crash
GDX – Bullish & Bearish
GDXJ looks weak (Again) , and so does IAG, PAAS, EGO, etc, so I decided to look at the bigger components of GDX and see if they look strong or weak.
GG
NEM
look again at the 3 charts above and you’ll notice that the miners are ‘looking’ weakish, but they also sit on their trend lines and tomorrow could show support there and a rally higher , or a further break down ( or weak bounce like October) . I am waiting an watching for set ups to materialize that give “lower risk’ entries. As I have mentioned in the past, it actually looks to me that money may change over to be repositioned in commodities.
Look at charts of COW, WEAT, CORN.
I also pointed out Steel stocks a while back , I used these charts and mentioned X, STLD, AKS, SCHN, etc .
If you look at them now, they do appear to have bottomed (AKS just broke off of it’s bottom, and SCHN near lows).
SO I think once the dollar finishes what I expect to be a bounce, it may start to drop again. This may boost commodities and APRIL may see some great trades for ENERGY, PRECIOUS METALS, STEEL, maybe Aluminum, Coal, etc. Right now I want to preserve funds and stay low risk. I am in Energy & CASH basically.
Using what symbol, is the best way for me to track the USD? Many thanks.
DXY. That is what Alex is charting, but you can’t buy DXY. UUP is the $ bull ETF,
I’m going to track them all and decide which is more useful to me. TKS :;
Hi Wishfull
You can use $USD or there is an ETF ticker UUP, it tracks the dollar, but it can trade a little differently , similar to how the QQQ tracks the nasdaq or SPY tracks the SPX . GLD tracks Gold, etc
Gottcha. TKS for info 🙂
Alex, you said above “As I have mentioned in the past, it actually looks to me that money may change over to be repositioned in commodities.” How do you know this?
I dont, it is an idea when you see a wedge forming in SPX, QQQ, IWM, etc and bottoms look to be forming in commodities. I dont know that for a fact though. Thats why I said that “It looks to me”. Its an observation based on what I am seeing
Alex, I bought X last week. The CEO of the steel companies went before congress to plead a case for higher import tariffs. Last time they did that, the steel companies took off.
Alex, I’m like you right now, in Energy (BAS and WRES), but mostly cash. In the past I have commented that everything is up today why isn’t XXX participating? You usually reply, well XXX went up 50% in the last week so its taking a break. Remember when SFY went way up and then traded down while the rest of the sector was trending up? With that in mind, how do we pick the safest entries into the Energy sector? GNE and ALJ mentioned above could sell off or consolidate? Should we be looking at stocks that previously ran up that are now back at the 50sma, like EXXI or SFY? I can do my own analysis, if you let me know what to look for. Appreciate your help here.
Its tough, because they can all move to their own individual track . look at the chart in the report of ANW. It bortomed in OCT, ran up , and now has only gone sideways. I could not have predicted that.
There are many approaches and some will work at certain times, others will work at other times. Some that I pointed out as strong are (So far) climbing bullishly along their 10 & 20sma. Pull up ALJ and use a 10 & 20sma only. What do you see? Thats how you play that one.
So yes, at anytime after a run up, they can consolidate, they may break that healthy pattern . I think that looking at EXXI and BAS above their 50ma is prudent, because if you buy them and they sell off below, your stop is close.
Buying SFY & WRES is trying to buy the bottom. That works at infection points, but when they return there , sometimes they are going to form a long base there. (See SZYM 4 month chart for a long base).
SO at THE LOWS…I buy a basket and we caught the initial launch upward, when many ran up 70- 100% off lows. ( EXXI, BAS, GDP, etc etc ). IIts the same with MINERS . at THE lows , they all take off, but eventually some just base out, others climb steadily (CDE, PZG did that). They move according to demand and one has to watch for those things.
I hope that helped.
p.s. I am a little frustrated at REXX. They “Could” “Maybe” be forming an inverse H&S , but I hate that it cant re-gain that 50sma, so I may cut it loose and go to cash . It is no longer acting as I thought it would as OIL was rising.
I was in REXX until today, couldn’t take it any more and just cut the cord. Still holding CLNE and EXXI. Will just have to find somewhere better for money to go.
Alex- What do you think of the solars? They seem to have been languishing a bit. SOL, JKS, etc.
Yes, languisging is a good word for it. If I look longer term ( say an 8 month chart) most look good – use a 20sma on JKS, TSL for example. SOL looks like a decent base, but the waiting is the hard part.
SCTY has been interesting yesterday and today ( 3 month chart)
I added GST to my energy stocks…..Price is at the 20 dma as support, very defenseable. IMHO 🙂
I added GDP, EXXI and BAS. All where almost at their 50DMA so not a lot of risk.
ALJ is rumored as a buy out. Reason for stock climb.
This was their earnings report March 6th …
Net income for the fourth quarter of 2014 was $42.1 million, or $0.67
per unit, compared to $13.5 million, or $0.22 per unit, for the same
period last year. Net income for the year ended December 31, 2014 was
$169.1 million, or $2.71 per unit, compared to $136.2 million, or $2.18
per unit, for the same period last year.
I’m sure that didnt hurt : )
GOLD just hiccuped
Trying to claw its way back up the hill, but it’s looking weak and tired. ;(
Nuclear Deal speculation – Another reason to beat Oil down/up- are you holding the Energy Basket overnight ?
Yes, I’ll hold , but I’m light.
I have been raising more cash for Metals trade later . I do like the charts of some like BAS abive the 50sma and GDP also
Tempted by GTE right now.
i am also very light energy and cash, looking forward toward next month, as we may have a very successful metal trade
ditto- I like the odds of a good %-Gain on some of the trades Miners offer.
I also think oil has bottomed for a variety of reasons in addition to your technical analysis so trying to stay patient in energy names and look for new set ups as they appear. Probably more likely to trade in/out of them, giving up all my gains at end of last week wasn’t nearly as fun as it sounds.
Interested in metals when ICL arrives; I remain convinced another leffect down is awaiting. Broad indexes too back and forth for me right now, going to steer clear for a few days. wow, how about the give backs in biotech recently?