VOL-A-TILITY

Thursday the Dow shot up  230 points.  Friday the Dow sold off, down over 100 points. Monday the Dow shot up  166 points. Tuesday the Dow went  up another 60 points, but sold off and  gave most of it up into the close. Wednesday we gapped down and closed down 178 points.  Currently at 6 a.m. , the Dow futures are up 100 points.  Volatility is the order of the day,  I should have used a picture of a roller-coaster.

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SPX –  I pointed out these wedges and said I was expecting a sell off.  Now we have a back test of the trend line break and a tag of the 50sma. Will this hold and  give us a genuine break higher to new highs, or just more up & down action?

IWM – the IWM actually already broke to new highs, but I expected a back test, as shown here

This is where it gets interesting…

After also breaking to new highs, the IWM did start a normal  pullback Wednesday

BIB –  Also  breaking to new highs  had a normal pullback

The question is,  will these remain normal pull backs?   

The VIX repeatedly bottoms near 12-13 and then bounces.  When the Vix bounces up & Down for a few days, the markets bounce around (Volatility).  When the Vix  runs higher like October and December, markets sell off.   This is getting interesting,  lets keep an eye on the vix and remember the Dow Theory.

The USD is a complex little set of moves too, held under the 50sma recently.  I expect it to break through, but can it move higher than 97.88?  Thats an important area to me.

WTIC –  oil is a bullish set up so far, squeezed between its B.Bands. This should end soon.

NATGAS – Broke out in April, back tested and is now dancing around the 50sma

XLE- I see this as improving ( MACD HIST ), but I’d like to see some solid buying come in.  I think if OIL breaks out higher, the XLE will move up too. 

GOLD – that may have been a reversal candle yesterday, but I am not expecting more than a bounce. We have had these candle before, I’m watching that 200 sma. I am still not trading this, but “MIGHT” short a bounce expecting it to then drop into a dcl.

SILVER-  Silver finally sold off Tuesday, but had no follow through on Wednesday.No position long or short expected right now.

GDX –  I drew this to show the bullish look to GDX, even though I’m not overly bullish.  I wanted to show this so people wouldn’t short it really.

GDX – SO now I still see that it could bounce after this back test.  I am not buying NUGT or Calls or anything at this point, because lately its up 1 day , down the next up 2 days , down 2 days. I expect a bounce could go to the 50 / 200 sma and roll over. THAT could be a DUST buying opportunity.  I wont know until we get there.

   I am still seeing plenty of trades with bullish set ups, but these markets are volatile and jumpy.  This can make it difficult to go long and hold positions confidently.  There is nothing wrong with being in Cash until the markets present some real nice low risk set ups.  As I mentioned, we wake up and Dow futures are up 100 points,  then next day they are down 100. The sideways chop makes it difficult, you can wait for a trending move  (possibly Oil soon) .

  I will still post a couple of charts for our experienced traders that are just looking for a few trade ideas.  This does NOT mean “Take this trade”, it is more or less being posted here for those that know how to trade on their own .  I am mostly cash, taking an occasional trade intraday or holding for a day or two while  waiting for OIL/ENERGY to break out 1 way or the other.  I am also waiting for a possible trade in Metals / Miners, possibly short at first.   Experience shows that Patience and waiting in Cash for a better trade set up can be better to your account than repeatedly getting stopped out.

Best Wishes

~ALEX

FOR EXPERIENCED TRADERS LOOKING FOR IDEAS

GASS– interesting consolidation out of the Feb lows. It moved above the 50sma, but was rejected at the 200sma yesterday.  You could buy here or wait for a close above the 200.

IDRA– this is my old chart. I was asked in the comments if its still ok.  Above the 3 arrows should be fine, and it has pulled back so a lower risk entry is now present with a stop a little below the 50sma.

CEMP – I posted this before the break out. It broke out and reversed back inside the bull flag,  but is still a valid set up so far for a possible future entry.

CBLI – short covering on release of phase 1 findings on  preclinical potential in the immunotherapy of cancer occurred at the end of May and Mid June. This stock is trade-able but I wouldn’t hold it because it did a 1:20 stock split recently. That makes it a 14 cent stock.

AMRN – repeat posting, still valid, but might consolidate  🙂

My post on “CUBA” weeks ago in May was because it remained above the 50sma ( Orange Arrows) I also liked the weekly, so here were my charts then.

I was asked in the comments is it a buy again on the last pullback. It broke the 50sma, but it holding on the trend line. A reversal could be bought with a close stop. Sell at the top trend line $2 higher.

SZYM looks good again

See also AAOI, FBR, ZBB, CDXS, ICD, VUZI

Just to show why I love these long bases after a sell off:  You may recall this chart that I posted of SPRT.  My recommendation here was based on a long base and some volume pops  in SPRT May 19.   

We have a double 1 month later  ( No, I didnt take this trade that day)  🙁

P.S.  – MCP filed Bankruptcy –  down 40%