Shopping

When the markets are volatile and choppy, it can be difficult to buy and hold a position for anything more than a day or two. We have had some very choppy markets lately.  The good news is that the current  set up that I am seeing in the markets currently may provide an opportunity to ‘SHOP’  with  a little less “CHOP”.

SPX – The blue lines point to the type of run I think we will see. We may have a pause or two, but I expect higher prices.

NASDAQ –  We gapped over the 50sma. That gap doesnt have to fill right now.

Summary:  The Pop & Chop volatile markets consolidated  gains from the prior run up, and made people nervous.  Add Greece and China concerns and other news warnings and you had bearish sentiment increase. THAT is how bull moves start, with a lot of worry.   I think we have an ICL in place.  Sentiment became very bearish  ( recall that I posted the charts with the CPCE #’s etc).  Those bearish extremes in sentiment have caused many to go short and now we are seeing a need for shorts to cover. I think we will have a run higher continue for a while.   Below is 1 of 4 charts that I used  to show extremes in pessimism ( Bullish, because the crowd is emotional and often wrong). I said that I thought a meaningful low was coming.  I now believe that it is here.   TQQQ , UPRO, etc.  or buying your favorite stock set ups  can be used to trade the market back to the highs.

The USD is a bullish set up, but it could slow down here. It is overbought and turned down. In the weekend report I pointed out the 97 – 98area on a wkly chart.

I look at UUP – So far  (this can change) volume buying was light. At resistance.

 Let me ask…Is this chart Bullish to you? It looks very bullish to me…

I received a couple of emails basically kindly saying , “You see oil as weak, but I see energy stocks moving higher and I think Oil is ready to explode higher.  Can you look at it again?”    The above chart is DWTI- inverse Oil.  If it goes higher, Oil drops.

WTIC– this looks like a bear flag  (So far) to me. The risk is the downside , so I cannot recommend going long until it gives me more reason to.  Watch the 10sma.  Look at DEC 2014, I remain cautious.  Note: Oil is still very oversold , so it could actually run up to the 50sma and tag it, filling the gap.  You can trade it that way with a stop close by,  but I cant recommend it here as a low risk idea.

NATGAS –  Its funny, I said in the wkend report that OIL looks weak, but NATAGS looks bullish.  Buy a break of the upper trend line.  I posted this chart- buy a break of the orange line or a back test of it.

Monday – I like the volume and it is starting that break. You could buy with a stop below the 50sma or triangle.

I have mentioned tickers CORN, WEAT, and DBA as bullish set ups.

DBA – bullish, loos like it wants to run to $25 from here.

GOLD SILVER & MINERS

Please re-read the weekend report if you need to be reminded of what I think is happening here.

GOLD– the count continues or we have our lows in place? I’m watching to see if $1145.90 holds as the lows on day 22. Watch that trendline for a break and you can go long GLD on a close above it & the 10sma.  Note: a slight undercut took place in Gold at the March lowsextending the daily count by 4 days. We may see that.

Silver –  notice that Silver did NOT undercut its original low in March. Capitulation lows may be in, and I would say silver stocks are reacting bullishly. Watch $14.62.

GDX was boring so I went to the juniors 🙂

GDXJ – Gold closed down $6 yesterday and was down more than that most of the day, but Juniors went green. Still below the 10sma, we would need follow through to gain confidence that a low may be forming.  look back at the March lows.  That represents over a week at the lows, they dont always come easy.

I thought that it would help to see how some miners were doing yesterday with Gold & Silver down.

CDE before the close, up 7+%

AKG –  up 7%   this stock does not look like we have been selling off. It’s up over 50% from March lows.

SSRI –  higher lows since March and still up 50% from March lows.   SILVER just broke its lows and everyone went short thinking SILVER lost support and would crash to $11,  SSRI, AKG, a few others look strong.

NGD – Bottoming? Up 7% while GOLD closed down $6

IAG – reversal at the lows with Gold down.

So I think the markets are set to go higher as mentioned in the weekend report. This is the time that you buy pullbacks to key areas or look for bullish stock set ups.

  I think OIL could go higher to the 50sma and tag it,  I will have to watch how it reacts if it gets there.  The DWTI chart looks like a full flag however,  and the OIL chart could be a bear flag.

NATGAS is a bullish set up and can be bought , or buy a dip.

The weekend report covered what I expect in Precious Metals.   I think we are putting in an early  ICL due to the COT report, so I dont want to miss this next move.   IF it proved to only be a DCL,  then we would know early on and could step aside and wait for that final drop.    It looks like a mild ICL.  I cant say 100% that the lows are in here, but the stocks are starting to show bullish signs, bullish divergence, etc

Let me show you a milder form of an ICL in MAY 2014. I was writing the chartfreak reports back then and got my BUY signal May 28. This run was great once it got going.

…Notice how long GDX lingered at the lows.  Plenty of time to climb aboard, so dont feel like you are missing the move if you miss the lows.   GDX bottomed late May and there was plenty of time to buy. Most expected it to keep dropping, it was too mild of a drop for an ICL,  so holding was a little uncertain at times.   THEN it took off with short covering, almost green everyday for 2 weeks. You  could have bought  (green arrows)

1. Above the 10sma, but there was a dip below & recovery.  

2. The break of the 50sma could have been bought. 

3 .  The test of the 50sma could have been bought.

   SO some may start buying their favorite Miners now in my opinion. I started taking positions yesterday and am still holding.   Those COT #’s are telling me that a meaningful low is close.    Some Silver stocks are still up 50% from March lows anyways, so there is strength.    For those who hate risk, you may want to wait,  as shown in the chart above.  You could have bought that low a week later as it crossed the 10sma.  2 weeks later as it crossed the 50sma was still very profitable.  Its up to your risk appetite, can you take a little draw down?  I dont think the Miners are going to sell off in a big way after they get above the 10sma.   I will keep an eye on things and keep reporting, but even the stocks I mentioned in this report with reversals yesterday are showing signs of buying.   Start small and add later after they prove themselves may work well too.

I will release this now (8:45) so it can be read, and I will add a few trade ideas later, please check back.  I havent drawn the charts and need time to do so.     I was going to recommend MU  (Very oversold and bottomed yesterday) , but I just saw it up $2 in premkt.  I had posted this MU chart here wks ago  and looked to buy a bounce in the $17 area, since it broke below the trend line.  We may be seeing a recovery of the beaten down stocks with this ICL in the SPX.

Thanks for being here, I will be back  with more charts in 1/2 hr to 45 minutes?

~ALEX

Trade Ideas… I want to start by saying that we have had volatile , shaky markets in a correction lately.  If you see a stock that was  strong and acted well, that says a lot about its stability going forward.  Those holding that stock were not wanting to sell it , even in a correction.  There are a few here.

AMZN –  Solid stock.

KITE – I have been pointing this one out as a good set up. It continues to act correctly each step of the way ,so it can be a longer term buy & hold now /  rising stop.   See all charts below

$55

$63

$69.78

REPH…same thing.  Strong Pharma company.  HUGE RUN UP $3 to $15…I knew this would be strong. It was a buy at $6 and $8

Still a Buy , though may form a handle.

These 2 stocks werent affected by recent corrections.

HNT…almost a Buy again