Open To Debate

The weekend report discussed Turning Points. Though I have laid out my big picture expectations, I also mentioned that at turning points it is important to continue to examine clues from an unbiased view point. Sometimes subtle changes at turning points can either alter the bigger picture or confirm it.  I discussed a few changes developing in my weekend report, so lets continue to examine any clues that may appear.

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SPX – Our run higher still resembles the run higher last fall in many ways. I am expecting a dip down into a DCL soon,  but the move out of that daily cycle low is going to be important to watch. It is not time to short this market yet. As the market rises , I see a bearish wedge and lighter volume. We wait for the dip.

Usually at tops  (even temporary tops) , the VIX gets down near $12 -$13. Spikes higher in the vix can lead to bottoms, and a spike lower can signal a top. The vix is low enough, but a spike lower would probably signal a temporary top.

 

Here is where it continues to get interesting.  As I mentioned in the weekend report, the markets really aren’t in sync. Lets take a look.

 

I pointed out this break higher by the TRANNIES over the 200sma.  The SPX is at JAN 1st Highs.  The TRANNIES are at new 2016 highs. 

  The NAZ ( usually a leader)  is relatively weaker in this rally.

 

THE NYSE – This also looks like it ramped up a bit stronger than the Fall rally.  

The IBB –  This is making a double bottom, no real rally to speak of, but the set up is bullish looking at this time. This can be a BASE that formed in the first daily cycle and really rallies strongly from here. 

I also pointed out the Big Picture Monthly and Quarterly charts this weekend as having a change in character.  What does this lead me to believe? The charts at the end of the Month ( March Monthly ) will be important.  If the IBB rallies strongly in the 2nd daily cycle, and then the SPX also rallies strongly,  it could break out since it is already near the recent highs.   The TRAN has already broken out above the 200sma, and down trend line ( see chart) , so if it rallies strongly in the 2nd daily cycle, it could make a run for the former highs.  SO I will be watching many different things going forward, but I will NOT keep bringing it up in every daily report.  We need more time to see how the markets pull back and then attempt to rally again.  I am just letting you all know that an unbiased view will keep us safe as the evidence continues to develop.   Right now we have a little bit of a mixed signal. 

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WTIC  #1 – Oil has had a beautiful rally,  and we caught the lows basically expecting them to possibly arrive at $26.  It has been a strong run and we flipped to Energy stocks and caught some sharp rallies out of the lows. Now oils 1st daily cycle has hit the 200sma.

WTIC #2 – A daily cycle in Oil can find its dcl anywhere from day 30 to 40’s!  It’s hard to know what will happen with such a loose range, so lets discuss what MIGHT / MAYBE / Possibly could happen.  We are on day 26, we could start to dip down now and simply go sideways.  We also have time to crawl below the 200sma and even POP higher before dipping into the next low  (As shown).

WTIC #3 –  Maybe it crawls under the 200sma for 5 days , and dips to a dcl at the 50sma before surging higher. So far OIL has been riding the 10sma nicely.

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You see what I am saying, right?  I cannot know exactly what Oil will do tomorrow, and then Wednesday, and then Thursday.  ” Will OIL be higher tomorrow?”   It is not a day – by – day,  play – by – play,  though I try.   OIL has been very bullish out of the lows, I expect it to remain bullish,  even if it pulls back.

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XLE – And so it goes with the Energy stocks  (XLE).  It can remain strong and hug the line, or pull back and attempt a break out after that. Should you sell your energy stocks? You should at least have a stop, and sell if you cant ride the wiggles.  Individual stocks may do their own thing too ( Like Miners).

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NATGAS –  It has been strong,  it dipped today.  AFter that break out, we may be seeing a back test. I would want to see that trend line hold as support. ( 10 sma is there too).

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CRB –  I can see the CRB pausing and maybe we get a gap fill .  It has acted very well, and so have the commodity stocks.  I still own VALE & CLF,  but I really like the way Steel stocks and FCX are acting.

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GOLD & MINERS are holding up very well. They remain  surprisingly strong in this sideways consolidation. Some refuse to pull back so far.  Lets review.

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GOLD –  I expect a pullback in GOLD that should embolden the bears and scare the bulls a bit, but can you imagine if it stays within this channel?  What if it only dropped to the rising 50sma before surging higher to $1400.  It would leave people behind again.   ( For safety sake, I still need to expect a drop to the 200sma, as shown).  

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I mentioned that some MINERS  could just march to the beat of their own drummer, so we could consider core positions in our non- trading account.

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CASE & POINT – WOW, look at AXU.  See also the stocks mentioned on the chart. SWC, TAHO, HL, etc etc.  They are at highs and   refuse to pull back so far  🙂

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  So miners remain very strong. A pullback would be a gift , these have put in a stellar performance. 

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I’d like to just point out some charts here.  Some are going to be BIOTECH.  RISKY? YES!.

The charts may be interesting to some of my more experienced traders, so I want to point out their bullish set ups, but you know your own trading style and risk management.  For some here,  the best thing you could do is patiently wait for a pull back in Miners or a commodity stock.  It seems that some of these commodity stocks look similar to Miners , they may just keep going higher too.  I will point that out here too.

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The question,  Is VALE or CLF still ok?     I posted this March 15.  These  could just  go sideways. 

VALE MONDAY –  It’s crawling along the 200sma.

VALE LONGER TERM.  –  No guarantees but If Commodities have bottomed, you’ll probably wish you owned it at $3 a yr from now.

CLF – Held the 200sma. 

 

CLF – No guarantees, but If commodities bottomed, you’ll probably wish you owned it here a year from now.

X – Yes, We’ll be wishing we owned this at $6.

We have looked at the general markets and seen improvement.   Recently they were making lower highs and lower lows.    IF stocks are now going to rally higher and break to new highs, instead of break down, should we fear missing the move?   No-  look at the potential if these one time high flying speculative stocks return to favor  ( like DDD, XONE, SSYS, VJET, Etc).

 

MU – Plenty of upside potential.

GPRO –  Plenty of upside potential

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So again,  lets look at some of those BIOTECH STOCKS with what appears to be bullish bases and set ups.  Experienced traders may want to trade them , despite the risks.  Or trade LABU if this sector plays out bullishly.    Others should just take note that this sector is improving, so the IBB may be ready to rally in the second daily cycle  ( You could buy an ETF  if this plays out).

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If you take anything at all from this list,  just note the fact that so many stocks in one sector are bullishly aligned.  Also notice just how much some of these have already moved %-Wise off of their lows. So this doesnt necessarily mean buy them, I am just pointing out that many Biotech stocks look bullishly set up.

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RPTP

CGIX –

 

IDRA

SRPT

LJPC

ADXS

KPTI

So we have a lot that I am watching right now.  Some of it affects future trading  (buying pullbacks) and some of it affects the big picture possibilities. I still own my commodity stocks and  LGCY, and I picked up 2 biotech trades to trade them out of their bases for a few days. Patience in the short term may also be the best action, waiting for the next trade.

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~ALEX