Welcome To Quad Witching
Quad witching can add volume and a little volatility to the trading day, so I just wanted to do a review of the markets and discuss a few trades.
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Let me start with the IWM this time. I actually like this set up for a run to the 200msa. We’ll see if Quad witching helps or hinders things. This does look bullish.
I wanted to start with the IWM, because…
The SPX still has a bullish and a bearish look to it. This first daily cycle is also quite Right Translated. That means that after it drops to a DCL, it should rally up at least 1 more time and make new highs. If that is a rising wedge, it will break down soon, but it can still run higher for now. Do you see the rising wedge from last Oct? It was a bit different.
Last OCT 2015 I was warning of a wedge too, but it was in the 2nd daily cycle. We see how that eventually played out, that was the highs, so I have to remain cautious until it breaks out higher or breaks down. It’s kind of like being on neutral ground after this recent rally, waiting for evidence.
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IBB – To me, TIMING is important for my entries. I have to write what I see . So I posted about the IBB lagging lately during the SPX rally. It remained at the lows,so I posted this . It still had room to drop, so we would watch it.
IBB – Thursday saw a reversal candle in oversold territory. Reversals can be bought low risk as a reversal /double bottom at the lows, with a stop! Is the IBB bottoming? It might be…
IBB WKLY– I would consider this quite bullish. Sometimes bottoms form over weeks of time (See lows of 2011) , so this year the 1st tag of the 200ma occurred and price went sideways for weeks. Is that it? It may now move higher, or keep going sideways like GOLD / Miners did in a 6 month period last fall. Still, it is low risk with a stop relatively below the 200ma wkly.
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The USD fulfilled my target and may be ready to put in a DCL.
Mid Feb I drew this. I thought we would bounce to the 98 area and roll over to a DCL, pushing gold higher.
We did bounce to 98+, and for now the downside may be done on the trend-line. We broke to a new low again. Lower highs and lower lows. So short term we are due for another run higher in the $USD. That would likely cause our drop in Gold .
OIL – Still moving higher as expected. Through resistance, $43 could stall things. It has been a great run, when it seemed that everyone on CNBC was calling for OIL in the teens, the rally began from $26 to $41.71 so far.
NATGAS – Also bottomed. This has been a good time for those able to spot bottoms and trade them ( us) 🙂 I personally didnt take the NATTY trade, but it went hand & hand with Energy Stocks.
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CRB – I pointed out the next possible bullish target on CRB yesterday, using a H&S ( 190 area).
The CRB still looks great, but lets also note resistance in the 180 -185 area too.
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GOLD – Looking at the MACD & RSI – the strength of the move looks to be behind us, despite the strong burst higher after the FED. A pull back will be an excellent opportunity to go long, but lows may come in weeks ( not days). Patience may be needed. I will cover it more in the weekend report.
Big round of applause if this is finally the top for HMY. 
SO many excellent runs in Miners.
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URANIUM – Looks like another sector may be constructively bottoming.
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LETS JUST REVIEW A FEW TRADES
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Since it is a Quad Witching Friday, things could get tricky. I present a number of set ups, but obviously, nobody here can or should even try to take all of these trades. I leave them here for you to build a watch list and monitor over time.
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ATLS – This was on my watchlist, but lately has caught my eye. It keeps popping with volume lately. I’m looking for a break out
SWN – Posted in Feb and March. Still looks good. This was 3-11-16
SWN – Now
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Anatomy of a trade – Good and bad 
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SWC – You may recall my post to buy this below the 50sma. I actually posted it when it was $6, but earnings hadnt been released yet. I bought it around $7 and held it for a while posting this chart, expecting a break out.
I sold mine here at resistance, it had struggled at the 200 in the past. Nice trade, BUT…
SWC – SWC bounced around on the 200sma ( now Support) and broke higher today with good volume. It may just run from here. A drop back to the 200sma may be a future entry if it pulls back with Miners. WATCHLIST
TOO – Mentioned at $4.50 with my list of SHIPPERS, which also look to be bottoming and making nice moves ( Shippers can be risky at earnings times, so be diligent before buying shippers).
TOO – Moved to $5, still bullish.
TOO – It hit $6.68 today. Still bullish, and might just fill that gap. It also doesnt have a lot of resistance and Can keep running. One could use a trailing stop if they feel that it will remain in this base and start to drop again. Or, choose to sell a partial to lock in profits and let the rest ride? Or let it ride until it dips and then sell it.
BOOM – I like this set up. Earnings came out last week. I’m kind of waiting for more signs of strength.
BOOM WKLY – I think that the weekly may be setting up to break out too.
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HERO – I’ve been watching this shipper too. I love the set up, but again, shippers are risky. Be careful if earnings are going to be released.
On this older wkly chart I pointed out what looked to be a rounding bottom. It was at $2.91, but has dropped to that purple circle at $2 , as seen above.
Those shippers are on my watchlist with SBLK, NM, SM, TNK, etc
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LPI has been acting correctly. It has overhead resistance and MIGHT play out like this if it remains strong.
TAHO – I liked this set up a lot on the weekly. I bought it, but sold it at resistance a week or 2 ago.
TAHO – today on a weekly really breaking out. It did sell off a bit into the close, but this base is great. A back test when Miners sell off would likely be a buy.
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FINAL TRADE REVIEW – We have discussed VALE until I have nothing more to say. So lets look at our …
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CLF trade.
BACK In Feb I spotted a long term break out. It was expected to POP, so it would be a quick trade like VALE was originally.
CLF – It was a nice pop! Major run up, and so we then look for an entry on the pull back. This Fed Day reversal looked solid. It had done a reversal higher on Monday too, but it failed. Would this have follow through? It was low risk with a stop below support. 20sma .
CLF – So we did get follow through, and just about all commodity stocks took off, so that is usually a good sign. Does this mean we just take off and go higher and higher as shown? All upside?
It is not easy to tell. We have a low risk entry and that allows us the opportunity to wait and see, riding the wiggles if we want. Or one could also just sell and be happy with small gains. We have to understand that we may get this too. A boring consolidation before the next run higher.
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CLF – Anything is Possible, so choose your trading plan to fit your needs. Lock in gains? Or ride it out? Price could eventually double from here, but it could go sideways for a while first too. The set up is still a good set up, choose your trading plan. 🙂
As always, thank you for being here! Enjoy your Friday and enjoy your weekend!! The weekend report will be out late Sunday night or Monday morning.
The thing about the miners is that so many of them have such wonderful weekly charts (with upside target levels, significantly above current prices) that it’s easy to salivate as one goes through the list of candidates.Nevertheless, they are “miners” after-all and “guaranteed” they will not make it easy. In fact, the current run-up (when it ends) will most likely usher in a prolonged period of correction/consolidation (IMO) that may not necessarily result in huge price declines but nerves will be tested. It is the next move higher (after the correction [whether this correction is in price or time]) that the real massive gains will be had. Excellent work Alex!
Thanks Pankef (First comment?)
And I agree. I think some individual miners may act differently compared to others. A bit like what we have seen in the African miners HMY, DRD, SBGL, AU, etc.
And I’ve looked back at 2008 and 2000 lows and tried to see how the correction played out, it can be a prolonged sideways move at times, that does try the patience of many, as you mentioned. They look easy to ride when you look back at a chart, but in real time, we are used to Miners dropping quickly, so sideways moves can make one nervous of that happening. If THE LOWS are in, however, this would be a very strong wave once it gets going. Should be rewarding. 🙂
yes first comment Alex. Thanks for the good work
I may continue to buy small position in stronger miners on big pullback to be ready when before we determine the next ICL. I won’t miss this a 2nd time.
Alex, you’re spoiling us with all of the Friday reports. Yeah, IBB and IWM look tradeable. I’m overweight energy and have plenty of cash, looking to diversify here so this might be it.
Great stuff in CLF, cause my next question was exit strategy. I sold my X way too early (have a habit of that!), but with these fast movers at a bottom of you don’t take something off the table you might not get anything. Does 8 or 13 EMA make sense for trailing commodities and energy? I have stops sets great now but as they move up want to close the ‘air’ btw them. Jabe a great weekend. Something about I have to work the rest of the day now…
sick write up for today. love everything. EVERYTHING. clf already up pre market 6%. oil still moving higher like you said last week,
Missed CLF by so little. I may be sick now.. 🙁
Fellow CFs, after today’s quad witching, WTI Crude April contracts expires Monday. May is priced $1.36 higher. If you own USO, UWTI, etc. you’ll see it bleed off as they roll contracts today and Monday. Just letting you know.
http://www.barchart.com/futures/expirations.php
Thanks Carson, appreciate the reminder.
🙂
Maweea, what are u smirkin at?
Nice report Alex, especially appreciate your thoughts on IBB. I’m going to nibble there and I already have a very small leveraged position in LABU (buyer beware, consider leverage on this one before buying!). I think biotech is attractive relative to most sectors, most of which have already moved.
Wkly chart looks promising on IBB, short term has been tough for Labu. kind of like NUGT at the lows november to January .
Ibb’s Double bottom low may work tho .
Alex why is it that on many of your charts you want rsi above 50 and some above 70. wouldn’t that be overbought, please help me explain this strategy. want to learn it
It is really Bullish to be embedded over 70 RSI…look at the RSI on the HMY chart in the report.
CF, whats your thoughts on REXX and LGCY? Look at a hourly chart. Look to be rolling over……?
use the 13 sma on a daily. yes REXX can drop. LGCY held above the 50sma.
I dumped REXX at 1.45, something is going on with that company. Dumped REN also, damn laggers.
With all due respect:
Why would one invest in a oil jr. with such high debt such as REXX ?
If you’re a scalper I could some what understand but even that is a high risk vs. reward imho.
Ken, good point. I was using TA only. Didn’t look at fundamentals. It would be great if someone put together a list of SOLID fundamental companies in Energy and Mining.
Bill,
I use Net Profit Margin% which is the % of revenue left after All expenses ….. (Interest on Debt !!!) ….. have been deducted from sales. I use Morningstar for that and much more info. on a company’s balance sheet.
I.E.: REXX = -217 (that is scary!)
LGCY = -212
Coming out of an ICL (like Miners) These gains can be explosive 200% 300% , and can last for weeks. If earnings have been released, there is less chance of a blind side within the first daily cycle . ( They can do a secondary offering or have bad news, so we still keep trades small and nimble). SO its not Buy & Hold… It is grab the flash in the pan and see how it plays out.
Thats why I often recommend selling on the way up. You can sell the first few days pop and make great gains fast, then the rest is a bit trickier.
I understand ….. as a scalper ….. I get that.
My concern is your an announcement away from that stock being in bankruptcy because of high debt service vs. income, which can happen at anytime. Been there.
Yes, so I try to stress the risk , knowing your self, etc
I do a basket at all times and lately Miners mixed with Energy , mixed with Commodity. I try to stress small positions, limit risk, buy a basket of maybe 5 or so if possible, Use Stops, and even the occasional surprises can be less damaging.
I cant run this service risk free, everyone must know the risks. I get emails all the time where people just want trade set ups. They dont even want a market directional wrap of things, just set ups. THAT cant happen.
As a trader , what I set aside as My riskier ‘ trading account’ has tripled since Jan 15 – so the risk / reward is in the reward side ( That included NUGT tho, $17.70 to $48. i was heavier in that due to confidence of an ICL)
And I had 3 bad trades that went against me ( CJES, SXE, BBEP,) mixed in there.
Agree a “basket” in a particular sector is safer for sure…… even safer if the basket was full of fundamentally sound stocks. 🙂
Alex don’t get me wrong a respect and value your thoughts and reasons behind said thoughts.
I’m seriously in agreement, and just showing you the other side, while listening to you. Good Fundamentals will remove a lot of surprise risk. I know its hard to read tone of voice in txts emails and chat, but I’m not bothered. I’m just explaining the way I do what I do, and listening to you 🙂
I have posted chart after chart here that has popped and run up quickly in the next few days.
I do what I do, others have to find their comfort zone. It’s all good. I know traders here are also doing very well, so that is what makes me the happiest.
Longer term, if that Bull MKT in Gold is returning, it is going to be a HUGELY profitable run for yrs, for all styles of investors and traders. we’ll all make 100s of % . 🙂
I think that one of the Biggest risks I have ever traded is Biotech individual stocks. You really need small positions, a small basket, or ETF only.
You can have a solid company come out and say their in process trials failed, or the FDA rejected something, and that stock opens up down 70%.
I have been there!
UGH.
Yea THAT sector can shorten your life span. 🙂
Check out a one year of CLDN. That’s what happens when you miss an FDA trial…
Exactly Cason.
Although the biotech ETF IBB does look interesting as Alex stated.
Just to clarify Alex, when you offer your thoughts on a particular chart set up you do Not check the company’s balance sheet prior to the investment or advise ?
whoa…. sanFranTastick… i figured at least that….. yowza
… someday when I grow up and can trade with both hands … I hope these opportunities still exist …. and of course that you are still kickin it here on earth in CFland..& not retired somewhere counting your gazzillions…
I still cannot even IMAGINE what trading will be like when the big kahuna wave 3 hits… :-O
I will need shock therapy….
,,,, and you know I have different accounts w/ diff timeframes… and that I wholeheartedly agree w/ you ken.
My wild wild west trading account is a super small percentage comparatively speaking. — no investments in there.
So how are you determining your heading into the Wild West?
for me….. well .. using 3xers for one .. ie. nugt, uwti, ugaz- most recently… so – daytrading.. scalping.. basing decisions solely on the chart/setup. not a viable long term strategy… strictly scrape and run…
Gotcha Tonto. 🙂
Allow me to add perspective on why REXX / LGCY? 🙂 (Refresh for 2 charts)
As Traders and scalpers, we made 200+ % on that little ‘lagger’ in 4 days. I recommended it on the chart attached. If we didnt sell anything, it was still a double as of yesterday.
LGCY – tripled in 3 days.
I bought REXX crossing the 50sma with Huge volume, I bought LGCY before the break out. I posted the charts below.
REXX 200sma was at $2.40 and it ran there 4 days. Thats about 250% in 4 days .
No – I didn’t post REXX or LGCY for fundamental reasons at all. It is best to sell some on the way up when they explode higher, you can ride the rest for absolutely free. IF IT IS STILL ACTING CORRECTLY, you can add on a dip at support for another possible leg higher. A stop under the support is low risk.
I never find the fundamentally safer AAPL, NFLX, GOOG, etc give me 250% in 4 days? 🙂
Trades like this can last for weeks ( like Miners) even in bear mkt rallies, that is why I might re-enter at support. .
REXX remains up 80% from my buy call at the 50sma to this day 🙂
Staying with the same sector of oil jr’s.
WG has much better balance sheet with about the the same % gain as your gains on REXX and LGCY for the same time period.
Its all about the set up for a trader like myself, ( UNLESS I am talking about core positions) , with the experiences I’ve had. I guarantee you see plenty of Jrs fundamentally better that had much lower % -gains in oils run this month, right?
I saw that with MINERS in 2008. I bought some for fundamentals, others that should’ve gone bankrupt, and in the end, those beaten down speculative ones were HUGE gainers ( AUMN, AXU stand out in my mind ). And even some that were just explorers went up 800% , making no money. The chart set ups were technically correct for speculators
It would also give the opportunity to hold long term with an excellent balance sheet vs. having to sell on the way up because of high debt risk.
Yes, for ‘CORE’ , I agree
Again….if your scalping I can understand that type of trade …….
You must determine if you are scalping prior to the investment risk…… imo.
Completely joking with the heat LR… ☺
I concur….
..concur… what is this language you speak? 😉
WG got slammed today down 15%
I think my core oil jr’s. with good net margins will out perform those that do not over the next two years……
I am not saying you can not make profits scalping (you have most certainly proven that), just know the risks involved over and above the technicals.
Ken, you must really hate LGCY
Sorry to hear Bill. I bought ERF as a lagger – was hard to hold for 2 weeks but I turned out a profit. I mentioned WPX a few times but is higher priced, seems to have less debt – she’s trading pretty normally off of support (13SMA) and resistance (currently vertical – was on my chart Thurs night). Scalping 3-4 days is working, watching support and timing with oil – try that might work better for you. OAS also a little higher priced. I’ll be happy with lower % return if it’s safer. Ok, I do have a DNR flyer in, but it’s a smaller position.
Good work Alex! Looked at major indices yesterday in the longer timeframes, and $spx is sitting just above the 50 wk sma. Just as a point of reference, but if it closes the week above, that should get a lot of attention. I have major trendline resistance about 1% higher than yesterdays close on spy, based on line chart (closing prices). So today being usually a volatile day, let’s see if spy goes higher and tags that line (20 points higher) and maybe closes lower to end the week below the 50 wk sma. I’m thinking spy corrects and takes everything down with it for a few days/weeks, with another run coming in april/may. What happens after that is anybodys guess. Last 2 bears rolled over in earnest after a run up similar to this one. This is just a guess of course, might not play out like this at all! But thats what I’m seeing. Have a great day and an even better weekend, that goes for everyone as well!
Alex, SRPT? Looks low risk here! Pharma sector.
I bought at 16.50. Moving up nicely
Yes, I do like the looks of that one, and I have seen that perform well in the past
Banks are moving JPM – I’m picking up BCS 🙂
I do see good set ups on the banks too. Those inverse H&S patterns may start playing out.
The bigger picture could change if things like that keep making progress.
Yes, thanks and enjoy your weekend 🙂
You too!
Quiet here ….we must all look like this….:)
LOL! Too annoying watching some of my dogs [LGCY included in that bunch] too stay around…I am off to my studio to paint.
I agree! I had to walk away for a while, just came back, walking away again….I did bail on my LGCY earlier, my patience not so great today….will probably regret it at some point.
this ole classic is more like me watching URRE..
I just saw this – Poor little guy, he needs to go walk around outside! 🙂
rotflmao :)) . parental advisory: rated G for graphic depiction of self-injury behavior coping with hyper-frustration.
’tis the season of the witch. witching, dwitching, twitching, and today qwitching. {`_` } .
LOLOLOL! I can SO relate to that…..R rated or not!
Morgan Stanley Downgraded VALE
Nomura downgraded on the 17th. Are you holding and are you concerned?
I sold VALE. Usually these type of things spook people into selling. I just took a beating with SXE so I didn’t want to chance it. I’ll buy something else. Bought SRPT this morning. Looks good.
Thanks for the answer. I read up on what is happening with their projects in Brazil with the government approvals [pretty corrupt from what I have read]…so it may just be usual setbacks on projects. I will stick with it for now, but I tightened my stop.
Bill, was SXE a downgrade also? I didn’t own but was watching and saw it get crushed. What’s up with the divergence in energy today – really ran the gamut.
For ATLS, you concerned about delayed financial reports? http://1.usa.gov/1XvNtjK
That would make me cautious, yes.
What a NASTY reversal in DNN today… wqs feeling good this morning! More sellers than buyers at the 250 sma.
Actually recovered 2 cents in the last 2 minutes.. but was up 8% at one point.
SO this afternoon when I got home I was looking at my list of BIOTECH stocks to see if I see bases and anything special in the activity.
Some have very nice bases with that double bottom forming in IBB.
I liked GNVC, CGIX, ONTY, IDRA, ZIOP, RPTP and really many more are setting up too,
I will put them in a future report. This is a VERY dangerous sector with ugly surprises from the FDA , rejected trials, etc etc – so I will be warning heavily about the risks of individual stocks/ companies . A small basket or ETF may work very well.
BASES like PRTA, RPTP, IDRA, etc really catch my eye.
Anyone else notice the volume in AG???
And HMY
Could be QUAD WITCHING
WOA !!!
I am Not discrediting anyone …… you just need to know the risks of a company prior to the investment.
GDP is an example of that type of risk !
in terms of ‘investing’ I’m actually even more conservative than you…. well … due in large part to the selection – or lack thereof – in my 401k. Strictly only/all mutual funds there. no stocks or individual companies.
Awesome. ( By the way, no heat in this discussion 🙂 he is a fundamental trader, I use charts. Just sharing ideas, and each trader must know their own risk tolerance, use an ETF or basket for safety, etc)
And by the way, Double in the past few weeks = KEWL.
It takes work, nice trading.
A first for me….
And your son 🙂
Imagine if we all just jumped in HMY and SBGL for a couple of months : )
Maybe next time
he doesn’t know… i actually havent told anyone – just u. (not this entire blog) lol
I’m still in disbelief..really…
HAVE A GOOD WEEKEND ALL!! Man the weeks fly by, seems like we wee just looking ahead to the FED Wednesday, now it’s the weekend 🙂
CF, not knowing that VALE had been downgraded today, I even added some slightly over 4 right before noon. I am thinking that it seems to have held up pretty well overall. The logical thing would be to put a tighter stop on the entire position, but with the recent long candles, there’s a danger of being shaken out, right? Just wanted to hear your thinking about this one. Thanks and have a super weekend!
Wow, I missed that. Dang. Thanks for sharing. Fwiw, I still have my original stop just a bit under $3.5.
Hi Kathleen,
VALE is fine. I’m not worried and I dont think that downgrade affected it . It was down 5 cents.
Often you will see a stock ‘downgraded’ so the one doing the downgrade can take a position at lower price. Its devious, but I used to see it with Miners a lot.
They would downgrade it, give it a target of $11, and buy it as it dropped.
I hate the analyst up/down grades b/c they are so late with the calls. You see them upgrade NFLX and TSLA at the tops and the price target goes from really low to the actual price, which is completely useless. What you talk about above is completely devious.
Anyway, Alex, good to see you here on night shift!
Quite the dichotomy in energy today.CRK and REXX down 20% but EXXI and NADL but up 20%. I haven’t seen that large a divergence recently in the space. BAS continues to be more even keeled than many of the others, imo.
Sold ERF and WPX at resistance early and for a profit. Holding 2/3 BAS, sold calls against it for downside protection next week. Holding VALE, DNR, bought TNA, biotech order hasn’t filled yet.
I’ve had 2 solid trades with WPX, if you pick it up on support and sell near 6.5 it just keeps repeating then one day it will break out. She’s a bit more stable then these penny stocks. Sure, won’t make you 70% in 1 shot, but if you make 15% 5 times….
what weird font are you using lately.?
seems some parts of your posts, as at the end of the one above, cannot be decoded in firefox & chrome .. and just reads as a lot of little boxes (appropriate, i guess)
#evenmoreboxesfrommaria
Lol.. sorry. I’m away from home and on my android cell until monday 🙂 those are smilies