April 28 – What About The Obstacles?

We have goals and we want to reach are targets, but often there are obstacles that can pop up along the way.  Can we still reach are targets along the way.  Yes.  Lets do a quick market review and discuss our current trading. 

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SPX – I noticed a couple of days ago that the NASDAQ was selling off, but the SPX & DOW were holding up. Now the SPX started to sell off. The stochastics shows that it can fall for a while. I’m watching a few support areas.  We’ll discuss this more in the weekend report.

NASDAQ –  The downtrend from the MAY 2015 highs is still in place. Lower lows and lower highs so far.  On this chart I am pointing out that when the NAZ broke down last fall, it broke through the 200sma, but the 50sma was not violated.

I’m going to focus on the ENERGY & COMMODITIES  area for a moment, since it could be considered the possible obstacle to our current trades.

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WTIC – OIL continued higher as expected.  I mentioned an initial target of possibly $47 -$48.  Please read the chart.

I noticed that my stock set ups from the Thursday report did very well in the morning.   Some were up 12% – 15%,  life was grand 🙂  Then they sold off.  🙁

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Looking at charts of  HK, CJES, HBM, etc etc . The gains sold off going into the close.   Wait, Oil was still up!  So that seemed concerning  ( And rightly so), so lets address that.   I will start with a chart of …

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HK –  This ran up 20%!  Woo Hoo!  Nice call.  THEN IT SOLD OFF into the close as seen here.  Please read the chart, it left a reversal candle.

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SO – Question is , Is this reversal the death of our run?   The answer is,  it doesn’t have to be, but it can lead to a consolidation or a drop.  It then can resume the run. 

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I looked back at many Miners, because we just saw a spectacular run out of the lows in Miners. Were there Reversals where stocks ran up early in the day and then dropped into the close?  Yes.

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CDE–  Notice CDE had a strong reversal on Friday  March 4. It shot up $4.50 to $5.25, then lost it all.  KEY POINT:  The next day it went back to to $5.20.  YAY! ,  then it dropped on March 8.  BOO!  What happened next?

CDE – The next lows were March 9 and we have NOT seen those lows again. The stock has almost doubled. THEN notice all of the reversal days on the climb higher. Profit taking?  Big money scaring rookies out, so they can grab more shares? This run was never in jeopardy, it caused a small pause .

EXK –  Another bullish Miner that had reversals.  Maybe SMART MONEY was buying and driving price up,  and did a quick drop to panic people out and be able to buy their shares?  Again, after each pop & drop  – the next day did not have drastic follow through.  Someone was buying.   We can look for that in Energy Friday.

Our energy stocks will have to let us know with time.   So tomorrow we have to see how these react,  but many still have bullish set ups.     Sell if you are nervous, you can always get back in if it’s a false alarm.  I owned 2 stocks that were extended and had good profit after a nice run up.   I have owned them for a long time and I sold partial positions in those after hrs.  I may re-deploy the funds if I see other good set ups  ( Fri, Mon, Tues, it depends) in Energy or Commodities.   For now I still have a good size basket of Energy & Commodities  in my portfolio.

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 CRB – The CRB is still acting as expected. It should struggle at the 200sma, but slowly work its way through. This was my April 26 chart.

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APRIL 28 – Pushing above the 200sma.

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CRB–  Just a possibility. This can work through resistance and then drop back and back test the 200sma in seeking out a DCL.

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Reversal Candle Example   #2 :

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I have been accumulating HBM for several days.  It too had a reversal candle. The set up remains bullish, but they had earnings after hrs.  I liked what I heard , we’ll see what happens tomorrow.  This could drop to the 10sma or 50sma  and recover as shown, so I am not going to panic if I see selling. 

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GOLD –  A GOLD break out from here is very bullish in T/A.    It might even mean that an ICL was formed in early April, like I mentioned 2 weeks ago.    It just seems tooooo   Bullish, but  Gold has been consolidating for a long time now. SEVERAL WEEKS.  I will discuss this further in the weekend report, but there is no doubt that Gold remained strong while SILVER broke out and is running up.   They may finally be synchronizing.   Silver was seriously lagging. 

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GDX – Miners consolidated and then started another run higher.  Many Miners have done this already, but some like GG look like they want to complete theirs now.   GDX can conceivably run to $27.

When I look at Miners, it looks like Juniors are all completing  A-B-C-D moves higher, and the bigger stocks are starting to finish theirs now? 

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NEM is complete, but GG and ABX look like they can run higher.

MINERS

  SO for Miners, my latest discussions have been ” Traders can trade them, long term holders should wait for a pull back, because retracements  do come after extreme run ups.”   I had even mentioned on APRIL 12th that I was trading TGD and BAA , etc.

I shared these for example…

Baa was set up correctly, and almsot  hit $0.35 today.  Still moving higher to complete its run.

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AG –   You can see why I cannot recommend buying a stock after such a strong run.  If I expect this, buying & holding here would hurt.   Picture if you bought here at $10 and just ride it down to $6 or $7.   Ouch.

In the back of my mind, however,  I do know that if they remain strong and heavily accumulated, they can do this.

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 So that’s the story for now.  Reversals in some Energy or Commodity stocks yesterday ‘could’ mean more downside, but as we’ve seen from my homework assignment with Miners , it may or may not amount to much.  With Miners,  we saw that they  had many reversals that amounted to nothing.  It seemed like smart money may have triggered sell offs to scoop up the shares of the weak hands.    Lets see how this plays out on Friday.

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Have a great Friday and Weekend!

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~ALEX

 Looking at reversals that look to still be bullish,  I look at VALE. I may add right here or at a drop to  the $5.00 area  🙂