Perspective

It’s all a matter of perspective. If you fell asleep Sunday night and didn’t wake up until after the market closed on Monday, you may have thought that not a lot had happened.  If, however, you read my report Monday morning , you saw that Oil had dropped 4% overnight.   CNBC and many other sources of information where lit up.  Was ‘Oil dropping to the 20’s again’? Was it ‘a great time to go short’?  No, Cycle timing and the charts were pointing to possibly just a small pull back.  We are invested in Oil & Energy, so this was important.   This was our Oil chart in the report.

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WTIC – Oil was early in the 2nd daily cycle, and the first one was R.T., so I expected more than just a day 6th high in this run. Maybe we would get a gap fill?

WTIC MONDAY –  Many ( Not here at Chartfreak) likely jumped in on the short side pre-market, but the shorts got overwhelmed.  This reversal did fill the gap and it did something else too…

Notice this important observation

WTIC –  Oil had recaptured the 200sma for the first time in over a year after repeatedly being rejected. It also CLOSED over the 200sma for 5 straight days!

Today when Oil dropped and filled that gap, it actually also got back over the 200sma by the close.  I felt that Oil ‘Could’ drop to the 50sma and still be fine, but holding that 200sma for 6 straight closes is impressive in my opinion. Oil remains bullish.

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Oil reversed , but it still closed slightly down.

The XLE dropped right to the 20sma and reversed higher to close green. This also ‘could’ have dropped to the 50sma and lower channel, but it remained strong.

SO this was actually a bullish show of strength for Oil & Energy, I will discuss Energy a bit more at the end of the report.  Lets review the markets.

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SPX – In march as we rallied higher,  I had been keeping my eyes on a rising bearish wedge shown below. I expected a drop and then a rally to follow in the 2nd daily cycle. I also mentioned that the drop could correct the wedge.

SPX – That wedge has disappeared and so far we are bullishly continuing to climb higher. The past few weekend reports have covered other bullish changes in the General Markets since the Jan – Feb correction.

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IBB – This is also an area that we have discussed going long due to the bullish set up and bullish base. I pointed out that This dip below  would lead to a buying opportunity.  There is risk in individual companies, so some buy a small basket of the ones mentioned here in past reports.  Some use Options, others use ETFs, or LABU.  LABU is 3x ETF, it is only for the experienced or short term trades.

IBB Monday – Price bounced right off of the 10sma. IT looks like it is preparing to break out again, this time from a long inverse H&S type set up. The IBB remains bullish.

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CRB – The CRB remains in a bullish set up too. 

We have been trading many commodity stocks in various stages on their run higher. X, AKS, AA, CLF, VALE, SID, etc. etc.  Some are pulling back, others are consolidating similar to what we saw when we were in CLF & VALE.

VALE –  I’d like to see Vale pull back further, so I am patiently waiting for this, but it i holding up well so far. CLF remains at recent highs.

AA–  It is still Consolidating, these are 2 older charts. AA  continues to go sideways and while some wait and buy the break out,  I entered at $9.70’s area. I DO think this will eventually  run into the teens swiftly.

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NATGAS – This is also just moving sideways.  I was Bullish as it came out of its lows, I would like to see this break higher soon.   As long as it remains above the 50sma on a closing basis, it should be fine.

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Nothing has changed with GOLD & MINERS Since the weekend report or for the past several days.  I feel like I am writing the same thing over and over daily for weeks, so please go back and read a few of the last reports for more detail. Basically  GOLD should pull back, it is due timing-wise, but it keeps going sideways.   Miners are consolidating bullishly, and some are just being accumulated and flying higher. For some reason,  Silver lagged and actually looks to be breaking out now. Will that keep Miners afloat if Gold corrects?

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I mentioned TGD ( and a few others) in the weekend report as still acting bullishly.

APRIL 12 I posted this HUGE volume break out day. Why Were Miners like GSS, AUMN, MUX, VGZ, TGD, etc all still acting correctly, if Gold was due for a pull back?   I don’t know, but they could be traded for traders in front of the screen all day. It has been good for ‘core’ positions, that’s for sure.

This weekend I showed this inverse H&S, also showing that BUY & HOLD core positions have been paying off since Jan lows too.

I’m pretty sure that Gold was down today, but someone forgot to tell TGD ( up another 18.6%) and GSS (up 11%) , VGZ, etc. Individual Miners that have proper set ups are still moving higher.

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I still expect something like this in the next 2 weeks for GOLD, but right now a sideways consolidation has been  the new pull back..

I found something somewhat interesting in MINERS coming out of bear mkt sell off in 2008.  I’m not saying that this WILL happen, but MINERS are holding up here,  what about the pull back?  Consider this.

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This is the HUI coming out of the bear market sell off lows of 2008.  ICL to ICL in 6 months time, where was the BIG DROP in miners?    A Wedge did form, and then we got a rather quick slam down in 2 weeks time. THAT was a 38.2% drop from highs.   Currently a  38.2% pullback in GDX is $19 and 50% is $17.75 area, so…

GDX – I Used this chart in the weekend report. GDX  could break down from this wedge quickly in a shake out type drop similar to the one above in 2009.   That 38.2% or 50% would be the $17 – $19 area. I’ll be looking for clues to buy in those areas if we ever get that drop 🙂

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ENERGY STOCKS

So the ENERGY STOCKS mentioned in last Fridays report ( And the Friday before) Still remain valid.  They went on sale today, but most recovered.  I did get some feedback that some readers here were buying.  I also got feedback that after reading scary things in other trading forums Monday morning, a few sold at the open, basically at the lows of the day.   Not knowing whether to buy the recovery as the day went on, I’m asked are they still bullish set ups or did the drop ruin things?  Lets look at a few and see why they look and remain bullish to me.  In some I’m going to go over the whole big picture for them – it may help.

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CPG – Breaking out from a long term trend line.  It ran $7.50-  $11.86 . I show this to show the progress that they are making since being mentioned in the report. This was at the end of Feb. 

CPG WKLY –  Now $15– It gapped down Monday  morning to support, recovered and looks ready to run from an inverse H&S base. This also did not sell off when OIL sold off for 9 straight days.

CNX- Breaking out from $4.53 to $8

CNX WKLY NOW – When you look at a chart like this (weekly) it looks like we would say,  ” I could have easily just Bought and hold that from $4.53 and tripled my money soon.” So I wanted to show you something very familiar to us now.

CNX DAILY – This was not just an easy ride. Patience in the consolidation phases was needed,   sound familiar? I am showing you this to give you the visual of the day to day volatility in those consolidations.  We rode consolidations in CLF, VALE, AKS, SID,  and now AA.  Also some energy stocks are jumping around and bucking us up & down, but longer term the recovery can be quite rewarding. Just use stops and remain alert. Look at the weekly chart above again  🙂

CLF – Do you recall this chart 1 month ago at $2.60?  We probably all wish we could just go back, load up heavy, and ride out that consolidation phase knowing what we know now about  CLF. It wouldn’t matter if it dropped 35 cents and then recovered, knowing what was ahead when it recovered.

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SO again, ENERGY .  Many stocks are recovering and OIL is early in the daily count for the 2nd daily cycle.  Sometimes it takes a little sideways consolidation before the brek higher comes along.

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OAS – Roughly $4.20 to $9  since recommended.    This chart was from the weekend report.  Did it get crushed when OIL dropped 4% today?

OAS –  It did drop quite a bit, but it’s still a good looking set up.  It went on sale today, but it would have been a scary buy until it moved a bit higher as the day went on.  Even if someone didn’t buy it yet, it can still be bought here.  Reminder: IT MIGHT continue to consolidate. 

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MRO– When first mentioned $14 was a resistance zone ( Keep that in mind). 

This was in last Fridays  report, has anything changed?

MRO Monday – Went on sale and recovered quickly. Volume was rather light, but that also means that it sold off on light volume when Oil was down 4%.  Since resistance was at $14, it may be building energy to break higher.

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  ERF  March 1st-  Notice the measured move to $4.

ERF – It ran to $4 and consolidated into a Bullish pattern. I recommended buying this consolidation, because OIL sold off for 9 straight days and this did not.

ERF Monday –  After completing another measured move, it dropped today with Oil and reversed higher, actually closing up 6.5%.  This has now moved from $1.84 to $5. Great gains.

Finally LGCY–  This energy stock moves in huge swings.  It is scary at times, but this big picture is helpful if this is going to recover too. It was actually over $30 in 2014.

LGCY dropped to the 50sma and started moving higher Monday morning. It also ended up green for the day. Still a bullish looking base.

 

So please note that in every chart of a stock that recovered,  it was NOT straight up.  There were many boring consolidations. Mondays drop could be considered part of that process.

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As a part of this lesson, I also wanted to show TCK.  What a great looking run, but it too got a bit scary at one point in the consolidation. 

 

Jan to Feb –  $2.56 to $7.25 – NOT straight up. Notice the sideways boring moves and volatility.

Then it got stuck under resistance and went sideways from $6-$7.  That’s about 10 days or 2 weeks of trading.

TCK Monday – Sideways for over a month now and I even warned about a possible H&S , but it never played out. TCK is now breaking out, possibly for a strong run out of this consolidation.

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Finally – I found a new stock ( New to me, I have never heard of this company). Hudbay Minerals.  They released earnings on Feb 24th , and the stock went higher. Their next earnings release is April 29th. They are mainly Copper Mining. Gold & silver also.

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HBM – ( HUDBAY MINERALS) – I bought it as a trade since it bounced off of its 50sma and it just kept climbing.  It has a long consolidation and a possible inverse H&S , so I will hold on to it until it tells me to let go.  I see TGD, VGZ, AUMN, GSS, etc still running strong, so I will try this one until it lets me know that it doesn’t want to run.

HBM close up– I think it may be ready to break out, so someone here also may want to trade it also? Just remember that it is a Copper / Gold Miner and could get caught in a pullback if Gold drops.  You could use a stop under the 50sma, or just sell a quick POP if we get one.  So far, trading in certain Miners has worked out well.

 

Like GSS in this chart from the weekend report. It continued higher Monday too.

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FCX is a copper stock that has consolidated for over a month and also looks like it wants to break out higher.  It might just continue to consolidate like AA has, so I’ll wait for the break out this time. 

 

Again , AA is still consolidating.  I own it at $9.70’s .   Kind of Boring, but then again so was CLF.  🙂

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That is your Tuesday morning review and a little extra.  Best wishes and thanks for being here!

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~ALEX