MAY 8 Weekend Report

We will discuss the Theme Picture later in the report, lets get right into our market review…

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SPX – We are expecting and late for a DCL.  The SPX tagged the 50sma and put in a small reversal candle. I believe that we are about to get a move higher.

That calls for a look at the bigger picture…

Using this MONTHLY CHART ,  I have pointed out several times what to look for in the big picture, especially if we are seeing the selling we saw early this year and thinking that we may be forming a top.  This chart had shown our anticipated break down,  now we needed to see if it could recover or just make a short-able bounce.   Use the 10 or 13 MA and look for it to be rejected or recovered . Click to enlarge any chart.

The SPX MONTHLY –  This shows that the markets have regained the 10 and 13 MA at this point. Since we are expecting a new 2nd daily cycle to start,  we would look for a possible break out to new highs.  ( A prolonged Sideways move through out the 2nd daily cycle here would seem bearish).

OTHER SECTORS of the markets are lagging, so there is not a strong indication that “everything is all bullish again”. The former highs for the general markets were made back in the Spring of last year, and some areas have a lot of work to do. Lets take a look. 

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NASDAQ  ( QQQ) –   Also due for a bounce or rally here. So far it has been weaker, but the volume selling this time has also been lighter. We’ll see if it can put in a strong bounce or show continued weakness.  Lets play ‘Spot the typo ‘ – I see a few on my charts today. Sorry about that.

 

IWM – 

IBB –  I Used this chart to point out what I think or though was a nice Big Picture bottom for the IBB.   2010 & 2011 had long consolidations.   Notice the Pink CHANNEL .  The IBB broke out from that base and looked promising too,  but recently…

IBB – It’s a sideways move and at this point is taking on the look of  a false break out from that base, and now it has returned to that base.  I’m no longer interested in this trade until I see it prove to me that it is healthy. The MACD remains healthy.

 

USD WKLY – In past reports I mentioned that we should expect a dollar bounce and that MIGHT help Precious Metals begin a decline. We see a Reversal candle in the Dollar.  Note: Gold may F-I-N-A-L-L-Y have one on the weekly top too, we’ll see that later in the report.

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WTIC WKLY –  Read the chart.

 

WTIC DAILY – Just an estimate. 

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CRB WKLY May 3 –

CRB WKLY MAY 6 –  I want to see the 10 MA hold on a wkly closing basis to remain bullish. In April we broke it and regained it on a wkly close.

CRB DAILY – I showed this updated view in prior reports, and so far it is still holding up near the 200 sma.

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GOLD & MINERS

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GOLD WKLY –  As mentioned, the USD had a reversal Candle at the lows this week.   This Doji may be a reversal candle for Gold if their movement  remains inversely related.

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GOLD DAILY –  I must say, however,  this gold daily chart looks bullish. Next week will reveal if this is a real cup & handle after a consolidation or a false break out with the $USD about to rally. Read the chart.  Typo #4 🙁

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This is how GOLD came off the bottom in 2008.  Like the Theme picture of the bouncing ball,  in CYCLES,  every bounce doesnt just get stronger and stronger.   Usually the first 1 or 2, maybe 3 daily cycles can bounce to newer highs,   and then they lose steam  (buyers) and drop to an ICL.    We are waiting for that now.      From the ICL in 2008 , we saw 4 daily cycles, 3 bounced with higher highs, then the 4th rolled over.  We want to be ready to buy if we see this kind of drop.

I actually drew the above chart and this one on March 29 for a report and didn’t post it .  This was me expecting the pull back in the 4th daily cycle in 2016,  just like we saw in 2008 above.   Like the bouncing ball, I expected it to lose steam in April as shown,   but it just made a higher high again.   We have now added a 4th daily cycle that remained bullish.  I still expect a  drop and a  5th daily cycle should be it.   I dont think I have EVER seen a ‘6 daily cycle’ Cycle.  We usually have 3 or 4 daily cycles, maybe 5 in Gold.

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GDX –  Read the chart.

 

ABX –  A major component of the GDX looks to be finishing up.  A Pull back could form a handle.

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Now I want to review some weekly CHARTS of some of the stocks that we may be holding. I want to point out what I am looking for and looking at.  What I might be loving, what I might be hating about them.  THEN…You can apply the same ideas to what you may be holding.

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NFLX EXAMPLE:  Left side of the chart – Big sell off maybe $40 to $8, then a base. 

If it is recovering, You want your weekly runs higher to close over the 10 MA on a wkly basis.    It’s not the end of the world if it doesnt, but many use this as a gauge of a real recovering stock, or a healthy stock in an uptrend   VS a weak one.  So I look for that   at the start of these runs.  IF You are over the 10 and 30 MA- That could be trending higher and viewed as BULLISH.  Read this chart.

 

SO I want stocks moving out of a Base to move over the 10 (And eventually the 30 ) MA.

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VALE WKLY –  Still over the 10ma & above the 30ma, it is overall healthy.   I do hate those big 1 week drops, but the one in March didnt last.

 

FCX –  Still above the 10 MA & 30MA.  Price has crawled along the 10 MA here for 4 weeks actually.

 

HBM WKLY – Big drop, holding the 10 & 30 ma so far.  I like the volume character, hate the whip saw price action.

 

CLF WKLY –  UGLY CANDLE,  HUGE DROP. Still holding the 10ma,  but I remain cautious here.  Even if CLF remains above the 10 & 30, it may need to consolidate to regain strength.

 

CLF DAILY –  This doesn’t look as bad as he weekly, but support is further down if the 50sma doesnt hold. A quick drop and recovery would still close above the 10 MA Wkly.

 

BTE WKLY – ( Another typo on the chart, I am hurrying too much )   🙂

 

BCEI WKLY –

 

LGCY WKLY –  Above the 10 & 30 MA . LGCY wick’d down and rebounded off of the 30MA.  This can go sideways along the 30MA or just take off higher, but if it doesnt lose the 30 I consider it quite bullish over time.  It is an excellent chart in many ways and I do still own it.  More on this in a minute.

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A WORD OF CAUTION :  I mentioned a week or 2 ago that Copper was looking bullish.  FCX, HBM, NCQ, TGB, etc are Copper stocks that I liked.    It is now threatening a break down.

 

COPPER WKLY — The 50 weelky moving average  is a trouble spot for Copper

 

Copper daily –  Negative divergence when it approached the March highs, and this did not correct itself. This looks too much like November to ignore, and it was oversold then too.  Oversold  means nothing if the channel gives way.

 

NOVA COPPER –   Tell Nova Copper that Copper is looking risky.   NCQ has ignored Coppers recent drop, running from $0.36 to $0.86 in the last 3 weeks. It’s up over 400% in 4 months.

LESSON:

Look above at that NCQ chart above again,  because it has done what LGCY is doing now.  NCQ is a perfect example of a stock that moved above the 10ma and then burst above the 30ma in February.  ( LGCY  just did that).   It then had 1 huge drop on the first week of March  ( we see that now in some commodity stocks, so maybe it’s just a 1 week deal).  NCQ  then spent  WEEKS ,  4 or 5 weeks – over a  Month  going sideways on the 30 ma until the 10 ma caught up. LGCY just tagged the 30 ma  too.   THEN you got the next leg higher, which doubled NCQ again .

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Oh, and if you see another stock doing this, please let me know  🙂

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Thats the weekend report.   The length of the first daily cycle in the SPX is ridiculously long and due for a bounce or rally in its 2nd daily cycle.   We had a rough week in some of our commodity plays,  the weekly charts helped a bit, but not if you bought near the highs.  Some Energy Stocks should still be fine, based on the idea that OIL probably just put in a 1/2 cycle low and can get to $49-$50.  They have sold off and some are in oversold areas too. ( RIG reversal on the 50sma, oversold.  MEMP in a trading range,  SDRL is almost on the 50sma and is oversold, etc) .  Anyone with a core of Miners  or trading some probably saw further gains too.  I see that the $USD reversed and looks ready to move higher.  Will that finally rain on Golds parade?  We’ll see.  Could that affect Commodities with further selling or sideways movement?  I’ll be watching for that too, but the CRB is close to a DCL and many are almost oversold.  I’ll looking for a possible bounce or continuation higher, but I need to see what next week brings in that sector.  As the dollar rallies, it is best to stop trading Miners until we see how things play out. Did anyone see the move that GPL made in the last 5 days!  Look at Mon – Wed last week (see below) .  WOW! I feel a little better about CLF possibly bouncing after seeing that!  🙂

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Lets see what this Monday and Tuesday have in store for our trading and trade set ups. Thanks for being here, have a great weekend!

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~ALEX

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GPL –  This may be just a bounce now, and an A-B-C down with a dollar rally.

MEMP