Aug 4th – Progress

Things still seem to be progressing along in the various sectors of the market that we have been following. Lets take a look.

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SPX – This sideways move is really a bullish consolidation. As time goes by, we get deeper into the daily cycle, but this is holding up rather bullishly. On a wkly chart, it is forming a very bullish pattern.

Tuesday we saw this  back test on the NYSE, and it held and reversed higher Wednesday.

As mentioned in Yesterdays report, I had to be at the hospital yesterday and I was gone all day.  I was watching various things taking place on my phone while in the waiting room and while away all day. I’m going to use some of  Tuesdays charts from Wednesday mornings  reports along with charts of Wednesdays close here to point out the progress that we are seeing ( And our thoughts of what we were expecting going forward).  

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USD –  I am expecting a bounce in the USD soon, but I do not expect it to get too far. I used this chart in Wednesdays report.

WTIC – SO we have been watching OIL sell off, and it is now within the timing that we can look for a Daily Cycle Low. I was pointing out this 50% area as possible support. IT is an area to watch, anticipating that a low could form.

WTIC – So we got a good reversal at the 50% mark. Many Oil stocks started to flip, looking bullish again. This could be a DCL, but we need further progress to get confirmation of a tradeable low. We need follow through by –

1. Moving above yesterdays high

2. Break that trend line

3. Break and close above the 10sma

Yes, I know that some traders here are experienced and may want to front run this confirmation of progress. Some may want to start trading bullish set ups in energy stocks.  That is fine, just honor stops if things do turn downward, since Oil can drop for many days until a solid low is in place. Read this chart.

XLE – The XLE has actually remained rather bullish during Oils sell off, and it has a swing low in place as it pushes against the 10 sma.  Some bigger Oil / Energy companies have held up well.  Charts like CWEI, MRO , HAL, and a few others are holding up rather well.

NATTY – Bullish, but I wanted to see a good Push to help that MACD and a few other indicators to remain bullish .

NATGAS- You can see that we got that Push, and that is progress. I moved the upper trend line of the wedge higher.

GOLD – Due to the look of this chart and the GDX  at the close Tuesday, I expected a ‘Stall’ or ‘Pause’ after 5 or 6 days higher.

GOLD – SO we see that Gold is pausing.  Notice that we had a 1 day pause on day 3. Maybe we get  only a 1 day drop here, or possibly we get another down day or 2.  Either way, Gold remains bullish and I expect a push higher soon. If you trade Gold, this would be a buy the dip time as it continues to make progress in its move higher.

GDX –  I expected the same here ( read the chart) and drew in that a dip is to be expected. There is short term weakness in Miners, so I called for a ‘pause’ here too.  Nothing bearish or nothing to get too excited about, I expect higher prices soon. Progress.

GDX –  We started that dip. Read the chart, but remember that Miners can also go sideways like the SPX has to reach that trend line too.

  NOTE: We are in the second Intermediate Cycle coming out of the lows. This is when individual Mining companies start to look good to investors, and these Mining companies may want to raise fast cash by doing a secondary offering.  You cannot usually tell which ones will do this, and I dont view this as bearish anyway, it allows them to raise cash and pay down debt or do additional exploration, tests, etc. at a time when the Bull is still young.  The fact that they do these offerings is just another reason why I have been encouraging a basket of miners if you buy individual companies,  or you can trade the GDX, GDXJ , SIL, etc .  Your gains may not be as great %-Wise just using GDX, GDXJ ( Some of  our Miners are up 300%, 500%, even 700%,  while GDX is up over 150%) , but you dont get the surprise of a short term drop like we have seen in SAND, GPL, VGZ yesterday, etc.  In the BIG PICTURE, a secondary offering may offer a buying opportunity  when it starts to recover.  look at SAND for example.

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GORO released earnings , and this is what it looks like when a company does good I guess.  I have been saying that I believe that AUMN is releasing earnings this morning and if they do not show ‘progress’, we may see what it looks like to Miss earnings.

 I want to release this report now,but I also want to add a bit more to it. I will be away again for parts of today, but I am seeing possible progress in the OIL / Energy stocks,  commodity stocks, etc.  I can share a bit more there.  Miners pulling back is also viewed as a time to add to positions, since we expect higher prices soon. Remember that we do not have confirmation of a low in Oil yet, but things look promising, so I will show a couple of charts of some energy stocks here.  Again, I’m releasing this report for the sake of time ( 7:30 a.m.) , and I will add a few more thoughts and ideas. I’ll post in the comments section when I am finished. If you dont have time to read through the comments ,  just refresh your report after an hour or so, and there should be additional info posted here before I leave for the day. Have a great Thursday trading!

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~ALEX

I wanted to add to this report, simply because we do see some bullish looking set ups forming in various sectors. I also was asked about core positions again. “What do you see as a possible good long term hold that hasnt really exploded higher to what is considered over extended like TRX or some of the others?”  Do your own due diligence, but if we have entered into a bull market in miners again, I cannot see how these 2 companies will not be up 100’s of % over time.

BAA – This chart is gorgeous to me.I was recommending it at $0.20 cents and higher, and though it has doubled, you can see the potential.

TGD – I have been pointing out TGD too.

Let me go through just a couple of Energy stocks.  You should look at the charts of CWEI, MRO, HAL, too, because these show you that when Oil is caught in a sell off, some stocks hold up better than others, and these could be future ‘buy the dips’ , because of their strength.

I was noticing LPI, this is the daily chart.  Oil was selling off day after day, and LPI  did a shake out at the 200sma. This looks like it has bottomed 4 days ago, right? This could be a good trade when Oil recovers.

LPI WKLY –  Also a good set up. This actually could be bought here with a stop below the support of the 10 weekly MA, but that is a good 11% lower.

LGCY –  This weekly chart looked good, but needed to POP over that 10 ma.  They released earnings Wednesday night. We’ll have to see if it gets hurt or can pop above that $1.90 area after that report.

SM – This is a bullish chart too. Earnings were to be released on Wenesday morning, and it surged higher with increased volume. It is a longer term buy.

MEMP – This took off a week after releasing earnings.

ALJ – Also released earnings already, trending higher during the Oil sell off

GST – Earnings to be released after the bell today, but it took a jump yesterday for some reason.

SO I just wanted to point out that OIL could be forming its low here, and many ( Many more than shown here) Oil / Energy stocks may be setting up to run higher when it does.  OILs cycles last for a long time, so you do NOT need to catch THE bottom to make a good trade.  They often pop up, dip back down, and then run strong, in a 1-2-3-4-5  type of surge.  I am just posting these to prepare readers here for possible future trades. Also some traders here are able to be in front of the screen all day, and they may find low risk set ups on their own that they can enter with a semi tight stop.  May I advise LOOKING UP when any company that you want to trade in this sector releases earnings. You might buy a good looking set up, but risk some ugly fall out if earnings are not good.  These Junior Oil companies ( And even some non juniors) can carry heavy debt and additional risk.  MEMP, ALJ, and a few others already released their earnings and are acting bullishly.  Look for this and you may fair better.

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Also many NASDAQ stocks  have been recovering, and the dips look like possible buy opportunities.  See charts of GRPN, DDD, XONE, CY, MU, GPRO, KONA, etc.  I will be keeping an eye on things as they Progress.