Not A Whole Lot Of Change Here
The markets are basically moving as expected, so without a whole lot of change, there isnt a whole lot to talk about. We'll do a quick market and then discuss some trade ideas.
.SPX- Good follow through.
Archive for year: 2016
Public Report – Update For The Golden Pennant
Many people are looking at this almost perfect Bullish Pennant forming in Gold. Many are also looking at the C.O.T. report that came out Friday and seeing bearish implications. Yes, Bull Flags can fail, but for now it remains a bullish trading pattern, so lets discuss Gold here using a few of todays charts from the premium report.
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GOLD – Gold tagged the $1250 area overnight. That is the top of the flag. Gold could break out from here, but since we are not at the Apex, GOLD MAY ALSO POP & DROP TODAY (SHORT TERM) IF THIS FLAG HOLDS IT BACK. This flag has eased overbought conditions meaning that Gold could still break higher in time .
GLD Monthly ( Feb ended Monday). Thats a bullish chart .
Silver- Silver actually dropped Monday and then bounced off of support. This can be viewed as a test of the break out and also may be relieving overbought conditions. ( I don’t know why volume didn’t appear correctly here).
This is a Monthly view of GDX, since Feb ended Monday. This surge with that kind of volume is exactly what you want to see.
I had posted this chart last week with a triangle that I had drawn in at the lower left corner. I’m pointing out that when a Flag pattern breaks out upside, one usually buys the break out and puts a stop below the apex. If it fails, you will be stopped out.
I also pointed out a couple of Miners that have ‘Lagged’ a bit and may be setting up to run even higher if Gold does Pop. ( AGI – Imagine thinking that $2.40 to $4.30 is lagging) 🙂
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So why do I like the set up in AGI? Look at the similarities between these next 3 charts. Long bases can lead to excellent rallies.
So AGI could break higher out of that base if Gold decides to break from that flag.
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What if Golds flag was only a 1/2 way point, and the RSI & STOCHASTICS gets embedded? That would prove to be a huge move out of the lows.
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Yes, The C.O.T. was showing that Commercial shorts are as high as they have been at previous tops. Will this flag fail? It might, but I’m not going to jump the gun and short this bullish move higher. I’ll just continue to tale it step by step, using and honoring stops along the way.
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Best wishes and thanks for being here.
~ALEX
What has been working lately?
The markets have been quite volatile and choppy, and that can be difficult to trade. At chartfreak, we've been focusing on bases and up trends, so lets do a market review and discuss this further.
.SPX- I've been saying that I expect higher price, but this has been quite choppy. If we dont get a surge higher soon, this could become an overbought bearish rising wedge.
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Weekend Review Feb 28
We reach the end of the month on Monday, so Monthly charts will come in to play too. Right now we'll take a look at how things are playing out using weekly and daily charts.
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Public Report – Bull Flags
I wrote a report about Bull Flags for the premium members last night. Why? Questions have been raised.
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On Feb 17th, after the recent run up in Gold, I mentioned that Gold could Pause and form a Bull Flag. These are often just a pause along the way (although they can fail).
Feb 17 - I discussed a possible Bull Flag forming after a strong run higher.
Feb 24 - We have the Flag and as mentioned, it is often just a pause before continuing to run higher.
Well on Friday Feb 24 Gold broke out and dropped. Many said Gold failed at the Bull Flag. Friday Feb 26 ( Today) Gold dropped down to $1212. Does that hurt the Bull Flag and prove it is a failure, like some are saying?
No- Let me show you 2 ideas that are not a stretch or grasping for straws. These are legitimate patterns playing out .
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Is That A Bull Flag?
On Feb 17th, after the recent run up in Gold, I mentioned that it could Pause and form a Bull Flag. These are often just a pause along the way (although they can fail). So lets discuss the last few days and discuss Golds Bull Flag and other important implications that I am seeing.
.Feb 17 - I discussed a possible Bull Flag forming after a strong run higher.
Feb 24, We have the Flag and it is often just a pause before continuing to run higher.
Then I started seeing similar bullish formations in various Miners, like TGD. This is an ascending wedge or ascending triangle, and usually plays out in a bullish break higher too. Hmmm.
Lets discuss chart patterns and look at some more Miners...
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Quite A Ride
There were reversals all over the place yesterday. From the Market sell off and Oil reversing higher, to Gold and The Miners breaking out only to turn lower. What can we expect going forward?
.SPX - Volatility has produced many reversal here at the lows, but I think they were just clearing everyone out before a run higher.
In an earlier report, I pointed out this possibility, and we see it playing out...
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Buy Sell Or Hold
I've been expecting a multi week rally in the markets since Feb 11, and so far it is pretty lack luster. I noticed weakness in the SPX on Monday and mentioned that I thought this would cause the 'rally' to stall.
I posted this chart, read the writing.
The SPX was rejected at the 50 sma.
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Public Post – A Trading Paradise In Metals And Miners
Are you basking in the Traders paradise? At Chartfreak, trading has been good in Precious metals and Commodities. Lets take a look at a few of our expectations going forward and review some trade set ups that are still working out favorably.
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SPX WKLY – After warning that there were signs of another sell off coming in November,I have recently been expecting a rally to draw the bulls back in. I expect that we could see a repeat of the run up last September, as highlighted.
OIL REVIEW
Back on November 13 , I had a $26.09 Target for Oil on a weekly chart. I also pointed out a $24 target later , if the selling reached extremes.
Last week the XLE didn’t make new lows, but Oil did, dropping to $26.05. That along with cycle timing caused me to look for Oil to possibly see a temporary bottom here.
I used these charts in my February reports.
Oil gapped up recently , so I drew my expectation of a gap fill and a tag of trend line. Then the move higher.
We got a perfect tag of the trend line. I still believe that Oil may be finding a bottom unless this trend line breaks?
Notice that Some Oil Stocks bottomed last summer, well before Oil.
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GOLD SILVER & MINERS
GOLD– We caught the strong run up in Gold and Miners right from the shake out lows in GDX. On Feb 17 I thought that a FLAG could form to consolidate recent gains, while individual Miners may still rally or play catch up, so I presented this idea and a few alternative ideas as well.
You can see that the Bull flag is almost complete.
SILVER – Silver never broke out, so it may do that this week or it may just continue to consolidate.
I definitely believe that we may be seeing the next phase of the Bull Market in Precious metals starting, as we surge out of the lows. Nothing goes straight up though, so lets also discuss what an eventual pull back could look like, as it may present another buying opportunity.
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This is one that would shake many people up. I don’t think that it is the most likely path, but it needs to be viewed to prepare us for any possibility.
These 2 charts were in my last public report. I favor these views.
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What about this Traders Paradise? Past public reports have pointed out some of our trades in Miners and commodities. Lets review a couple more here.
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SWC – This stock was pushing on the 50sma and was a good set up last week.
SWC – SWN has broken out after reporting earnings. I expect higher prices.
MUX – We recommended a 2nd buy on Jan 26 at $1.17
MUX – today it is at $1.75. If Miners pull back in a significant way, I can see a test of the 50sma as possible.
ABX – $ 7.65 inverse H&S with good volume pops.
ABX currently at $13.42. This may just form a handle, before another strong mive higher.
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Here is some good news too. Some of the commodity stocks presented in past reports as ‘trade set ups’ now appear to be breaking from their bases and could have great upside potential for the long term.
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CENX – Feb 3, nice long base with a shake out, ran and pulled back to $4 at the 8 ema.
CENX Has moved from $2.63 to above $7. A pullback may be another buying opportunity. Look back at how ABX and NEM ran from their long bases.
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FCX was mentioned as bottoming near $4, and then a 2nd buy was at $6 as it broke above the 50sma. FCX is near $8 today. This also may be bought on the dips if it remains healthy.
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Feb 3 – VALE at $2.32 , this was a low risk entry, since your stop would be placed below the lows. Price is now trading above that blue triangle.
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X Daily– Notice that US STEEL is forming a multi month base with divergence. This has a lot of upside potential if it recovers from here.
Recent reports featured AA, AKS, STLD, TCK, VALE, FCX , etc., and most of them now look like bases that may become longer term bottoms.
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I’ve been discussing the possibility of the Equity Markets topping and the Bull returning in Precious Metals and Commodities for a while now. Many public reports have been posted at Chartfreak.com to highlight these events. I liken it to a large freighter ship turning around in the ocean. They can’t turn on a dime, but gradually they will reverse course and head in the other direction. Is that what we are seeing here in the markets today? Many Miners and commodity stocks look to have built their bases, and they could even become buy & hold investments longer term if conditions remain this way. Why not join us as we continue to monitor the situation? Chartfreak.com
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~ALEX
Wash Rinse Repeat
Well, I had a weekend report with 32 charts and not much has changed in one trading day, so lets do a little review and then look at some trade set ups.
.Last week we saw a healthy set up for a move higher
