Friday March 24th

LOADING * LOADING * LOADING… As we watch various markets lining up or setting up for the next trade, it often reminds me of that dreaded “LOADING” symbol that shows up when you are using a slow internet connection.   It seems like it takes forever to ‘get connected’ to the internet. With trading it can also seem like it takes forever to get things lined up for a low risk trade set up, but patience has its rewards.  As the saying goes, “Good things ( including good set ups) come to those that wait.”

For our Friday report, we will review how some set ups are playing out well, and others may be setting up now.

SPX –  Even though a swing was put in place, I wouldn’t trade this long or short at this point. Thursday trade ran up under the 10sma, and sold off again. Also…

XLF – The Financial sector was concerning to me. It is oversold, but…

XLF –  Even though it may be oversold, it could unwind like this. I’ll be patient in this area for now, because the weekly charts formed a swing high.  Information on what this wants to do is still loading.

MOST BANK STOCKS AND THE XLF LOOK LIKE THIS SO FAR, so being long the General Markets right now could be risky.

THE USD did not change Thursday, so this is yesterdays chart. Price did not break the high or low of the Wednesday candle, but it is due for a dcl.

EDIT:  The USD went to 100 last night, and is dropping now. That puts an unconfirmed swing in place as long as the low of 99.34 isn’t taken out. I’m also watching Februarys  99.19 .

WTIC – Oil sold off a little bit and struggles at the 10sma ( $48.49).  As mentioned, I’m expecting a drop into the lower 40’s, but shorting is difficult for me. I wanted to short the bounce, but I expected a back test to the 50sma.  They havent made it THAT easy for me yet.

NATGAS  has been a LONG trade for weeks, since I expected that it put in an ICL, and it has been playing out as expected. Inventory reports on Thursday mornings can make things a bit tricky , though, and yesterday was no excuse.  Look at the intraday action in the morning when that inventory report was released.

NATGAS INTRADAY

We saw a slam down below all of the prior lows, and this would run all of the ‘tight’ stops. Immediately after that slam down, buyers / bulls  took control and bought up the panic.  Focusing only on short term charts would have kicked one out of this trade.

Stepping back a bit and looking at the Bigger picture ,  that would not have shaken you out. Here we see a cup & handle on the hourly chart.

As you can see,  NATGAS on the daily looks great above both the 200sma and the 50sma. I am still in this trade, hoping for a run like we saw in November. stops can be raised to the 200sma or 50sma. I got in early, so I’ll use the 200sma loosely.

NOTE:  I looked at several NAT GAS Stocks, and they are NOT responding to this move higher yet. That is worth watching, but so far NATGAS is acting bullishly. XCO and FCG are examples.

.

GOLD – DAY 9 and Gold stalled. By now you know my expectations. I think that Gold will top in this 3rd daily cycle soon, and then drop into a dcl and an ICL eventually too. Yes, at a glance this chart looks bullish, but Miners have been stalled out for about a week, while Gold was up for 6 days in a row.

I think that for some active & experienced  traders a short in miners is Loading* loading* loading*.  Shorting is not for everyone, and some may want to just wait for the next intermediate low to go long & strong. CASH is a position too.

SILVER actually looks bullish too.  It looks like it wants to tag the 200sma, and the way Silver POPS, it could do it in 1 day from here.

GDX –  Almost 1 month ago I said that I would probably short the Miners at the 50sma back test. After explaining all week what I am seeing, and that was that Gold is rising 6 days in a row and Miners are struggling at the 50sma, I did buy JDST at the open on day 10.  I sold 1/2 for a good gain of almost  $1 per share, and may hold the rest to see how this plays out.

THIS LOOKS LIKE A BULLISH REVERSAL CANDLE and it could break higher above that 50sma for a quick run to the 200sma, so that 50sma is where I would use a mental stop for my JDST ( or a bit  Under $14 on the actual JDST chart , if I want to lock in all gains). So I may sell the 2nd 1/2 under those conditions.

Topping out can take some time, it is a ‘process’, and I think that the Miners may wait for Gold & Silver to top before really dropping  ( Like that slow internet connection loading- loading- loading).  So ‘shorting’ is a tricky trade and difficult to execute properly, I use intraday charts to enter my trade,  sell 1/2 when I get decent gains, and watch the rest at his point.   This leveraged trading is NOT for everyone, and actually any trade that you take, you should have an EXIT STRATEGY BEFORE YOU TAKE THE TRADE, HAVE A STOP IN MIND & HONOR IT. I SAY THIS FOR EVERY TRADE, PERIOD.

NOTE : I think that there will be time to short the miners later too, for those that aren’t quite comfortable shorting this early in a daily cycle.  Also this is not a trade for all traders, so please be patient and do not feel that each trade mentioned here needs to be executed.  My thinking is this: Do you remember what it feels like when a daily cycle drops into a dcl?   You may recall that the entire comments board becomes full of fear and loathing and warnings, etc.  If you are short at that time, you are amazed at those comments, because it doesn’t feel quite that bad and agonizing. You could even short a daily cycle from day 20 onward and get most of the gains. The final days often drop fairly quickly.

 .

TRADE UPDATES

CGIX – This trade has also been working out very well. It is as bullish as I thought it would be, due to that excellent base set up, but it is playing out a bit differently, so let me share my updated observations.

#1 –  My upside targets were hit, I thought that maybe we would se an A-B-C type correction to $2.60  break out area

#2 – CGIX dropped to $2.60 the next day and then buyers stepped right in.  I thought,  “That looks bullish, maybe we get a bull flag, and this is a buying opportunity.”  One could add to current positions or even start a position.

#3 – Boom, it took off again!  So obviously this isnt an a-b-c correction Alex.  Obviously  this is not a bull flag forming, any more ideas Alex?    Yes, I do, and I hope that I am right 🙂

When I see a stock coming out of a long strong base and it BURSTS higher, then drops back, and bursts higher again…that just looks like a bullish move out of a base and can continue to make strong moves out of that base.  You’re going to like this if I am correct.

.

Do the next several charts look familiar to you?

#1 OCT 28  – I pointed out that I loved this base and we entered around 40 cents, and the POPS out of that base confirmed the bullishness. This was our NAK trade.

#2 NAK DEC 12  was Popping, and dropping to the 13 & 30sma at first, before it took a steeper ascent. We may see this in CGIX, but notice how it was a process. It wasn’t straight up like most people like to remember it.  NAK was a game of patience too.

#3 DEC 28– Look at this chart and CGIX may act this way.

#4 March 23 – I’m going to “kill 2 birds with one stone” .

1. CGIX could climb in the same manner that we saw NAK climb on the left of this chart.  I added on the dips all the way up, and it doubled and tripled in the following months.  NOT AS EASY AS IT LOOKS, but rewarding for the patient ones.

2. On the right hand side of this chart:   So far NAK itself has been selling on very very light volume over the last 2 days, and only tags the 10sma. I think NAK remains bullish here  🙂

 Honestly it has been a very exhausting 2 weeks for me, with the FED RATE HIKE and all of the volatility, choppiness, and market sectors flipping bullish and bearish repeatedly along the way. My daily reports have been like long extended weekend reports.   I can’t wait for the more normal  ebb and flow of the markets.  The fact of the matter is that there are times when we have tons of proper set ups,  market sectors all proceed with a rhythm and flow that is much more predictable,  and the trades follow through like clockwork.   We have enjoyed those times here and made money on many many trades for months!  And then there are the occasional times when things get choppy and volatile and it is just harder to make the gains. I try to just cover the markets at those times, but readers let me know that they want ‘trade set ups’ daily despite the risks.  We have very active day traders here, so I do look for trade set ups, and some work out, others wont under these conditions.  Please do NOT feel like you MUST trade under these conditions.  Holding cash and waiting for the markets to calm down a bit is safer and patience is often rewarding.

I want to reassure everyone that the markets will settle back down to a very readable ebb and flow, and trade set ups will again become abundant. We just have to remember that at times like this, we might need to be patient and allow things to settle. I have mentioned that I keep trade positions small and manageable in this environment.  We always need to know BEFORE we even enter a trade,  where will I exit if this trade goes against me? In other words,  always HAVE AND HONOR STOPS.  I have said that repeatedly, protect your funds.  No excuses.  Sure, getting stopped out is frustrating, but losing 40% holding a trade that went against you is a bit worse, right?

Enjoy your Friday trading, and have a great weekend.

~ALEX

SA – I mentioned that I was watching several bullish looking Miners, some that were just ‘average’, and some are just plain ole weak.  SA was a good one, and this was a beautiful chart.

Thursday : It does make me a bit nervous when I am trading anything that shorts the Miners, so traders beware.  We are still getting some Mixed signal with the choppy volatile markets.   Be safe! 🙂