April 5 – Resistance

Wednesday when the Oil inventory report was released, Oil reacted to a resistance point. Later in the day, when the Fed Minutes were released, various  markets also reacted to their resistance points.

.

NYA April 4th – I’ve been a bit cautious about the General Markets and pointed out the  charts of the NYA & the XLF . Let’s take a look …

NYA APRIL 5th – The move higher has had weak divergence, and it was turned back again Wednesday at resistance.

XLF April 4th – For almost 2 weeks I have been pointing this out as a reason that I am not overly Bullish about the markets at this point. This needed to recover for me to feel a bit more comfortable going long.

This was the XLF on Wednesday

XLF April 5th – This possibility of a drop has kept me on the sidelines

XLF – And this is the big picture possibility.  You can see the timestamp on the chart was at 11 a.m. when the markets were higher. I actually drew this for a friend that has asked to become a student of mine. I was pointing out that this could be a bear flag and a drop could follow.

When I drew this at 11 a.m. for him, the NASDAQ was up 30 points and looked to be a solid break out.  I was pointing out to him that this is a bad set up with weak divergence and megaphone patterns. I wrote that ‘you can be long here, just stay alert’, because price can climb that bull horn for a while, but this bigger picture looks weak until this changes.

NAZ CLOSE UP –  It  sold off after the FED MINUTES right after tagging resistance. New highs and a lower MACD with no bullish cross.

Again, I haven’t been ‘recommending’ long positions until things resolved themselves, and they certainly haven’t yet. I was looking at charts of SOXS, TZA, TECS, SQQQ, etc etc and they look pretty good ( Short the market) , so I would be careful out there being long at this point.

USD – If the USD does a small pullback here, Gold can pop and Miners can push to the 200sma as mentioned in prior reports. When we get to Gold & Miners you will see why I hate this current set up either ‘long’ or ‘short’ Miners.  It is becoming a complex set up.

WTIC MARCH 17th –  RIGHT FROM THE TIME THE LOWS WERE COMING IN, I WAS EXPECTING OIL TO RUN HIGHER AND POSSIBLY FAIL THERE AT THE $52 AREA. Then I thought that we could see an ICL in April.

WTIC APRIL 5 –  Oil tagged the 50sma near $52 and dropped Wednesday on the inventory report. Energy stocks surged higher and also rolled over midday. This is where we really see what we have, an ICL ahead of us, or an ICL at the double bottom already in place. Please read the chart #1 & #2 thoughts.

WTIC – A more Bullish view. Yesterdays report mentioned that some of the Energy stocks were really set up nicely and running well, so this becomes a possibility with ‘C’ being the ICL in place.  Oil put in a new lower low a week after the initial low.   The ENERGY STOCKS will be a buy the dip, so let’s look at the XLE…

XLE – A break above the downtrend line, but the 50sma stalled it. I still like this set up, because many other Energy stocks that we were watching DID break above their 50sma. We will watch the pull back for possible entries, with the ‘timing’ depending on Oils future path.

.

GOLD & MINERS

.

That drop after the FED MINUTES yesterday looked like another false drop to me. Gold keeps dropping into a double bottom and then the MACD crosses and price moves higher.  That was pretty what happened again yesterday. I did not add to JDST, but  his late in the 3rd daily cycle, I do not expect Gold to go much higher really.  This late in a 3rd daily cycle, Gold may  be too heavy to break out at this point.  So let’s talk about the Miners.

MINERS – THIS IS BECOMING A COMPLEX CONSOLIDATION IN MINERS, AND I HATE THOSE BECAUSE THEY ARE DIFFICULT TO GO EITHER ‘LONG’ OR ‘SHORT’ AS YOU WILL SEE.  LET ME SHOW YOU WHY…

,

GDX MARCH 20 – I have been saying that 2 possibilities are there for Miners.

1. It could be a bull flag to the 200sma as shown, or

2. Continue to be held back at the 50sma ( I preferred this one eventually).

Now look at GDX weeks later.  That is a very frustrating move for “Longs” or “Shorts” and who can make money on this set up so far?   Now on Wednesday,  GDX broke above the 50sma and then pulled back a bit, so I re-drew that chart aboves expectations again, after this multi-week consolidation.  The Miners sold off quickly at the FED MINUTES and were bought up with strong volume just like Gold was, so it looked bullish again in the short term. That MACD has looked bullish the whole time, but that CAN fail, as you will see, and Miners CAN still just roll over.

THIS IS WHERE I WANT TO SHOW YOU THE COMPLEX PARTS OF THESE CONSOLIDATIONS, MAKING A LONG OR SHORT POSITION FRUSTRATING 🙁

GDX – Blue boxes – Notice that right before the big sell off in November, GDX also went sideways day after day and then POPPED-  It looked like a real bullish run would start, BUT THEN DROPPED RAPIDLY. We have gone sideways for days ( I went short at the 50sma) and now it looks like it could POP to the 200sma and then drop again.  The past 3 weeks has been quite  frustrating for GDX / GDXJ longs or shorts, near impossible to make money.

FOR MANY, the best thing to do is wait for that ICL.  Being either long or short a GDX GDXJ trade has basically gone no where.  No trend.

.

CHECK THIS OUT:

.

GDX – Now let me show you how frustrating this can really get. On the chart below, an ICL had occurred in September as shown, so one was due, but GDX just consolidated sideways for weeks & weeks.  It even ran up and broke out in December sucking people in ‘Long’, and then dropping again.

THEN after a few more weeks of that , it really broke out in late December,  BOOM!  THIS WAS DUE FOR AN ICL THOUGH.  How could that be, since no real ICL was visiblble?

This was the 2 break outs above, when an ICL was still due.  Yikes! It was an EVIL, DEVIOUS, RIDICULOUS SHAKE OUT ICL after the break out to new 1 month highs .  Then we saw that strong run out of the ICL in Miners, but many refused to buy after that.  We did NOT miss it here, we doubled and tripled our accounts in months.  Well, I’m thinking that we are due for an ICL in April or MAY and we can catch another great run higher, but right now we have this complex consolidation and it is impossible to be ‘long’ or ‘short’ comfortably – for more than a day or two anyway.  For some it is just best to be patient and Wait for the trending move out of an ICL.

So how does the recent action translate in my JDST trade? Well, it has been moving from $12 to $15 to $12 to $15 , etc , but that is only good if you buy low and sell high.  This has been a difficult trade and it is NOT recommended for everyone. Nor for many. I know that without a trending move, I am sick of it. I make gains and watch them fade over and over.  If you do not scalp your trade and cash in quickly, the gains fade away so far.  : )

Conclusion:  It has been a bit frustrating  at times just passing time inside of consolidations and choppy markets, but good things will come to those that remain patient. We have had some good short term trades in Energy, Pharma, and more, and we may have some good Energy set ups again if the Energy sector continues to pull back, too. All trades that I have been holding were very good shirt term trades out of good set ups, but holding on too long has given many gains back.  I am lightly invested at this point.

So here is where we are at.  I have made some money in NATGAS, SWN, OAS, CGIX, and a few others, but I have also lost some money trading other set ups by holding on too long.  I also have made some nice gains and watched them evaporate in NAK, MACK, etc.   Trade set ups that look proper are popping and then rolling over  ( CLF, VALE, FNSR,  etc).    When this happens, I know that we are in choppy, volatile times, and this is NOT a real traders paradise. We are not trending.   So far, this is not a time where you can buy a position and ride it for a few weeks (yet) ,  but I also know that the current situation in ENERGY and MINERS should lead to some excellent trades in the near future where we can buy & hold for a while.  NATGAS may set up again too.  That said,  if you want to keep trading,  KEEP POSITIONS SMALL and always use & honor mental or solid stops. It has been choppy and a bit frustrating.

Best wishes on your Thursday trading.

.

~ALEX

.

CGIX – This is my line in the sand.  If the trend line doesn’t hold, I’ll be out. I sold OVAS , I still own MACK.  Typo on the chart, “There is still room to drop” , and that bothers me, so I may exit this trade today, and save that Money for the low ICL in Miners.