April 9 – Weekend Report

As time moves forward, the Market big picture always become clearer, so let’s see what has been happening this week, with a few added ‘surprises’. I’ll also add in 3 more trade ideas.

 

SPX – This is a possible inverse H&S forming now. The DCL would be the head, and whether or not you took a long trade while waiting to see how this develops ( I have had concerns based on the XLF and a few other factors) you can see that you have not missed any great move in these choppy markets.  Notice that Price is STILL the same price as day 1, the first day after the swing low!   That said,  If you want to go long based on the possible inverse H&S and place a stop under the 50sma with a little wiggle room, this is as good a place as any to do that  risk reward wise.

NYA –  I was concerned with the dropping MACD , so I still have concerns there…

XLF – One of my main concerns was the financials and bank stocks like  GS, BAC, JPM, etc. Until I see a recovery, I will still be concerned, but again, price is at a low risk reward area in some of the General Markets. I am not Long or short currently.

NASDAQ –  We Don’t want to get too bullish and forget this chart from Thursdays report of the NASDAQ on Wednesday. This is still in place and that MACD has dropped further.  Markets have just been very choppy and volatile and I am still cautious on their ability to gain more upside at this point. They need to prove themselves and the Financials need to do that soon, in my opinion.

 

NOTE: This weekend report needs to be a bit more to the point in some areas, if I am to release it on Sunday. It will still be a full report, but I usually put in older charts of every sector and show expectations of Then & Now, and time today is limited for me to get this out Sunday night.   If I can’t shorten it, it will not be released until Monday morning, and it may be too long for some to read and digest before the market opens.   So if you need more  reminders of what I was expecting in the past with THE USD, OIL, NATGAS, GOLD, etc. etc.,  you will have time to review older reports  ( See the Friday after the Syrian Attack report,  The Thursday after the Fed Minutes release on Wednesday report, etc) with this  weekend report.

 

USD – After the Syrian attack, Gold burst higher by $20 Thursday night and the dollar dropped rapidly. My Friday report was asking if this was a  “Knee jerk reaction or chain reaction?”.  In other words, just a quick reaction or would this start some follow through?  So with the USD selling off Thursday night, did it have follow through to the downside and break down?   Look how that ended by the close Friday.

 

 

WTIC – This was in Thursdays  report from Wednesdays chart.  I was showing that OIL could possibly pause and then break above the 50sma,  with  ‘c’ actually acting as an ICL. This was still only  1 of 2 possibilities. The other a drop to new lows from here into an ICL.

WTIC – FRIDAYS TRADING could be the identification of something important.  Last week I said that the Energy picks that I presented look even more bullish after OIL paused at the 50sma.  Why? Because the Oil stocks broke above their 50sma and could be leading the way.  We were on alert that OIL may have put in the ICL ( Final low)  on the double bottom, when March 22 slightly broke below that first low ( the one that I did not think was an ICL). Now we see a triple bottom!

FRIDAY OIL BROKE ABOVE THE 50SMA too, and the RSI is at 70.   A strong 12 day rally out of the lows does with the RSI at 70 is better that the rally out of the Nov lows,  not just a weaker back test.  A trend line break happened on Friday too. I am seeing a bullish set up in Energy stocks, and am no longer interested in shorting the back test of the 50sma like I originally planned. This is my current analysis of what we see here, and we also took the trades at the lows, so we missed nothing in the big picture.  I got out of SWN & OAS, but will now likely look to re-buy.   I will explain more of my prior thinking on OIL in a minute.

XLE –  As stated in prior reports, The XLE and Energy stocks themselves was two of the things that alerted me to the bullishness of Oils recent low.  XLE broke the trend line& 50sma,  many Energy stocks regained their 50sma and trend lines too, and still sit above them.

Look at SWM, OAS, LPI and others and they remain above the 50sma, and the RSI is still strong,  so these may have their lows in place.

 

Current thoughts remain the same as last week, where the more bullish scenario seems likely: I did not re-enter my trades yet,  I want another day or two to gain more evidence, but the set up seems more bullish than bearish at this point. Monday could say a lot. We made money on a few trades off of the lows and price is still not far off of the lows if we need to re-enter.

 

SO, Why did I originally think that OIL could have a lower low for the next ICL after a back test of the 50sma?  Partly it was the COT reading with smart money extremely short ( Record levels). I also saw a lot of bullishness with OIL going sideways between $51 & $55 for many weeks ( Months), and I thought that that would need a cleansing.  Also I wrote this chart below in a prior report and cut it from the report on April 4th to avoid confusion.  Now is the time to add it back in, so you can click on it and the chart and the writing will pop up.   The idea is that I was thinking that we had a VERY short ICL to ICL ( 15 weeks) , the next would usually be a longer than normal one.  See the chart.

 

 

 

 

NATGAS – I’m still hoping for a drop into a dcl to get a lower entry for another run higher.

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GOLD, SILVER, & MINERS

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GOLD – I will review Gold.   Friday was day 20 and this was our day 19 ,  Gold has been repeatedly rejected at the 200sma. Syrian air strikes surged Gold above the 200sma. This  looked Bullish,  and many traders wanted to just  ” Jump in Miners for the next leg up!”, but I was saying that it is late.  Though Gold could Pop to $1300 in 2 $20 days,  this could be a fake out move, a knee jerk reaction.  I said that I would not be going long ( see Fridays report).

Also from Friday A.M. s report.  Gold did look very Bullish, but I warned that I have seen this new event type POP before.  A reminder actually,  that we all have seen this before,   because …

I posted this Friday a.m. –  Trumps overnight $50 POP, was the TOP.  BREXITS POP was around the top in price too.  Therefore this could top a 3rd daily cycle too.

GOLD FRIDAY AFTER THE CLOSE – This could be the intermediate cycle peak, it is a bearish reversal most of the time. That pop did not cause a surge of short covering and Bulls taking control to give it follow through. It sold off. Now I want to see what Sunday night and Monday can do.

SILVER – MARCH 31 – So many buyers waiting for the break out.  I warned that no matter how Bullish Silver looks here on March 31, beware because …

This type of Drop (  2 shown) can come out of nowhere with Silver this late in a daily cycle.

And now we have that drop exactly 5 days later, and buyers on March 31 never really made money. Now Silver did lose the 200sma  on Friday, and stockcharts has the wrong closing price.  Silver is at $17.96, and that is a close below the 200sma. Notice that  Silver  has gone nowhere since March 27th , 9 trading days ago, and is again below the 200sma with a reversal on Friday.

 

GDX –  This was a reminder that POP’s in the past have also fooled BULLS when the timing was right for a drop.  We needed this reminder Friday,  because  MINERS WERE SET TO POP and People were asking, “What if this is…?”  Or ” This is very Bullish, we need to just get in. ”    And what if everyone was screaming on Twitter , “Last chance to buy JNUG before the next HUGE rally”.  I felt that this reminder & Caution on that Friday pre-market pop was needed.  GDX was up 40 cents in Pre-market.

GDX-  A 40 cent gap open occurred on Friday, yet GDX closed down 1 cent.  It was a believable POP above the 50sma, but then it dropped. Yes, Monday it can still go higher, but that was disheartening for the Bulls and it is getting late as you know.  Could that Gap open have just been a be a fake out to suck in more ‘longs’ and a 40 cents gap open to get shorts to cover in fear of a rally?

 

GDX –  I see it this way , and this is called a ‘bearish rising wedge’ if it does not break out higher soon. We are late in the daily cycle and I’ve been cautioning about a possible bearish drop for a while now .

GDXJ – Even with Gold up $20 overnight after that attack on Syria, GDXJ did not break above the 50sma, and then it sold off on top of that. I have been going short at the 50sma and that bounces JDST between  $12+ to $15+.  As a small Cautionary note for the bears – Believe it or not, I still have a bullish MACD on GDX & GDXJ, but it is getting late for the Bulls to prove themselves.  I think we are going to finally see a drop this week.

 

I drew this as the last chart in the  Friday morning report.  Gold broke to new highs finally above the 200sma, and was bull flagging.  I showed here that GOLD could again break higher Friday to suck in the bulls, and then give it all up. Read the chart.

 

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Gold did  play out that way by the end of the day.  This double break out to new highs really got the Bulls excited, and then dropped them off as it sold off into the close.  Now we’ll see which was they can push this thing, but it seems that the path of least resistance is down at this point.  🙂

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It has to be noted that Geopolitical tensions are rising, so things are remaining Jumpy and  a bit choppy. North Korea is rising to the top of the list of  rising tensions too. I dont want to be ‘afraid to trade’ just because of these possible events.  In other words,  I don’t want to not trade my set ups thinking  …”if  ‘something’ happened with N.Korea…”   I cannot predict that, and there are always ‘things’ that can happen and markets do often climb ‘a wall of worry’.    Let’s just say that at times it may be best to adjust your position sizes,  Really think about how many positions should be traded at this time,  How much should remain Cash on hand for future opportunities, and  just adjust your trading, trade a bit differently than you normally may, based on the possible threat of choppiness in the future due to Geopolitical tensions. That is what I do under various circumstances. ADJUST YOUR RISK BY ADJUSTING YOUR TRADING TO THE CURRENT ENVIRONMENT.   Being “ALL IN”  with 30 stock trades currently in place in volatile markets is just risky, right? We can control our risk.    Also,  a military situation could take weeks to plan out & set up.  It is possible that the next ICL comes about as tensions really begin to mount a month from now, who really knows? At this point my analysis is as stated above, with a dash of caution as we deal with a few unknowns  and the current choppy volatility.

ENJOY YOUR SUNDAY EVENING AND THANKS FOR BEING HERE! 🙂

 

 

 

 

~ALEX

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TRADES – Any trades in this choppy environment do have a bit of added risk, even if I say that they are ‘low risk set ups’.  That only means that the downside likelihood is minimal where you would exit the trade if it goes against you, and upside potential is better if it follows through.  Use caution & Stops when trading in our current  TREND-LESS environment.  Some may wish to just be patient and wait for a nice predictable trending move.   The following 3 trade set ups look promising if they have the necessary follow through.

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AKS– Some steel stocks bounced again on Friday, like AKS, X, STLD, and ZEUS. These have been very choppy lately too, making a short term trade difficult or frustrating,.  Currently hovering above an open gap and bouncing off of the 200sma,the AKS  set up saw a strong POP Friday. It looks good and can be considered lower risk with a stop below recent lows  (  Although the possible gap fill remains a concern.  A stop below the gap is a tad deep, so maybe buying a break above the 50sma adds confidence in a bullish potential?).

 

 

PEIR 1 IMPORTS – After a strong gap open on DECEMBER, it finally filled and is building a base. Both the 50sma and 200sma are lining up, and Friday price did get above the 50sma for the first time since Mid January. This base is the result of trying to strengthen in a choppy market, so again, this action could continue. It could be bought here or put on a watch list too.

NL – NL broke from a downtrend and recovered the 50sma after a strong run off of the 200sma in November to January dropped into a consolidation period. It was a bit wide & choppy in February, but tightened up in March – April.  It is a buy and can run like it did in November  (or remain choppy, so keep that in mind).