MAY 13 – On The Watch

Another week has passed by and many of the recent trade set ups like MACK, NAK, VSTM, NATGAS, etc  mentioned are enjoying their following through.  We also remain on the watch for that next big set up in Precious Metals.  let’s take a look…

SPX WEEKLY – Timing wise, the markets are due for a dip down, That doesn’t end the bull, you can see these are normal dips to ICLs along the way.  The MACD gives this more of a double top look too.

The NASDAQ ( QQQ here)  has been very strong and earnings season hasn’t stumbled it either.

Look at this view and you’ll see that it looks very similar to the Parabolic blow off top in 2000.  This ending is not out of the question.  Let’ s just take a closer look at that time period.

NASDAQ 1998- 2000 Zoomed in–  you can see the run straight out of the sell off lows on the left of the chart , in1998. Then it was a year of normal up & down daily cycles, in a series of higher highs and higher lows. The final ramp up at the magenta arrow  ( Remember, this is a weekly chart) was very strong week after week, for months.

If we head into this phase , where nothing sells the market off,  you can just buy & hold and ride it.

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WTIC – Oil has a low in place, and I need to see how strong or not so strong this next run is. AT THIS POINT, I still see the XLE and many Energy stocks looking rather weak, I have not played this bounce and do not own any yet.

WTIC – I tried to look into the length of an intermediate Oil Cycle and you can see that since the daily cycle can be 30 – 50 days long,  the intermediates can vary.  You could say that a yearly cycle low is due in Oil now. Usually we get a long daily, followed by a shorter daily to even things out, but basically the conclusion for me has been that we could drop one more time.  I expected a drop below $42, as shown in another report, but it is not Necessary. For me,I was expected Oil to give us a failed weekly cycle. I  will be patient and wait and see. SO far we really are not missing a thing here.

NATGAS DAILY – We went long a week or so ago and now we have a break out. This pattern looks quite bullish. ( I see that the NATGAS COT shows smart money adding to their shorts. This is normal to see them short as price rises, but I’ll be keeping an eye on it going forward. Their short position is higher than it has normally been recently).  I never use COTs as a ‘timing tool’, but it is a cautionary note however. Stay Frosty on Natgas ( I am long).

NATGAS BIG PICTURE – Honestly, NATGAS looks to me to want to trade back above $4.  I dont see why Smart money is short.  Were they shorting that H&S?  That will be invalidated if  Natgas keeps climbing,  in my opinion.

I was asked,  where do you add on BOIL or UGAZ. That is tough because as you can see, at times NATGAS has normal pull backs and you can add there.  Other times it just rockets higher.  If this leg is like the 1st leg that we traded in March, you will be able to add on pullbacks.

GOLD – Gold didn’t run & hold the highs.  There are still sellers in this area, but that is a swing low unconfirmed.  It is not above the 10sma, but Miners have been moving out of their lows as expected.

GDX WEEKLY #1 – What kind of a drop will Miners have into their ICL?  They can be VERY STEEP or after a sharp drop in the 3rd daily cycle, they can be more of a consolidation into the final low.  Look at this chart to see 2 or 3 different drops into ICLs.   I have planned on discussing this more as we move forward.  It seems like we have seen a pretty solid drop in Silver already, but there could be more ahead.

GDX WEEKLY #2 – The push out of the DCL has been normal as seen here.  That first initial burst can be big, and it fools the bulls and draws them back in. Some have already been asking me if they are missing the big move out of an ICL.  So far, on a weekly chart, it looks similar to the last daily cycle low. I have mentioned that this “Am I missing the move” feeling at dcls repeatedly in past reports.

GDXJ APRIL 26 –   I EXPECTED THIS BOUNCE when I drew this chart.  I even thought it would come sooner and rally into the FED May 3, but it started then. Now we see if things slow down going forward and look to see if it is topping as left translated at our targets.  THAT IS JUST ABOUT ALL YOU CAN DO SAFELY AT THIS POINT.  I DID CLOSE MY JNUG FRIDAY, though there is a little more upside room to my targets.

GDXJ APRIL 27 –   Again , I EXPECTED THIS BOUNCE as shown here. I say this again and again because at this point , we need to try not to let it get us loaded up & bullish. I expect just a bounce.  I SOLD MY JNUG TRADE Friday.

GDXJ May 5th – I EXPECTED THIS BOUNCE. I even pointed out the MARCH SURGE HIGHER at the last dcl and then it topped.  I said that this sharp rally can happen again, but I dont want to be fooled into thinking it is the ICL.  I say this again and again because at this point , we need to try not to let it get us loaded up & bullish before another drop ( And some are doing just that). I SOLD MY JNUG TRADE Friday, now is the time to watch how it plays out.

MAY 8 GDXJ – I EXPECTED THIS BOUNCE. I say this again and again because at this point , we need to try not to let it get us loaded up & bullish, before the next drop. I SOLD MY JNUG TRADE Friday.

MAY 10th GDXJ – This was last Wednesday, and I expected a bounce to the 50sma.  Is this a rocket ship out of the lows that signals an ICL is in place?  No.

GDXJ MAY 11 –  In this report I said that I am watching the 50sma to possibly get tagged. Are you sick of hearing this? Some are still asking me if this was the ICL and I missed it or even that I didnt expect this move out of the lows. As you can see, this is exactly what I expected.  I basically said that it is a trade at your own risk if you want to trade the bounce, and this should just be a daily cycle that fails later, so stay cautious. Now we are seeing that bounce play out…again, as expected.

GDXJ rocket out of the lows?  Pretty much looks like the same kind of push out of a dcl as we saw in March .  Nothing has changed for me and my analyses at this point. NOW it is time to wait and see if Miners act any different than expected.

#1 – I expect something like this, but please also note …#2  even if the ICL was in place right now, look at that move out of January 2016.  This has been  1 week out of the lows.  That is it. Does it look like you’ve missed anything even if an ICL was in place? No, you could still catch a huge move coming .  For now, I see this as still the most likely path going forward. It could become a double bottom with the Dec 2016 lows.

I posted this chart in a previous report Just to show what the next ( 4th)  daily cycle could do.  The BIG BLACK ARROW is where we would be right now. This can help us all to see how a fast beginning higher can eventually roll over.  This is just to help you to see how a fast start can still die off.

Finally,  Let’s discuss briefly a few Miners ‘differences’.  I will also discuss this LATER, IN future reports

MUX – Some Miners like MUX have sold off all the way back to their December lows.  Weeks ago I had  heard some say that GDX cant sell off to Dec lows, so this shows that –  “yes it could too”. We’ll wait and see.

AG –  Yes, AG looks like it is bottoming.  It raises a question, “COULD SOME MINERS HOLD RECENT LOWS WHILE OTHERS SELL OFF DEEPER?”   Yes, that is possible, I may discuss this in the coming weeks. ( I honestly do not like to discuss this, because people start buying a bit early & may get burned a bit).

CDE – CDE already broke down in MARCH and broke well below the DEC lows. This remains a warning sign that some Miners may be breaking below DEC LOWS- and that was our last  ICL.   Now CDE looks to be recovering, as though it had its own little ICL in March.  Could those lows hold going forward? We’ll see. Read the chart.

AAU – Very strong out of the DEC ICL. Higher lows in March. Weekly back test on the recent drop.

So I just wanted to show that we do get a mixture of strengths in various Miners.  You can see that most still dropped a lot in the 3rd daily cycles drop, so they rarely escape more selling in a drop to an ICL.  THAT SAID,  we go forward watching how things unfold, and so far it is exactly as I have expected, as the many charts showed.

I am still on the road, and I am traveling early Tuesday morning, This may cause me to be unable to produce a report on Tuesday. I could try to release a small report on Monday night, but if not, may this weekend report & last weeks reports and stock picks  guide you through both Monday & Tuesdays trading.  I own currently NAK, MACK, VSTM, UGAZ, ( &  EDXC & NWGFF longer term), and I do not really expect any major changes for Monday or Tuesday, but anything can happen. Always have and honor Stops, Mental or physical.  I hope all had a great weekend!  Rested and ready for what this week may bring. Thanks for being here at Chartfreak !

~ALEX

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I want to teach you something that I learned 20 years ago.   Does it always work 100% of the time?  No, but it is amazing how often I have seen this work & I have used this to my advantage.  I was taught to look for this by a guru day trader friend of mine 20 yrs ago.  It almost always seems unlikely when it happens, but here it is…

NAK –  I even mentioned this the other day.  I said that it is a bummer that NAK slammed down to $1.64 on heavy volume Wednesday,  because they can get re-tested. Well, I often watch for that re-test as a day trader  ( I put it on a ‘post it note’ if necessary or I set an alert)  and I BUY if I see a test on light volume.  I had a ‘buy’ at $1.64 because of that high volume spike down.  I NEVER thought it would get hit when NAK was at $2.30,  but it is something that I just always look for now.

Well, it didn’t actually tag $1.64 yet,  but it hit $1.65 and bounced. That could be close enough.  I came in to grab lunch on Friday and saw that it missed by 1 penny as shown below.  It popped right up from there, so I added a little NAK at $1.77.  This can drop again, but I just wanted to add at this point.