Friday May 19th

It is the final trading day of the week, so let’s review the market action…

SPX – The SPX backtested the break out trend line and bounced after filling a gap. Please read the chart.

Some may think that this is the dcl, and the “buy the dip'” team has rescued it again.  That might be true, however…

SPX – If you look at the Stochastics and MACD I would view a bounce from here as short lived, since an ICL is becoming due.   Remember that a parabolic blow off move is always possible, with short pullbacks along the way too.

USD – If this is a dcl for the USD  ( It can’t break 97.28) , Then Gold has probably reached its peak in this daily cycle. This also could be a break down & back test before resuming downside. We need a bit more time to see if it can move higher above that trend line.

WTIC – Oil has regained the 50 & 200sma, but it did that in the last Daily cycle too. Oils daily cycles can run for 1 to almost 2 months, so I am watching how this unfolds and I was expecting a final drop below $42 to give us a weekly failed cycle into an ICL   ( that is usually what happens).   Some energy stocks finally started looking decent yesterday.  Oil CAN run tot he blue line & drop like the last daily cycle, but I honestly expected it to struggle at the moving averages.

OIH –  So  yesterday in the comments section I wrote the attached comment below :   I did not take a trade,  but You can look these charts up as a watchlist or short term trade.  The last time I bought SWN, LPI, OAS, etc –  they looked good breaking out and then rolled over before Oil did.   I am not buying & Holding any trades in this sector currently. Maybe if they improve next week, but I want to see what today brings too.

OIH – Many energy stocks look like this.  It is a normal bounce so far not really following that nice move higher in Oil and that concerns me. This is why I have not taken energy trades yet.  Breaking out over the 50sma would be a bit more of a confidence builder

NATGAS – The break out is invalid, but if NATTY can move higher from here, it could be fine.  The recent lows should not be broken and remember that the smart money has been highly short.

GOLD – A swing high could form on day 7 if gold drops below 1246.20. That would be extremely left translated, but remember that gold CAN top higher too, and still be left translated  ( more about that with Silver & Miners)

SILVER – Please read the chart,  top at day 7?

SILVER – A bounce higher still wouldn’t change the set up for a L.T. daily cycle.  Topping at day 11 is common too. Look at Silvers big drop & temporary recovery in April.

GDX #1 – This could be the top too and follow through down would start that final daily cycle drop into an ICL.  GDX could bounce at that 10sma if buyers step in  ( Buy the dip crowd).

GDX #2 –  Again, I can see a fake move higher drawing bulls in further with support at the 10sma. I still didnt get my tag of the 200sma, but it does NOT have to tag it, that was just my expectations from way back in March and April.

So we May or May not bounce here in the precious metals sector,  there is no way of telling for sure, but my expectations as mentioned in recent reports has not changed unless GDX & GDXJ were to surge higher and break out & run. Not likely in my opinion.

This is Friday, our last trading day of the week, and the weekend report will cover things further with the bigger picture expectations. I am mostly in cash, with just a few trades on, but nothing exciting at this point.  I am constantly looking for safer low risk set ups, and the 3-D stocks were then best trades so far. I’ll be watching a pull back in those, I’m watching energy and precious metals daily too.  Until the weekend report, enjoy your Friday trading!

~ALEX

One trade that I took yesterday went like this…  I will post it as sort of a lesson,  but I do not know whether to recommend it or not.  It is similar to the MACK trade and when we bought that base, it stayed in that base for weeks.

CYTR –  I have been watching this one due to the weekly chart and recent news causing it to surge and drop  ( often a sign that it may want to break from a base).  It gapped open and back tested the 200sma and is now above both, but there was a gap to fill and I was watching to buy it under 50cents.

CYTR WEEKLY –  This is why I liked it, but again, sometimes these bases play out sideways for a while like MACK did.

INTRADAY, I posted in the comments section that this pattern could fill the gap, and I started a position under 50 cents and may add lower or on a break out. This is an example of how I look at a trade in various time stages for my entry.  I find a good spot on the daily ( Gap fill and 200sma)  and then look intraday for more clues of lower targets.

I was asked about Metals stocks by email.  Some got hit with new yesterday X, SID, VALE, etc. They did look to possibly be setting up at their lows until that point,  and AKS and CLF looked like this yesterday morning , and I drew these charts to answer emails.

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Low risk set ups because they are near the lows and look ready to bounce, but still in a downtrend.