Wednesday May 17

/157 Comments/in /by

This mornings futures show the markets down a bit, but they have been holding up well lately, especially the Tech area. Let’s do a little pre-market review…

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 SPX chart from Yesterdays report.  We are still due for a dcl, but the pullbacks have been shallow.

I like to use the NYA too, and this is a bullish set up / consolidation so far.  If it continues to hold the 50sma, it remains bullish looking .

We also have been keeping an eye this…

 

The XLF actually had been weak and struggling. My feeling was that the general markets would weaken over time if Financials break down. A gradual process where financials lead the way lower, but the markets continue to get bought on the dips for a while.

Well, after breaking down below the 50sma and struggling,  now the XLF has signs of a possible recovery in the works.  PASS or FAIL? I’m still watching that 50sma which is curling down. A break out could recover into this inverse H&S pattern. Time will tell.

I stopped covering the USD for a while, simply because not many trade it, they usually trade by it-  it’s inverse relationship to Gold.  That inverse relationship came to a stop when the USD & GOLD dropped together.  Let’s look at the USD for a minute at this point…

 

USD – The USD is really showing signs of weakness. We keep breaking the former lows, so one would expect Gold to be at highs right now.  It’s an odd set up and I am waiting for ‘something’ to change. This relationship with the USD:GOLD doesn’t usually last for long periods of time. A weak USD usually produces a Bullish Gold.

WTIC – Today we get the OIL inventory report.  I have not traded the move out of the lows in Oil, because many Energy stocks remined weak and things just didn’t look right in the XLE so far.  Today we will see if the inventory report finishes this rally right at the heavy resistance shown,  or can we get a push above this area?  This move does look similar to the first leg of the move out of the lows in November.

 

XLE – This was resistance for the XLE in April, and yesterday saw the xle drop in this area too.

 NATGAS-  I was on an airplane and was stopped out of my position yesterday. I will clip & paste  what I said in the weekend report below that had me somewhat cautious. I DID think that we could get a back test, as shown, but yesterdays was a bit bigger than I expected too.  Please read this weekend clip…

***NATGAS –  With Smart Money short NATGAS a bit more than normal, do they know something? I didnt see anything in the news on Natty, but I was traveling and research was more than limited. The break out was undone and now we’ll see if the 50 & 200sma can hold.  If so, I may try to re-enter my position.  This is not ‘horrible’, but the break out is invalidated in my opinion.

 

GOLD – With gold on day 6, we can continue to see Gold move higher. It does have  resistance overhead in the form of a 50 & 200sma at the $1250 area. I played a ‘long’ trade out of the lows, but I need to watch how Gold acts in the next few trading days.  Again, it is odd that the USD is so weak, so I am starting to look for signs & clues along the way. I still expect a final drop to shake out the bulls.

SILVER –  I have mentioned that Silver looks like it did have an ICL type sell off.  That was straight down day after day selling that broke March lows and was 39 cents from the Dec lows.

GDX – Miners sold off hard in February and April too. THAT makes me wonder if the sell off into an ICL could just be a sell off from the 200sma to a ‘stop run’.  As mentioned in the weekend report, there are differing types of drops into an ICL ( Usually brutally sharp & relentless), but at times we see “stop runs”. See the weekend report again if necessary.  I posted a chart showing that occasionally you get a sideways move & then a final sudden slam.

When it comes to that statement that I just said above,  ” I posted a chart in the weekend report showing that occasionally you get a sideways move & then a final sudden slam.”  I also said in the weekend report that I expected to be discussing this further as time goes on. Yesterdays report showed how those steeper sell offs can really get going. In a future report, I may cover the shake out ICL if I see that that may be developing.

Note: I couldn’t get a direct flight yesterday and after traveling for most of the day and getting home & trying to get things done here, I was rather tired and didn’t have time to do as much daily research as I usually like to do, so I will be looking into a few things today.

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For example, MACK took a dive on no news. Most of us bought this around $3, so it isnt a big deal, but that was a rather large drop on heavy volume with no news attached and earnings were what started the break out rally. Is this just a back test already?  I expected a tag of the 200sma really. Have I ever mentioned how I hate Biotech & Pharma stocks due to the way that they move? 🙂

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  Enjoy your mid week trading and thanks again for being at Chartfreak!

 

~ALEX

157 replies
  1. deshy
    deshy says:

    Alex, thanks for pushing through the fatigue of traveling to publish a report! Appreciated!

  2. chartfreak1
    chartfreak1 says:

    TTWO & JBL – I posted those charts a month ago as buys. TTWO had immediate follow through, JBL broke out &consolidated, but looks good again

    And what about SSYS, DDD, VJET, XONE….MAN what a run!!

      • chartfreak1
        chartfreak1 says:

        I hear you. DDD & SSYS have been non stop too.

        Also my recent JNUG trade at the lows. I simply promised myself that I wouldn’t hold it for more than 8 days ( Due to L.T. expectations topping it by day 8-11 rough guess), and I kept it pretty small since I was on vacation.
        I got $14+ to $18+ roughly , but I always expected GDXJ to tag the 50 sma and THAT is where I really wanted to sell. That could be GDXJ $22+. It stinks watching it go higher , but there is always the time that you get caught holding it and it drops 24% in 1 day while I’m on a plane or not looking.

        That is why I always tell myself that there is always another trade ( And I think a good trade in Miners is going to play out).

    • Cason
      Cason says:

      So mad!! I took a VXX trade last week based on VIX below 10. Thesis was whether market rolls over or not, spot VIX will trade back above 10 so bought VXX and set stop below 52 week low. But the VIX trading instruments decay so much I got stopped on Monday and now BOOM! Drat!!

    • chartfreak1
      chartfreak1 says:

      Tough call. Looks good and that was possibly a power gap that won’t fill, but the 200sma is at the gap fill – so it is risk, but a stop below the 50 would cut losses.

    • chartfreak1
      chartfreak1 says:

      There is no real way of knowing. The last one did in April with a tag of the 200sma, but recently it keeps selling down, volume seems to be drying up for the selling, and buyers keep propping it up.

  8. Brian
    Brian says:

    Still holding 2nd half of my NUGT trade from $28. & my UVXY from $12.75.. 5th Wave down in Dust / Jdst ( 2 hr chart ). I have a buy order for full position @ JDST $60… I’m waiting for S&P to break 2373 then I think things will get interesting. Worst part of all this, it’s the nicest day we’ve had all year and I’m stuck at this stupid computer now. lol

  9. chartfreak1
    chartfreak1 says:

    GLD ( And GOLD) Paused at the 200sma the last few times it went there, this time it blew right through and the volume is pretty strong. Along with the USD plunge I’m not jumping in short until this has enough time to do its thing. Gold looks pretty strong right here, need time to see how things play out.

    GDX is not at the 50sma yet, and GDXJ is not at the 200sma – which have been the likely targets for Miners too

  10. Glenfidd
    Glenfidd says:

    Kind of reminds me of a geopolitical pop in gold. Usually I’d be inclined to bet against it. Day 6 is a little early for the Jdst trade. No hurry.

  15. Brian
    Brian says:

    CF, it feels like GOLD is sniffy out S&P 2350 which would be a backtest of the breakout from 4-24-17. S&P turned at 2373.90 that is way to technical for a turn. The more I think about it I think I am going to use S&P 2350 – 2355 area as my entry for JDST entry, assuming 2373 breaks

  18. Maria
    Maria says:

    will be crazy- Rob … if Natty stops at the 200day…

    https://www.tradingview.com/x/93dVZaT0/

    in case you’re wondering .. cough cough KEN … i took profit at the rejection of the TrendLine… THAT was my signal ..
    PLDDDDDDDDDDDDDDDDDDDDDDD

    #meow
    I will LOL though if it really stops at the 200…. if not oh well…. ;o)

  20. chartfreak1
    chartfreak1 says:

    There are some individual miners that I do like. The way some have been acting – they almost seem like the lows are in, but they could test the lows ( Like the chrt I had of a weekly AG or CDE).

    Other Miners just look weak. And what happened to EGO while I was gone- I thought that that one was shaping up. Toook a sharp drop 2 days ago.

    edit: Just checked, they are buying someone

    • Cason
      Cason says:

      Wow, that last surge came out of nowhere, eh? Considering NAZ is down almost 100 points, I’m actually holding up rather well today. Well, except for LABU, but otherwise (can’t get them all right!).

  21. Brian
    Brian says:

    Just noticing how much the volume has come down day after day on GDX. I think we are close. Today may even be it.

  22. Cason
    Cason says:

    Pecos, you doing anything with GUSH here? My stop (mental) is at 28, near close. We had a quick dip then recovery. Stocks getting slammed but oil inventory report supporting crude. Tough call, could recover if this is only a 1 day dip in SPY and friends. Or I could exit and let caution win, make sure I don’t take a loss.
    #BH #HB

  26. Glenfidd
    Glenfidd says:

    That’s a big morning gap in the miners. The conspirators will go ‘bananas’ if the miners sell off to fill it. I’m flat. But won’t be surprised in the least if the gold shares disappoint today.

  30. Cason
    Cason says:

    Sold AG on the late morning spike. She’s been strong, needed to take profits while I can. More on the story after work.

  31. rg64
    rg64 says:

    When the last lower in miner formed keep this in mind – Over the past month miners experienced record outflows. Ever. Gdx has been around since 2006. Never in its history has it ever experienced more outflows.

  32. Brian
    Brian says:

    If S&P starts to make lower lows into the close and GDX is not making higher highs, I will enter my JDST position today. I think the ICL is another 4 weeks away, I won’t time the bottom perfectly anyways.

  33. Brian
    Brian says:

    GOLD and UVXY almost ready to make a new daily high here and GDX not following through as of yet

  34. Brian
    Brian says:

    If GOLD makes a higher high here its going to do it with a negative TSI divergence on the hourly. Sold UVXY

  38. Brian
    Brian says:

    I entered my JDST position here. With the S&P selling off and GDX starting to sell also even with GOLD near the daily high and the VIX at its high, once the Stock Market turns I think that may be the top for miners till the ICL.. In @ $68.30

      • RAY
        RAY says:

        i entered jdst as well at 67.72 looking at gdx and gdxj you can clearly see a 5 wave pattern. up
        do you guyz see this 2 ? Alex? or am I wrong?

  39. Dom
    Dom says:

    last couple of weeks market seemed to always be bought at the end of the day, today feels different

    • dsaulw
      dsaulw says:

      I think we are in for a more pronounced correction. Though we know it won’t go straight down.

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