August 30 – Multibull set ups

SPX– Yesterdays reversal filled a gap and strongly moved higher. It is right against the down trend line, and a push higher above the 50sma and the trend line is a buy if you ask me(  I would have taken a chance and bought here). A break higher should indicate that we have a dcl and the markets are done consolidating for now.

Let’s take a look at the NASDAQ

NASDAQ – This is the same set up, but it closed above the 50sma. I see this set up as short term bullish. WILL THE NASDAQ RECOVER? …

AAPL, NVDA, NFLX  have recovered, so it is likely that they are leading the markets again.

IBB–  And as I had pointed out in the weekend report, BIOTECH is bullish now, after breaking a down trend line.  I have traded and continue to watch VSTM, ZIOP, IDRA, OPHT, etc and many others , and they are looking good.  OMED was also mentioned to me by one of our readers Chuck. I will put a chart of VSTM & IDRA  at the end of this report.

USD – USUALLY we see an inverse relationship with GOLD & THE USD.  THE USD put in a bullish reversal candle, and this could be a shake out. That could weigh heavy on Gold, so we will discuss this in the precious Metals section.

WTIC – I mentioned yesterday that OIL could drop below the 50sma, shake out the buyers that bought the 50sma tag, and then put in a dcl on day 48, 49, 50.  We saw a reversal candle Tuesday,  Wednesdays inventory report may send Oil higher.

XLE -And with OIL at fresh lows,  the XLE made a higher low?  THIS is starting to look bullish now in several ways too.

FOR HIGH RISK, EXPERIENCED TRADERS ONLY- GUSH 3x  ( OR DIG  2x) –  This is a low risk trade, since your stop could be at Tuesdays lows.

NATGAS –  This set up is looking more and more bullish too. NATGAS now sits on the 50sma and the downward slope is leveling off.

ANTHER HIGH RISK TRADE FOR EXPERIENCED TRADERS is UGAX 3x ( or BOIL  2x) – Buy a push above the 50sma.

GOLD, SILVER, MINERS

• NOTE:  One point to keep in mind if you are holding on to Miners…  ‘Surprises often come to the upside in Bull markets’.  That means that when more of a bullish move takes over, buyers step in at times that one may not expect it.  Some Miners may resist selling off when Gold drops, and even the Metals themselves may drop & recover instead of just selling off in a normal manner.

GLD MEASURED MOVE – The recent leg higher off of the 50sma (what I labeled a dcl on day 21) is now equal length to the first leg.  That can complete a move, but a bullish push can also take it higher.  I drew a channel now, and we see that price left the channel and returned on Tuesday.  Usually they drop to the lower channel line again.  THAT would be a normal back test of the break out and a gap fill.

HERE WE SEE A GOLD REVERSAL CANDLE TUESDAY- A normal back test would look like this for Gold, and would find support. This is not a big drop if support holds, so Gold MIGHT just dip down and go sideways for a bit.

As a side point of caution: The USD does look bullish, which MIGHT affect the drop for Gold.  If the USD rallied strongly and Gold took on an inverse relationship again, a drop into a dcl here could dip 50% of the recent run as a normal dip to a dcl.  This would give the impression of a false break out, but it also could be a buying opportunity.  AGAIN, GOLD MIGHT JUST GO SIDEWAYS ON SUPPORT TOO.  It will take a little time to see how this plays out.

GOLDs 4 hour chart –  A short  a-b-c drop to support & back test would look like this.  It would be 1/2 way to complete.

This would be a surprises to the upside climb along the channel top.

This would be a normal Gold drop to support at this time. I will hold my Miners at this time, even if we get the dip ( Leverage is a personal decision, but it could be a much bigger drop if GOLD, SILVER, GDX & GDXJ dip into a dcl).

GOLD BIG PICTURE – It would also be normal to get a pull back and back test the big picture break out.

SLV – SLVs 2nd leg out of the Aug 7th lows is also now equal to the 1st leg. I’m looking for a drop to the lower channel leg ( maybe the 200sma?).

GDX AUG 28th  – I did expect an extended move that would lead GDX to slightly above $25 as shown. This can still happen, but let’s take a look at yesterdays chart…

GDX AUG 29th –  GDX only got to $24.74 and reversed. We’ll see if we get a back test now or can it continue higher, back up to former highs.

Since I expected higher price, I’m wondering,  “Can it still go a bit higher, even though we have a reversal candle?”.   Then I noticed that GDXJ did move higher for 2 days after a reversal candle in May.

Surprises to the upside: I just want to point out again that some individual Miners CAN move at their own pace.  You remember when Gold dropped $10 for 2 days in a row on that Monday & Tuesday 2 weeks ago, and some miners moved higher?  Look at Tuesdays action…

BAA still closed up 53% and …

GSS closed up 7.53% ,  ignoring the selling by Gold, Silver, & GDX

THM– This was also up 7.5%, and AUMN closed higher, etc.

So if  some Miners are going to ignore a sell down and continue to act bullishly, I would probably hold on to my Miners and even look to add on the dips.  This with the idea that the sector has turned bullish, and surprises could come to the upside.  I would, however,  consciously avoiding  holding Leverage into a dip to a dcl.  It is rather early in this ‘Break out from the triangle” in precious metals, so how can we know the best way to play it?  Time will tell.  Enjoy your Wednesday trading, and for ‘Traders’, there seems to be more than 1 bull running here. I will offer just a couple trade set ups at the bottom of tgis report.

~ALEX

VSTM –  A Biotech stock that some of us made great gains on.  This is a rather loose or wide consolidation, ut it has tightened up over the last 2 weeks on support. An easy buy with support  and a stop right below it.

VSLR–  This Solar stock ran extremely well in June and has now moved down to the break away gap. Buyers stepped in yesterday and the MACD is crossing up.  This could be a nice trade.

IDRA –  I have traded IDRA, ZIOP, EYES, etc successfully in the past, and IDRA and ZIOP have been acting bullishly since last week.

Another bullishly set up sector are Uranium again.  See  UUUU, DNN, UEC, URG