Friday August 4th

  If you were recently stopped out of TQQQ or UPRO,  would you really want to start a new ‘long’ or ‘short’ position on a Friday going into the weekend, with the NASDAQ on day 25 of its daily cycle?”   Probably not, today is the last trading day of the week.   Let’s take a look at the QQQ, for those already positioned however.

QQQ –  Again the Q’s closed under the 10 sma and as it gets later in the daily cycle, the more it may not have enough buyers to push it to new highs. Even if it did, it might be a short lived push higher.

Earlier in the week I pictured the QQQs  just dropping and tagging the 50sma, and I wasn’t encouraging jumping back in, for fear of getting stopped out again.

So far this is playing out, but I wanted to mention something else…

On a Friday when we get the  jobs reports, we often see that it can move the market in either direction.   Realizing that, I then noticed  TTWO after a bullish surprise yesterday and thought to myself  ( see if you agree),  “That TTWO set up looked just like the QQQ set up  before it popped higher.”

Compare these 2 charts below  – They look very similar as far as a drop, sideays for a few days, and then the TTWO pop.   So if the Jobs report is bullish,  we may see a similar POP in the QQQ, but I still won’t start a position on day 25. Any pop may be short lived, it could just go sideways, and then drop into a dcl shortly after.  If I was already long, however? I would raise my stops as it runs higher for a bit.

THE USD & GOLD

This chart of Gold was from yesterdays report.   I was pointing out that even though Gold was on day 17 Wednesday ( 18 yesterday), it could still pop higher for a peak, before dropping into a dcl.   Now let’s look at the USD.

THE USD is very oversold and due for a low.  I was thinking, “What if the USD did a quick stop run first, below the 91.88 of Spring 2016, and then it reversed higher?  That could also see GOLD POP, PEAK,  and then drop into the next dcl. ”    Time will tell.

GOLD –  Yesterday on Day 18 Gold tagged the 10sma and then moved higher again.  There is one thing that I have found interesting about this run in Gold.  Look at that chart from JULY 10 to now and you see a move that is almost straight up.   I cannot remember when I have seen Gold move steeply higher like that, and yet see so many people nervous about it all the way up.  This has been a nice solid run above the 10sma.

GOLD will eventually be due for a drop into a dcl, so what might it look like?    Maybe it looks like this.  THIS IS JUST A GUESS USING THE 200sma AS A TARGET, it could even just go sideways or bounce around the 50sma. I just see the below idea as more likely to shake out riders. The next dip is a strong buy, since Miners have been in a triangle type pattern.  Let’s look at Miners.

Note:  This week, Day after day I’ve been getting the same question, ” You said you were long  GDX / GDXJ, what do you think of GDX now?”  That kind of surprises me,  because it has NOT changed for 7 days from what I clearly point out in my reports.    Let’s look at GDX, and see if you agree.  I will try to be very clear here what I am looking at and why.

GDX –  For the last 7 days GDX has been above the 10 & 50sma. For the last 5 days it has even closed above the 200sma and is riding along it. I said that I took a long position weeks ago. I will let it ride and just stop out under the 200sma or 10 sma, but I am still holding just in case we get a POP first, before a drop into a dcl. 

GDXJ from yesterdays report.  I showed it in a channel and above the 10sma & 50sma.  I am long until the 50sma is violated, because as I said, a POP could happen and you could see GDX & GDXJ run for 4 or 5 more days to day 22 or even day 25 or so, before dropping into a dcl.

So  what do I think of GDXJ now?  🙂  It dropped 13 cents and is still above the 50sma.  What will I do if GDXJ drops below the 50sma and lower channel line and closes down there? I will stop out & look for an entry at the next dcl.

I will show you visually again why I am not being emotional about my trade, I am just letting it ride.  I am just riding GDX along the 50 & 200sma, or the GDXJ above the 50sma as long as the trade remains bullishly positioned.  If it stops me out,  I will wait for another set up ( next dcl) . If it POPS, I capture an even  better gain. Maybe the Jobs report stops me out.

So once again,  I am not trading this based on my emotions or how I feel if GDXJ drops 20 cents and I am unhappy that it didn’t go higher, I am unemotionally long with the GDXJ above the 50sma.  If it goes up or down, it doesn’t change anything for me until the key moving averages that I pointed out are triggered.    Trading is a game of probabilities and possibilities, and this is a bullish set up so far.

Enjoy your Friday trading, and yes, I also expect that the first question Maria asks in the comments today to be, “What do you think of the GDX though?”   🙂 .  Have a great weekend too.

~ALEX

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IPI #1-  IPI completed the inverse H&S move yesterday.  Like I always do, I sell only a portion and ride the rest.

IPI #2 – I sell some to lock in gains, and I hold some in case we simply get a bull flag.  I have seen this in my experience.

EXAMPLE:  I AM SIMPLY SHOWING HERE THAT  ON THE 2016 RUN HIGHER IN MUX- I GOT A REVERSAL CANDLE AND TOLD MY SUBSCRIBERS THAT I SOLD 30% ON THAT REVERSAL DAY AND WOULD RIDE THE REST.   YOU CAN SEE HOW THAT WORKED OUT WELL, I ACTUALLY ADDED THAT 30% BACK IN A WEEK LATER.

TRX AS THE SAME EXAMPLE-  BEFORE THIS RAN HIGHER, I WAS REALLY PUSHING THIS AS A BUY DUE TO THE BASE & TIMING CYCLE WISE.    WHEN THIS WAS RUNNING HIGHER, WE GOT A HUGE BEARISH REVERSAL, BUT I TOLD READERS THAT I ONLY SOLD A PORTION, IN CASE IT FLAGS.  IT DID.   THIS IS JUST SOMETHING THAT I HAVE LEARNED FROM EXPERIENCE – IN THE PAST, I FOUND THAT I WAS SELLING MY BEST RUNNERS TOO EARLY, SO I CHANGED MY STRATEGY.   I ALSO DID THIS WITH NAK, AS MANY HERE WILL REMEMBER.

SO IPI GAVE ME A REVERSAL CANDLE AFTER COMPLETING AN INVERSE H&S, BUT I BOUGHT THIS MUCH LOWER, SO I ONLY SOLD A PORTION, BECAUSE….

REMEMBER THE BIG PICTURE –  I WANT TO BE IN IT AND RIDE IT HIGHER FOR THE BIG PICTURE TOO.

 THIS MAY TAKE ANOTHER CONSOLIDATION PERIOD BEFORE CONTINUING HIGHER, BUT THE BIG PICTURE STILL LOOKS GREAT.

I traded CSTM in MAY through June, and I want to point something out with CSTM ( A steel stock).

CSTM went sideways along the 50sma nd 200sma as it consolidated gains.  It remained bullish above these points (  I no longer own it, but notice how it just bullishly remained above those major moving averages).  My point is that this is a similar set up as GDX now, riding along the 50sma and 200sma, and boring people to death. I would love to see GDX pop for a few days and then just drop to a dcl back onto the 50 & 200sma.  THAT WOULD BE A VERY BULLISH BUY, so we can watch and be ready if that happens to happen.