Tuesday Sept 19th- After The Storms.

Storms can cause a pretty big mess, no doubt about that, but sometimes after the storm, we can appreciate the beauty of the recovery.  Right now the Precious metals are selling off, and to many, we have a mess. Will there be beauty after the storm?  We will discuss that in todays report…

SPX ( Or UPRO) – I’ve mentioned using a trailing stop, and by day 19 we start to look and see if it could be topping. The last daily cycle went sideways from day 19 to 27 and peaked on day 27. On this chart you will see that topping action at the end of July into Aug ( Sideways for 2-3 weeks). It then dropped sharply. Monday was a doji and usually indicates indecision, but this can continue higher.  I’d still use a trailing stop here.

SPX – I do just want to mentioned that Pre-Fed,  the SPX is again at a possible resistance area. Things look  bullish in the General Markets, but the SPX is at a nice round number ( 2500) and often the markets stall and bounce around at round numbers, people sell at round numbers.  So do we break out or break down after the Fed Decision?  We should know soon enough. At this point, we have been seeing things as a ‘long’ since the lows in Mid August. I personally did not take this trade in UPRO or TQQQ.

I was asked in our comments section to try to briefly explain what I have been pointing out about a possible parabolic move in the General markets.  I have used many charts in past reports to explain that we should get an ICL  ( A deep, easily visible drop) that reduces bullish sentiment on a climb higher in the General Markets.  These regularly occur every 6 months roughly.

SPX Chart from Aug 11 –  Suddenly, we do not see those types of drops happening.  This could lead to a parabolic move higher. I used this chart as recently as Aug 11 to point out that those deeper ICLs are missing.

As far back as Feb 2017,  I was pointing out similarity of the parabolic run in 2000, and they still exist. Now we are lacking deeper ICL type pull backs,  so markets could “Melt up”.Look at the NASDAQ run last Feb…

That run continued. I used a chart in my May 2017 discussion to show how the NASDAQ parabola in 1999-2000 still looks similar to what we see unfolding now,  and that “melt up’ phase is still possible.  A POSSIBLE run higher into a parabolic top is on the table, with ICL type deeper drops eluding us.

LABU – I caught this chart breaking out, but it closed back at the blue line. Even though it sold off into the end of the day, this looks bullish, and your stop could be placed under the MAGENTA line.  I would expect this to run higher,even though it dropped into the close.

OIL & NATGAS REMAINED BULLISH ON MONDAY

Here is NATGAS and a Major break out in my opinion.  It seems that with OIL & NATGAS set up this way, Energy is going to get a bit more expensive.

XCO – A NATGAS company attempting a break out. A buy with a fairly tight stop could be used.

I got emails about Mondays  drop in Gold & Silver. I am asked if something is wrong and are we  going to see the precious Metals sector crash?  Some sold their Miners, because they were buying the dip when Gold dropped to $1330 & 1320 area and they thought that the selling was done ( By the way,  I never said that, I’ve been pointing to and pretty much expecting a $1300 area tag in Gold, possibly even lower).  Let’s review again.

On Sept 11th over a week ago – I pointed out that Gold could drop to the break out as a back test ( or even the 50sma has been pointed out as a back test, but it would be rising and might come higher to meet price). I said that this drop could happen going into the Fed Week or Fed Wednesday.

Mondays drop was normal and could continue. A 1300 back test or the 50sma is totally normal.

Look at this chart,  do you see that scary drop in SLV for example?

Have we ‘never’ seen one like it?  I saw one when I called the DCL near August 8th, it was a capitualtion type 1 day slam down.  Maybe we are near a DCL here too?  Timing wise, we are getting close.  Mondays gap down could be the start of a shake out.

Please read this chart –  Remember that DCLs change sentiment from bullish to bearish or even panic. Everyone wants to own Miners on the way up, no one wants to buy on the down days into a dcl. A trend line break IS NORMAL heading down into a dcl.  They happen all the time, so nothing is abnormal here.

GDXJ SEPT 18— THAT IS WHY I ALWAYS SHOW YOU THE BIGGER PICTURE IN WEEKEND REPORTS. This is GDXJ as of Monday.   We want this back test out of the way, and have expected it as a possible scenario, haven’t we? Below $32.50 is a moment when something is possibly a triangle break out failing.

These markets are moving as expected, in my opinion.

IPI – Our IPI trade Popped and this is a valid break out in Ag stocks.  See  POS, IPI, AGU, MOS, etc- mentioned in prior reports.

I used these IPI charts recently to point out the bullish consolidation that could be bought.

SEPT 7

SEPT 7- Big Pic with higher targets over time

IPI SEPT 15

JULY when $2.50 was the buy & it popped

MONDAY – Now $4.12 and still further to go.  Congrats for hanging on. I’m at a double here on my start positions, but have added along the way. I see this moving even higher, see the Sept 7th chart above- big Pic.

Is NAK really a Bullish ascending triangle? IF so,  it is a bullish breakout waiting to happen.  This could eventually also double from our Buys down at the$1.30 area in July & August. With a pattern like this, a ‘buy’ is give with a break higher and a stop is placed under the triangle , in case it fails.  ( Obviously buying this pre-Fed is tricky, but I know that some are still holding this one, so I wanted to point out the bullish set up). I own this one too.

I will have a WED morning report on FED DECISIONS.   Though I get many requests, I already have in mind what I will be writing Wed Morning.  For now,  everything is playing out just as I have pictured that itcould.  I see no real surprises at this point.   Trades like IPI, ENPH, HOS and other trades are working out , while MINERS pull back as expected. I have held on to my individual miners, because surprises come to the upside.  Energy trades out of lows are working out too ( see OAS, SWN, RES, ERF, etc.)  AXAS is basing and looks like it wants to mve higher. There are quite a few energy stocks shaping up nicely, after that stormy sell off.

I want to mention something that I hate to bring up as a trading thought,  but please understand that crazy world conditions also could lead to crazy surprises.   Why not Google  “News about the U.N. and N. Korea” this morning.  If you wake up one day and N.Korea has fired a missile that lands in a neighboring land, or the U.N. says that the N. Korea antagonistic ways has lead to a ‘response’, all I am saying is that a response to that kind of situation alone could cause GOLD to pop $60 overnight.  Would your Miner that is now down 10 cents today stay down under that ‘surprise to the upside”?  How would you re-enter a Miner, if they all gapped up 50 cents?   Will the gap fill? Is that the DCL?  All I am saying is that I sold my leverage for this drop, but I held on to some MINERS, because surprises seem to be coming to the upside.   Look at chart of  TAHO a week ago, PZG Yesterday, ALO, etc. This sector still looks Bullish to me during a normal pull back, and geopolitical situations are the volatility that could ignite a rally.  I want to have at least SOME skin in the game.

1. Have I expected a possible back test of GOLD $1300 area? Yes.

2.  Is our triangle back test coming into play? It seems so.

We have a FED DECISION coming on Wednesday,  I do not, at this point, expect any big surprises.  I will cover that more on Wednesday mornings report.  Today,  enjoy your Trading on Tuesday-  trading has been very good in various areas.

~ALEX