September 28 – Still A Mixed bag

Last week I pointed out the differences that I was seeing in the General Markets. For example the SPX, NASDAQ, RUT & IBX , XBI ( LABU) were all acting a bit differently.  Let’s revisit a few of those charts …

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SPX – The SPX looks ready to break out higher, but I had mentioned that I felt that the upside is limited, since each prior break out has simply moved up, gone sideways, and then dipped back to the 50sma. I’d still be ready to lock in profits in the near future.

Now let’s look at the NASDAQ…

NASDAQ – Sept 22 I was seeing weakness in the NASDAQ chart internally, so I expected a drop, and not a break out.

NASDAQ–  You can see that we got that drop to the magenta line  and now we have a pop.  That may be a 1/2 cycle low, but I would still use a trailing stop under that 50sma, because the upside here has been very problematic on each pop to new highs. Take a look at the chart…

Look at the promising POP on July 18, for example,  at the end of the first blue box. For 6 days it slowly drifted higher and in 1 swift crash, gains were wiped out.  I mention this because 1. The NASDAQ has been quite volatile, and 2. the VIX is under 10 again.  We may just see a pop, drift, and drop again.  It is all time highs again, so that is very respectable.

 

RUT – On Sept 22 I was showing that the Russell 2000 was bullish and had put in a sharp V-Bottom, even though I was seeing weakness in the Nasdaq. Strength was in the small caps after a sharp sell off.

RUT – What a strong move higher on Wednesday. This is now hard to buy ( IWM), but certain individual small cap stocks may be buy-able.  A pop like that after a run like that can top the run and back test soon.

RUT WKLY –  That slam down v-bottom was part of a Megaphone pattern on the big picture

 

USD ICL – Day 13 closes above the 50sma and leans this daily toward being R.T. ( Bullish, and an ICL in place).   THIS is concerning to the Precious Metals rally, but so far, some Miners are still resisting selling.  When the Dollar dips into a dcl, Gold should bounce or rally.  That will be a sell the bounce now, in my opinion.

WTIC – On day 18 we can still see Oil move higher, but as it gets later, you want to protect profits if you have been riding this  ( Or UWT, UCO, USO).  I would sell some & let the rest ride, or use a tighter stop. $54 is a possible target for this run.

NATGAS – The inventory report is released today. This has been a whole lot of sideways up & down action, very difficult to trade until it chooses its direction (Which should be higher ).

 

PRECIOUS METALS

 

GLD – Symmetrically, the Dec to Feb run is the same as the July  – Sept run. The following pullback ( green line) is about the same too. The following bounce or daily cycle could happen as the USD dips into a dcl soon.

GOLD –  Gold didn’t close above the 10sma, so the swing was not a confirmed swing low, and therefore the daily cycle count continues.  I said this before,  at this point it does not matter if you believe that this is day 35 or day 54 or you have another count over 30 days,  either one signals that we are well overdue for a dcl.

GOLD symmetry pattern –  When I look at Gold this way, it looks like we get a 2nd leg down after tagging the 10sma.  I’m hoping that this is a shake out below the 50sma yesterday and recovers quickly instead.  Also, many Miners are still holding up well. That is encouraging, but as mentioned before, LEVERAGE this late in an intermediate cycle is difficult and is a personal choice.  I did buy some hoping for a dcl expecting a good bounce, but a 2 legged drop like these would have me out. Time will tell.

GOLD –  This chart tells us a few things. If this drops to the red line in a back test, it looks like 1275 area on this chart.

 

EDIT:  Looks like Gold hit near 1277 overnight, and reversed, lets hope that we continue higher from here and the USD starts to dip down into a dcl.

GOLD – Note: A break of the weekly trend line & 10ma weekly usually indicates that it is time to begin dropping into an ICL, rather than run to new highs at this time.  There can be a good bounce when a daily cycle bounces it higher, but the peak of this intermediate cycle may be in place, with this trend line break.

GOLD – Let me explain why I have a problem calling this 1 solid  54 day 1st daily cycle out of an ICL.

1. That would give us 1 very long, very Right Translated first daily cycle out of an ICL /  YCL –

2.  And then it is immediately ready to drop into another ICL?  So we’d only have a 1st very strong Daily Cycle run, one that ran 54 days, R.T. & Now drop to an ICL?  That is just hard to believe. If we had 2 daily cycles, and this was the 3rd, I can see it rolling over and seeking out an Icl.

Conclusion:  I have already said numerous times this summer that when triangles form, Cycle counts seem to get messed up.  This seems to be due to the formation of a triangle, and the movement necessary to shape it, so I am not Using CYCLES exclusively here. I mentioned a long time ago that if a trinagle was forming, cycle counts would vary among cycle guys, and that is what we see now.  The count does not matter to me, it is used for timing the intermediate cycle length more than the daily cycles at this point.  Now for Miners…

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GDX – The Aug 8th low did not break a ‘timing band’,  so others didnt count it as a dcl. I called it a dcl back in August anyway when it broke the 10 & 50sma and recovered ( See the chart now) . This dip is visible on Silver, GDX, and GDXJ.  Gold had more of a mild dip on August 8th.  We would be looking for the start of the 3rd daily cycle, which COULD roll over into an ICL as the USD bottomed.   This is all short term stuff, and I will explain in the weekend report.  Here we didn’t close above the 10sma yet, so we are still looking for a confirmed DCL and what I would call the 3rd daily cycle.

GDXJ – This also broke down below the 50sma and recovered on Aug 8th and ran higher.  It may now be at a support (again).  I bought leverage for an average price of just under $19 JNUG.  I am still in it for now, expecting a dcl and a bounce.  You can see on this chart that I bought in this area, but leverage exaggerates the move, and I have to allow deeper losses at times ( Stops).  I am OK with that as this plays out. Leverage is a personal choice, I have not ‘recommended’ it, I usually recommend caution at this point.

AAU – This was a strong bullish engulfing for a day when Gold was down $10 2 days in a row. As I mentioned, some miners are holding up nicely, so I am still expecting the dcl soon.  DRD Still didn’t fill that gap.

 

Summary : Those are the various market sectors. Stocks, especially small caps and those in the semi conductor sector, look bullish.  See   TSEM, MU for example, CY looks like a buy, and FNSR also looks to be setting up. These may only be short term trades of a week or two, since the General Markets could peak & begin their dip into a dcl in the coming weeks.  I just don’t like the VIX under 10 when I am long.  Oil remains Bullish, NATGAS looks good, watch the inventory reports today.   Finally,  The USD has that ICL that we were expecting confirmed now, and that means that for the next month or two , it could move higher (or higher & sideways).  This can stifle Golds progress, UNLESS a Geopolitical event ( N. Korea Tensions?) pushes it higher.  Time will tell on that one.  In the meantime, the USD daily cycle tend to run shorter than other ones, so I would expect that it might peak soon & begin to drop into a dcl, and Gold should put in a dcl as the USD begins to peak.

I am pointing out several trade ideas after signing off below, enjoy your Thursday trading.

 

~ALEX

 

 

CLF – This break out is a buy in my opinion, with a stop under recent lows.

X – Steel & Commodities setting up bullishly again? It looks that way.

SID – Read the chart

 

 The 3-D printer group is active again

An example of how they can run, See this run of XONE ( and see VJET too)

DDD – Basing out under the 50sma, and trying to break higher, this could run to the 200sma.

SSYS – This looks like a quick shake out of the 200sma, but now formed an inverse H&S supported on that 200sma.

CAMT ( tech stock like semi conductor)- This was in my Energy watch list, but it is also a bit more like semiconductor.  It had no shake out at the 200sma, and then crawled along under the 50sma, then Popped through it Wednesday. This looks ready to go, I almost bought it yesterday, I may buy it today.

HOS –  OR I may re-buy this one instead. I owned it on the last run, and it ran strongly out of this base. Please take a minute to look at charts of WTI, WG, REXX, CDXS and so many more.  we are seeing surprises to the upside in Oil / Energy stocks after the beat down.

IPI – Just a nice slow steady ride higher. Notice September 11, it dropped form $4 to $3.60, but the trend is your friend.  Bull runs are not easy to ride if you watch them day after day and worry on normal dips.  Use reasonable stops, and you can ride these higher over time.

 

TGB – This is in a support area, but a bit more of a drop would get us on a back test of the Feb highs. I sold mine in the $1.90s, and was hoping to re-enter. This was a really nice run from July onward.  It has become a break out & back test. If Copper runs, this may not pull back further, it tagged the 50sma yesterday.

 

REVIEW OF ANOTHER BULL RUN AND HOW DIFFICULT THEY CAN BE TO HOLD

 

GRPN-  I posted these set ups this summer, but I did not take this trade.  I’m reviewing it because, it is good to go back and see how a bullish trade played out, if it continued higher.  Why? You may catch another bullish trade  ( like out IPI, TGB, HBM, etc) and if you are in one, this can help you to see that the ride is not always easy, but can be rewarding.

 

GRPN from July 12 – This was coming out of the lows and offered a 2nd entry.  This looks so easy to ride, but honestly, if IPI or TGB drops from $3.90 to $3.50 – people get anxious and may even sell.  GRPN dropped from $3.90 to $3.50 in July, but reversed at the 10sma.

 

GRPN –  It repeated that same drop and that formed a shoulder for an inverse H&S. I drew that out here. The target is former highs near $4.80- $5.00.

GRPN  has now reached the inverse H&S target. Was that an easy ride?  Not at all, but that is a great % – gain from the lows, and the selling never violated the bullishness.