October 25 – Are We Rolling Over?

Are the markets starting to roll over? If so, will it be a deep dip, a ‘Buy the dip”, or is this just another ‘one day sell off and recovery’? Let’s take a look at the charts and see what we can take note of…

 

NASDAQ – So here we see that the NASDAQ sold off yesterday, but by the end of the day, some buying came in and gave us a reversal candle. Does this mean that onward and upward we go?

 

 

NASDAQ – Here we see other reversal candles that came in (blue arrows), but the selling actually persisted a little while longer, or at least it went sideways and got a little choppy until it worked over to the 50sma area, so I do not think that yesterdays reversal automatically means that the selling is done.

Things could get CHOPPY, but we are also LATE in the daily cycle count and already due for a Daily Cycle Low, so a close above the 10sma may be the next signal to go long again.

 

REMINDER #1:  In my weekend report about the possibility of a blow off top, I pointed out that the trading looks straight up, but was actually a bit choppy in the 2000 ramp up, as it ascended to the blow off top too.

REMINDER #2: It could be a BUY THE DIP opportunity at the 50sma area, but if we start that steeper climb into a parabolic top, the dip may be shallow.

 

SPX – I wanted to point out these 1 day drops in the past too.  Notice how often we saw a drop, recovery, drop, recovery, etc  In other words, it got choppy and a bit sideways and eventually tagged the 50sma.   We can’t help but notice that the last ramp up is steeper than the others, so are we in a stronger parabolic phase?  Time will tell, but for now we are extended and I do expect a bit more of a pull back.

RUT – The Russell 2000 started the decline almost 1 month ago. This is the sideways chop that can slowly bring it from overbought back to oversold. A break above the megaphone pattern is a buy.

USD –  Inverse H&S, expect higher prices.

WTIC – I was pointing to the drop at the 50sma as an early dcl, and I’ve said that it bothers me a little that it came about before day 30, but price still climbed higher.  If that was a daily cycle low,  we would be on day 12 expecting higher price.  I am seeing somethings now that hints at weakness, so I wanted to zoom out.

WTIC – When I look at this bigger shot, it looks like that may have been more of a 1/2 cycle low. What I see in this chart that bothers me slightly a hint of weakness, so it is possible that this 2nd square is one big daily cycle and it could dip down into another higher dcl sooner than later.  Honestly, these last 2 peaks looks like a double top now.  I’m not long or short Oil at this point though.

***The STOCKCHARTS NATGAS chart gave another bad print.   They have really had a difficult time getting these correct, with GOLD & NATGAS being incorrect lately, so I will move to another chart of NATGAS

 

NATGAS STILL UNDER $3.00  –  I have been long Natgas for about 2 weeks, but I closed my UGAZ position today to lock in small gains.  I am NOT bearish, I just remember last Thursdays ride at 10:30 a.m., and decided to hit the sidelines, until the Inventory report is released at 10:30 a.m. Eastern time.  I can always get back in.  It is a bullish set up at this point, and as pointed out in past reports,  SMART MONEY  is LONG, Short positions for Dumb money are at record highs.  That is often a very Bullish situation.

 

GOLD  – We are on day 13 of this daily cycle. I do not think that day 6 as a peak can be broken at this point, but Gold does look like it wants to bounce. How about a back test of the 50sma  😉

 

GOLD – I captured this at 9 P.M. to point out the divergence with this drop and the MACD.  This really looks ready to move higher  ( and the markets could start selling down into a dcl.  That makes sense).

 

GDX CYCLES –  I have been saying that this is not the time to buy miners longer term. We now have a failed daily cycle using cycles.  Even if we get a bounce, do not be fooled, it should NOT break above the Oct highs.

GDX TECHNICAL ANALYSIS – If this is a H&S, the neckline broke and the downside is still ahead. It  doesn’t have to be straight down, it can bounce too.  Wednesday had heavy volume on the drop. We could see a back test of the 50sma here, but I still expect more of a drop.

 Well, even when we can get an idea where certain sectors of the markets should be heading to, it’s easy to see that the point from ‘A’ to ‘B’ can still be a bit choppy.  Let’s see what Thursday has to bring our way.  I will discuss a couple of the trade ideas recently, to see how they weathered Wednesdays volatility and a few other nice looking charts.  It may be wise to keep positions small or manageable just in case that choppiness does continue, but if things simply continue to rocket higher, that could be part of the parabolic run to the top.

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Enjoy your Thursday trading and watch for that NATGAS report at 10:30 a.m. eastern time.

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~ALEX

 

 

NM –  This was the bullish chart set up that I posted when I mentioned shippers and I took my position in NM,  ( SB, TNK, SBLK, and SALT were mentioned too).

 

NM – You can see that it Popped, and then dropped again, and now it is basically still trying to go higher.  After selling off yesterday, it actually crawled back to green. That seems bullish with that market sell down.

 

BBG OCT 17th  – This was a bullish set up at $4.36 last week.  Did it survive the selling yesterday?

BBG – You can see that it made it to $4.52 and then drifted for a bit. Wednesdays market sell off saw it drop back toward the 200sma, but buyers scooped it back up for another reversal.  I still like this set up above the 200sma.

GGB –  I like the set up on GGB and it was not really affected by Wednesdays selling.  It could be bought here above the 50sma, but I would put my stop under the 200sma, because even if it falls to the 200sma, it is fine.  It might work best to start a smaller position here, and add at the 200sma if it dropped there.

 

When I mentioned Shippers as being bullish a week ago, this was on my list, but the base didn’t quite look ready yet.  Now it might be…

 

GLBS – Due to the fact that the Shippers have been doing well, I actually took a position in GLBS near the close on Wednesday.  I noticed it because it was on my watch list and I noticed a large POP that took place in the last hour.  It may be just another POP, but I’ll take my chances.  It popped to $1.10 and then dropped back down, so I entered near $1.00.

1.  They already released earnings in early October, and

2.  GLBS closed a private placement this month, so what bad news could come out now, right?  🙂   Famous last words, but the BASE is good and the lows of the base are at 90 cents for months-  I do not think that the lows will be broken.

Back to the JRJC trade that I have been following.

JRJC –  At 12:45 p.m. Eastern this was JRJC as the markets sold off. It actually closed in this area , so the 50 sma support seems to be holding  SO FAR.  Volume remained light.

PLNT – This was the PLANET FITNESS trade on Oct 20. Did it survive the Wednesday drop without technical damage to the chart?

PLNT – Wow, it dropped to the 50sma  (slightly below actually) , and then it was bought right back up.  That low was $25.59 and it ran back up to close at $26.35.  The set up is technically in tact.

“WHAT IS GOING ON WITH MBOT?”,  I am asked.     THIS IS THE LONG BEAUTIFUL BASE that I pointed out in September.  I pretty much did a ‘BUY & HOLD’ on this one with the disclaimer that THIS MIGHT NOT BE FOR EVERYONE.  It swings like a monkey in a tree!    So far the POPS have been great, but it does give it all back again.  Lets go to the daily chart…

MBOT – “Swings like a Monkey”  =  POPPED to $1.40 , dropped,  POPPED to $1.50,  dropped.  Thiose swings are 40 & 50%!!  It is ‘percolating’ and so far  THE LOWS of that base are $1.00.   $1.00 to $1.50 is a 50% gain, but like I said, I bought this as a BUY & HOLD, hoping to see this recover a bit more long term out of that long base.  Below you’ll see the YELLOW lows of the base, and the BLUE support area too.  MBOT finally reached the oversold area, maybe we will get a break out again soon.

 

 

XCO –  XCO POPPED in August and since then has formed a base. It was up about 8% when I saw it near the close, and I mentioned it in the comments section, and suddenly it took off to up 40%.  I missed it , but will be watching it going forward. Down the road, a back test of the 200sma may be a good buy opportunity. This is NATGAS.

 

ATNM – On Oct 12th, I didn’t buy this thinking it could drop to the 50sma ( see chart), but I wanted to track & buy at the 50sma if it did.  Well, I ended up buying it last week anyway and…

ATNM–  This morning volume was 1 million in the first 15 minutes, and it started ripping higher.  I was thinking this was going to just rocket higher, BUT….  It then sold off & IT ALMOST TAGGED THAT 50SMA – lol.     I captured this image at 3 P.M.  and posted it in the comments as a BOOM to BUST, but maybe it would just back test the 50sma area. I said in the comments that I did NOT sell my position…

ATNM– And then it closed green, back above the 10sma?  Wow. It jumped back higher from 66 cents to 76 cents.  SO now this may take off & run, it may just continue to consolidate, I don’t really know, I haven’t seen THIS pattern too often (if ever).  It is a giant doji. The RSI is still rising.