Thursday October 19th

SPX – Yesterday in our comments and in other blogs I read where people were saying how this market can’t pull back,  nothing can drop it down, people were adding leverage, etc .  That very thing happened at the various ‘tops’  before a big drop on other occasions, late in a daily cycle.  Let me show you the DOW & THE NAZ.

EDIT :  Futures are a little down as I proof read this a.m.  Nothing too big yet,  but a large gap down or large Gap higher is short term bearish , as I explained below when writing this last night. 

DJIA–  Though this looks really bullish,  it is often an exhaustion candle.  If it gaps down and leaves a big gap on Thursday, I immediately sell.  I mentioned yesterday,  once 23,000 is tagged, it could be a short term top, similar to 22,000 & 21,000 a day or 2 later.

QQQ –  I am hearing talk that these markets can’t drop again.  ” Everyday the markets go higher, nothing can drop these markets.” In the past when this talk gets circulating,  we get enough of a 1 day drop to erase 10 + trading days & scare the daylights out of everyone.   I have a new theory on what is happening here,  pertaining to these crashes.   PLEASE USE STOPS.

QQQ #2 –  I DO REMEMBER,  and you probably do too,  the comments that were happening at these tops.  I wrote the same type of report back then.   When bullishness gets so frothy that people are adding leverage this late in the game, and they know that we are late in a daily cycle, it is dangerous.  One can lose a lot in 1 day lately.  2 to 3 weeks of trading were wiped out in 1 or 2 days in the past.

SOX –  The semis could be topping right here, we’ll see-  obviously this same candle occurred each day lately & it still went higher,  so time will tell, but this cluster looks toppy.

USD-  This looks like an inverse H&S is forming  ( Bullish)

WTIC  –  Oil hasnt changed , remains bullish looking.

NATGAS –

NATGAS –  Did you see NATGAS jump over the 200sma yesterday, or is Stockcharts wrong again 🙁

If this is what NATGAS did yesterday, then…

If that was an accurate NATGAS chart, then this is Billy enjoying strawberry cotton candy with Wendy,  BUT ITS NOT.  🙂   SO let’s look at NATGAS on another charting service.

NATGAS #1 –  The drop in Natgas is normal so far, but now it gets a bit nerve-wracking, because they release the NATGAS Inventory report on Thursdays…

NATGAS# 2 -We do NOT want the OCT lows taken out, or we have a failed daily cycle.

UGAZ – Please read the chart. I just took this trade on the drop 2 days ago around $10.40  ( after pointing it out on the weekend report), and I feel like I’ve been in it for weeks.   I personally will allow  almost a $1 drop before exiting, but I will sell if we make new lows.

GOLD –  Peak on day 6, we are on day 9 Thursday.

GDX – See the chart

I think that we’ve had enough trade ideas in the last few reports to keep an eye on, so I am only going to add a few thoughts below.   The Steel plays like  AKS, CLF, X, VALE, etc  had gaps and I pointed out that they may fill the gaps before going higher.   It is starting to look like the gaps may not fill.

This chart of  AKS is bullish looking and it looks like buyers are scooping these up as they enter the gap.  That seems rather bullish.

VALE filled the gap & then buyers stepped in, giving it a reversal out of the gap. I believe these are still BUYS.

CLF –  No gap fill here  so far

That is the market wrap, sector by sector.  Thursday is the inventory report for NATGAS,  and the last chance to sell or ride before whatever happens.  Please at least use stops , just in case it breaks down. Enjoy your Thursday trading.

~ALEX

Progression of a trade

I want to show you this trade that I have recommended a few times, because I think that it is moving much like NAK.  It Pops, goes sideways, Pops and pulls back, etc etc – but eventually you get a nice move if you can just buy & hold.

PXLW – I used this chart at the end of August as PXLW was breaking out from a downtrend.

PXLW OCT 6 – It was a rough ride, much like NAK, but it was moving back to the former highs in my opinion.

PXLW – And it continues higher,  much like NAK 🙂  Notice how it has popped higher, and dropped , then popped again, and dropped or went sideways, again and again.

NAK from OCT 12th,  this is what I am expecting for NAK.

EAT –  BY request.  Yes, I like this a lot- please read the chart,  it is a buy right here in my opinion.  It MIGHT need time to move into the APEX, but it looks like it really just wants to go higher now.

BBG – I posted about BBG yesterday,   it is a flag type consolidation.

TACO-  I was asked about this stock ( Someone was hungry yesterday?  Same person asked about  ‘Eat” – 🙂   Thanks Frank).   This looks similar to BBGs set up,  so yes, bullish looking on a break out.