Nov 30 – ‘All Together Now’ – Or Not?

Well, the markets decided not to run together again, so let’s take a look at the recent changes.

SPX –  The SPX stalled and had a heavy volume doji candle stick. This is often a top or point of indecision…

I want to remind readers of something that I wrote the other day…

SOX – I saw this strong indecision, and I used it as a warning.  Please read the chart that was in Tuesdays report.

SOX – YESTERDAY I posted this again,  the Semis  ( usually leaders) Were not feeling bullish, even though the SPX and RUT and BKS were.  I wrote   Hmmmm? to question this behavior.  That means,  “I wonder what it going on here,  we need another day or two to know”

SOX – Wednesday the Semis got crushed , pretty much right out of nowhere, but the charts were indicating that something was wrong.

SOXS – I also pointed out that the ”  3X ETF Short semis” looked bullish on Tuesday. It also sold off with the MACD rising, that is bullish divergence.

SOXS – Wednesday it POPPED 13%.   NOTE: Usually people see this and Pile in to this after the Pop.  I want to point out the last time this POPPED,  it went sideways with no real follow through for 2 – 3 weeks, before a 2nd leg higher. I see this a lot, so keep that in mind.  SOXS could stall & go sideways at the 50sma.

SO THE SPX HELD UP WITH A DOJI STICK ( DO WE TRUST IT?), SEMIS GOT CRUSHED, WHAT ABOUT TECH?

NASDAQ – TECH got hit too, so I would use that as a warning for the SPX & Small caps too. You can see a pattern here.  Even though the NASDAQ is still making higher highs and still climbing here, it has short bursts of selling making it difficult to ride. NOW we have the SOX ( Semiconductors) Selling off too and THIS drop was a higher volume drop.

NFLX – And those other mini drops didn’t do anything to GOOG, NFLX, AMZN, etc.  Wednesday looked a lot more real in all of those.  This is a 2nd strong cautionary note for the General Markets.

IWM or RUT – A pull back could be starting here also, but it gave us time to close longs on Wednesday if any here were long.  This is a topping candle usually too.  The last few had minor pullbacks, but  the NAZ & SOX may be signaling more.

WHAT ABOUT THE BANKS?  THAT MOVE LOOKED REAL ON TUESDAY, IS THIS REMAINING BULLISH OR GIVING IT UP TOO?

BKX – After looking weak, BANKS broke out  Tuesday

BKX – Follow through  Wednesday  (Maybe due to an interest rate hike coming?).

JPM – And the individual Banks like JPM, BAC, MS, HBAN, RF, etc?

JPM – This looks like a very real move, when you see the volume piling in. We may be seeing some money leave semis and heading into banks for sector rotation.

HBAN – This appears to be breaking out again for a possible move to $18- $20. Some of these bank stocks get pretty choppy and difficult to ride longer term, but the break out from a consolidation can be more of a straight line move.

USD – So here we are, a possible DCL in place, and at resistance as mentioned yesterday. We should see the USD eventually get above here, and that would drop Gold, but Wednesday the USD struggled.

WTIC – I am still thinking that OIL needed to drop to a dcl, but these daily cycles can last to 50+days,  this is day 36 in my opinion, so will this run to $60  & then drop, or stagger and drop now?  I expected a drop now, because the XLE was not looking bullish.  Also OIL had increasing selling volume, but Guess what?

XLE – The XLE almost looks like it is going to turn bullish? It is still under resistance, but the volume is increasing , which COULD give it the push it needs. Watch the XLE tomorrow for clues. If Oil drops, this should drop, if Oil Pops, this may pop.

GOLD – The USD struggled,  but Gold still sold off (As expected). I have been saying for several weeks or over a month that I do NOT expect Gold to be able to get above that $1308.40, before dropping down into a new low. That is why I have not been buying Precious Metals.

SILVER  – Silver took it on the chin a bit more. This may be leading the way.

GDX #1– GDX had a high volume sell off and looks like it may have further to go with an overbought stochastics. I have decided not to short this over the past few weeks, and that has been the correct choice, this would be very frustrating holding a leveraged 3x ETF.

GDX #2 – We are possibly about to break a trendline, so I am just pointing out prior drops in this situation.  NOTE: Look at the dotted line arrows pointing out a similar trend line drop at a MACD cross, and notice that the next 2 days did not have follow through, but it still sold off later.  Interesting, so if we dont continue down on Thursday, that doesn’t mean that the sellers have dried up.

The markets are getting a bit mixed again, with the SPX and IWM holding up amidst a pretty real looking sell off in the Semiconductors and Tech stocks.  The Banks and banking index are bullishly pushing higher, they could be considered for long positions, but stops need to be placed in every other area, and maybe you were already stopped out yesterday. That SOX divergence was strong, so I did mention ‘tightening stops’ on Tuesday.

Oil and Energy stocks are floating around, but a break higher of the XLE may trigger short term buys in Energy stocks.   The Precious Metals do finally look as though they may sell off into the FED meeting, to give us a nice buying opportunity,  an ICL.   Right now I want to be patient and only take trades that have minimal downside risk. I sold my last Blockchain trades yesterday because they are starting to swing very widely, but I am still holding my 2 Canadian Medical Marijuana companies and CNBX. I still own NAK & SING, but I have basically raised CASH & may just hold on to it and watch how the Precious Metals sector plays out.  I will add to that thought that I  have been watching ENERGY STOCKS and seem to be becoming bullish again, but I’d like to see more confirmation.

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OAS – I drew this in early November after the 2nd leg higher toward resistance.  I was expecting it to drop to the $9 area as a possible next buying opportunity.

OAS TUESDAY – I pointed out that this is a good set up  (Now in that $9 area) and maybe a break out could be bought. I didnt want to just buy it on the 50sma, because I have seen a few ‘shake outs’ lately and the XLE didn’t look great.  Well, now the XLE looks to have improved a bit, so  I looked at OAS again yesterday and…

OAS –  I am thinking of buying it at the 50sma instead of waiting for the break out if the XLE moves higher.

SWN & DNR are very similar set ups as OAS. They are pinched between the 50 & 200sma, and that can be a bullish pinch, so you can keep an eye on that too.  SWN broke out higher yesterday, but gave it back.  Maybe it can find some follow through if Oil moves to $60.

I will be looking for trade ideas, but you do not always have to be trading day after day.  That is often how accounts get chipped away, when we have the type of volatility that we saw yesterday with the heavy selling in Tech & Semis. We will see what Thursday has to bring our way. I should be in the comments section during morning trading hours, we can discuss things there if anything outstanding comes our way. Happy trading!

~ALEX

GOLD NOV 10 – This was an older chart , but it shows the bigger picture expectation of Gold really not getting back above 1308.40 and my expectation of it dropping into a Buy-able low.  At this point, I cannot tell how deep that low will be, but we have been expecting that drop since September,  so we want to be ready to buy it when we get an identifiable ICL.  LOOK AT THE SELLING INTO THE LAST 2 ICLs-  It can just pick up and drop for a couple of weeks.  My guess of $1200 was put there to help the reader see that if we DO find ourselves at $1200 or even lower, it is acceptable and would still be a bull market.