January 6th – Weekend Update

Looking at SPX, DJIA, and the NASDAQ at the end of the week, and we basically see the uptrend remains on track. Using  a trailing stop has kept the ‘longs’ in the trade.  Some are riding UPRO, UDOW, TQQQ.

I wanted to point out the VIX again, however…

 

Reminder:  On Jan 3rd, I posted this SPX / VIX chart. The VIX is trading in the 9 range, and that is usually when tops occur.  Also, this is looking more and more parabolic as time goes on, so dips may not be all that deep if this keeps up.

$VIX – It is sitting at 9.19, and that is extremely low.  This usually indicates a top is coming (at least a temporary top).  Timing-wise we are due for a dcl, even an ICL in the markets. The VIX usually spikes and the markets drop as shown below, and the Vix does look due for a move higher.

SPX PARABOLIC? – All through 2017 I mentioned the idea of the markets going parabolic.   In October I presented this chart again entertaining the idea of a parabolic type run higher. The dips are less deep under those conditions, so we continue to watch this play out.

DJIA –  If this is a Parabolic run, they are strong but end sharply and ugly. This doesn’t look like a top, but just  look at the ramp higher & the RSI just since discussing this in September & October. This weekly chart is almost straight up since the Magenta line.

The SOX actually does look like it already dipped down, and is now recovering as of the first week in January. DO NOT SHORT THE SEMIs, THIS IS A LONG.

SOXL –  Last Spring while waiting for the Gold ICL, Some were discussing buying TQQQ.  I mentioned buying SOXL instead of TQQQ for ‘more bang for your buck’.  It has doubled since the summer dip in June,  TQQQ doubled Jan to Dec. Both are good trades in a bull market, but NOT as easy to hold as the weekly charts make it look  🙂

SO ARE SEMIs TURNING BULLISH?

 

AMD – Even AMD had a good week coming out of its lows. It gets slammed down at earnings, and bought back up near $10 repeat, repeat, repeat.  It may break out on one of these earnings reports. For now it seems to be a $10 – $15trade.

 

CY – Cypress also had a good week after a November slam down. It looks like it wants to run now. The correction in semi s seems to be ending on the first week of 2018.

 

OIL

 

OILs C.O.T. – The shorts by ‘Smart Money’ increased again.  They are determined to ride a drop in Oil prices, though Oil has been bullish in recent weeks.

 

WTIC DEC 29th – Oil did tag the $60. In the past I mentioned that it could tag prior highs shown here near $62-  this was last weeks weekend chart.

WTIC – Oil tagged the $62.21 and closed down at $61.44 this week.  It IS Due cycle timing wise for a dip now. The COT agrees. This looks VERY bullish if it breaks out, so I would say that if we get our dip – it is a strong buy when we get the lows are finally in place.

NATGAS –  I do not trade NATGAS lately because it cant prove itself successfully. this has been choppy and frustrating many traders….why bother until it breaks free?  Some say they traded it because it is cold across America….

Last winter, NATGAS dropped from Jan into March. This was the coldest week in many areas, it snowed in Florida, The Caolinas, all across the east Coast, and NATGAS dropped sharply.  Do not trade Natgas based on a cold winter.  Natgas is plentiful, we are looking for a bullish break & trend higher, maybe a drop in supply.  It is oversold though, we need follow through higher before I am even interested.

USD WKLY-  We have lowered the parameters for a weekly swing low in the USD.  It is due for a low. I expect a weak bounce, see the chart.

 

GOLD WEEKLY – Week 3 was another Green week. The timing for a daily cycle low ( a small dip) is approaching, but these 1st daily cycles can stretch out.  I think we should at least touch the red line first.  This coming dip is nothing to be too concerned about.  Moves out of an ICL do last for several weeks, as seen by the Purple Arrows.   A dip may not come this week but even if it did, it should then lead to new highs.

 

GOLDs COT always gains ‘shorts’ on the way out of a low, as producers like to hedge to lock in gains. This is not an ICL ‘top’ area.

 

LESS LIKELY:  This is my ‘GOLDS ALTERNATE  POSSIBILITY’.  As Gold gets a bit later in the daily cycle, we could get a pause & dip into a dcl and then a continuation.  Let me say this,  if we get a dip,  I AM NOT WORRIED.  Miners would mimic this too.

SILVER –  I honestly think that the run we are going to get in 2018 is similar to the one we had in 2016, so this should eventually break out and the technical buyers will then want to own Silver  (and silver stocks). We are positioning ahead of them. This looks like a GIANT multi-year inverse H&S.

 

GDX – In the past,  we have had large weekly spikes out of the lows, and this one seems a bit subdued. Some have emailed with concern about this. Yes, I see it, but I think those other Bursts were more ‘short covering’, we were closer to the ‘bear Market’ in miners then.  This slower move higher seems to be leaving people behind, Doubtful.  In prior surges higher, I think there may have been  more ‘shorts’ in place then.  So yes, I am still in my JNUG position ( that has been the main question in those emails).

GDX WEEKLY – This Intermediate cycle could go into the 30+ day range.   We are in the first daily cycle and I do not think this is a ‘peak’.  Also the 2nd daily cycle can be even more explosive than the first, especially if this ‘Breaks Out’  higher and signals a technical buy. This could gradually even run to $32 and form a Giant Cup in the 3rd daily cycle.

KL – Kirkland Lake has had a bullish start. If we get a dip into a dcl, and you see this back test that consolidation, it would be a buy since this is a strong Miner. The biggest dip was in Oct-Nov, an early Bottom for this one. $12 to $16 since then, $5 to $16.75 in 2017.

I pointed out MGXMF in Fridays report as a strong POP over $1, closing at 97cents. I have been watching this consolidation all year after that run from the about 13 cents to over $2! This is a 1 year base that does not break down, and Thursdays POP could be the start of something good. I said that I would buy a dip or try to figure out how to get into this one…

MGXMF – It dropped Friday and I bought it. This is the weekly, now closing at 87 cents. The lows were in May, July, and October for this one. This will probably go into my “Buy & Hold’ lot. I won’t sell unless recent lows are broken.

 

VJET broke out Friday, for the Tech traders out there.  A  3-D Printer company, I have traded this a few times in the past, with XONE, DDD, SSYS, etc.  During the strong runs, it makes good gains, as seen on this 9 month  chart in May & September.

 

UAN WEEKLY – CVR Partners LP is a holding company, which engages in the fertilizer business. Its products include ammonia and urea ammonium nitrate fertilizers. This weekly chart looks quite bullish, but the daily gapped open Friday,  so I am going to see if we get a gap fill. It ran from $3.30 to $4.12  last week.

 

IPI –  Speaking of fertilizer, this has been a buy and is a buy again. The handle MIGHT continue downward, but it is  a bullish set up.

ZEUS – Another STEEL stock breaking out on a weekly chart. Lows came in this summer on many Steel stocks, but some are slower movers than others.

So just about everything is acting as expected, except that Oil just wont dip down into a dcl. I’ve discussed a couple of trade ideas to watch next week, and I want to discuss a few more things below that some may be interested in.

 

Enjoy the rest of your weekend,  see you Monday!

 

~ALEX

 

ADDITIONAL THOUGHTS

 

MJX –  This was pointed out to me as an  ‘alternative harvest’  ETF – for those that want to buy Medical Marijuana stocks, but can’t buy the OTCBB. This trades on AMEX and has moved quickly in the past 2 weeks. I would put it on a watch list and hope for a pull back or bull flag consolidation, but believe it or not, this is more oversold than overbought on the stochastics.

 

So we had the Medical Marijuana sell off Thursday, and I addressed that subject both before it happened in Thursday mornings report, and again in Friday mornings report after we saw them sell off.  Now I will touch on a few things here, but feel free to re-read my thoughts in either of the other reports- they are still valid.

 

NWGFF – I put this in Fridays report to make a point, please read the chart.   You can see that this was extended and actually started selling midday in December. On the BIG sell off Thursday,  sellers were almost done, so we saw a reversal. My point was: Is the selling really almost done in this one?

NWGFF – So far, Thursdays reversal was The Lows. I actually captured this Friday  late morning, the volume was higher by the close.

If you simply looked at the chart of  OGRMF ,  would you even know that there was a major sell off Thursday in that sector?  No. This looks perfectly normal and still looks bullish to me.  I mentioned that I am holding all of my Canadian MJ stocks, because talk about what ‘Sessions’ thinks should not affect Canadian  marketing .

OGRMF WEEKLY – What sell off?  We started buying this at $1.75, $2.25, $2.50, etc.  It hit $4 this week.

EMMBF – I posted this on Dec 27 and this was a Buy, it was ready to break out.

 

EMMBF – This one is also Canadian based, and it was a break out from a base that has now held up on the back test so far. It had a reversal higher on Friday too.

SRAX – This is a good looking set up in the Blockchain sector.  It was a buy on the moving averages, and a break out is also a buy.

There is a bit more to the story too, when it comes to BITCOIN. When I wrote my report about  ‘cycle counts’ appearing in Bitcoin, we saw Bitcoin top near $20,000 and looked like a deeper low was due in Jan.  An ICL. I think it may have come in Late December, and I will show you why  ( side note: Ripple, Ethereum, Litecoin, IOTA, etc have marched to their own drummer too).

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QUICK REVIEW  &   NOW

 

BITCOIN seems to flow in cycles , with daily cycle lows at Red Arrows, and it also shows deeper ICLs on long term charts. Was this going parabolic or would it just consolidate?

I pointed out the parabolic type top in Bitcoin in 2013 – it drops and makes lower highs, lower lows forming an eventual base. The run wasn’t done, just over heated.

 

2 charts – On Dec 27 I drew these 2 choices – A double top, with a deeper drop in Jan to an ICL, and then a series of lower lows like 2013?

 

 

Or a quick consolidation to the moving averages, with an ICL in Jan and then a run to new highs?  Just another big correction in the bigger picture?

 

BITCOIN JAN 5th is no longer extremely overbought and bounced right off of the 34 sma (another common moving average in stronger up trends). That could be the ICL, but there is more…

 

I pointed out this break and recovery of a trend line in my last report as a possible ‘shake out’ back in December,  but we should recognize that this  trend line break & recovery also could be an ICL in Late Dec  ( I expected it in January, but this would be close enough in late Dec).  There is more…

 

At the time of capturing this chart on the morning of Friday Jan 5th, I am seeing this move as bullish, and here is why…

 

It becomes a bullish descending wedge using technical analysis and it broke out on Friday.  Click the chart to enlarge if needed. Wait, there is still more…

 

 

BITCOIN then made a higher high on Friday too, and closed back above the 10sma.  This is what we look for coming out of a dcl (or ICL).  The RSI has remained bullishly above the 50sma too.

The Bitcoin ICL or ‘cyclical deeper drop’ that we see every 6 months or so, as  pointed out in my last report,  seems to have appeared a couple of weeks earlier in late December.

 

Conclusion:  It does appear at this point, that BITCOIN may have finished making that deeper ICL (low).  It would now wants to make a run at the 20,000 highs and possibly even beyond. Some of the blockchain trades that we traded in October – December like RIOT, GROW, MGTI, MARA, SSC, SRAX, BITCF, BTSC, Etc Etc,  also seem to have also ‘re-set’, as shown with the chart of SRAX.

I am still very focused on the Precious Metals sector and other areas highlighted in this weekend report, but this is an area where some of the gains were staggering and it may be re-setting.  For example, Riot ran from $7 to $40+ in weeks.  I will be watching some of the charts in this sector too, and looking to see if any set ups seem low risk / reward.