Friday – Carrying A Lighter Load

As mentioned in yesterdays report, I find that as each day goes by I have taken profits and lightened the load a little bit  since buying the reversal low in Miners.  I am doing this until the volatility, and thus the short term uncertainty, passes.  Let’s review the markets again…

SPX REVIEW AGAIN –  Feb 6th I pointed out that Markets may drop a-b-c style to the 200 sma, and then flounder around trying to form a base.

NASDAQ –  That went for the NASDAQ & DOW too, as seen here…

 Now even thought we had some nice moves out of the lows in most of the Sectors recently, I am currently seeing signs  along with the pauses that indicate possible weakness.  Miners shot out of the lows like they were shot out of a cannon, but I am losing confidence in the potential follow through now.  This has caused me to lighten the load more and more each day,  until I get more of a sign of bullishness. With that thought in mind, let’s continue…

NASDAQ Currently #1 – The NASDAQ  dropped to the 200sma area, Rallied sharply higher and now seems to have formed a bull flag,  HOWEVER, This is not a clean healthy looking bull flag.  I do see weakness here and it could mean that ‘Base Building’ that I talked about.

NASDAQ Currently #2 –  Each day price  moves higher and then sells off. On a candle chart, the ‘wicks’ are all along the top, and this can be a cause for concern. That said,  If I was leveraged in TQQQ, I would have a reasonable stop in place.

WTIC – I have shared my views on Oil, and they still stand for now. I did say that this can even make new highs and still roll over as Left Translated, but I prefer not to go long right now.

That possibility was shared in early Feb

I have been asked, “Can I go long Oil with a stop under the 50sma?”
Sure,  that is a plausible trade,  just please use a stop. I am here to tell you what I see happening, and maybe how I am ( or am not) playing it.  I do not want to play the long side, I may be preparing to go short, the COT is still quite bearish.  You, of course,  can take my view of oil, along with your own view and put on a trade as you see fit.

UUP –  This USD reversal on higher selling would make Miners & Gold look bullish, as though the USD wants lower price. Let’s examine Precious Metals…

GOLD, SILVER, MINERS, USD – As the USD dropped,  GOLD & SILVER did run higher.  MINERS should take off with Gold up $7 and the USD dropping.  Miners sold off.  This was concerning to me, so I posted this in the comments section.

NOTE:  I personally do not try to make excuses for that action when I see it.  Some might reason… “Maybe the Miners will follow Gold tomorrow if the USD drops further“.  Sure that is possible, but I find that when Miners lead the way higher,  it is a more bullish environment.  When I see the above action,  it has more often than not proven to be a warning.

GOLD  – So Gold acted o.k. on day 9 with the USD dropping. That is a weak MACD so far though.

SLV  –  Silver moved higher, but this isn’t outstandingly bullish either. A break of that downtrend line might get my attention, but I’d also want to see the miners move higher.

GDX –  This is not bad by itself , a 61.8%retrace is fine, but  GOLD was up $8 at one point and Miners held the lows though.  🙁  I will follow this with 2 GDX charts. One will be with the Bullish Traits and then the other chart with the Bearish Traits, and I have to lean to the bearish one until things change.

GDX BULLISH IDEAS –  See the chart

GDX BEARISH THOUGHTS –  See the chart-  I was implying on #3 that the RSI  shows strength, or lack of it. Here it shows a lack of strength.

CONCLUSION :   As the day went by, Gold was continually climbing, up $7  and the USD was dropping. GDXJ was up 25 cents , stuck under the 10sma, light volume buying,  and then started selling down over & over again?  I view that as ‘Weakness again under favorable conditions‘, so I Lightened up again- taking that as a warning sign.

NOTE #1 for review  – Why DID I Buy and is it still valid?  – Look at GDX just last week, and what is not to love? .  This was BULLISH.  Miners burst from the lows  with high volume, the MACD was curling up, RSI wanted to cross 50sma, etc.  You can clearly see why it was time to buy,  THIS could keep going.

BACK ON FEB 13 –  This was a ‘DAY 1 BUY’ and I even said then that a minor pull back is fine, I would add to my position.   A pull back would still leave this as a  bullish set up.

Now with GOLD up $7 or $8, the USD down,  and GDXJ moves 25 cents, stays  under the 10sma and then turns down?  What is the chart telling me now?  It is telling me that even with GOLD running higher and we expect a bull run,  NO BUYERS showed up to the party. ‘Weak Miners under favorable conditions‘.

I looked at many Miners and some that had held up began to break down too. GG dropped below the 10sma with GOLD up $8?  In my head, I simply have to be honest –  “Would I BUY a 3x etf under these conditions with confidence?”  No,  I would wonder if something was wrong.  I dont care if JNUG takes off tomorrow, I am taking all profit and will wait for signs of strength ( I need further reason to like the set up).

It is Friday, the markets have been a bit volatile across the board, and when I keep making gains and then giving them back with my set ups ( or at least losing more of the gains than necessary), it is often a sign that ‘something has changed’.    The set ups were good, I had gains in every position on entry.  JNUG at the lows, ENPH, HMY, THM, etc etc., but when the bright light  begins to grow dim and the charts begin to look stale,  you need to do something other than just accept it, unless it is acceptable. SO I said…

Gold up $8, USD down , Miners dropping?  That is not acceptable after this strong set up got me in. I need another sign of strength.

This week has been a time of  trying to figure out the slow changes from Bullish to weakness, volatility, and a lack of follow through in some areas.  I’ll jump right back in if things perk up, but for now I needed to lighten that load and view things objectively. I still have a few trades on, they look fine, and I’m always looking for more.

We’ll see what Friday brings.  Enjoy your Friday trading and we’ll see you at the weekend report!

~ALEX

2 Ideas

WKHS WEEKLY –  Good news of a deal with the UPS.  It is a small victory, but it could lead to more sales in the future, so I am watching this base  (  I have traded this, I do not own it).   You could put this on a watch list and look up the company & read the latest news.

POTN DAILY – Below is a link for the news on POTN. I also like the 5 yr weekly chart, but it does include reverse splits. I own this and added before this consolidation breaks out.  It also landed on the lower trend line.

This is a link – click this sentence –>->->    With $756,000 in Sales, PotNetwork Holding, Inc. Continues Strong Upward Trend, Reporting Revenues over 360% Higher Than Corresponding 2017 Timeframe