Friday March 2

What more can we say here on a Friday?  What I warned may happen does seem to be  happening, and more, so let’s review…

 

SPX  WARNING –  In the weekend report I had warned using this chart that even though the General markets cleared the 50sma, 10sma , etc-  We have seen re-tests of the lows in the past.  Be cautious of the possible resuming of the sell off to a double bottom or more.  I saw a lot of bulls buy that dip and CNBC was pretty happy about the V-Bottom.

SPX – It is only day 13, with a day 11 peak and no signs of regaining that 50sma so far.  This could actually drop quite a bit if it doesn’t see buyers entering soon, this selling looks like the real deal here.  I’d expect follow through, maybe a reversal and bouncing around, and difficult trading for a bit.  Again, it is only day 14 Friday.

I sold my DWT to lock in profits on a 3x etf –  but I do think that OIL  has further to drop.  Trading has been choppy, so I grabbed gains, but if this bounces I may short it again.  The volume increased and this reversal candle may be similar to the one on the way down in early Feb.  It didn’t reverse, it  just kept dropping.

 

USD, GOLD, SILVER, MINERS. SO FAR YOU HAVE TO CHALK IT UP TO CHOPPY SIDEWAYS TRADING

 

Let’s be Honest,  it would have to be a considered little bit of ‘guess work’ or maybe just  ‘a few ideas of possibilities’ to discuss what the USD, GOLD, & MINERS are doing in a Friday report, considering what happened Thursday. I have several ideas of what might be happening, but we really need more time to see how things play out.  It will be especially interesting to see where these sectors are lining up going into the March 21st Fed Meeting.   For now I will share a few ideas and a couple of thoughts  🙂

 

USD #1  – When we got the ICL in September,  we had a low, a bounce, and an  undercut low that was the ICL. Something similar just happened, and gaining the 50sma, I mentioned that this could be the ICL.

USD #2  – The USD lost the 50sma on day 8, so  was that a peak?  If so, that would indicate that  the USD just had another dcl and not an ICL on the 19th, with a L.T. peak here?  WE NEED MORE TIME TO KNOW,  but…

 

USD #3 –  I have mentioned in the past that from ICL to ICL in the prior Intermediate Cycle, we had many months of lower lows -again and again.  Look at the drop from Dec 2016 to Sept 2017,  that was many months of selling.

 

 

GOLD  – SO we have Gold on day 14 breaking below the daily cycle low and then putting in a bullish reversal.  Please read the chart, this may be a 1/2 cycle low that actually caused a failed daily cycle.  Is it an early day 14 dcl? We wouldn’t know until time passes, but it looks like it wants to bounce.

 

GOLD  – Due to the inclusion of the holiday,  this chart shows Gold on day 15.  This chart is simply to show  how a failed daily cycle can play out.  It can bounce around, but should continue lower over time until an ICL is in place.  I would picture the USD rising out of an ICL if this happens, so I am watching both.  What about Miners?

 

 Believe it or not,  GOLD failed its Daily cycle, and Miners actually look Bullish (short term anyway).

 

I posted in the comments that I sold my Dust near the open. Why?  Dust completed  a measured move, so I started watching GDX after this…

 

GDX #1 –    Miners began to sell off to the lows on pretty light  morning volume.  It headed into a candle of 100 million volume on Feb 9. THAT in my playbook is

1.  Much less sellers at a bottom,  so selling become unsustainable, and

2.  A successful test of a high volume low.  later as the day went on, the lows could not be broken. After that test, Miners began being bought up as the general markets sold off and volume came in on the reversal.

That is a bullish reversal, a bullish engulfing formed on the above chart, I look forward to seeing if we get follow through above that down trend line.

 

 

GDX WEEKLY – So the weekly chart shows us that this sideways chop continues for now. Miners sold off to lows and Gold did not follow in Early Feb.  Thursday Gold broke Feb lows and Miners didn’t follow.  We’ll see what kind of a bounce we get…

 

MORE ABOUT THE MINERS SOMEWHAT BULLISH ACTION THURSDAY

 

AG –  I wrote this in the comments yesterday about AG  ” AG came out with an earnings miss, I’m pretty sure, ( Revenues totaled $252.3 million, representing a 9% decrease from 2016. Mine operating earnings of $16.0 million compared to $49.2 million in 2016. ) and yet it dipped, flipped upward, and looks ready to break higher.”

Think about that:   AG has been selling off for Months for apparently no reason at times.  Now an earnings Miss on a sell off day, and AG cannot break the lows? In fact, we see MACD Divergence and a bullish engulfing?  I bought it for now, but what an I thinking?  Am I crazy?

 

AG BIG PICTURE IS STILL INTERESTING,  but something else to consider is NSRPF …

 

NSRPF – Another stock that sold off relentlessly but finally found its lows.  It actually avoided the early Feb sell off, and Thursdays too.  MAYBE some Miners will not follow Gold anymore. MAYBE miners will begin to lead here.  MAYBE miners will bottom before Gold.   These NSRPF lows were January.

 

ABX –  Even ABX looks like it put in a final capitulation low here.

FNV –  Franco Nevada has been selling off  for weeks. I think we have at least a temporary low here too.   GOLD broke Feb lows and sellers in FNV dried up. This was a buy signal to me.

 

BTG –  GDX / GDXJ tested lows,  BTG is above the 50sma.

So what is going on here?

1.  Things have been very choppy in this sector

2.  It has traded sideways more months really.

3. Gold failed a daily cycle on day 14  ( 1/2 cycle low?) , and then reversed higher.

4.  The USD lost the 50sma, and Miners look rather bullish with reversals and bullish engulfings,  at least for the short term.  Well,  that is how I am going to leave it for now. We honestly need more time to know EXACTLY what is happening for sure, but in the back of my mind I have a couple of thoughts.   I will mention them in the weekend report.

 

STEEL & ALUMINUM

 

Some of the Metals Stocks came roaring back after a Trump Tweet about trade Tariffs. These look like strong legitimate reversals, but you’ll have to decide if you want to trade choppy markets or sit on the sidelines until the dust really settles and things become more directional.

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CLF – Steel stocks flipped higher on excellent volume with news of the tariff proposal. I like this as a buy. See also AKS, X, STLD, NUE, etc

STLD & NUE have been buy & hold candidates for a long time.

 

  I did do some buying of Miners and CLF since, as a technical trader,  we had ‘bullish reversals’  and selling seemed to have died up in Miners for now.   Everyone  HATES the Miners now, or they are afraid to buy , because they feel that they will only lose money. Most are absolutely sick of the choppy trading range.  I really didn’t see anyone get excited about the reversals and say that they bought in the ‘comments section’  and  That is a very rare occasion.    Yes, we could be just bouncing inside of that choppy trading range, so with that these trades may last a day, a few days,  or more.  Only time will tell for sure.

 

Sidenote:  I was asked, ” The markets have been more active than ever the last 2 days, why do you keep disappearing from the comments section in the afternoon. It would be nice to hear your real time thoughts?”   I know, I understand, and I try to be there when I am available,  but at times I am away and simply using my phone when I can to view & trade.  The comments section really is a voluntary bonus, an ‘extra piece of market activity’ along with the reports.  I try to explain everything in the reports, and when the General markets old off,  it should not have been a surprise really.   That said,  I have been leaving because I damaged my hand recently and had to go to  urgent care and a follow up to my primary physician.  If you do not want to see pictures with this story,  do not read the end of this report.  This is where the report about trading ends.   🙂   I will explain a bit more of why I haven’t been around to give real time feed back below. The pictures aren’t anything drastic, but they just aren’t very pretty either.

Enjoy your Friday trading, though the choppiness may continue!

 

~ALEX

 

So again:  I was asked,

” The markets have been more active than ever the last 2 days, why do you keep disappearing from the comments section in the afternoon. It would be nice to hear your real time thoughts as the markets sold off?”

You’re going to be sorry that you asked  🙂

I had my hands full and, stooping forward, I slipped on a small rug & slid against my wood stove.  The outside of my hand was burned and I decided to just let it heal on its own for a day.   Though I cleaned it, it started to get infected as seen here.  I took this picture and txted it to my wife at work Wednesday afternoon, and she scolded me to get to urgent care NOW ( So I left the comments section behind Wednesday afternoon)  🙂

 

The doctor  decided that the hand had to be scraped clean down to the bare wound and start the healing all over again, wrap it in bacitracin,  give me antibiotics and a tetanus shot.  O-U-C-H!  I came home & went to bed,  and had a follow up yesterday afternoon …

So trust me, I would rather be in the comments section discussing a wicked market sell off, than having scabs scraped down to the flesh !

But these things do happen from time to time, so I’ll be there when I can, but the reports are written to cover my expectations for the day.

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