March 1 – Choppiness

The choppiness continues,  let’s take a look at what we have.

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This is a pre-market snapshot, it contains quite a bit of red so far…

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SPX – The SPX broke below the 50sma & Volume increased, so this needs to be watched carefully. Yesterday I reminded readers of my weekend reports ‘lessons’ section at the end, it is worth keeping in mind or re-reading. Day 12 peak so far.

DJIA – SO we have bearish rising wedges forming & over bought stochastics. The Dow also closed below the 50sma with an almost 400 point drop. Look at November & Decembers climb,  day after day after day.   We are not in that environment right now, things are a bit choppy.

I did mention last week that along with a V-Bottom low, you can also get high volume lows that get re-tested (Double bottom). That is why I pointed out these double bottoms.  It can happen.

XBI– Biotech is above the 50sma but volume picked up as it dropped too, so watch the 50sma on this one.

Sidenote:  TZA, SQQQ, etc look bullish, and that is bearish for the General Markets.  This can change, but the set up does look like follow through is possible ( Not a recommendation necessarily, I dont think that everyone should trade 3x etfs).  It could indicate that the Markets will test those lows.

General Markets : I am not shorting the general Markets, but breaking below the 50sma seems a bit unhealthy. I’d be cautious short term.

WTIC –  Wednesdays inventory report was released and Oil had been climbing in the morning.  Suddenly it started to drop at 10:30 Eastern time & I saw volume swelling in  USO, UCO, DWT, DRIP, ERY,  so I jumped in DWT & ERY for a trade, and ended up holding them overnight. This could drop similar to how it dropped in early February or it could be a shake out, but the COT is bearish.

WTIC  WEEKLY-  Feb lows were $58. If this drops as the COT seems to imply, Oil could get down to a $55 support or lower. SCO  is another option when Oil drops.

DWT – I bought DWT when it popped on Large volume at 10:30 a.m. & have a dollar cost average of $11.80ish. It can push through that 50sma if Oil is now going to sell down.

ERY – $7 to $12, and consolidation,  and ready to go again? My stop is below $10. We did see a false pop 6 days ago, but this had more volume.

DRIP  – This was in yesterdays report,  it did break higher too, closing up another $1.12 .  See the next chart…

DRIP  – Now at $15.48, this can run to the mid twenties if this is the sell off in Energy starting.

USD –  A little more follow through, but not exactly a blast off.

GOLD DAY 13 –  Gold dipped down and closed below the 50sma,  but this is not  exactly a slam down move yet,  the volume was even lighter.  So is this just going to continue to be choppy  or will it sell down?  It is a tough call. Either way,  this definitely looks like it will be a L.T. daily cycle that will be selling off now or over time.

GDX – Same story here. Not a slam down like Miners can do, and volume lightened up a bit. This almost looks like only a re-test of the higher volume lows. I covered DUST in yesterdays report, and bought DUST as a trade 2 days ago & still own it, but I almost sold it because this sell down looked unconvincing so far.  I did not recommend it, because for many, Inverse Bearish etfs are very difficult to manage mentally.

So the markets remain choppy and indecisive.  You can tell because one day you’re wishing that you went long, and then next you wish you were short. It is not easy and I am not really recommending any action right now, since things can flip so fast day after day.  If you are in front of a computer all day, and you have experience in these choppy markets, you can probably find some trade set ups to scalp.   It is faster trading & until a trend starts, it can also be choppy and hard to manage.   I know many in our comments section do employ that style of day scalping, so that is fine for them.  Below I will cover some of the trades that I have mentioned I was in recently, since some indicate that they followed me.

Enjoy your Thursday trading,  we’ll see if the general markets can turn higher & just give us a 50sma shake out,  or is there more selling in the works?

~ALEX

ENPH DAILY –  I was heavy in ENPH, because I bought it & added several times, so I sold 1/2 before earnings unfortunately. This is a strong volume follow through post earnings.  I added again at a $3.12 pull back when it dropped to $3.07.  I saw a small gap around Nov 8th that never filled, so I dont know if this one will either.  This did NOT pull back with the markets.

ENPH WEEKLY  – And this is why I am still holding it, it did not sell off much when the Markets slammed down.

GGB – I Sold GGB, and will look to re-enter.  This COULD just climb up along the upper channel, I did expect a higher target than this, but AKS and CLF sold off with the markets yesterday and I took that as a heads up.  ‘X’ did not sell off a lot and GGB did not sell off as much either.

MU– MU ran to about $49.50,  this is where it might start to form handle (if it is going to).  I sold 1/2.  MU was already in a consolidation and also did not sell off in a big way when the Markets did at the end of January.

Yesterday I showed a couple of ideas, this one with a handle would include selling…

This one without.  It will probably follow the markets though, and if they sell down, we can look to buy this lower.

I HAVE BEEN ASKED ABOUT THE MJ STOCKS-  I WILL GIVE MY THOUGHTS

CBWTF – Some of them put in reversals yesterday, and that ALWAYS gets attention. I hear,  “Is this where they will run right back to the former highs?”  They could, but I will give you a different perspective too. The last reversal Feb 20th tagged the 50sma & 10 EMA& dropped further.

SPRWF  – You may recall that I bought this strong looking reversal  and I think I added too, but it went sideways , unable to get back above the 10- EMA, so I dumped it.  It was not time for the next run.  No buyers stepped in for follow through.

APHQF –  I bought this in Oct and sold in November around $10 & then it gapped open and ran to $20! It is back at $10 with a reversal yesterday,  is it ready?  Again, I am watching the 10EMA  ( or 9 sma). Each reversal seems to end there.  Look at the chart below , and then let me show you something else that may be happening here…

APHQF  –  If you pull back and look at what many of these did,  they look like parabolic exuberant blow off tops. If so,  those do not recover immediately. All the buyers were in,  those that bought from $12 to $20 likely lost their gains in the sell off by holding on too long. IT went from $12 to $20 to $12  in 1 month.  After this fast move, buyers become scarce for a while.  IS THAT HAPPENING IN THIS SECTOR?  MAYBE.

CNBX –  So let me show you what I mean.  That was a blow off run in Feb 2017 for CNBX. Everytime Buyers stepped in, Sellers stepped up too. They sold the bounce, and getting back above the 10 ema was difficult for months.

CRON -Now this is a different story. JT mentioned this in the comments, I did not have this one on my list. This went from $4 to $12 to $5 quickly and actually shook out at the 50sma and held it as support.

So now we see a break out in this one above (CRON), and some set ups like this may be fine,  but I am waiting for a close above the 10 ema and I’d like to see it hold for more than a day.   Some MJ stocks may become leaders for the rest.

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TWMJF –  Some do look to be leading the way when it comes to firming up and possibly gaining strength going forward, see the chart below.

These are some of the things that I am looking at in this sector for signs of strength.  A Close above the 10 ema, down trend line breaks, can it even regain the 50sma if that is close by,  etc?