March 17th Weekend Report

This opening picture describes how the General Markets shot up, especially into the end of last year.  With little else than a volatility pop here and there, they just kept climbing.   Well, in the weekend report, I like to take a step back and look at that Bigger Picture.  At times things stand out from a distance that I may not see when I am focused on taking the ride using daily charts.  Let’s take a look…

 

 

Please read the following intro, don’t skim this report 🙂

 

I won’t have time to go into great detail of all of my thoughts in this weekend Big Picture review, but I just want to say that I do still see some cautionary signs. I will show you some of that.  As Tops begin to form, they do not always show up as quickly on daily charts, because at tops everything still looks very bullish.  At tops,  the retail crowd is still buying and chasing , but certain things might begin to show up  in the weekly charts.  I will be pointing that out here.

To be clear: I don’t necessarily mean ‘ The Top’, but maybe a temporary topping process or sideways pause.   We should be rising from an ICL here, and tops don’t form from an ICLs first daily cycle, the second daily cycle will help us to see things more clearly.   let’s just say that we ‘Might’ be slowly seeing a form of pause, stalling, sideways, or a topping process beginning here.

Over time, we will see the body of the animal form –

 Is it a Bull    or Bear trying to catch us? 

 

That said, I am still long some general Market stocks, and things do seem short term bullish on daily charts, but I’m a bit cautious with the Big Picture going forward too.  This is the Big Picture View.

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SPX – To be short & clear, at the Green arrows I see dips, yet just 2 weeks higher and the damage was repaired on the indicators.

–  Green arrows 2 weeks higher and the MACD crossed higher and

– the lower indicator turned up SHARPLY at Green arrows. 

– 5 weeks off the low and I do not see that now? Time will tell.

 

MAYBE it is because the dip was much more extreme this time? That might mean that we need more time to repair it. The current move higher does seem sharp though, but I am not seeing a sharp move higher in the indicators. That simply means that I am sharing with you what I am watching.

 

DJIA – The DJIA was racing higher for the final 8 months of 2017, now it cant do any better than a choppy sideways move for 5 weeks, right?   So far this is 5 weeks sideways, and read the chart. 1 & 2 week Pops turned up the lower indicator. I am not seeing that now, it is flat (so far anyway).  Here I drew a double top possibility?

 

DJIA – Here I just drew in an eventual drop after sideways chop, a double bottom possibility that  I have been mentioning if this remains weak.

 

The SOX & The NASDAQ have been strong, racing to new highs however.  Let’s take a look at the NASDAQ.

 

NASDAQ – So far this divergence could indicate a double top, and last week I pointed out that this is what concerned me-  divergence at new highs.  The RSI (relative strength) is weak.  Look at the deep sell off in June 2016.  That one did NOT affect those indicators like we see now.

 

Lets look at a few of our bullish stocks.

 

CREE WEEKLY – CREE raced higher Thursday and then sold off.  On the daily chart, MU reversed on Friday and does look like it wants to go higher short term, but the weekly still looks like a topping candle.  The weekly is cautionary.

 

MU WEEKLY – I feel that this looks like an exhaustion gap higher, reversal weekly candle.  My price target has already been met.  Two thoughts come to my mind here that I want to share with you …

1 . Everyone is excited about the ‘upgrades’ & ‘price target of $100’ recently. Yes, it absolutely can go there over time, but in my personal experience, I have seen big market movers   A) “Upgrade” a stock so that they can sell or unload it into the top.  B) I have also seen them take a beaten down stock and right at the bottom they ‘Downgrade’ it, so that the last sellers will cough up their shares & they can finish loading up.   IS THAT HAPPENING TO MU?  We’ll see, but …

 

2 .  Yes, I do agree that MU can get to $100 if the markets stay strong, but it also  can drop first, eventually recharge,  and run higher again as shown here.

CONCLUSION”   I am still long some stocks. The General Markets have been bullish, but the Big Picture gives slightly mixed signals.  If we just put in an ICL, I would expect this to linger near the highs or get very bullish again.  MAYBE next week an FOMC MTG Push will help? Maybe we get some FOMC selling into the next  dcl and THEN we get a stronger run to new highs in daily cycle 2?  For now, do not short it, this is a bull market and you can stay long and strong until the short term daily charts change.  It is Day 24 and  on a possible 40+ daily cycle, it  can still have some upside.

 

 

WTIC  – The COT is still bearish & I did the same analysis on this chart.  Last summer we saw 5 weeks basically sideways out of a sell off  and ICL. That 5 week sideways move corrected the MACD & Lower indicator last summer. Right now, I see 5 weeks and weakness in those indicators.   I do expect lower price in Oil , but I am now no longer short or long.  The whip saw daily was distracting.

Conclusion:  As I said, right now I see weakness and I do expect lower price, but I am now no longer short or long.  The whip saw daily is distracting.

 

USD DAILY – Another unconfirmed swing low, but they keep failing at this resistance and the USD has been going sideways. I am almost certain that the USD will make a move by or on Wednesday with a yes or no Rate Hike FOMC Decision, and it is now oversold. Lets look at the weekly chart.

 

USD WEEKLY  – That MACD has pretty good divergence, and this looks like the USD wants to go higher for a bit. That should drop Gold over time.

 

PRECIOUS METALS – I do expect a drop & that makes some traders happy ( waiting to buy lower) and other traders  just want Gold to rally. I feel both ways too, but lets take a look.

 

GOLD ICLs – ICLs ( the deep MUST BUY lows) are know to come every 4-6 months, leaning more often to the 5-6 month range. Sticking with that understanding, we look for May or June to produce this low. GOLD has been rather strong, it has put in the last few ICLs without the catastrophic drop. That means that GOLD may go sideways and not sell off sharply yet.

GOLD – So Gold could bounce around, sell off , and give us a stop run or another higher low, likely into an ICL around May or June.  Thus a break out to higher highs is unlikely before then.

 

SIDEWAYS SILVER  – Notice the DIP to the ICL in July 2017 was lower than the DEC 2016 ICL.  Now we find ourselves back at the recent series of lows and the COT is rather bullish.  This has been a bit uncommon and puzzling, and I have a few ideas of what may be taking place.   I will explain at the end of the report.  Some Silver stocks actually look good so far.

 

GDX #1 – The GDX is back at the lows too, and has gone sideways for months, even a year! People are SO SICK & TIRED of Miners, that NO ONE wants to buy them.  That is becoming a perfect set up for most to miss the run, similar to 2016. Look at those 2016 lows =  a sad Sideways chop,  yet this one may be worse (longer). read the chart…

GDX #2 – At times I think that a stop run this deep is perfect for the Big Boys to run stops & Load up … but …  at other times, I hear EVERYBODY saying that that is where they are waiting to buy. They are going to back up the truck & load up on Miners at that break down.  Hmmm, USUALLY the crowd gets left behind.

 

GDX REMINDER –  Back in February I was discussing that we may just see boring sideways action in the Miners similar to last May, June, July. Did you remember that Gold had its ICL in JULY?  Miners didn’t drop to new lows.

GDX #3 – So yes, we are still seeing that sideways choppiness and as a result,  so I haven’t discussed trading this at this point. Sideways chop is frustrating to trade.   If an ICL is in the future however, we should expect one of these types of stop runs.

 

If  EVERYONE is expecting that stop run type move, is it possible that  it just goes sideways and takes off higher ( to leave everyone chasing)?  I do think that even that could be in the list of things to keep in the back of our minds. Why?  It seems so unlikely that many would not believe it if they see it.   People would think it is just 1 more ‘fake rally’ and wont dare to buy it, but  we will not miss that type move either. There are ways to identify that action too.  Read below and I will show you exactly why we could see that too.

Next week we have out first FOMC MTG / Rate hike decision with the new Fed Chairman.  So far the General Markets have dropped every time he spoke to congress, we’ll see if the big picture is hinting at a drop sooner than later, or will the markets treat him a little better this time?

 

Enjoy the rest of your weekend, and thanks for being a Chartfreak with me!

 

~ALEX

 

FOOD FOR THOUGHT: LET ME POINT OUT SOMETHING THAT I FIND INTERESTING, and this is why I think many could be left behind waiting for that ‘Stop Run’.

 

We know that SILVER and Gold dropped down & put in an ICL in July 2017.  Silver actually sold off very sharply that day.  See the chart below.

GDX – GDX did NOT break the lows in July.  COULD THAT happen again? maybe Miners bounce at the FOMC MTG, continue to chop sideways  for a few more weeks, and then when Gold drops to an ICL, could Miners resist the selling like they did last summer?

I have this feeling that if that happened, NO ONE would buy the rally then, because they would think that it is just another one of those bounces, and  they are waiting for that stop run.  They would be forced to chase & buy in later, and they could be used to ‘add more buyers’ later, after the ‘shorts’ finish vovering.

 

SILJ – And when SILVER slammed down in July ( maybe it was premaket, but even so) , Silver Junior Miners also did not panic out & run the stops. And notice that the Dec 2016 Lows  (Stop run) has already happened in the Silver stocks ETF.   If we see that sell off in May or June for Golds ICL, The Miners might already have their lows in place, but who will believe that!

 

One final thought:  SILVER ALREADY BROKE THE DEC 2016 ICL, so those stops are gone.   The COT is already very low for smart money shorts.  This leads me to wonder, is the major part of selling already done for SILVER & the majority of MINERS?  Gold keeps putting in higher ICLs, Silver ran stops, etc.   It is an unusual set up – so I am keeping my eyes & mind on every possibility,  and we will NOT miss the next run when it happens.  I think that we are going to see a major bull run in 2018 in this sector, since all of this churning & Consolidation has bullish hallmarks to it. 🙂

 

Update:

Still watching the Medical Marijuana stocks , and some are still improving.  TWMJF is one,  and CBWTF (  I Still own this one form a few weeks ago)  Is improving as well as others.