March 23 – Fridays Trading

DJIA   – The DOW was down 724, and THAT is scaring a lot of people.  We have been expecting this and so far, it is what it is.  At this point I am looking at us on day 27,  markets can fall further,  watch for support at the 200sma.  It CAN BE BROKEN in a shake out,  we wont be buying without a swing low in place.  I will discuss my experience in later reports.

SPX  – I have been pointing out a Double bottom possibility for weeks to prepare us for this type of a sell off moment, because when this happens, people panic.  I wanted you to be ready and not watching CNBC as they try to pin every reason for this drop. You may hear:   “Was it a trump tweet?” “It was FaceBook?”  “Is it the FBI probe?”  “Is it the Rate Hike?”  “New Tariffs are destrying the markets” –  The Bulls were just too confident.  Even North Korea threatening to blow up NYC financial district last year didn’t rock the markets,  so I doubt  FaceBook losing some peoples personal info did this.  No, we saw weakness was in the weekly charts.   All I was reading or hearing on CNBC  recently was that this was just going to run higher & higher for months.  I pointed out that I was seeing  ‘weakness’ in this WEEKLY CHART this weekend.

QQQ LAST FRIDAY –  Quad witching, and yet QQQ looked fine on the daily charts and 60 minute / 30 minute, etc.  It was just going sideways to the support of both the 10sma and the trend line for 3 days ( Wed, Thursday, and Friday) not really dropping.  It sat on Support and Mondays Gap down just shocked the Bulls in a big way.    The daily chart was an illusion …

Yes,  for those not looking close enough,  it was just an illusion.  Is this lady really floating?

No, It is a shadow of a flag pole on the beach to her side, her platform is also on the beach sand. Just a quick glance without a closer, deeper look, can be deceiving  in markets and in life.

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The  WEEKLY CHARTS seemed to be the only ones showing weakness, and some of it was pointed out here.  A weak weekly will lead to a weak daily and I mentioned this in the weekend report 2 weeks ago too. I used this in  last weekends report to show that even though that daily QQQ looked fine Friday, I was still  “CAUTIOUS”,  due to the weekly charts internals. I still owned some of the stronger stocks.

NASDAQ  NOW –  So currently we have time in the daily cycle for more downside, so lets just expect it.  I do NOT advise jumping in on an intraday reversal.  We had a good bounce yesterday and then it sold off to lows again, trapping buyers.   I will look for a swing low, and for now lets just expect it to be near the 200sma most likely. Don’t panic, this is necessary to clean the Bulls out, and then we will know later if this as a Long Term Double Top, or another  double bottom low.

AQ, SQ, MU, HCC, SGH, etc  still look pretty nice.  I mentioned that I like to watch the leaders as these market pull back – they may be the strongest of the bunch when buying time comes.  IF Everything starts to fall apart, we will re-assess things at that time as a possible top.

MU – Even with the Market slam down, this was MU 15 minutes before the close.  It then dropped in after hrs and bounced back, so we’ll see how these hold up in the coming days.

WTIC   – I would expect that  Oil will pause or pull back sooner or later.  Why?  The cycle timing,  but it may or may not do that now.  I am drawing this just as an example of what a dcl in day 30 – 33 or so could look like, but OILS DCL CAN also come at day 40-50! . This means that it could extend higher first before putting in a dcl.  So …

XOP –  I took some energy trades and some are still near the lows,  that keeps us cautiously optimistic.  This is one area of Thin Ice in the opening theme pic.  It is when ‘support’ could give way and you need to allow yourself to be taken out of the trade if it does,  just in case the waters are deep.  I do like the trade set ups in Energy at this point.

The other area where we need to picture Possible ‘Thin Ice’ is the Precious Metals, until we see a move higher. It is a bit risky this late in an intermediate cycle, but this triangle break is inviting for at least a trade.

2 THOUGHTS –

GOLD #1 –  In my experience   (Gold & GDX here), triangles can mess with ‘cycle timing’ and a move out of a triangle is often  DAY 1.  Friday would be Gold day 3.  THAT SAID,   I did some buying of miners as mentioned yesterday.  IF THIS ROLLS OVER AS L.T. , it may top by day 5-8,   so keep an eye on this one, and YOU MAY WANT TO RAISE STOPS IF MINERS MOVE HIGHER.  You will then be assured to lock in some gains if it rolls over.

GOLD #2– I will be watching for either a blast higher or just a push back toward highs and then roll over into an ICL (Maybe May).  This may be a short trade due to the intermediate cycles timing, I just cant tell if Miners are in sync with Gold or are they acting separately?

GDX  – Thursday looks like a Triangle back test, and hopefully this is it. It just looks Bullish here, but please note that 50&200sma.  My style would usually be to possibly sell some of my positions if we get up there this late in Golds daily cycle, but in Dec Miners blew right through it, so let’s see if they can do that again.  I have reviewed several Miners Wednesday & Thursday that appear bullish.  DO they after Gold dropped Thursday?…

HMY  –  Does this look like GOLD is ready to drop into an ICL,  or does this look like it may be de-coupling from Gold & Silver?   HMY actually moved up 4% on Thursday when Gold & Silver were down.  This looks like a very bullish chart, it already broke from a lower base that seems to have become support.

EXKs Chart from  YESTERDAY – EXK has a lower base, similar to HMY above in my eyes.  I bought EXK and mentioned yesterday that this base could be broken and act as support  (like HMY above) too, under favorable conditions.

NAK – NAK broke out Thursday with strong divergence.  I know that many may hate NAK,  but  it may be a good trade here. A quick tag of the green 50sma is a 30% gainer. A stop close by protects capitol & can be raised as it rises.  Gold was down Thursday, Markets crashed, NAK was up. I own it.

TRX – TRX surged today  (Gold was down) and closed above the 50sma. I bought it.  Why? From the DEC lows, this ran higher & held in a sideways move.  It broke the 50sma and now recovered the 10, 50, and 200sma.   I’ll give it a try with the GDX triangle break possibly indicating day 2.

AG  – This was yesterday, and it moved a bit higher Thursday. Raise your stops above the 50sma to lock in small gains if this falls. If you bought it and held when I bought it weeks ago,  you have plenty of cushion ( I sold that trade & HL for gains as mentioned in the comments, but I’m back in AG)

SO BASICALLY, THE GENERAL MARKETS ARE IN CORRECTION. BE PATIENT.

OIL LOOKS BULLISH,  I HAVE ENTERED ENERGY TRADES

I HAVE MENTIONED THE MEDICAL MARIJUANA SECTOR LOOKS TO BE FIRMING UP. IT STILL DOES, BUT I GOT STOPPED OUT OF MY 3 TRADES YESTERDAY .  IT WENT FROM NICE GAINS ACTUALLY TO A PAPER-CUT.   🙁   I WILL STILL BE WATCHING THAT SECTOR WHEN THE GENERAL MARKETS SETTLE DOWN.

MINERS ( GOLD &  GDX  ) BROKE FROM A WEDGE OR TRIANGLE, AND THAT IS OFTEN THE START OF A NEW DAILY CYCLE AFTER A CONSOLIDATION.   I LIKED MY CHANCES THAT THE USD COULD CONTINUE TO DROP & MINERS CAN GIVE ME SOME GOOD % GAINS.  THIS CAME ABOUT AFTER A FED MEETING RATE HIKE –  SO FAR/SO GOOD.  IF YOU WISH TO WAIT & SEE, THAT IS FINE.  WE HAVE BEEN IN A SIDEWAYS CONSOLIDATION FOR MANY WEEKS. I’M BUYING AT THE LOWS & HOPING FOR SOME UPSIDE, BUT I DO REMAIN CAUTIOUS.

NOTE: I AM NOT “ALL IN”.  I AM TAKING POSITIONS AT A POINT WHERE I THINK THAT SUPPORT IS IN PLACE, AND WE SHOULD MOVE HIGHER.   STOPS CAN BE RAISED IF WE MOVE HIGHER OVER THE NEXT COUPLE OF DAYS.  “RAISE STOPS, SELL POPS”, WHATEVER YOU ARE COMFORTABLE WITH SHORT TERM.   IF WE DROP, I AM OUT IN SHALLOW WATERS, I AM NOT DROWNING.  START SMALL, BUT IT IS ENCOURAGING TO SEE STOCK CHARTS LIKE HMY THAT SHOW LONGER TERM PROGRESS.  FOR GDX / GDXJ?  IT IS A BIT DANGEROUS BECAUSE IT SEEMS TOO EARLY FOR AN ICL – SO A L.T. DAILY CYCLE MAY  TOP ON DAY 5-8 OR SO.   ENJOY YOUR FRIDAY TRADING!

~ALEX