March 28, 2018 – Choppy Markets

 

 

By now most of you know that I accidentally hit ‘Publish’ while uploading charts and trying to hit ‘Save’ to save them as a draft.    Sorry for the confusion, and now you’ll see what those charts meant to me.

 

As a contrarian,  you want the BULLS to lose faith in the bull market.  A Fear index of 7 shows extreme fear.  I already showed the Put Call ratio as approaching an area that Bottoms are found in too, so we seem to be close,   …

 

Recall that in yesterdays report there were Two  things that I pointed out when discussing the markets.  On this chart, it was only day 29 plus we had a high  Sell On Strength,  and high SOS doesn’t usually show up at Bottoms  (DCL) , so I did mention that we may not be at a true DCL yet…

 

DJIA –  And the markets were green for most of the day,  bulls may have been buying,  and yet at the end of the day-  CRASH.   We could see the real   ICL /  DCL very soon now.

ALSO FROM YESTERDAYS REPORT–   I wrote Lets see how it acts at resistance, and ‘you might have this’,  which was a false reversal low that gave way downside again.

 

QQQ 10:02 a.m. –  The Q’s hit that resistance & Stalled.   I received an email in the morning,

   ” I am new here, SHOULD I BUY THIS MORNINGS POP ?”, and my answer was to capture this chart at 10:00 a.m. ( time stamp on the chart)  and show how resistance could be holding it down and also take a look at the first Feb low and bounce.  It failed.   I said,  “Why not wait for a break above the 50sma, or start very small with a stop in case we drop like this again”.

 

 

 

QQQ 12:30 p.m. – At noon time it simply looked like a Gap fill as it dropped, but again,  we hit resistance & were rejected.   I drew this one at 12:30 , but then left for the chiropractor later in the afternoon.

 

TQQQ  End of the day – And came back to this?  Wow. Lets call that DAY 30 and you see why ‘Caution’ was warranted.  Anyone buying TQQQ in the morning POP would have lost over 10% if they didn’t pay attention and sell on time.  This can drop further too.

 

Again,  day 30 is Wednesday,  and if you are getting “CHOPPED UP”  like the Theme picture,  why not ignore the markets until we get a swing low confirmed.  Yes,  you miss the exact bottom,  but you also miss this chopping away at the account too.

 

NYA –  When we get our DCL ( ICL),  I will watch for signs of strength or concern.  I always do.

 

 

WHAT ABOUT OUR STRONGER BULLISH STOCKS?  SOME TOOK A HIT,  BUT I MENTIONED THIS IN YESTERDAYS REPORT TOO.  THIS COULD MAKE FOR A GREAT BUYING OPPORTUNITY IN TIME FOR THE PATIENT ONES.    I WILL SHOW THAT OPPORTUNITY AGAIN , I USED SQ…

 

 

SQ #1 –  We had a reversal, but the markets were early (Day 29) and the SOS was in my mind,  so this MIGHT Break higher,  but I also mentioned …

 

 

SQ #2 – That we could get a NORMAL consolidation / pullback if the markets remain choppy.  THIS would become a future opportunity.

SQ #3 –  I also drew this and said that SQ  could go sideways to the 50sma similar to Febs drop.

SQ #4 –The Current View  –  It looks like it just might do that.     DO you see “This” on the chart.  It was a NORMAL pullback, and it may happen “Here” on the chart too.  That would back test the break out.

 

IO –  The only  Tech Stock that I bought yesterday ( I mentioned it in the comments)  was IO. IT broke above the 50sma Monday and that was a bullish sigh.  This also has already pulled back from a strong run.

 

JBL –  I mentioned  JBL in past reports ( yesterdays too), but I didn’t buy it yet.  It has pulled back and did NOT get slammed yesterday.  THAT puts JBL a bit higher on my list now –   it filled the gap & is at support.

 

So the General Markets sold off very hard, and GOLD dropped $16 at one point,  did Miners get crushed as a result?

 

GOLD –  Gold dropped $16, closed down $13, but it is not even down at support yet. Yes, Gold could drop more and still be alright.  $1332 is the 50sma.

SILVER – Silver was rejected at the 200 & 50sma, landed on the 10sma.  So looking at SILVER,  we see high volume and a good price drop rejected at resistance.   DID SILVER MINERS GET ROASTED AS A RESULT ?

 

FSM –  FSM closed higher and are at the recent highs.  Volume buying looks good. Bullish after Silvers drop & the Markets drop

SSRM –  A $10 stock down 4 cents after reversing on the 200sma. NOT exactly bearish after Silvers sell off & the markets drop.

 

AG – Down 5 cents for the day Tuesday and bounced off of the 50 & 10sma. It could drop to the trend line & 50sma Wednesday,  and I might add to my current position with a tight stop if it does.

GDX- Day 5.  Even a Left Translated Daily cycle could top on day 8 or 10 or 12,  and this was day 5.  So far, so good with Gold down $16 at one point.

GDXJ –  BIG volume, but not a BIG drop. It tagged the 10sma and bounced (So far).  Gold was down $16 and GDXJ was down 1.5%.  Not bad .  Are GOLD stocks holding up ok with the market slamming down & Gold down $16?

GG –  A $14 stock lost 25 cents.  It can drop further and still be ok too.

 

KGC –  KGC is still trying to break above the 50sma, and it did close above it again, with Gold down $16.  That is encouraging, we see  a $4 stock was down 3 cents with Gold Closing down $13?  Seems odd too.

 

NEM –  Nem actually completed ‘a measured move’ and is still above support too.

 

End of story –  The General Markets may not be done selling off, but I am starting to see signs that they could be or should be close.  Again,  it is best to wait for a swing low DCL that is confirmed, they are less likely to sell off if the timing is right for a dcl  ( and it is now).

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Gold and Silver took a bit of a dive, but Miners actually held up very well.  Also noteworthy is the fact that GOLD dropped $16 , but looks healthy and is well above support.  That actually means that GOLD can drop further and still be ok.   The $1332 area is the 50sma.  MINERS are acting bullishly so far ,  so I just continue to watch how this unfolds and I am still holding my recent purchases.

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I am just going to continue to watch the action and I am really looking forward to the possibility that those bullish TECH STOCKS come back to a good buy point.  AQ to the 50sma is a solid possibility.  SQ as shown in the report.  JBL, IO, may be good here.

 

TWTR–  Is that dropping to the trend line or even the 200sma? So far we are seeing that large earnings Gap fill.

This cleansing had to take place. An ICL was due and the Markets seemed a bit parabolic. The Comments section and Twitter and my emails were filled with comments on how easy it is to just BUY & HOLD recently,  with no reason to sell.  That is when the majority are too relaxed, the VIX was pinned low, etc etc now.   We needed a consolidation  to shake out the bulls and change sentiment.  I heard that one letter writer was actually calling his subscribers  idiots for not buying, already saying that they missed the next big move –  and then it crashed.    CNBC is worried and many are starting to get sick of the markets choppiness too.  Meanwhile,  MINERS are less choppy?  Odd.

I will continue to watch this unfold and do my best to guide us to the bullish set ups,  but sometimes it is best to drop to the sidelines and be patient during the choppy consolidation periods.    I mentioned recently that I am more than 50% cash in this choppy time of uncertainty.  I do have a percent invested on Miners since the FOMC  , and I also trade for a living , but when things are just ‘Not Quite Right’  it is uncomfortably choppy at times.   I slow it down on position size too.  Most of my trade ‘set ups’ are doing great out of the entry,  but they seem to lack follow through, another sign of choppiness.    I am finding that IF I dont sell early,  my gains are given back.

  SO That is how trading has been for me as someone that does this for a living.

IF YOU FEEL THAT YOU ARE GETTING CHOPPED UP, IT MAY BE BEST TO JUST WAIT. IF FOR SOME REASON YOU JUST CANNOT PATIENTLY WAIT ON THE SIDELINES FOR ‘A CONFIRMED LOW RISK SET UP’, I have 2 pieces of kindly advice.

1. STOP USING LEVERAGE, AND / OR

2. USE SMALLER POSITION SIZES.  That may help with the papercuts until things stabilize.

Enjoy your Wednesday Trading ( If you are doing so). The next set of trade able lows in the General Markets should be getting close.   🙂

~ALEX

 

 It is also good to note that The UNBREAKABLE BIG BOYS are getting hit.  This can be a bigger sign of trouble  (markets choppy / toppy to continue?)  Or it can be a normal part of consolidation,  it is too early to know.   It is good to take note of the Big Boy Stocks and leaders at times of corrections though.

FB

 

GOOG

 

NVDA