Thursday March 29 – Still Waiting

 

Well, unfortunately, neither the shorter term trading nor the medium term investing is really  playing out very well right now.  I have mentioned several trade set ups in the past week, and  they have almost all started off great.  Price popped and gains were there, but these choppy markets are causing those gains to evaporate.  If I dont sell my trade in a day or two, I’m finding that the price comes right back down to break even or a loss. It does get frustrating when even the set ups that usually work out well get whip sawed.

THAT SAID:  We could be close to a bottom in the General Markets, but really until then, I tend to think that it may be best to try and be patient and continue to wait for the market sectors to begin trending higher.  If you cannot do that,  at least do as I have been doing, and Keep positions small and on a short leash.

Let’s do a quick review, not much has changed…

 

SPX FROM MARCH 19 –  Looking at past double bottom sell offs, we could see this.

 

SPX –  When we dropped,  the SPX landed on a lower channel line March 23rd and …

SPX –  It is still there.  The markets have been choppy, rallying, dropping and really not going anywhere.   This has allowed the 10sma time to drop lower, so now it will be easier to move above it.  IF the drop has finished and we get a dcl here, the ICL was at the  February lows.

SPX – If we drop further, we could get a quick shake out and the ICL would be at that new low.  This ‘pause’  would prove to be a bear flag, and at this point, a bear flag does seem more likely with more downside.  I Expect a shake out here, so waiting for a confirmed swing low is a good idea.

 

COMPQ – The NASDAQ eased the parameters for a swing low, but this really looks like it could drop further too.  Time will tell, We are still waiting for a confirmed low.

GENERAL MARKETS  SUMMARY–  We are in the early timing for a DCL,  but until we get a confirmed DCL, I actually lean toward a bear flag in the SPX and another drop in the SPX, DJIA, and the NASDAQ.  Each morning rally or Gap up sells off.  Finding additional Buying to give us some follow through above the 10sma is the problem.

 

WTIC  – The Oil inventory report was released and OIL put in a doji.  Oil has formed a swing high on day 30, and daily cycles in Oil last 30- 50 days. This ‘Doji’ Wednesday  was NOT as simple as this chart makes it look.  Yesterday OIL was very  choppy…

 

 

I was watching Oil real time, and after the release,  Oil took off higher and looked Bullish.  BUlls probably went long.   Then it crashed  as seen here on a 5 minute chart.   That could have been a bull trap & a bear trap, and Bears may have jumped in short , but…

 

It wasn’t done.  This is now a 30 minute chart and as the day went on,  it rallied again and sold off again, even lower.  Was Oil going to be Bullish or Bearish after that report?  It was just going to be wild and choppy.  And then after this crash …

 

And that after this crash it rallied again?  This would have been impossible and rather  frustrating to trade,  and this is how many market set ups are playing out intraday. They wont pick a direction,  they are just choppy.

 

XLE –  So Oil rallied & dropped and rallied, but the Energy Sector ETFs looked to want to break down.  Maybe this is a clue to Oils real direction?  MAYBE DRIP & ERY will be a good trade  when Oil dips to a dcl. ( Short Energy).

USD -The USD closed above 90,  so I wanted to post this here, since STOCKCHARTS did not get it right.

 

USD  – I drew in the candle above 90 and we see a trend line break & a close over the 10sma.  This is in the proper timing for a dcl.  Notice that the last DCL or ICL  did not rally much, but we’ll see how this one goes now that it got above the 50sma.

 

 

 

GOLD –  Gold dropped to $1327

 

GOLD – So if you picture that here, Gold broke below the 50sma & closed there. So far,  Gold has been sideways chop for Months. THe USD has been sideways and Gold has been sideways.

SILVER  –  Sideways chop here too.

GDX –  Please read the chart, but they closed below the 10sma & Volume selling increased.  THAT SAID…

THAT SAID: Some Miners remain quite Bullish

 

HMY – THIS Is not following GOLDS CYCLES.  WHY Do I say that? See that the Dec ICL lows to Jan highs were tiny & Gold rallied fast.  HMYs Feb lows to now were Big Gains.  I dont know how this will hold up if Gold sells down into an ICL in April/ May,  but I would think that owning this one after a pull back would be a good idea.

 

FSM –  Also still near the highs after the last 2 days of the Metals selling off. FSM is not following SILVER.

PAAS –   PAAS was still holding above the 10 & 200sma today,  despite the GOLD & SILVER Sell off the last 2 days. This was in the morning and it did close lower, but remains above the 10 & 200sma.

So you can see that some Miners are ignoring the Metals.

.

 

Conclusion: There is a time when ‘Good set ups’ and even ‘Average set ups’ play out very well, because the market direction is in their favor.  In a Bull Run, many stocks just join in.  There are also times like now when the most Bullish of set ups do not find follow through.  When the Markets are Choppy,  the set ups are less reliable, and the follow through can be put on hold.  I am holding a few trades ,  but going forward I am not adding any new ones until this choppy directionless market gets some direction.  The General Markets actually look as though they could drop even further.   Yesterday I mentioned that even the big reliable Fang stocks were choppy and selling off and posted charts of GOOG, FB, NVDI, etc.   It won’t hurt to wait for a buying opportunity that is safer or more reliable.  I need to just go for a walk during the day,  since I do this for a living and find a good set up difficult to pass by!  🙂     I still recommend waiting  for a dcl. before adding anything more,  and I will stop out of current trades if they go against me.  WAITING IS BORING, BUT IT SAVES ONE FROM CHIPPING AWAY AT FUNDS. MOST TRADES ARE HAVING TROUBLE WITH FOLLOW THOUGH AT THIS TIME.

 

In FACT:  This is how I ended yesterdays report.  Click to enlarge if necessary.

 

Today I am going to try going for a walk a few times during the day  🙂

 

Also,  like I pointed out,  some Miners seem to be holding up well, others may not be. Yesterday I sold EXK,  but I still own THM, TRX, AG and will hold them for now  ( until they give me a reason to sell).  The expectation is that if the USD put in a dcl,  it should go higher and Gold should drop,  but over the past several weeks, both went sideways & became choppy  at the last dcl.   If you hold any Miners,  Stay alert and do not ride them down too far.  Many are still at or around the 10sma,  like the charts above of HMY, FSM, etc.  That seems like a small miracle since GOLD dropped about $30 in the last 2 days, right?

 

** I keep referring to this chart.   If we are going to get an ICL 5-6 months after the DEC ICL, it could be another higher low and may be near the FOMC MTG in early MAY? Since I drew this,  GOLD went back to the highs at the end of March and is now selling down again.    Having a lot of cash on hand at that time sounds like a great way to make solid gains in the future.

Enjoy your Thursday trading or afternoon walk or bike ride,  whichever you prefer, until we get a good solid bottom to find some lower risk set ups.  🙂

 

 

~ALEX

 

As an example: I bought IO a couple of days ago and I added too. This is like buying a 3x etf.  Tuesday it rallied almost $4 above the 10sma!  And then sold off into the close. Wednesday it rallied again about $1.50 and then sold off to down almost $1.  It closed down 50 cents,  but that isn’t as fun of a ride as it looks, I know, I own it  🙂   It still looks bullish, but I owned this semi- heavy and gaining $3 / share Tuesday and closing down $2 below that point the next day is just a choppy mess.  I am still in this above the 50 & 10 sma,  but it is going no where until the markets bottom.

 

AG – This moves like the wind too!  I made money on it in early March, but yesterday I bought AG on a reversal near the 50sma,  just in case the markets are ready to bottom.  I already rode it about $1 higher, and then it sold off again into the close.  It closed down 62 cents.  If the markets have not bottomed, this could do a $2 shake out.  That isnt fun  : )   I would have to stop out for a loss.    The MACD is like a wide-mouth bass.  That USUALLY indicates that more selling could be ahead too.

Patience may be the less frustrating route at this point