4-21 Take A Look

 

SPX DAILY – This is where the SPX  stands with its cycle count. We experienced a bit of weakness at the end of last week, and you all know my Big Picture outlook.  This could be playing out the way it was presented in the weekend report 3 weeks and also 2 weeks ago. On the chart I wrote  week, and meant ‘weak’.

SPX WEEKLY – Nothing is wrong with the weekly chart at this point, but it was rejected temporarily at the down trend line, and I want to discuss the big picture further in this report.

 

I have mentioned that I want to see how the market action unfolds going forward, after we got our Feb lows in place.  Just taking things  step – by – step and trading along the way often leads me in the right direction sooner or later. Often sooner than later.

 

NOW I WANT TO LOOK IN THE REAR VIEW MIRROR. 

 

IF ‘KNOWLEDGE’ IS SIMPLY THE ‘FACTS’, AND ‘WISDOM’ IS THE USE OR ‘APPLICATION OF THE FACTS’, THEN HISTORY OF PAST MARKET ACTION IS THE ‘KNOWLEDGE’ THAT CAN GIVE US SOME WISDOM MOVING FORWARD.  IN OTHER WORDS, IF YOU WANT TO KNOW HOW PRICE CAN ACT GOING FORWARD, TAKE A LOOK AT PAST MARKET MOVEMENT. THAT REAR VIEW MIRROR CAN AT LEAST GIVE US THE CLUES WE NEED TO ACT WISELY.

 

LET’S LOOK AT THE SPX 2007 top –  It came in the form of a double top for the SPX.  Note that OCT 2007 was THE TOP.

COULD THIS FORM AS A DOUBLE TOP TOO?–  Yes, so we will watch many different things going forward, but already my Quarterly & Monthly charts have warned us of that possibility. Right here and now, this doesn’t look horrible, but Time will tell.   Let’s dig deeper…

 

NASDAQ 2007 top  – A different kind of top, not a double top like we had with the SPX.  The NAZ had a higher top that formed a H&S. Note that THE TOP was also Oct 2007.  Currently  coming out of the FEB lows in 2018, we also just saw the NASDAQ form a new higher high, while the SPX & DJIA did Not.  Are we currently forming a right shoulder here in 2018 too? 

 

NASDAQ NOW –  Are we currently forming a right shoulder? Time will tell, and I am constantly covering this in the daily reports. My weekly and daily indicators are showing weakness, so this needs to pick it up soon or it is in danger of topping or consolidating for a prolonged period of time.

NOTE: In 2007, THE SOX topped Earlier than the SPX – Interesting, the SOX topped well ahead of OCT 2007 when the SPX, DJIA, AND NASDAQ topped. It double topped in JULY 2007.

I posted this drop in our daily reports this week, saying that I am thinking about the weakness in SOX , and I listed several Semiconductor stocks that had a high volume drop too.  Signs of  a possible top in place for the SEMI s ??

 

EXAMPLES THAT I POSTED IN THIS SECTOR OF WEAKNESS THAT  I WAS SEEING ARE BELOW

SOX NOW  – The long term indicators that I developed are showing weakness on the last 3 new highs heading into March, and now the Semis are dropping on heavy volume.  Look at the relative strength (RSI).  This could be distribution at the top.  In other words, it could be a top. I’m staying away from Semiconductors at this time.

 

SOX POSSIBLE PATH – This is not a prediction, but it is a path similar to one that history says the Semiconductor sector could take.

TRAN APRIL 19- What about the fact that the transports broke higher this week?  I posted this nice push higher while last Wednesday with good volume.

 

It might just be the shiny object that distracts us from the reality of a top forming.  Look at the TRANSPORTS during that 2008 top.  Remember that SPX & NAZ topped OCT 2007.  Did the TRAN top on OCT 2007 like the SPX & NASDAQ?

 

 

TRAN TOP MARCH 2008 –  IT ACTUALLY TOPPED 7 MONTHS AFTER SPX & NASDAQ TOPPED OCT 2007.  So what does history tell me here? Don’t simply look at the TRANSPORTS to see whether or not markets are topping. THEY MADE NEW HIGHS 7 months after the SPX topped, but met the same fate later.

Conclusion in the General Markets:   I have been reporting in our weekend reports my thoughts about the Big Picture and nothing has changed, even though the little day to day reports had some long trading set ups and some charts are still holding above the 50sma ( SAIL, IO, SQ, etc).  I am sounding a warning of caution, we may be seeing distribution as a top forms.   Not to worry, my reports have also been pointing out the ‘Bottoming Process’ taking place in other areas, and I know that they can be quite rewarding, also based on history and from my own experience.

 

IF THE MARKETS DROP, DOES EVERYTHING GET DRAGGED DOWN WITH IT LIKE 2008?   Good Question.

 

WTIC WEEKLY 2008 – Oil did get caught up in the selling, because we were having a global crisis, but notice that when the SPX & NAS topped in OCT 2007, that is when OIL RALLIED to parabola. The sell off came later.

 

GOLD WEEKLY 2008 #1–  When did the General Markets top?  Oct 2007.   Notice that Gold rallied for 6 strong months after Oct 2007, then it put in an inverse H&S and rallied into 2011. In 2008, Gold back tested the BLUE WEDGE break out as it dropped into an ICL.  I WILL USE THIS CHART AGAIN WHEN I DISCUSS GOLD.

 

MOVING ON TO CURRENT MARKET CONDITIONS

 

USD DAILY  – The USD looks ready to move higher  ( Short term), and this can push Precious Metals down. Maybe it runs to 92?

USD WEEKLY – The USD is in a major down trend and so far has been unable to cross the magenta down trend line. 91 or 92 breaks that line, so we could see a false break out.

 

GOLD WEEKLY 2008 #2– I found this to be interesting with this chart too, applying it to todays set up.

1. Markets were topping Oct 2007 ( They may be topping now)  and

2. GOLD broke out from a wedge when it was really due for an ICL. THIS is the kind of thing that most analysts could miss. Let me explain…

3.  Take a close look at June & OCT 2006 ICLs.  WHERE IS THAT ICL 6 or 7 months after the OCT ICL?  It was stealth in a wedge.  BURN THAT INTO YOUR BRAIN FOR A MINUTE. A mild dip at the APEX?

4. I have always said that Triangles seem to obscure cycles counts & cycle action. I HAVE ALSO SAID THAT I OFTEN IGNORE CYCLES IN TRIANGLES.  It looks like that blue ASCENDING WEDGE obscured the  ICL and changed the way cycles normally act.

5. Again, BURN THAT BLUE WEDGE & ICL  INTO YOUR BRAIN FOR A MINUTE. BUY THAT BREAK OUT.

GOLD WEEKLY – Hey Look , a BLUE WEDGE with an ICL due.  Gold is pushing on the 2017/2018 highs.  So I drew in a dip, since the USD is set to rise, but we do not have to expect a DEEP DIP into this ICL, in my opinion.  We’ll look for a confirmed swing low, but at the same time, we have been buying Silver stocks over 2 weeks ago, and they are higher.

 

YEN WEEKLY – The YEN broke to new 2017/ 2018  highs already, and Gold tends to follow the YEN. If Gold did this type of break out, say at the FOMC MTG in early May, it could put in an ICL dip like this yen back test, as a June ICL too.  Just an idea of how things could play out.

 

SILVER DAILY #1- Silver burst higher this week…

 

SILVER WEEKLY #2- Volume swelled, and we have been discussing the very bullish COT. It has paid off holding some Silver stocks, but it isn’t too late, this break is fresh.

 

SILVER  WEEKLY #3-  The last few break outs fell back down, so I am looking for follow through.

 

SILVER WEEKLY #4- Drawn like this, we need follow through to break resistance.  This really becomes ‘Buy the dip’  or ‘Buy the rip’.  The daily reports will discuss this further.

 

GDX DAILY – Day 20 really has this forming a right translated daily cycle. GDX looks like it wants to form a cup here at the $24 area.  Does that match what we expect on the weekly chart?

 

GDX WEEKLY – We are at that line in the sand discussed last week. GDX have turned down here or continued higher.  Please read the chart.

 

GDX WEEKLY – Some of the individual Miners like TRX, THM, GORO, etc have been bursting higher, so I am still holding the Miners that I purchased a while ago.

 

GDXJ  WEEKLY – The Big picture looks quite bullish when it comes to our MIners, but a shake out or stop run is possible. Please read the chart.

 

 Conclusion:  In the daily reports over the last couple of weeks, it seems that all sectors have stocks that are setting up and running bullishly.  We have been trading Tech stocks, Biotech,  some Energy stocks,  as well as Miners that were lining up quite nicely, and as mentioned in the daily reports, BITCOIN is now becoming interesting again. I took on a couple of Block chain trades that are showing nice profit already…

 

Many stocks in that blockchain area ran swiftly in Oct- Dec have now based out and seem to be setting up to run again.    Medical Marijuana is another area that ran almost straight up last the end of 2017, many doubling and tripling. Now we’ve seen a few perking up out of recently formed bases, so we really have not had a shortage of trades to look at.   I think that most of these set ups will continue to play out bullishly too.  Finally,  most here have traded the Miners in the past.   The gains in that sector, especially when timed correctly, can be exceptional.  I am really excited about what is happening in the precious Metals sector, and I look forward to the coming weeks. These can be very profitable trades, and since they can also often be bought and held for weeks, this allows you to relax and just enjoy the ride ( and maybe you’ll even have time for a few other hobbies that you enjoy on the side).

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 Of course, we will continue to discuss these things further in the daily reports, but for now that is your Big Picture Weekend Report.

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Thanks for being a chart freak with me,  and have a great weekend!

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~ALEX

 

 

MORE ‘REAR VIEW MIRROR’ HELP REGARDING GOLD WILL BE FOUND IN THE NEXT DAILY REPORT