Tuesday May 22nd

 Mondays Markets…

 

SPX MAY 18th –  Last week I mentioned that we had a bull flag forming on the 10sma, so it should break higher…

 

SPX – The General markets did break higher, but they gapped open. Toward the end of the day, they started to sell off, but they still didn’t close those gaps. The gaps could fill, however…

 

As mentioned in one of my prior reports, some of the General markets Tech stocks are remaining bullish ( CREE, TWTR, MU for example) , while others have weakened  (CASA , AQ, etc). So because they are not just ALL RUNNING STRONG like we had out of the Feb lows,  we get a bit of a mixed area where now being a stock picker or ETF buyer is important.

 

 

CREE – CREE did a ‘shake out ‘ at the 50sma and actually looked weak until the May 1st reversal candle. Once it regained the 10sma, it then continued higher daily as a strong semi stock. Now it is at new highs.

 

MU – After a solid 10 day run higher, MU finally pulled back to test the 50sma & trend line break last week, so I posted this chart as another opportunity to enter on support.  This makes for a low risk buy, with a tighter stop possible.

MU  Gapped open but it too sold off into the end of the day too. This remains a buy area if you wanted to own MU.

 

WTIC – Oil is in a runaway type move. It is climbing along the upper trend line. $72 &  $74 targets have been a possibility.

 

XLE APRIL 25 –  The XLE should be ready to make a 2nd leg, so ERX was a buy.  I did not take this trade, but I should have, ERX ran from $34 to $43 so far.

XLE  – The XLE and ERX  actually have more room to run if we consoder a measured move as taking place.

 

SN  – SN was pointed out as a bit of a lagger breaking above the 50sma in early May.  Now it is pushing on the 50sma. One could Buy the flag or wait for a break out, so this could go on a watch list.

 

 

 DRAWING A CONCLUSION: MIXES SIGNALS ONCE AGAIN

 

 The Precious Metals sector is acting quite tricky by giving mixed signals again. This is what you will see in the charts…

1. Gold is selling off, but keeps rising back into the close

2. Silver itself actually looks quite Bullish.

3. The Miners wont really sell off the way we would expect them to this late in the game. Lets just look at the charts,  talk about those charts , and discuss where we are at.

For starters, we were expected this sell off in Gold, because we are expecting a drop into an ICL.

 

GOLD #1-  This shows that for the last 4 days, Golds sell off keeps trying to recover.  It did make a new low on Monday though.

 

GOLD  #2 –  That is actually a reversal candle on Monday, and ‘appears’ bullish however, so I would expect a bounce here.

GOLD –  You may recall that Last week I mentioned that a back test could be 1 way to draw in the bulls for the slaughter with this chart. A move above the 200 sma would look like a shake out though.

GOLD  $3-  So will we just get that back test, like I have been saying, and then a final drop?  This is what I posted as a most likely move, not a ‘shake out’.

So while there are several reasons to believe that Gold will do that bounce & drop into that ICL, as you will see ,  SILVER & MINERS actually look bullish.  Let’s just continue with Gold for a bit more, and I will show you one of the main reasons  why I have to still expect a deeper drop in Gold …

 

GOLD  – At day 14, if this was the low, it would be right translated. THAT IS NOT How an ICL works.  THAT SAID,  a bounce now cannot be an ICL here if we are on day 14 with a day 8 peak.

 

GOLD  – And this is what I have expected all along too, so I still have to expect lower lows going forward.

GOLD  – This is the only way that we could be seeing an ICL right here and now in my opinion.  A different cycle count, which I HAVE mentioned as a scenario that is  ‘least likely’.  I honestly feel that day 29 was a dcl, because we closed above the 10sma for 3 days, but we did NOT break the down trend line to help confirm that as a dcl.  IF THIS WAS DAY 43, it COULD be an ICL.

DEEP DOWN INSIDE –   I JUST FEEL THAT THIS IS MORE LIKELY, WITH DAY 29 AS A DCL ON MAY 1st, but if that 200sma is recovered and that trend line is broken, the above day 43  scenario may have to be accepted.  This remains least likely also because…

 

SILVER DOES NOT LOOK IN SYNC WITH A GOLD ICL HERE.

 

SILVER – Silver is making higher lows and did a reversal to the 50sma Monday.  It has BULLISH indicators. Silver looks like a MAY 1st dcl, with a bullish divergence& higher lows, so this doesn’t exactly Match Gold- Gold is at lows.

 

MINERS NOT IN SYNC WITH SILVER OR GOLD

 

GDX #1   –  NOTICE THIS –  GDX pushed higher with Golds sell off Monday and closed at the highs of the day, above the 50sma.  A reversal re-gaining the 50sma should draw in traders.   Day 13  DID break the May 1st lows, unlike SIlver which is making higher lows.  That break of the may 1st lows should make this a failed daily cycle, but that is a more bullish looking chart than Gold, since Gold is at new lows.  This will either suck in the bulls for a quick ICL drop & Slaughter,  or something odd is playing out.

GDX #2  –  So will GDX just rally for a few days like it did in early May and then roll over, drawing in Bulls for a sell off into the June FOMC?  We’ll have to wait and see, but this is about as tricky as it gets.

 

So these are the MIXED SIGNALS.  Gold is at lows, Silver made higher lows, GDX regained the 50sma, and now GDXJ.

 

GDXJ – And GDXJ  has made higher lows since February and did NOT break the May 1st lows either. 

I cannot remember getting a Precious Metals picture this out of sync.  We are getting mixed signals, with GOLD at the lows, Silver making higher lows,  GDXJ making higher lows since the Feb lows, and GDX breaking May 1st lows, and then recovering the 50sma 1 day later.

I am simply remaining patient in this sector, it really is coming due for an ICL, almost 6 months after Decembers ICL.  I haven’t missed anything at this point by being patient. I am still holding some Silver Miners for insurance in case things just drift higher there and I am watching for clues in the short term action.  Basically I am expecting an ICL in Gold.

 

I am going to once again discuss a bullish sector at the end of this report, since it is still acting correctly.

Enjoy your Tuesday trading!

 

 

~ALEX

 

In APRIL I wrote an article saying that I think the Medical marijuana Sector was beginning to act bullishly again.  Let’s review, because it is really acting correctly in may ways now.

 

OGRMF CHART 1 of 4-  Pushing on the 50sma, I bought this at $3 on the 10sma break, and added to my position while recommending this here, since MANY IN THIS SECTOR STARTED HEATING UP.  THAT WAS IMPORTANT.

 

OGRMF CHART 2 of 4 FROM LAST WEEKS REPORT  –  After OGRMF broke above the 50sma  it has been slowly but consistently running higher, I posted this Bull flag possibility last week as a buy at the 9 sma.

OGRMF CHART 3 of 4 – WITH FRIDAYS REVERSAL, IT WAS STILL ACTING CORRECTLY. This was posted as a buy again Friday.

OGRMF  CHART 4 of 4- Follow through was strong, notice the volume surge as it runs to former highs.

 

TWMJF  –  I posted this on May 7th, it was just starting to break out from a base here at $23.

TWMJF  – On may 14 at $25, it Popped higher  on strong volume. I mentioned that they are going to be listed on the NYSE as CGC by the end of May. That should add buyers over time.

 

TWMJF  –  This is a bit extended here, but it could still simply run to the former highs and form a cup & handle.  It is now at 30+, and again this shows that the sector is heating up.  Many have consolidated and formed bases, I have been buying these bases and it is paying off.

 

LET’S LOOK AT MORE BASES

 

CBWTF – I have pointed this one out and I do expect that it will run.

CBWTF   – It broke above a wedge and the 50sma, and has now done a back test and reversal. This is sort of a ‘streaming’ company and I expect it to do well over time.

 

MNTR – I bought this and posted it in the comments Monday. It is pushing above a base and the 50 & 200sma again. This is a bullish set up.  If it eventually runs to former highs, it will more than double.

 

SPRWF – I have been waiting for this one to get going, and it finally looks like it is breaking out too.  It was crawling tightly under the 50sma and POPPED yesterday.  IT COULD PULL BACK OR SIMPLY RUN HIGHER, so in that case I usually start a position and if it runs I ride it,  if it dips to the 50sma as drawn, I add.

APHQF MAY 18th  – This broke from a wedge and is also above the 50sma. Here I was just pointing out ( Boxes) that the recent run higher is similar to the start of the November run higher.

APHQF  – A close up shows that APHQF  broke above the 50sma a week ago, and back tested it.  THAT IS A BUY IF IT REVERSES THERE AS SUPPORT, and it did.

 

CANN FROM MAY 18   – Bouncing off of the 50sma and at the downtrend line,  it looks ready to go soon. Will it POP? …

 

CANN – It Popped, but sold off by the end of the day.  I still think that this will go higher eventually, and this one roughly ran from $2 to $6 in April, it could do a second leg that adds great gains too.

 

CRON – For those that do not like OTCBB stocks or cannot buy them with their current brokerage,  CRON is already listed on the NASDAQ ( and TWMJF is being listed on the NYSE soon as CGC).  CRON moves quickly when it gets going.

 

AS A REMINDER:   LOOK AT THESE CHARTS AND UNDERSTAND HOW THEY CAN MOVE. THESE TYPES OF MOVES MAY NOT BE FOR EVERYONE.  DO NOT buy them if they are extended, because they can drop 10% in 1 day quickly if they are not at support areas. These can run fast in both directions and they can also go sideways for weeks.