Jan 25th – Even More Hope Ahead?
After avoiding the stormy waters of the sell off in October through December, we had the hope of a nice rally out of the ICL , and some good trading opportunities presented themselves. I have mentioned the importance of watching how the first daily cycle unfolds, and especially the 2nd daily cycle. Well, we have some ‘things’ to look at that add hope that the current gains may continue for a while longer…
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Just yesterday I said and drew these two things about the market…
When discussing that I expected higher price in QQQ, you may recall that I was asked, “Can I just continue ‘Holding’ the current TQQQ position purchased at the lows?” I said that you could just hold it, and I added this…
TQQQ – TQQQ running higher from here to say over $50 is a 25% gain. I basically went conservative and only showed a run to the $50+ area, it may do better than that.
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SPX – So here we still see price moving sideways along the 50sma, but the real HOPE came from what I saw happening yesterday, and I started to mention it in the comments ( right before the website crashed)…
THIS LEADS ME TO BELIEVE THAT THE REST OF THE GENERAL MARKET COULD BEGIN BREAKING HIGHER SOONER THAN LATER
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THE SOX – The Semiconductors all began exploding higher yesterday. I grabbed a chart of SOXL midday and posted it in the comments. The SOX broke above the 50sma and was up 16%, so for me this break higher does 2 things…
1. It gives us hope that the General Markets will break higher too, as expected, but also…
2. Gives us some great looking set ups to trade right now.
SO at the end of the report, I will discuss these Semiconductor Stocks in more detail.
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WTIC #1 – The recent crawl along the 10 & 50sma makes Oil looks like a bullish inverse H&S
WTIC – After the inventory report, OIL moved slightly higher and is above the 10 & 50sma. This is Bullish.
We discussed how many Oil stocks broke down, like OAS, BTE, WPX, WTI, etc. the XOP, OIH, and XLE were also dropping under the 50sma. What has happened there? Is it just a shake out, and then the rally continues? It may be…
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XOP – The XOP ( and OAS, BTE, WPX, etc .) did not recover the 50sma yet, however…
The OIH – Which also recently broke below the 50 & 10sma, recovered both. And the XLE?…
XLE #1– We saw a bear wedge…
XLE #2– It crawled along the 50sma to form a rising channel, see the chart…
XLE #3– Now the XLE looks like it does want to recover soon too. If Oil runs higher, and I am thinking that it should, this sector may recover from the recent break down, and could be bought above the 50sma ( Gush, for example) as a trade.
UUP – The USD did move higher as expected, but GOLD was not as affected as I thought that it might be.
GOLD – Gold made a new low and tried to recover again. So far, it is forming a round top, but it is having a hard time selling off. A move over $1286 seems bullish.
GDX – GDX can drop further, but if and when it breaks above the 10sma, I think it will become a left translated daily cycle and roll over into the final low of an ICL. At this point a close above $20.75 looks Bullish short term.
GDXJ – So far the 8 ema is holding back price. Let’s see what Friday brings. This is a very long daily cycle, so the lack of selling is affecting things. Let’s just say that at this point a push above $30 would be Bullish short term for GDXJ.
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SOME MINERS THAT ARE LEADING ARE STILL DOING THERE OWN THING, BULLISHLY.
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FNV – This looks like a BUY to me at the 50 & 200 sma, despite Gold, Silver, and GDX GDXJ drifting lower.
AU – Another leader, AU moved higher out of the recent sell off and looks to have broken the down trend. I expected a normal tag of the 50sma, but so far it reached oversold and Buyers keep stepping in .
BTG – BTG just did a normal back test of a break out, and also came up shy of the 200 sma. This looks like it may break out above the Magenta line, which is bullish.
AEM – AEM doesn’t look like it wants to sell off very much either. The 50 sma is rising and it has been crawling along the 200 sma. It looks like a base that formed above the last base.
When it comes to the Miners, they have been pulling back very slowly, and some of those former leaders look almost ready to run again. I have been asked “Can I buy the next DCL, though you expect it to peak early?”. I would say that many Miners are acting bullishly, so you could, and just use a stop , even raise the stop. It can run higher to day 12 ( almost 3 weeks), before it drops again. Also when I look at various Miners, those former the leaders are not selling off sharply, instead they seem to be holding on to some of the recent gains.
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When it comes to the The General Markets and Oil – I have been saying that they are moving out of ICLs, so the first daily cycle should be bullish and the second one should also start out that way, but then it needs to be watched for clues moving forward. We are in ‘earnings season’ now, and yesterdays earnings Popped the Semiconductors. INTC released after the bell, and dropped 6%, so it is a bit mixed, but the set ups for many chip stocks looks good right now. I have already been saying that I liked the set ups in SQ, MU, AMD, etc, and now they may be ready to run again. The Sector ETFs like MJ, TQQQ, UPRO, SOXL, UCO, USO , OILU, UWT (Maybe even GUSH) for Oil look Bullish too. The MJ stocks have been running again for weeks and they still look hot, so Let’s enjoy this environment while trading is favorable. There may be a little something for everyone! I will discuss things further below.
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Enjoy your Friday trading!
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~ALEX
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LETS START BY SAYING THAT MANY STOCKS IN THE CHIP SECTOR STARTED BREAKING OUT. LRCX & TXN reported good earnings, and the sector broke out higher. LOOK AT AMAT, XLNX, LRCX, TER, TXN, and others and a few were even up with double digit %- gains. Lets look at some charts and discuss this further …
TXN – This may be a good one to watch. It already formed a base around the red 50sma line, and broke out Thursday with strong volume. Can it get above the 200sma? If it does, I think that TXN is a strong buy, and I will show you why later, so remember TEXAS INSTRUMENTS.
AMAT- AMAT popped over 10%. If it didn’t leave a gap, I’d say it is a buy and should run to the 200sma. It still may, but I stress out over recommending a stock with a gap open, and then watching it drift to close that gap for the next few a few days. If this back tests the 50sma and fills the gap, this is then a strong buy.
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NOTE: I WANT TO POINT OUT SOME COMPANIES THAT HAVEN’T BROKEN OUT YET, BUT LOOK TO BE SET UP IN A SIMILAR MANNER. ONE SHOULD CHECK & BE AWARE OF WHEN THEY MIGHT RELEASE EARNINGS, BECAUSE INTC RELEASED AFTER THE BELL AND DROPPED 6%. LET’s LOOK AT INTC…
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INTC – It broke out from a big choppy base, but released earnings after the bell and dropped $3. That puts it back under the 50sma, but still above the 200sma so far, so this may be worth watching FRIDAY, to see if it
1. Holds up at the 200sma?
2. Drops even more to the bottom of the base?
3. Drags the entire sector down a bit? The most important thing to watch for is how this sector acts after they missed earnings last night. Gaps may now fill.
MU – I actually pointed out MU, SQ, and AMD as buys recently in the reports after the ICL , so here we will look for follow through. AGAIN, YOU MIGHT WANT TO SEE WHEN THEY RELEASE EARNINGS, since we are in earnings season. MU broke out above the 50sma and you can buy or add with a stop under the 50sma. This can run to the 200 sma overhead, a nice trade.
CY – CY formed a base and then broke the down trend and is slowly curling the 50 sma upward. This is a buy too, and I want to show you a 2nd chart…
CY Big Picture- Going forward into the peak of the first daily cycle and then a 2nd daily cycle, you can see how this could either recover & markets become Bullish again ( Fed slows rate hikes) or this & the Markets tops. We are buying near bases and looking for clues along the way.
AMD – AMD looks like a nive long base ready to pop. As this breaks higher, this is a BUY SET UP. It has been riding the 50sma. Earnings are next week, so you’ll need to be aware of that.
TSEM #1 – I wanted to start with a big picture progress, and you see that TSEM gapped down & capitulated into THE OCT LOW as the markets sold off. It now has been climbing with higher lows and broke the down trend & back tested already.
TSEM #2 – It ran $12 to $16 and pulled back to the 50sma. It is oversold and may run with the sector. Check when they release earnings , this may be ready to run.
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I WANT TO POINT OUT THE BIG PICTURE DIFFERENCES TOO.
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NVDA – We all know that NVDA got crushed recently. That said, do you recall when I told you to remember Texas Instruments?…
TXN – This is almost back at the highs because the sell off was not as severe. Id TXN can get above the weekly 50ma, it looks possible that it could even break to new highs after a massive 1 year consolidation. AGAIN, we need to look for clues in the Big Picture for the General Markets as time goes on too. If we enter a bear market, this would likely triple top.
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OTHER INTERESTING SET UPS
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GPRO – I would buy this with a stop
SOL – SOL started breaking out after reversing on the 50sma. This was a buy. I captured this at 1:30 for the comments section , but the website crashed for a few hours and I couldn’t post it. I have been mentioning JKS, SOL, and other Solars too.
SQ – I had SQ in yesterdays reports ( And other past reports), this company is pretty strong.
MJ ETF – As mentioned in prior reports, I expect a second leg higher here soon. Crawling along the 200sma is bullish and can be bought with a stop ( loose) .
ACB – The MJ stock Aurora trades on the NYSE. It reversed above the 50sma and may be ready to run higher. I bought this yesterday. It should break the 200 Friday or get rejected by it.
ALEAF – Back in December I Bought ALEAF at $1 and recommended it as it crawled bullishly along the 200sma, which it was formerly trapped under, and began to Push against the 50sma overhead. It was ‘Pinched’.
ALEAF – I added yesterday again and captured this at 10 a.m.. Volume seemed to be surging and it looked ready to break out. You can see the slow progress but I think that this is showing signs of an upward move, barring any bad news going forward.
WITH EVERY RECOMMENDATION, whether it is AMD, MU, GPRO , SOL, or ACB- be sure to know when they are due to release earnings ( I think you can quickly look up the stock on Yahoo Finance and find that info). I use TD AMERITRADE and you can find their earnings there often by just looking up the ticker . A little due diligence goes a long way. I just dont have time to look up every stock that I post. Enjoy your Friday trading !
