Tuesday February 26th
For the sake of time, I will not spend time proof reading this report for typos. I lost power last night and the internet was unavailable. I want to try to release this report at least an hour before the markets open. Thanks.
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The SPX, DJIA, and NASDAQ gapped open, and slowly sold off by the close. They still closed up slightly, so for the SPX for example, this is either a day 11 peak of a 2nd daily cycle, or if this was all one daily cycle, it would be day 41. I discussed why I think this could be a 2nd daily cycle in the weekend report using the DAX, NIKKI, etc.
SPX – This reversal could lead to a pull back in either case. It looks like sellers appeared after the gap open.
I do see some nice POPS and SET UPS in individual stocks, I see a good number of former Bull stocks with at least a temporary double top type set ups. This may be temporary, or they may back test the 50sma on a dip. Time will tell. Let me show you what I am looking at…
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AAPL – Less buying power and sellers seem evident on the 2nd push higher. Back test the 50sma or just choppiness?
NFLX – This looks ready to pull back too. Back test the 50sma?
SQ – Back test the 50sma or just continue sideways and choppy?
While those tech stocks V-Bottomed and ran out of the lows, some other stocks have formed better bases and are just breaking out higher now. I mentioned last week that mainly the Chinese Tech stocks have been perking up. Let’s take a look at this too…
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HUYA – No V-Bottom rally in January here, this has traded sideways for weeks. This formed a base and is now running higher. It looks ready for a pull back, this may become a nice ‘buy the dip’. Read the chart
YY – This actually bottomed in October, double bottomed in December, and has just formed a large base roughly between $55 and $75. If this breaks and runs, gains can be very good. This would be good for a watch list, especially if it lands on the 50sma and reverses again.
NIO – I have been pointing out this BASE at various stages of buying opportunity. It gapped open, and broke out Monday. When a base like this break, it can run to former highs swiftly, and I know that some here do own it from the 50sma ( $7). If it back tests the base, its another buy opportunity, but it may just run away. EARNINGS MARCH 5th.
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WTIC – Oil dropped sharply Monday. To be honest, this big of a drop was a surprise to me and I don’t like the volume, but…
XLE – Shockingly , The XLE, XOP, OIH all closed Green, ignoring Oils big drop. That makes this hard to read. Tighten stops on energy stocks until this clears up, or lighten up. OIL dropped sharply, These OIL/Energy Sector etfs did not. I personally sold mine for now.
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Last week I was asked about NATGAS, and I said that a low looked to be in, you can buy it with a stop. I have been asked by a couple of other traders this week, so I’ll just cover it here.
NATGAS BY REQUEST- NATGAS has put in a low and has now broken a downtrend line. It is day 10 of a new daily cycle and you can go long, but you will need a stop. When NATGAS trades, it can move higher very fast, but it also can drop sharply. I am not taking this trade personally, I currently have over 10 positions open, and I try not to open too many.
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A NEW BULLISH SECTOR? It seems to be Biotech…
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IBB – After the V-Bottom , Biotech went sideways for 2 months. I would have expected a drop to the 50sma, but it POPPED Monday. The gap may fill, but this looks good…
LABU – LABU gapped open and closed up 11%. I don’t like the gap, but if price drops down, it may close the gap and become a ‘buy’, so I will be watching for that. IN THE MEANTIME, Several Biotech stocks have these sideways consolidations and look like good buy set ups. I will discuss a few for your watch list at the end of the report.
GOLD – This ‘Base Building Action’ is choppy and tires people out, it makes them weary, and it makes them give up due to the inability to comfortably enter a position and hold it. It is the same with Miners… I have people telling me that the wiggles keep stopping them out on short term charts ( 30 minute, 1 hr charts, etc). I think that buying above support and using a 30 minute chart for a stop is a mistake. BUY AT SUPPORT and use stops under support. That choppiness wears them out. This actually encourages me that Mr. Market has done its job before it launches higher. A BULL will buck the riders off, and then it TAKES OFF HIGHER. Buying the next dip might be the last chance for a good entry, but many will likely be afraid. Notice how past break outs resulted in a strong rally, and you’ll see current potential.
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AS A SIDE-NOTE: ‘ALMOST ALWAYS’
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Does an ICL drop have to break the trend line? It usually does, in fact, that is actually one of the characteristics that we look for when identifying an ICL drop. I PERSONALLY SAY THAT ‘Something may happen 90-95% of the time in the markets, but always look for exceptions to the rule, to be better prepared’. I have found a few times when either we had ICL to ICL at a year apart …or… we had a no trend line break and just saw a consolidation or bull flag in place of the ICL 6 months later. I am posting one below and I’m doing this for a reason…
GOLD ICL & THE TREND LINE BREAK – Where is the trend line break 6-7 months AFTER the 2nd ICL on July 2007 ICL? There is only a bull flag 6 months later. There is no trend line break for many months and that dip is about 1 yr later. So with the drop that we are expecting now, I am watching for other things too. I have mentioned targets for the next dip. I am not glued to a trend line break as a must here after a shake out & recovery. I’m just staying alert to possibilities, and Time will tell.
GDX – GDX dropped to the 8 ema. We had a weekly reversal candle and this is selling follow through.
AG – Some Silver stocks did well, despite GOLD , SILVER, and MINERS selling off Monday. AG released earnings pre-market and ran up 6% during the day. It then held most of the gains. The break out above the 200sma was a 2nd BUY.
AG – Just a reminder, AG is now at $7, but if you can handle the wiggles, the end result could be very rewarding.
EXK – EXK was doing good, but released earnings midday. It still closed up green, but gave some gains back. We’ll see if EXK can hold above the 200sma. This is actually a Bullish 6 month base so far.
Precious metals are due for a pullback, but I have been saying that some may act on their own. AG seems to be doing that now that it broke above the 200sma, so we’ll just keep an eye on ‘things’ as time rolls forward. I am expecting some great buying opportunities on this sector ahead. It may be the last chance to enter without seriously chasing .
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I have some trade ideas below, enjoy your Tuesday trading.
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~ALEX
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PLG #1 – Last summer and here in September, I loved this base when PLG was at 11 cents. I thought that it was ready to run, but Platinum has lagged Gold and even though it did run, it then consolidated. Time for an update.
PLG #2 – This weekly chart is a bullish break out and Platinum is now moving higher with Gold. Note: PLG did a 1 for 10 reverse split, so the price is much higher for that reason, this would really be 17 cents on the first chart, but this chart looks very good long term. It has been choppy, but higher lows are present. Look at the weekly RSI.
PLG #3 – The lower risk entry / buy was last week above the 50sma or bull flag. Jumping in now MIGHT result in a pull back, but someone thinking long term could start small and add on a dip- or just put this on your watch list and buy the next area of support later on. That long term weekly chart looks very good and Precious metals may have started its next big move 6 months ago.
TGB by request – Yes, TGB is still looking good, it dropped last Thursday as a single day event and you may get that from time to time, but support was not broken. This remains “Choppy but healthy“
ACB – I love yesterdays reversal, so I added to my current position. I sold a large portion up at $8 and rode some. Now ACB is a buy using the trend line break as a stop. Let’s see if we can get some quick upside.
ALEAF REMINDER #1 – I posted this to show the potential if an inverse H&S formed…
ALEAF #2 – This reversal formed that shoulder and was a buy – it is acting correctly too. I think we are going above recent highs, see the above long term chart, so this can still be bought as a nice trade. Volume increased.
TGODF – This is still a buy in my opinion too.
CNBX – I stopped myself out of CNBX a week ago or so, but this still looks constructive. I got bored and maybe nervous with it breaking the 50sma , but it did recover quickly each time. It could be bought as it breaks higher ( watch list) .
Shipper TK – This still looks healthy after an earnings release last week, but the shipper ‘TOO’ broke down slightly so far on it’s earnings release last week, closing below the 50sma Monday. Some shippers look good, others are choppy, and…
NM – Some of the other ‘shippers’ that are still at their lows are looking like they are setting up bullishly too. NM & SB are 2 of them at the lows. NM released earnings last week & dropped slightly. If this breaks higher, it is a buy. 
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BIOTECH
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OPHT – This is a buy at support and looks like it wants to run higher now or over time.
ABEO – This was a nice 13% pop yesterday. It is forming a constructive base and has good potential. It is a Base at these lows from DEC – NOW & may be breaking out ( 50sma). If it finally gets follow through, it could make fast gains.
NTLA – JT mentioned a few Biotech in the live chat area , and this was one of them. I love this base and it looks to be breaking out here & now, so this can be bought with a stop at recent lows. It has been very choppy, but that may be finished now. He also pointed out CRSP, but it was up 25%, so I cant recommend it ( But it looks very nice too. Buy a gap on CRSP if it happens).
XENE– This is also an excellent set up. It broke out above the 50sma, has crawled along it, and now reverse higher from an oversold position. This can be bought right here above the 50sma with a stop under the 50sma.
SENS –
My biotech watch-list for today does consist of the above 4 charts ( XENE, NTLA, ABRO, OPHT). I may trade 1 or 2 as soon as today if they continue to act correctly. They are nice bases and set up to break out & run. I do need to spend time after finishing this report trying to find when their earnings are released. Biotech can be trick with FDA findings and failed test results, but at this point, these are lower risk entries near support and acting correctly. I’m looking for possibly a 2 week run higher (?), and then I’m out.
