April 2 – Healing
Weakness followed by a break down in parts of the General Markets ( The TRAN & RUT) was reported here by me over a week ago. Over time, we gradually saw improvement, so that is what was also reported toward the end of last week and in the weekend report. These area would need to be monitored continually. Well, Monday we saw signs of healing, so we need to address that as a starting point.
.
RUT – On March 22, the Russell 2000 lost the 50 sma and broke below the prior low. This is a bad sign and needed to be monitored. As this was taking place, the Transports were showing signs of weakness too, so these areas were to be reported on daily.
TRAN – The Transports were also breaking down as noted on March 20
TRAN -A week later the Tran stayed below the 50sma, so this is a concern and caution was warranted.
TRAN – I did point out a bullish possibility, but until the 50sma is recovered, I would be staying away from the Transports, and I would remain cautious in the General Markets.
TRAN – I pointed out ‘Improvement ‘ last week.
THE TRAN WEEKLY IN THE WEEKEND REPORT SHOWED A REVERSAL. I SAID A PUSH HIGHER IS BULLISH.
TRAN – Well Monday was a complete recovery of the 200sma , and I posted this midday in the comments.
This was in the weekend report:
RUT WEEKLY – If I use technical analysis, this could be formed a descending wedge and a break above the wedge is actually Bullish. This means that next week will likely tell us if the Small Caps can recover & become at least short term bullish. A bigger move above the 50 week MA could be an inverse H&S break in technical analysis too.
RUT – This is the Russell 2000 currently, and with the Transports recovering, I would have to expect that this will now break higher too.
TNA is a 3x Bull small caps trade- So taking a trade here long, anticipating follow through and a break out in small caps would allow for a tight stop as a low risk entry.
SPX – New highs for the SPX
I concluded the weekend report by saying that this week would show us if the improvements in the TRAN & RUT could continue, and I said that you could view SPX, TECH, Biotech as long positions with a stop. Now after just Mondays trading, all damage in the transports and Russell 2000 seems to be healing. We had a real break down below the 50sma & 200sma recover.
.
WTIC – I have expected Oil to move from the ICL to the 200sma, and it finally got there. I then expected that a wedge forming could pull back to a dcl and maybe try to break out, but this actually looks fairly strong. Since OIL has long daily cycles, and I marked the dip to the 50sma as a dcl back in February, we COULD see a break out here. Oil looks good.
WTIC – I would have to say that a break out above the 200sma, and a back test later is now possible, since Oil has been bullish out of the ICL.
PRECIOUS METALS :
.
GOLD – Gold broke the 50sma last week and closed under it for 3 days. Though Gold doesn’t look too bad…
GDX– Miners broke down Monday. Day 20 would leave some time for more selling, and the 200sma is likely the next target .
GDXJ – GDXJ dropped almost 3 % as it heads for the 200sma too. That 200sma CAN be broken, so that is not necessarily a buy point, just a likely target at this point. Let me show you something…
Let me show you this as an example: When Miners want to sell off, They are known to really SELL OFF. I feel that it is best not to buy until the selling stops. If you own a load of Miners, losses day after day can be emotionally draining. For example:
.
NSRPF – This looked ok crawling along the 200sma, but it dropped last week and then really dropped another 11% Yesterday.
SA – In the last 3 days, SA got pretty ugly fast losing both the 50 & 200 sma. It has dropped from the peak of $15+ to below $11.50
MUX- And this is why we allow out stops to get us out of a trade that is not acting correctly. I actually haven’t recommended MUX in a LONG time, but I want to point out that it lost support a while ago, and therefore it CAN drop to the next support near $1.25 or even 75 cents. It was just trading at $2, so this would mean a position would lose 50% from just last weeks price.
So it really is best to wait for the selling to dry up and then we will look for swing low to take lower risk entries. If we are dropping into an ICL the way some of the past ICL drops have taken place, the selling can get a lot worse than what we have seen so far.
I had someone write and tell me that they still held leverage, what should they do? “Wait for a bounce and sell?” My simple answer is NOT having leverage during these times. I have seen selling take place 5-7 days in a row, and waiting for a bounce can cause serious damage to your funds & emotions.
.
Some people are trying to be patient and wait for the Miners to bottom, others are still trading the General Markets or Biotech on the side. Many of the stocks on the past watch lists are perking up again, so check your charts ( for the Tech, Chinese stocks, Biotech stocks) and see if these stocks have pulled back to support and maybe even reversed.
.
Enjoy your Tuesday trading!
.
~ALEX
.
I HAVE BEEN TRAVELLING AND WANTED TO COVER THE CHANGES IN THE TRAN, RUT, and THE DROP IN MINERS, SO I WAS LIMITED ON TIME AND UNABLE TO CATCH EXTRA STOCK PICKING CHARTS. I WILL JUST POST A FEW THOUGHTS BELOW THAT YOU CAN THINK ABOUT DURING YOUR TUESDAY TRADING. IF YOU KEPT A WATCH LIST LIKE I RECOMMENDED, YOU ARE BETTER OFF. AGAIN, SOME ARE JUST WAITING TO BUY MINERS AFTER THE SELL OFF, THAT WILL PAY OFF LATER.
,
Yesterday I mentioned this in the comments: YRD, VIPS, IO, HUYA, YY, BIDU , NEWA and more = CHINESE PLAYS DOING WELL, charts looks good.
BIDU looks like a nice buy
Also Biotech was mentioned, check your charts …
Bio’s look good. I do still like AVEO, TROV, NLNK, OMED, CRMD, SELB, EYES, ATNM, ADXS, etc etc
Sold my LJPC a while ago to lock in gains, and now that it dropped to the 50 and is riding on the 50sma . Looks rather good with low risk stop.
.
Many know that I have been posting about BITCOIN for quite a while. I recommended HVBTC in the weekend report and said that it is one of my BUY & HOLD. Also RIOT, MARA, GROW, SRAX, XNET, etc were mentioned in the past , related to blockchain. Well, Bitcoin also broke out last night.
I mentioned URANIUMS in a recent report last week, but also mentioned that with the encouraging up days, we also get choppy sideways action.
URG, UUUU, UEC, DNN looked pretty good with good volume.
I also think that I mentioned that many have Good long term 5 yr weekly bases- So the BY & HOLD can be used here.
UEC & URG seem strong.
THESE ARE SOME CHARTS THAT I POSTED FOR THIS SECTOR RECENTLY TO SHOW THE POTENTIAL
