June 5th – Stretching Out

The General Markets moved higher today, and even though the Miners were already quite stretched out and lately  they’ve moved inverse to the General Markets,  they actually continued to stretch out a bit more.  As mentioned in recent reports, I believe that the The Precious metals sector has bottomed and is acting bullishly.  Let’s take a look at various  markets sectors.

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I have been expecting a bounce, but not a rally.   That said, I want to keep an eye on things going forward, just in case there is a surprise to the upside in General Markets, because I am seeing small signs of Bullishness.  Cycles seem to point toward more downside, but we need to roll over again pretty quickly.  Sentiment got quite bearish, The RSI is diverging at new lows, The FED may cut rates now, and I am seeing signs of a change again.

 

SPX – We did have a nice bullish reversal in early May, that stalled & failed at the 50sma. THAT was the FED MTG. Now Powell spoke & we get a similar reversal-  so lets see how this bounce plays out.   I am  simply looking for Strength or weakness and with good reason.  With the markets, you need to stay open minded & flexible and One thing that seems odd is that we are already looking at breaking the down trend line.   THAT usually signals an ICL.  COULD THIS BE AN ICL & CAN MARKETS RUN TOGETHER WITH GOLD?  YES, they can run together. And I will discuss that in future reports.

QQQ – QQQ recovered the 200 sma, but again, we had a similar reversal in early May at the FOMC MTG. I am looking for strength or continued weakness for clues going forward.  I am focused on Miners personally, there could be some fast gains there.

 

SOXL  – I Tweeted this idea out Tuesday, because even with a simple bounce,  the 3x ETF for the Semiconductors can make big %  gains.

 

WTIC   – Oil looks weak, let’s see what happens with the oil inventory report Wednesday.

 

OIH  – The OIH, XOP, XLE bounced, and many Energy stocks looked interesting too.

 

HK – Popped 20% after I tweeted this out. It closed up only 10% though. These are bases that are no longer selling lower with Oil, so I trade them as a trader. VERY HIGH RISK and not for everyone.

BAS –  BAS did a little 30% POP off of the lows, so these are beaten down and really popping out of the lows. LGCY  had an outrageous bounce Monday, and then down 40% Tuesday –  NOT FOR EVERYONE.

We’ll see what happens after the oil Inventory Report is released Wednesday. I am focused on Miners, I think that this ICL is going to be rewarding, as mentioned in the past few weekend big picture reports. See the weekend report for reminders of what I am looking at.

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USD  – The USD is dropping.

Note:   Some people were lamenting the green stock market yesterday, thinking that Gold cannot run with the markets.   That is NOT true, I will cover it in a future report. I say this because I believe that we have an ICL in Gold, and that means that The Lows are in place, and Gold looks very bullish.  I am focused on Miners and yesterdays pause was good for adding to Silver stocks.

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GOLD – A doji at the highs after a run can be a short term topping candle, but not always. After that big surge, this is probably not a top, it may be a ‘pause’. Let me show you why I expect more of a ‘pause’  than a top ( This could Bull Flag) …

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GOLD 2 hr chart–  That was not a normal choppy move higher like those other runs.  It was impulsive, straight up non-stop.  This chart shows Gold as I write on Tuesday night & it is now flagging.  It may not drop & end the same as other runs higher. It may bull flag and  then continue higher.

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UPDATE:  WHOA!   GOLD AS I PROOF READ AT 6:30 A.M. Eastern Time –    Very nice.  Gold does not want to let people in.

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SILVER  – Silver hit resistance, but the volume seems Bullish. Silver could break through this area and really get moving, so I have been saying that you want to own Silver stocks.

GDX – GDX was down for most of the day, but then some Miners started to rise and GDX & GDXJ both closed Green, even with the Markets bouncing. With a market bounce, most expect a gap fill after that gap down, so Miners are showing strength.   So far we have a 3 day runaway move that many will not dare to buy. 

As I have pointed out in recent reports:    I used this chart recently to show the 2016 runaway move that left many behind.  You want to own some Miners, and add when possible in a run away move.  In 2016, people HATED the choppy miners at the lows. As it popped and started the run away move, everyone waited for a deep dip to buy, as you can see, that deep dip never really happened, and many missed the whole move.   This may happen again.

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CDE  – The SILVER stocks were beaten down quite a bit, so they may continue to attract Buyers.  This is at the lows, so why not own some?

MAG  -Mag turned higher in the early trade, so I posted this on Twitter. MAG actually closed up another 5 %, with the Markets reversing higher.  That is bullish.

KL  – KL broke to all time highs already.  It is having its own runaway move, locking out those that wanted to buy it.   Even though I can picture a cup & handle forming, I am pointing out the last strong run. It formed what is known as a running correction. Everyone waits for a “pull Back to buy it”,  but the running correction keeps people from buying and then it just takes off.  If KL does this again, it’ll be $60 and many will wonder how it got away without them.

 

 

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At this point, we have a General Market  bounce to watch  ( strength or weakness) , Oil inventory is today and Oil almost always moves after that, and the Precious Metals are still holding their gains, even though they are stretched and had a good reason to pull back Tuesday. I believe that the ICL is in place and we will see more upside & short covering in Miners, so this stall may be a buying opportunity,  especially for Silver Stocks. 

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Below I am going to point out just a couple Bullish set ups in various sectors.  I am actually seeing quite a few after all of the selling & choppiness, but I want to take it slow  (and I am focused on Miners too).  For now, view the set ups below as Bullish Short term set ups and go step by step with them if you enter a trade. You will see that some of these picks  actually RESISTED the sell off, and that is why I view them as bullish too.

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Enjoy your Wednesday trading!

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~ALEX

 

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DO you recall in April when I bought VSLR,   a solar stock set up to break out with this chart? Notice the set up.

 

VSLR ( May 21) broke out from that point and ran higher from that set up, well …

FSLR  – Now First Solar has a similar set up and during that General Market sell off, it just dropped & found support along the 50sma.   This break out can be bought.  ( These are a bit choppy, but that may change).

 

 

RUN  – Run was a Buy back in March, and has set up as a buy again.  This may or may not be ready, so it needs more of a break out. If it isn’t quite ready, it can drop to the 200sma 1 more time ( you can put it on a Watch list unless it breaks higher today).

 

 

 

SNAP  – This is the same lind of set up, but what makes this one seem really bullish is that the General Markets have been  selling straight down and SNAP is already at 2019 highs with this break out. It had a power gap in February and never looked back.

AMD – I have pointed out the bullishness in AMD a few times. This also has been VERY CHOPPY, but it really hasn’t been caught up in the market sell off, and looks to be breaking out now.

CSII  –  CSII landed at the 200 sma  and then bounced sharply back up to the highs. It has gone sideways during the market sell off and bounced off of the 50 sma faithfully in May, so this is showing strength during the sell down too.  I said that I didn’t love this volume, but it closed the day with 300.000 and that is fine.

 

GRPN  – TAKE A LOOK AT GRPN.  We are in a steep market sell off and GRPN looks to be under accumulation instead.

GRPN  – This is a close up.  It has been choppy, but strong during a market sell off. Now it is breaking higher.