Thursday Aug 29th – There Are A Few Choices To Be Made
In this report, I want to review the markets and discuss a few choices that we have at this point…
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SPX – We still do not have any meaningful change to this trading range. The SPX is still under the 10sma & 50 sma.
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WTIC – Though Oil popped & dropped on Wednesday, there are signs ( small signs) that it may be improving.
1. The 50 sma has actually curled upward.
2. That may be a 1/2 cycle low or at least a higher low on day 13
3. A trend line was actually broken & Oil closed above the 10 sma (13 sma is shown)
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XOP Aug 26– I showed divergence starting to develop on XOP 3 days ago as it bounced along a bottom.
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XOP – And now we see a bit of a push higher with good divergence.
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So here is a choice that traders do have. I tried to buy GUSH & got stopped out with a tight stop last week, but now it set up again (Matches XOP), so even though I am not 100% confident that OIL & Energy are ready to go higher right away, there are signs of bullishness & possible bottoming action. At these lows, it is a Low Risk Entry with a tightish stop. I will discuss that a bit more at the end of the report too.
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XLE- The XLE shows divergence at new lows too.
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GOLD -The 1 hr chart seems to have formed a PAN & HANDLE. I consider this a bullish set up AS LONG AS THE HANDLE does not break lower than 50% of the Pan. (Roughly $1510-$1515). Gold is $1540 as I write Wednesday night. So on a daily chart…
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GOLD – On a daily chart it starts to develop as a possible bull flag. Gold itself still looks bullish.
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HELLO PLATINUM! – Out of nowhere Platinum Popped over $40! PLG & SBGL are Platinum Miners. I will discuss them below at the end of the report.
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GDX– GDX & GDXJ also stalled on Wednesday after a nice advance on Friday and Tuesday. We now have a MACD cross higher, and that is honestly pretty bullish, but also new highs with divergence. AS TIME GOES ON, THIS IS OFTEN A WARNING SIGN, but so far the Bull is running and surprises have been upside …
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AS TIME GOES ON, THIS DIVERGENCE AT NEW HIGHS FOR GDX IS OFTEN A WARNING SIGN, but the bull are definitely in control! That said, We do have a decision coming up. Gold looks like a Bull Flag or Pan & handle and can go higher, however, The U.S. Markets have a holiday & are closed on Monday for Labor Day. Gold & Silver DO trade Sunday night, so with that GDX divergence, we need to decide if we want to hold a full load of Miners over a 3 day weekend? Will you sleep better holding smaller baskets? Do you have leverage? If so, do you wish to hold through the US Holiday – 3 day weekend, as Gold trades on higher or lower? Will you cut back to be safe, but possibly risk a little upside if Gold & Silver were to shoot higher Sunday- Tuesday morning? Those are a few of our choices. Those in Canada , Europe, and other countries will be able to be in front of their screens Monday and are less affected.
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Personally, if you bought with me at the May lows, there is no WRONG choice, because we all have a large cushion of gains to sit on by now. 1 day dropping shouldn’t destroy 3+ months of gains, but I know that some have emailed me and discussed wanting to cash out near the highs & re-enter at the next ICL fully loaded, so I wanted to mention that Monday is a holiday in the US. The risk is giving some gains back, but we do have some good gains out of that ICL. I’ve mentioned the divergence showing up in GDX, but it could still go either way at this point, the Bull is not giving up yet. 🐂 I would be cautious about leverage, and I think that personally I will trim some positions that seem extended, but I will continue to hold a basket of Miners to catch upside gains, while minimizing risk if some selling develops.
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I am also trying a few energy trades again, and will discuss more trading below. Enjoy your Thursday trading!
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~ALEX
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Oil & Energy may be starting to stabilize. As you may recall, I have mentioned this before a week or so ago, but it has been tricky. Why? ‘Bottoming’ can be a process and not always an ‘event’. The hard part is that we ( myself included) usually always expect a V-Bottom type move, but we often get a ‘Base Building’ move instead. That can prove to be choppy , sideways, and frustrating. The May ICL in Miners was a long drawn out process too. I have already tried to grab a ‘Gush’ trade (leverage) near the lows, but the chop had me exit my position. Well, the set up is forming again, so WITH THAT CHOPPY BASE BUILDING POSSIBILITY IN MIND, let’s take a look at this sector first for our ‘traders’.
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XOP for GUSH– Gush did break out above the 10 sma last week , but it dropped back to the lows. Now i have a double bottom low with good MACD , RSI, and HISTOGRAM divergence, so I did take this as a short term trade. It is easy enough to put a stop at these lows. I bought GUSH right at $3, a stop could be $2.75 because it is leverage & can move a lot.
So think about our long watch list of Oil / Energy stocks like OAS, XEC, LPI, WTI, MRO, VLO, AXAS, and so many more. Some of these are now Really beaten down. MRO & VLO are cheap compared to 1 year ago. If this sector comes alive bullishly, I will be posting low risk set ups as trades. For now, I will just post a few…
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VLO – VLO ran from about $35 to $120 in 2016 to 2018, but has been beaten down. It may be approaching support at $70, it could break down and fall to $40! So buying near support maybe just a bit lower, a stop can be placed under that area. The MACD is rising nicely.
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XEC – You can see that the 2nd low here was a false break down when you look at the RSI & MACD. This popped 10% yesterday and I’d say that this is a buy. The only problem is that it MIGHT form a base rather than a v-bottom. That was big volume though, and this may tag the 50sma for a quick trade.
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OAS– I used to trade this stock in the teens often, and it hit $2.50 with the recent sell off. Wow. Well, it put in a higher low and has moved back above the 10 & 13 sma and the MACD crossed up too. It looks to be working its way up to that 50sma.
DNR – This may be basing instead of the V-Bottom that it used to put in. In the past, this was a FAST runner in prior rallies, rocketing higher out of a V-Bottom low, but so far I see it chopping sideways and maybe battling the 50sma. It is worth being on a watch list as it seems to be building a base.
MR – This has been mentioned twice in the live trade area by a trader named Yarborough , and I like it now as a double bottom with good incoming volume. This looks ready to Pop right now actually. Look at the steep climb by the MACD as price is back at the lows. I do not own it, but if the sector continues to shape up I like it.
Many Shippers also seem to be setting sail. I looked at NM and noticed something that I consider big. Think about your best Gold or Silver Miner (maybe EGO?). Now look at NM…
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NM– A Shipper. In June- July NM ran from $2. 75 to $8! It then crashed down to $4, and ran from $4 to $7 is 1 week of August. These are Huge gains. So now it tagged the 10sma & flipped higher, so I bought it. I expect a run to $8 or $10.
NM– I had grabbed this chart just above $6 when I bought it, and they have already released earnings.
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SB– I would say that SB is also a buy above that 50ma. SB, TNK, FTK, GLBS, etc also look to be shaping up. I’ll try to keep my eyes open for opportunity here going forward too.
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MINERS
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VGZ- On last week and again on Monday I discussed buying lagging Miners that have bullish set ups and pointed out AUY, SBGL, VGZ, etc
VGZ– You can see that VGZ is starting to run higher now, back toward the recent highs. I added to my position. AUY & SBGL are already at new recent highs, and so on.
SBGL – I posted this in the live trading area and mentioned that I added. Why? It is also a Platinum Miner ( They bought Stillwater Mining) and I was thinking that this may break out & run with Platinums $40 pop. This has been in recent reports.
SBGL – It did start to break out to new recent highs. I wouldn’t be surprised if this runs higher , in fact…
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SBGL – I posted this potential Gap Fill recently, if it breaks higher & runs.
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PLG – Also a Platinum Miner, PLG certainly responded to the Platinum Pop. I didn’t buy it, but this looks ready to make a nice run. If it bull flags , I will buy it. So far this is a short term double bottom base.
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HMY #1 – This is a steep run, and it could be due for a pull back. Can it keep running higher too?…
HMY #2 – It also may just drift or dip down to the 13 sma, since that is what I have seen it doing so far. That is not a big drop. I have a larger position & because of the holiday weekend in the US, I may decided to sell 1/2 , even though this CAN just keep climbing. I will then try to re-buy if I get the chance at that 13 sma. This is a beautiful chart.
