Tuesday May 12th
SPX – The General Markets are chopping sideways, but they are holding up. They can have 40+ day daily cycles, and this should be day 34. Tag the 200 and drop to the 50sma? We’ll see. I do not think day 29 was an early daily cycle, but these markets are strong…
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NASDAQ – I showed how the NASDAQ keeps climbing, and here it is up Monday again. I just have to say that we are in uncharted territory with the Virus running globally causing company shut downs, 20 million job losses in 1 month, etc, and yet the Markets are moving back to BULL RUN HIGHS? I said that the first 2 daily cycles out of the ICL would be strong, but let’s be honest, This kind of strength is a bit unexpected. I thought we’d be here at the 2nd daily cycle.
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IBB -This strong price action is not unexpected, and Biotechs are very bullish. Biotech and pharma stocks & companies are in strong demand.
Look at this chart: I actually think that IBB put in a dcl on that gap fill drop, and so this would be a ‘sign of strength’ break out on day 6 of daily cycle #2.
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We have covered many ( what I call Corona-companies), and the gains have been excellent, but the ride has been extremely difficult.
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NVAX FOR EXAMPLE – $4 to $25, but this was a Very hard bull to ride. I have been in & out of it a few times, with good gains, but the dips are Very Big for the ‘buy& hold’ group! What a pay off though. I actually looked in after hrs and it is now up 80% Monday !
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I have traded or Mentioned NVAX and INO, IBO, VIR, VXRT, NNVC, BCRX, MRNA, ABT, HTBX, GILD and others in this sector. Check out the charts. The ride may not be easy, but if we aren’t really going to have a vaccine until 2021, and there are ‘treatments’ “ventilators’ , ‘Test Kits’, etc in this sector, they could rise for months to come. If you are interested in these riskier fast movers, let’s look at an example of lower risk entries vs something like NVAX ( now up 80% in after hrs)…
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HTBX – Since this sector can Pop and Drop 20%, you don’t want to buy one after it is running, because it can drop 20-30% and still be ok. You want to look for one at or near support and enter there with a stop ( And look for earnings release dates). HTBX is an example of what to look for ( 200sma / 50sma / etc).
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NNVC – This is also a nice long base after exploding from $2 to $18 in January (WOW). You can see just how hard this would be to ride ‘Buy & Hold’, but if it runs back to $18 like NVAX did, the gains are real.
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GILD is known for working on the vaccine for coronavirus, so you’d expect Buyers to flood in. Well, this has moved from $65 to $85, but this is N-O-T an easy ride. That said, GILD & ABT are in the buy zone.
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WTIC is crawling or even bull flagging at the 50 sma. I expect higher price, since it is only day 14.
The XOP is still climbing up the 10sma, and may also have a flag-like formation.
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GOLD is still riding inside of that triangle. As mentioned in past reports, time is running out, but we might see a quick drop that I think would be a false break down ( Shake out). I expect a run higher over time, not lower.
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SILVER already broke out above the 50 sma, it is breaking from a triangle, and is set up bullishly.
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Last week I used this chart of GDX to bring to our attention that the second daily cycle MIGHT become choppy as it tries to consolidate the gains out of the ICL. This Choppiness is not necessary, but I mentioned it as an F.Y.I. because this would be hard to ride with Leverage. So…
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GDX moved higher after the day 33 reversal and is chopping sideways. 3 things I’ll point out here…
1. The day 33 low of $31.31 should not be broken if that is the dcl.
2. If that does break ( and back tests that 50sma), we’d be on day 40 or 40+ and the drop should end quickly as the dcl.
3. Gold is chopping in a triangle, so realistically GDX may be waiting for that to end. I DO still expect day 33 to be that dcl at this point.
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If GDX remains choppy and sideways, I still think that this is a MAJOR BULL break out and will run swiftly higher in time.
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I have also mentioned that even if we get a choppy consolidation, individual Miners can do their own thing, so holding a basket of miners could pay off nicely.
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For example, GDX dropped Monday, but TRX popped 13.5% & sliced through its 200ma. That is very strong volume and it is breaking a down trend, so TRX looks bullish here. This was a lagger crawling along the 50sma when GDX ran higher, now its running away. If it craws along the 200sma, that may offer a buy point. If it just keeps running, it is not always prudent to chase- Market fear of missing a move can be dangerous, I always remind people that “There is always another trade!”
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GPL at the open looked good to me so I posted this triangle break on Monday in the live chat area below the report. I own it.
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GPL closed up 6% with other silver stocks closing red, so again, individual Miners can perform on their own. This had great volume and actually looks ready to go.
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And I like the long term potential for GPL too. This is trying to break from a multi-year down trend. GPL above $0.60 is even more bullish.
CDE – I’ve been pointing out that CDE held the 50sma support a couple of times, so it could be purchased or accumulated before a break out and run.
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So with the precious Metals, we are enduring a little choppiness, but GDX & GDXJ are still up near last weeks highs. The cycle count remains in our favor and we are likely just waiting for Gold to break free from the recent triangle consolidation. It is just a matter of time, and sometimes the choppiness before a break out is a good time to add to current positions if one was a bit lighter than they wanted to be.
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Enjoy your Tuesday trading.
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