June 25th – The Balancing Act
The markets are experiencing off and on turbulence, so I wanted to direct our attention to the balance between bullishness and Bearishness. Today the JOBS REPORT will be released and with Wednesdays sell down, we want to think “PRESERVE FUNDS’. If the selling continues and you are long the General Markets or Oil, you need to use stops & let them do their job ( lock in gains or preserve funds). Remember: There is always another trade!
.
After a drop into what should be a 1/2 cycle low on day 21 for the SPX, I would expect a run higher and then a dip into a dcl (daily Cycle low). Well, we ran higher, stalled, and have been chopping sideways so far. The markets seem to be lacking the buyers to push it higher. Support at the 200 sma held up yesterday, but a break of that support is dangerous, because that could signal that a drop into a dcl may begin from here. The last daily cycle was 37 days long and that could mean almost 10 days of a sell down.
I drew this for the Live areas midday, simply to mention that Wednesdays drop was not a signal to automatically go short for me. Sure, we could break down from here, but it also may just signal that we are going to experience choppiness right now, like we saw at the end of the first daily cycle. Thursdays jobs Report should tell us more.
The NASDAQ (COMPQ) also dropped to support at the 20 sma, so another day will help us to see if we are breaking down or just getting choppy again.
I pointed out the divergence in Oil yesterday and Wednesday ( oil inventory day) saw Oil drop 5%. On day 45, this very well could be the drop into a dcl starting. I personally would close long oil positions ( I am already out of any that I took a while ago, like OAS, CPE, APA, OKE, MRO, etc). After a dcl is in place, Oil should become a Buy again.
The USD bounced out of a low and looks like it wants to push higher to the 200sma. I want to point something out here though. The USD has overhead resistance.
.
YESTERDAY I WROTE THIS FOR GOLD:
.
I have slight concerns in what I am seeing in the Precious Metals sector... It is not a major concern, just observations that I will have to keep an eye on, I’ll discuss it at the end of the report. (My concern was weak looking Miners will Gold breaking higher and closing at the highs).
.
GOLD – Gold looks good and moved higher Tuesday. This looks like a normal rally higher Tuesday.
GOLD WEDNESDAY: Gold popped and reversed, and now this consolidation box still looks valid.
GOLD – Going back to this view, Gold could simply back test the break of a triangle and remain bullish. THIS is a Bullish Set up really.
.
SILVER dropped right to the 34 sma again and bounced a bit, so hopefully Wednesdays lows hold up, because more of that drop would break the channel.
GDX dropped and also bounced off of the 34 sma. This is not that bad, considering that the Dow was down 700 points and the Nasdaq was down 222 points. It would have been MUCH BETTER if Miners ran higher as the markets dipped down, but so far- this is not so bad. Some Miners were green too.
.
Lets see what Thursday brings our way after the release of the JOBS REPORT. I didn’t sell anything important yesterday, in fact I also did some buying in certain areas. So are the Miners still going to break higher from this 1 month consolidation? Are the General Markets that are now balancing on support going to reverse higher? If not, will they drag the miners down with them, stopping us out with a break down? We don’t know for sure, but I would say that Thursdays trading will no doubt help to clarify which way this balancing act wants to lean.
I’ll discuss a few additional things below. Enjoy our Thursday trading!
.
~ALEX
.
AUMN was a breath of fresh air, and a few other Miners also ignored the selling. I actually added to AUMN as it broke higher, since this is a bullish set up and had an easy place to put a stop on the new position ( 34 sma).
NAK has a bullish pattern and a break out higher should run nicely ( this could be bought on the break out or here with a tight stop).
SQ BY REQUEST – I liked SQ in the Bull run during 2019 and recommended it in March a few times after the crash. I Recommended it on March 24th here. BELIEVE IT OR NOT, SOMEONE BOUGHT IT & HELD! Congrats to you D.J.! The question was:
The question was: “I’m in 100% gains!…
“It has been a great run, I don’t want to lose gains. Would you sell or raise stops or even add?” Answer: We are near the timing for a dip into a dcl to start. A dip to the 20sma is normal for SQ. I would say that You must decide to either sell some at these highs (?) & try to buy back at the 20sma? However, if selling picks up & it breaks down further, you could sell all or 1/2 or really whatever you want. You have enough gains to play this a number of ways. You could even sell it all, be happy, and re-buy if it dips and reverses at the 20sma at the market dcl.
NVAX JUNE 16 – Recently I pointed out several ‘Corona-themed’ companies, due to a possible increase in cases again as places relax restrictions, testing increases, and closed down places of business ‘open up”. NVAX was bullish here at $50, I did not buy it, but…
NVAX -I wanted to show how bullish these have been though. NVAX ran to $80 and looks great.
I posted VIR last week at $41, as it bounced off of the 50sma repeatedly. I listed other bullish set ups too …
VIR is now almost $50 and was up about 20% Wednesday. This has more upside so if you bought it, you can just try to ride it out. If it dips? You could ‘add’ or others that didn’t buy it can buy it.
INO was a buy in April at $8, as it rested on support too. Did it run?
INO has been a ROUGH RIDE, but it has tripled. So…
I also mentioned VXRT in the morning as it started to move, and IT was up 20% too, so these are running. What about others that may be ready to go? Yes…
.
BNTX has been consolidating bullishly and popping here and there along the way. This may be ready to go right now. I may buy this Thursday if it starts to rise.
MRNA is also on support and could easily run from $60 to $80 or $100, the way these move lately.
.
APHI is the one that I warned about as choppy and difficult. They supply respirators. I own it and it has dropped $1 or $2 in the morning, and then recovers. That can be a Tough ride, so I cautioned about that! Well, it is starting to look more organized and seems ready to continue higher. I really like the potential if it remains healthy.
.
DTIL popped above the 200sma and drifted back lower by midday. I bought this and will see if this long consolidation provides the energy for a strong run higher. Price remains near the 200sma. That can be a stop.
.
IBIO #1 -I grabbed this chart Midday. IBIO actually popped open 50%! It then sold down and looked like it wanted to fill the gap, so I posted this in the live area below the report too. Well…
.
IBIO #2 – It closed on the 20sma, and this is a great one for the watch list. If it reverses and starts moving higher, that is a buy with a tight stop. Notice that IBIO HAS popped and consolidated in the past, so this may just move sideways, but with the whole sector gaining attention, it is worth watching.
.
HAPPY NEWS 🙂 – This company is called Happiness Biotech, and they produce protective masks and were working on a covid test in march. It has been basing since then….
HAPPY CHART – The volume is increasing and it made me wonder if management is buying or knows something? I took a position here Under $3 and at $3 ( So my Dollar avg is $3) and a stop is under the 34 sma. Price is over the 10, 20, 34, and 50 sma. I am just trying to get in low, in case it makes a run.
.
HTBX dropped and reversed off of the 50sma. With the markets selling off, it closed green too. Many of the Covid Companies did. I already own this .
.
SONN #1 – SONN had a reverse split in April to keep price over $1. It has now formed a LONG BASE.
.
SONN #2 – SONN had some large volume coming in and it popped from the base. False POP or Pop & run? I read that they have 40 million cash and a promising treatment for Covid / inflammation. It also has 38% short interest, so if good news is released and shorts cover, this could run.
.
LLIT – Midday I pointed out that even with a 12% drop, it just keeps bouncing off of the 200sma and remains fine. Later that day it bounced back up to 77 cents and put in another reversal candle. I am still in my position.
.
CHFS also dropped and bounced into the close. I grabbed this chart to again show a possible large triangle forming. It actually closed slightly Green, I am also still holding CHFS.
