Friday July 24th – The Skies The Limit?
Gold and Silver have been on a tear, racing higher and taking out the ceiling on the way. We had a little rumbling in the markets yesterday and even though we’ve been trending higher steadily since the March lows, we do need to pay attention and stay cautious. Even the miners sold off, with Gold and Silver still green. So why pay attention now? It has to do with cycle-timing. We are in a 3rd daily cycle, and that puts us in the middle of a good run, but it could peak at anytime too. It could actually peak now or 2 weeks from now. Let’s discuss this …
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SPX #1 – The SPX is in the 3rd daily cycle and they can be a mid point in the entire intermediate cycle. The 3rd can be strong or it can begin to peak & top out, especially near day 20 or so. We have used trailing stops on the ride higher and they do not get hit until we start a drop into the daily cycle lows (DCL – Red arrows). SO…
SPX – This 3rd daily cycle can keep climbing to prior highs as shown here (like the NASDAQ did), or it can weaken at any time. That said, we just have to let it play out and we keep stops in place, just in case yesterdays drop begins to pick up downward momentum.
NASDAQ – The Nasdaq has been very strong. What I have noticed is that each higher low has remained as a higher low through all 3 daily cycles! That even makes the dcl’s hard to see. That tells me something else: When this does start to roll over, it may become evident in the NASDAQ first, with a lower low. The first time that I see the NASDAQ break a prior low , I think that it will signal to me that we have some new weakness creeping in.
WTIC – Oil has remained in that tight consolidation. We did not get a sharp drop to identify a visible dcl, but we may just get a break higher . I think that OIL/ Energy stocks may become the next trade. I have started buying a few , as mentioned yesterday…
XOP – When the markets dropped yesterday, the Oil stocks that I own remained Green, and AROC even pressed on to new daily highs. That is noteworthy to me. They did not sell off with the markets. I own AROC, SLCA, CPE, and APA at this point.
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GOLD – There isn’t much else to say about Gold. It has done what we have expected here for years. It broke from the base and ran back to the highs over a period of 3 strong intermediate cycles. This has been an excellent run, and Silver should do the same.
SILVER – If I was long silver itself ( or maybe SLV), and I started to see a straight up move taking place, I often raise my stop to the 10sma. IF IT GETS TOO STEEP, it runs away from the 10sma, and then you can simply use the prior days lows as a stop, as shown with various lines here. Read the chart for the unfortunate part 🙂
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I want to remind you all what I mentioned a week ago: Silver bottomed about a week after Gold did.
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Today is day 29 and silver is red hot. That means that it MIGHT continue higher, even if Gold itself pauses. This could also just Bull Flag and then start the 4th daily cycle higher. Silver has had a Massive up day on day 26, and it is right translated, so after a pause or dip for a dcl, it should make new highs again.
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While GOLD & SILVER were GREEN into the close yesterday, the Miners started to follow the dip when the markets sold off. GDX is on day 33 and is due for that dip to a dcl. The drop on day 23-26 may be similar to what we see here, or it could just bull flag if the Metals remain red hot. Time will tell.
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Today is Friday, the last day of the trading week. We really have had some exceptional money making trades in Miners and even Biotech (Though some of those gains have been taken back). I recommended yesterday to anyone owning a straight up move like EXK, you might want to do as I do : Sell some to lock in some gains and then you can let some ride with a stop.
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I will discuss a bit more below regarding a few trade set ups below, but today is Friday, the last trading day of the week. You may want to take a look at your portfolio and decide if you like what you are holding over the weekend, or do you want to trim some gains ( in miners?). If Gold trades down sunday night, it could gap Miners down. I’m not trying to scare anyone, but this has been an exceptional run and a dcl is due. We either get a bull flag or a dip, I just want all to give that some thought.
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Enjoy your Friday trading!
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~ALEX
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BIOC #1 JULY 21 – Recently I presented this chart as a ‘buy’ at the 34 sma around 67 cents, because BIOC has been faithful to that are as a support area on the climb higher. I was looking for a break out. The last one that we caught in early June gave us 40 cents to 95 cents ( 100% gains). Bioc then consolidated…
BIOC #2 JULY 23 – We got the break out to about 87 cents, but then price dropped back down and BIOC gave up all of the gains.
BIOC #3 end of the day- At this point BIOC has returned to the 34 sma at 68 cents. Today we’ll see if it holds support , but the volume was quite light Thursday, so I would think that it will continue to act correctly.
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AIRLINES? REALLY? Most airline stocks charts are bullish set ups. I know that is odd with most cautious about flying and you would imagine that sales are down quite a bit, but AAL, JBLU, SAVE, MESA, DAL, JETS were all very similar looking bullish set ups. Let’s take a look, but this is an area that we want to view cautiously…
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JBLU – It is hard to believe that JetBlue ran from $7 to $16 after the crash, but it did. It is holding support at the 60 sma, so it could be bought with a tight stop in hopes of another run higher.
JBLU Big Picture – So I see it as resting on support after breaking from the base. It looks to be bottoming and even just a run back to the 200sma is a good Gaining trade.
SAVE – We see a similar set up with Spirit Air, and volume is coming in nicely. This can also be bought with a low risk entery using a stop.
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UAL -United Airlines had increasing volume too.
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CPE – I just want to mention that I bought this trade set up as mentioned the other day. It has big reward vs risk, since a stop can be tightly placed under the 50sma, but it is risky in other ways. MANY MANY low priced companies are starting to do the dreaded ‘public offering’ after they pop in price.
It may be best to avoid low priced stocks if you are away from your screens during the day, or at least sell the pop higher sooner than later. Other trades like APA, MRO, AROC, SLCA, ETC may be safer set ups for those unable to babysit their positions.
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UPDATE MARA AS OF FRIDAY MORNING :
I liked this Bullish MARA WEEKLY CHART, and I also liked the DAILY chart so I mentioned that I bought it as it passed $1 the other day. It rallied nicely, however…
MARA – You can see that rally Wednesday to $1.22, but Thursday it dropped on large volume. DID SOMEONE KNOW SOMETHING? They announced a public offering at 90 cents, which puts this right back on the 50sma. That isnt so bad, but sometimes after an offering, price sticks around that area for a week or so. I bought this as a Blockchain play expecting BITCOIN to run, so it still may get some sympathy buying over the next week or so, but I may just sell it as dead money. I’m not sure,
