August Trading – Pop And Chop
SPX – The stock market sold off and recovered, so the selling hardly shows up on the chart. Actually the SPX is at all time highs, yet basically it feels a bit choppy again in real time. Reminder: We are now due for a dip into a dcl.
NASDAQ – The NASDAQ just keeps climbing, and as pointed out before, it is just bouncing off of the moving averages 13 & 34 sma. DCLs have been mild.
WTIC – Oil closed above the 200 sma on Monday, and on Tuesday it remained there. I have been expecting this move and I was looking forward to this break out, but…
XOP – The Energy stocks did not celebrate with me. The good news is that this was a very light volume minor dip, but I really expected a nice pop higher in this sector. I’m still holding BTE & SLCA, but this is slow motion action.
GOLD is on day 4 and it crossed above the 13 sma. In real time Gold shot up and dipped and chopped a bit.
SILVER did the same as Gold. It pushed higher and then sold off and this made the Miners choppy. Most were red for the day even though Gold & Silver were green.
GDX Popped open and sold off red, and many miners did the same. If this drop continues down and closes the gap, that Island bottom is gone. Miners might just become choppy here. Remember that red rectangle that I recently pointed out from June. Sometimes movement at the lows is choppy and indecisive.
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Trading can often feel a bit heavy and choppy in August, and we may be experiencing that now. I’ve mentioned recently that I have cut my number of open positions in half and my active trading has been cut back too. I have basically been increasing my cash on hand, simply because many set ups are not following through. The good news? This slow down in good trades is only temporary. We go through these cycles repeatedly and eventually the choppiness leads to a break out higher or a dcl (or even a deeper sell off into an ICL) depending on the timing. THAT drop into an ICL is tough to take if you are holding too many positions, but THAT is where you can then redeploy your money and look forward to 2 or 3 new daily cycles ( 3-4 months) of steadier gains.
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We will still have Bullish set ups that develop now, I was hoping that Energy would be one that we could switch over to, but so far Oil is acting as expected and Energy trades are choppy too. Other set ups will develop, and some will play out properly, but August trading is known to be a bit trickier. This is the time of year where some of the Big Traders leave for their summer vacation and some trades can lack direction or follow through (buyers) to push them higher. As mentioned in recent reports: We just had 5 months of exceptional trading and made great gains, but if you find that you are chipping away at your gains, cut some positions loose and let the choppiness pass. That is what I do. Smaller positions and smaller number of trades until the storms pass. 🙂
With that said, I will still include a few trade ideas, but smaller positions may be advantageous until this light action goes away in September. Enjoy your Wednesday trading!
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~ALEX
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I have always seen BLDP, PLUG, FCEL, CLNE, and a few other stocks run well together. Well they are running nicely now. I mentioned BLDP yesterday, so I want to discuss this area again…
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FROM YESTRDAY: BLDP ( & CLNE) – Last May – July BLDP had a STRONG run from $9 to $22. It tripled from the April lows. BLDP pulled back to the 50sma at $14 in July and has a strong reversal buy opportunity right now. You can use a stop near recent lows.
BLDP broke the downtrend and is above the 50 sma ( that is the 34 that you see). Volume increased yesterday and this is a trade that could work out bullishly, despite the August trading.
FCEL popped yesterday and volume increased here too. It has been choppy lately, but is moving between $2 to $3.50 lately. This consolidation could eventually break to new 6 month highs and continue higher, so it may be a trade that gains follow though.
WRN – Popped 10% yesterday with good volume. It has been consolidating gains over to the 34sma in a Bullish set up (copper). Sometimes you get this one day pop from a consolidation and it just runs away, at other times you can get a quick pull back and then it continues. If it dips, I will probably take this trade.
BY REQUEST, 2 Uranium Stocks: They look good to me.
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UEC – Yes, the Uranium stocks have still been chopping sideways too. Many remain above the 34 or 50 sma, so they are still fine, but this is what I am talking about when I say choppy, frustrating, boring trading. It can be bought here, but it may or may not be ready to move higher (They did not run with the last Precious Metals run).
So UUUU is doing the same choppy sideways consolidation. It did run higher after breaking that 50sma, and then it dropped to back test it. Now it has chopped into a wedge or triangle, so basically this trade has gone nowhere since July, but it is still bullish above that 50 & 200sma. In fact, a break higher above that downtrend (wedge) is a buy.
JKS – This is a buy.
