Tuesday August 25th – Not A Straight Line
I want to point something out that I found in the General Markets, but at the same time reiterate what I mentioned in the weekend reports, since that also needs to be kept in mind. The weekend idea is that I feel the NASDAQ is acting similar to the Tech Bubble blow off top, and that is why we have such shallow pullbacks in the daily charts.
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SO FROM THE WEEKEND REPORT: NASDAQ– Notice the MACD. It is hard to say when this will end, but this is getting extended and becomes unsustainable at some point. The RSI has divergence at the top . When these do drop, it may be a great shorting opportunity simply using SQQQ, SOXS, etc. JUST DON’T BE EARLY ON THAT TRADE.
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Along with that ramp up in the NASDAQ, let’s look at the daily chart: The daily chart shows only Mild dips. It is somewhat hard to see a dcl, which is supposed to turn the 10sma lower, etc. That is not happening, we are seeing the NASDAQ run away with occasional dips of 2 or 3 days.
THE SPX DAILY has also moved in a way that makes the dips a bit hard to see as a DCL too. Since the lows in June, you can see that we have only had 1 day dips or sideways chop. They have been rather shallow too, as seen below. So I wanted to show you something else…
I decided to show you the DOW JONES INDUSTRIAL AVERAGE. It has deeper, more visible dips.
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DJIA #1 – So take a look at this first chart. This is just to show you at a glance that the DOW has dips that are more easily identified. Some dips lasted for a week or so, so let’s zoom in. The next chart points out how this could be helpful.
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DJIA #2 – So dips that are just 1 or 2 day dips on the SPX & NAZ are normal drops on the Dow. It makes that dip into the blue arrow look like a dcl. IF SO, that first leg out of that dcl ( Blue Arrow) could now be matched in length by the next leg higher. Thus the runaway move in the NASDAQ ( & SPX) would continue. The DOW now looks like a large bullish Cup & Handle too.
WTIC – Oil remains in a sideways (very tight) Consolidation.
XOP – The XOP lost & regained the 50sma on a Pop reversal Monday. This MAY OR MAY NOT be a dcl. This would be a little earlier than normal, so I’ll show you why…
XOP – The move out of the ICL was 40 days long. The move out of that DCL lasted 39 days to the next DCL. We have now only seen 30 days out of that low, so it seems a bit short. That is tough, because that means that this might just chop around a little longer. It is also not quite oversold, as seen on the chart above. So this may move higher, but not be a dcl quite yet.
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I mentioned that I bought and held AROC & SLCA recently, simply because I think that these energy stocks are still acting bullishly despite Oil & The Xop chop. Well, I sold them recently too, feeling that the break down on the XOP was a possible warning of weakness to come. Let me show you those 2 stocks…
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AROC – This did drop from where I sold it, but it has now reversed rather bullishly at the 50sma Monday and remains bullish. AROC also has a series of higher lows at support, so I do feel that it could be winner going forward- but choppy movement like this can also be frustrating. Why? AROC is the same price that it was in Mid-July & in June. That is choppy trading.
SLCA -Sold off from where I sold it and is suddenly higher than where I sold it. It is breaking to new recent highs. So these remain bullish, SLCA may even run from here, while others are a mixture of improving or lagging a bit…
APA – Apache Corp is another company that I was watching, and you can see that so far it has held support along the 50sma, but there are no ‘Gains’ in holding it yet. Until these start trending higher, many of these are just sideways choppy positions.
So this Energy Sector still may be setting up to push higher in September.
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GOLD – Gold barely moved on Monday- day 8.
SILVER is also going sideways. I can’t help but notice that when Silver bounced strongly after that 1-2 day crash, the RSI remains turned down & the MACD crossed lower. This bounce did not correct those indicators.
GDX – Miners have been choppy lately too. GDX peaked on day 5 so far, and we are on day 9.
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This is the last full week of trading in August and it can be slow and choppy at times ( I cannot believe September starts next Tuesday!). That doesn’t mean that there are no trades that are following through, just that we can see more choppiness and less follow though in many cases. Some retails stores have been choppy and higher. Look at the GAP for example. It is choppy, but still trending higher. I think that this is a buy at this point, so I may even include a few more of these choppy runs in future reports.
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As for me, I personally cut back on many positions ( back down to 4 or 5) and told my wife that we could do a couple of day trips together this final week in August. I don’t want to have to worry about buying good set ups that may fall apart or this choppiness stopping me out while I am away. I will be around today (Tuesday), but I’m taking Wednesday off to travel up north to the Mountains and lakes region. I will also discuss a couple of trades below, one by request. Enjoy your Tuesday trading!
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~ALEX
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NIO made an amazing run from $2 to $16 in the Electric Vehicle space ( TSLA). It has consolidated those gains in a cup-like formation and looks ready to move higher again. It is holding the 34 sma so far.
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SPAQ – I mentioned that I own this Monday morning in the live commenting area, and it steadily climbed all day, closing at the highs. It had some major gains in July when it ran from 410 to $22. It is also in the electric vehicle sector. If it gaps open & moves higher, it may not be a safe buy, since it could also pull back on you, but if it stalls and even dips, it may be a good one for the watch list.
NXE & UEC were higher yesterday. These Uranium Companies ( along with UUUU, URG, DNN, CCJ) are still a bit choppy, but they do have bullish set ups
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BY REQUEST: This is a royalty company and several of these smaller Miners lagged for months and suddenly started to run at the end of the run. Unfortunately people were discussing that late run by some of these smaller companies a week or 2 ago, and others bought a few of these at that point. That turns out to be the highs. Now they are dropping , what to do? I was asked, “Should I just hold because its a bull market, should I add, what would you do?” So…
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MTA – Unfortunately someone bought this near $9.50, but it stalled and today it is $8 with a heavier volume drop yesterday. I think that it is possible to give up all of those gains. I see a gap at support near $6.00 and this COULD go there, so you have to do what you see best.
NSRPF – This one a reader says that they want to add, so for this and others I personally would be patient. You can watch these fib numbers, but I do think that we will see lower prices in 2 weeks, and volume is starting to pick up on some of these as they sell down. If I told you that you could buy this at $3 last week, or $2 next week, which do you prefer? 🙂 I just recommend a little patience.
