Thursday October 8th – The Rescue Mission

You may find the first part of this report surprising,  especially after yesterdays ‘Tweet’ sent the markets down quickly, as though it were weak.

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SPX – On day 9 the General Markets rallied back from that Random Trump Tweet. I mentioned yesterday that I did think that we were seeing just a possible knee jerk reaction ( over reaction sell off ), since his tweet exclaimed a delay in stimulus for 1 month and not that it was completely eliminated. The main point was that price held above support & this now looks like an inverse H&S.

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THIS IS THE IMPORTANT NOTE:  We are within the timing for an ICL, and this dip shown below resembles the a-b-c drop in June 2019. That was an ICL 5 months after the crash. Lets take a look.

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THE SPX  fell below the 50 sma after the crash in 2019 in an a-b-c drop.  It then rallied (sometimes choppily) for the next 8 months, so that was the ICL at 5+ months.  We may actually have an ICL in place here at 5+ months.  So what I also did was looked at something else…

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An observation:  I went through and looked at several of the stronger stocks and noticed that this past drop was the deepest drop for each company since the last ICL, yet now they are recovering again.  Instead of breaking down continually into a deeper ICL, we are now already seeing a deep dip & recovery in many of these.  Sounds like ICL material.  Lets take a quick look…

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SQ – You can see that Square barely dropped on the normal dcl dips (monthly daily cycle lows), but this time it was a deep yet Normal  drop to the 50sma and now has reached back to new highs. That feels like ICL action.

 

NVDA -This was choppy, but it also hardly dipped during normal dcls each month.  This time  NVDA dropped to the 50 sma and now is trying to make new highs too. DCLs were minimal, this  drop was notable. We may have had an ICL in the general markets.

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GPRO  sold off sharply in August and then in September started to build a cup, but this week it really shot up gaining 30% yesterday alone.

Since we may have had an ICL in the general markets, we have to conclude that these Markets might just continue a parabolic run higher. We’ll see how they act as the US elections approach and eventually pass. For now they certainly do look to be set up Bullishly.

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WTIC  – On the Oil inventory report day, Oil dropped and still has not regained the 50 sma, so that is something to watch for.

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EMAIL:  “If this is a dcl in Oil stocks, can I buy them?”   My answer is “Yes, you can buy them with a stop under the reversal low, but with this chop & indecision, it may remain difficult, but that is your choice. ”  NOTE: I am wondering if the Oil Stocks will have put in an ICL with the General Markets though.  Time will tell on that one.  Let’s take a look…

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XOP – Oil stocks actually moved higher and this could be a dcl, but was THIS an ICL with the General Markets? Are these following the General Market more than Oil? At this point, I can’t tell.   I drew a weaker daily cycle here.  Like I said, this reversal low COULD be bought, but it may or may not really make good gains if it isn’t an ICL…

 

So with MRO for example –  You would buy this with a tight stop under the reversal low and see how it plays out. I have drawn in both a bullish and a weaker scenario.

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GOLD stalled and did not even recover the 10 sma yet. I do still think that Gold in a bull market could tag that 50sma,  even if it will roll over into an ICL drop later. WAS THIS AN ICL?  We cannot tell yet, but Miners seem weak.

 

GDX also remains under the 10sma.

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GDX SAME CHART:  I do want to point out something to keep in mind.  IF GDX does recover that 10sma, that is not automatically a Bullish recovery.  Notice that in the last daily cycle, recovering the 10 sma happened 3 times and it just remained choppy, sloppy, and weak. Regaining the 50 sma might change my mind though.

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Trading and investing has been exceptional the past couple of weeks or even 1 Month +. We have had solid steady profits  in everything from slow & steady runs of SPWR, CSIQ, JKS, BYND, BBY, BBBY, GPS, BNTX, SPAQ, SQ, AMD, CREE, WKHS, SPAQ, SNAP, COUP, TWTR, etc etc- and we also have seen a few real rocket ships like WWR, OPTT, SOL, etc etc.

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  You may recall that in August I warned that it can often be a very hard month to endure, and trading can be choppy and set ups may lack follow through. This is because some of the Big Players go on vacation for the last 2 weeks of August or even for all 4 weeks in August.  I wanted to see if September changes that.   Well September saw great improvement after Labor day holiday and now we are seeing some good set ups and good follow through, while we wait for the more lack luster Oil stocks and Miners to set up properly when their time comes.  In the back of my mind are things like the elections, Govt stimulous, and other things that can cause uncertainty in the Markets,  so use stops as always.  We can also look forward to excellent trades with the Miners in the future too, when that sector heats up again.  For now, Solars, EV and clean energy, tech , and so on are paving the way higher.

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I will discuss a few additional trades below, Enjoy your Thursday trading

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~ALEX

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Do you remember when I said that I bought BNTX as it tried to break out and crawled along the lows? Well…

 

BNTX – Notice the crawl area now.  That break & run has been great and now NVAX has a similar crawl…

 

NVAX -This crawl under the 34 sma looks very much like BNTX, so you can buy it with a stop or buy i after it breaks out higher.

 

AMD was a buy recently as Semiconductors began to recover.  AMD reversed at the 50 sma.

 

On September 14th CREE was pointed out as a buy with a wedge pattern & divergence too…

CREE – That trade is playing out and should run to former highs & beyond.

 

TSEM has stalled but is still a bullish set up with the MACD rising.I would expect i to start to move higher if the General Markets did put in an ICL.

 

This was BBY on September 22 when I was recommending a lot of these good companies that pulled back & reversed at the 50 sma. I’ve mentioned that I would expect these to form ‘cups’ and then we watch for a possible break to new highs.

 

BBY  so we see  that a cup has formed and we can break to new highs. This remains a buy & hold, just raise your stops if you wish.

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Now keep in mind how many of these we have seen recover and form a cup, and we can then look at some of the other set ups.

COUP  was a buy at the reversal lows September 21.  I was expecting many of these to start to form ‘cups’.

 

COUP  – My expectations as of September 21 with that Buy at the lows. Again, a CUP should form in this recovery.

 

COUP TODAY  – This is a good place to add to your reversal buy. If you didn’t trust this trade at the lows, you could even start a new trade here at the 50 sma, since it is proving itself & recovering.

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JD September 30 –  This was a buy at the reversal lows, a buy here above the 10sma, and another one that should gradually form a cup

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JD  is actually crawling sideways along the 34 sma, so if you missed the buy? This can still be bought with a tight stop here too.

 

I have been discussing clean energy since the sector has been on fire ( Solar, Wind, Water, etc).

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PLUG  ran from $3 to $10 into July and then consolidated & dropped to $7. It reversed sharply off of the 50sma.  Lets see what happened next…

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PLUG  ran from that reversal in August from $7 to $14 and then choppily consolidated the gains again through September. Now PLUG broke out & ran again from $11 to $18+.  We see choppy consolidations,  but THE SECTOR IS ON FIRE.  Now we’ll look at BLDP again…

BLDP –  I pointed this out the other day as a buy again as it began breaking from this consolidation.

Remember the chart of PLUG above:  May that chart of PLUG s acceleration  help to keep you in this trade as it forms a cup or breaks to new highs and keeps going.  This can run $14 to $21 or more.

 

BE WEEKLY – I wanted to jump right to the weekly chart for Bloom Energy. The progress that some of these Energy Stocks have made is actually becoming long term Bullish looking.

 

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 X – was posted as a buy on Oct 5th using this chart.  It broke from a crawl under the 50 sma and has been in a long consolidation.

 X – dipped when the markets sold down Tuesday, but popped 10% yesterday so it remains on track. One of our readers wrote and reminded me of the US Steel ‘buy’ saying that he added yesterday- Thanks!

 

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 I bought EEX and I want to try to hold it as a swing trade. When I see a set up like this, I view it this way:

– When this sold off from the $10 consolidation, it was that Feb-March Crash that the General markets experienced. For EEX though, it was constant selling day after day. That tells me that people were just bailing out causing that free-fall.

– NOW it has based out and you can see large volume as buyers are re-entering & Accumulating it.

– If we can get above this consolidation area (base), I  shouldn’t see any ‘sellers’ that were trapped on the way down. They all bailed out and got out of the way, so we should have minimal  resistance on the way higher. And…

 

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EEX WEEKLY – I love this weekly chart too. We see a huge flush out in February -March and then a base formed.  That volume this weeks represents only 3 days of trading as it tries to get above this base.  Even if this only ran to the Moving average that stopped it in February that would be 100%+ for gains, but I think that it can break through it.

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CARV ( Consumer & Commercial Banking) has a long consolidation also and if you zoom in on a 3 month chart you can see small volume pops on the up days. In June this popped to $22 and then slowly sold off. I like the upside potential so lets zoom in …

 

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CARV– You can see the small volume pops and it looks like one of these days it will Pop & Start a climb higher. Put it on your watch list with UONEK. I bought CARV earlier this week.

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CYDY  (Biotech) – I just happened to notice that CYDY shot up 16% yesterday and when I looked at the chart it has landed perfectly on the 200sma & reversed.  That 16% pop looks tiny compared to the potential if this gets running-  so I added it to my watch list in the Biotech area, but I do need to do a little more reading about the company.

 

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BY REQUEST: I’m holding NIO is it still ok?  (the Tesla of China) :  We have been trading or riding this one higher as an Electric Vehicle play for a while. It recently formed a ‘pan and now a handle’ type of consolidation pattern.  Yes it could take off higher at any time, but I wanted to draw a possible continuation until it gets to the 34 sma, since that was tagged a few other times during consolidation periods. A stop at the 34 sma works.