Weekend Report Dec 5th

 

SPX WEEKLY – The price has pushed higher out of the W-Pattern or consolidation and these often produce bullish runs.  I mentioned in one of my recent reports that “you just have to respect the Bullishness”.  I was asked, “What does that mean exactly?”  It means that we ride bullish positions and it is best not to short these bullish markets.  Let me show you, because it has to do with runaway type moves that I have pointed out in the past too.

 

So I said that the Put Call Ratio was calling for a pull back , and also there was no fear & excessive greed in the markets.  These usually give us a pull back, but I said that you need to respect the bullishness ( in other words, do not short the market, and I stay long with stops on my positions). The updated Fear / Greed indicator dropped slightly but remains overly Bullish.

 

.

This chart includes the end of the year 2019 run and shows how The SPX can run away and barely give us a visible dcl (see the blue arrow). As price runs away from that consolidation it can get stronger and stronger riding that 10 week ma.

 

So here I am pointing out 4 months at the end of last year where The SPX ramped up. Do you see any big dips or dcls each month? Not really, and this is why we do not short a bull market and I always keep in mind that at times these Bull Markets can just continue to run away and stretch out.  THAT SAID,  The Put/Call Ratio & Greed Index do call for a pull back.

 

The NASDAQ WEEKLY also shows a break out from that consolidation. Look at the NASDAQ at the end of last year and you see way more Green weeks before that crash.

.

SOX: Just keep this in the back of your mind. I still believe that we are seeing this rapid bull push higher in sector after sector because the markets are euphoric & putting in a blow off top. Last week was a big week for the SOX and we certainly can have that so called ‘Santa Clause Rally’ into the year end, but we need to use stops and be aware of our surroundings here.

Stay Frosty My Friends!

.

WTIC – Oil has been bullish and closed green for 5 weeks in a row now. Dips are taking place within the week, but buyers are pushing Oil & Oil stocks higher (as expected).

 

The XOP is the same story and many of our Oil Stocks are up 100% out of the lows now.  It would be nice if our Miners start moving out of the lows like this too.

 

THE USD broke below the ICL, so even if we get a Daily Cycle Low and bounce as drawn here, this is calling for weeks of downside and that should lift the Precious Metals higher. The weekly MACD has crossed lower.

 

GOLD – Does this look almost too perfect or what? We have a perfect reversal at the 50 week ma and Gold is also oversold. A rise next week above $1852.70 gives us a weekly swing low and is further verification that an ICL should be in place. It would be great  to see a nice strong push higher next week.

 

 

THE SILVER WEEKLY chart is just as bullish looking as Gold. It would also be nice to see a push higher and a break out next week . This was a bullish candle dropping lower than last weeks and basically regaining the whole candle by the end of the week.

.

#1: I wanted to start with The GDX DAILY Chart– because I got a couple of emails where readers were concerned  – or angry  🙂  that Miners didn’t take off higher out of the lows when Gold & Silver looked good. Let me tell you my view of that:

1. Try to remember that when Gold was down $20+ Last Friday and $20+ this Monday, Miners were green and forming a bottom.

2. I drew this channel and said that I’d be happy if price stayed in the channel. It has

3. Let’s say that Miners broke higher roughly from $33 to $36 and slowly dipped to the 10sma at $35. That is still bullish.

4. The MACD is crossing up and this chart looks fine.

 

#2  THE GDX WEEKLY has recovered the 50 week ma. This is a weekly swing low and remains oversold.

.

#3 THE GDX WEEKLY  has also dropped about 38% and then reversed. That is a bullish dip.

 

THE GDX WEEKLY BIG PICTURE shows a reversal at an important moving average support level. AT THIS POINT…

AT THIS POINT  Buying Miners with a stop is a low risk entry and that  dip Thursday and Friday should have been helpful if you were not invested as much as you want to be at these lows.

.

NERVOUS AT THE LOWS? THEN THIS MIGHT BE YOUR MOST IMPORTANT CHART IF WE CONTINUE TO CHOP SIDEWAYS NEXT WEEK: We saw 4 weeks sideways at ICLs and then a strong rally. If we go sideways next week, it doesn’t indicate that something is wrong.

 

.

• The General Markets have been bullish as they rise out of a consolidation. We want to be ‘aware’ of the idea that overly bullish markets often do  pull back, and we can get a dip at anytime, but respect the bullish trend.

• Oil and the Oil stocks have been strong out of their lows, and they remain Bullish

• Gold, Sliver, and The Miners  have solid weekly reversals and look to be at their lows. We have a DCL and it should prove to be the ICL, since the last one was last March. We are 8 months away from that last ICL, most come 6 months after.

.

The last several weeks have provided excellent trading and it has produced strong gains in various sectors for those willing to trade while waiting for the Miners to bottom and start a rally of their own. At this point, we should be very close to that Precious Metals rally, since the lows are in place. I did point out, however, that in the past I have seen price chop sideways for as many as 4 weeks at prior ICLS.  The GDX can linger at the lows trying the patience of the bulls for weeks, but then a solid rally followed. The current set up and weekly reversals look very good, next week should tell us what kind of lows we have in place here.

.

Enjoy your weekend!

~ALEX

.

I mentioned in the live area that I felt that Bitcoin was not just going to break to new highs and just run away with no resistance. I felt that it could have a pull back & stall.  Several readers asked me  right away why I feel that way. One said, “There will be no resistance at all time highs, so what stops it from running straight to $30,000, $40,000 , etc?”  I agree that that COULD HAPPEN,  but I was saying that I felt that it will pause, and I will show you why.

.

This is Bitcoin racing for the all time highs. That is a parabolic move to the highs so far and many expect that breaking those highs removes all resistance & off it goes. I agree, there is no resistance, but…

 

.

What just happened when Gold hit all time highs?

.

GOLD broke out and EVERYONE was Bullish, Bulls were ‘all in’ thinking that now we go to $3000- $5000 Gold.  Here at Chartfreak I sold my leverage and the bulk of my miners in August expecting a top to the Intermediate Cycle. Gold paused, pulled back, and we are STILL looking for that reversal after many weeks of downward chop.  Bitcoin could also do this after the Bulls are ‘all in’ at new highs. Also…

.

After that 2000 Parabolic pop and drop a large base formed in the NASDAQ. Gradually the rally got the Tech Sector back to the highs in 2015 and what happened? Did it break out & run without any resistance?  No. It could have, but instead it actually dropped and chopped sideways for 2 years & then off it went higher. A Large Pan & Handle type formation occurred.

I don’t know for sure how Bitcoin will react to new all time highs.  I do think that if it’s due for a daily cycle dip at that time, it could  break out and back test the break out (or pause & maybe even chop sideways the way Gold has). It may not take 2 years of churning like the NASDAQ did, but I do think that there is the possibility that all the bulls will buy the break out to new highs and sellers will lock in some gains and stall the move. Either way, you stay invested and let stops take you out so that you dont miss a runaway move it that scenario IS the one that plays out.

.

A Few Trading Thoughts

.

CLR DAILY ( Oil  & GAS) – I saw Continental Resources pop 18% Friday and then when I looked at the chart I noticed the potential that is left in this move. This had a crash down in March and then formed a higher low base. CLR is just breaking out now.  It is hard to buy a stock up 18%, so you may need to wait for a dip to the 10sma. Check out the weekly chart…

The CLR WEEKLY Chart shows us a long downtrend that ended with a capitulation into that crash. That downtrend has been broken after reversing out of that higher low and the upside potential is great.

 

 

Shippers like CTRM, TOPS, SHIPS and others popped out of their long bases with strong volume. The set up has become bullish over time, likely with Oil turning bullish too. I am pointing this out so that you can put them on your watchlist. Let me show you one more…

.

SHIPS also had a very long base and broke with strong volume Friday, so this sector may be bottoming with Oil and could offer entry points if it starts trending higher along the 10sma. Now let me explain something else…

When the Oil Stocks and the MJ Sector began to bottom, I pointed out some bases and started to develop a plan to trade them.  It is the same with this sector…

.

This was a 30% pop, so buying here is not really a ‘safe’ entry, since it could just drop 20% Monday.  This is just a heads up on the Shippers watch list ( CTRM, SHIP, GLBS, FRO, FTK, NM, SB, SALT, SBLK, TNK, etc.). If they start trending higher like Oil and MJ Stocks have, we can capture some of the moves and look for laggers.

.

GPL – I had this chart for the Friday report and forgot to include it. The good news is that Friday GPL  dropped 2 cents, so the chart remains valid. I wanted to point out that with Gold, Silver, and GDX near the lows, GPL is at the point where it looks ready to break out.  This is showing strength if it breaks outa nd can be bought here or at the break out. Look at that Big Run after the last consolidation break out.

 

SPRWF -On November 6th  I had mentioned SPRWF as a BUY & HOLD, since I saw signs indicating that this base was setting up to break higher. Gains could be exceptional.

SPRWF was up 50% this week with massive volume.  Congrats if you bought this one, but I do also think that over time this will continue higher.