Wednesday January 6th
SPX – I discussed the possibility that our market drop on Monday was just one of those quick 1 or 2 day drops to the 34 sma that we have been seeing with this bull Market. So far, Tuesday reversed higher. I do see here that The MACD is still showing weakness to me, so I think that we may get some more choppiness, but so far it was a quick dip that bounced. If the markets drop again this week, I’ll be watching the 34 sma again.
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NASDAQ – I do see weakness in the Tech Sector when I look at those high volume drops and see a MACD cross down, and a few other things. The NASDAQ also bounced out of that 1 day drop though, so we’ll have to see if this can break to new highs or not. If the NASDAQ breaks below that lower trend line we may be dropping into a dcl. I just don’t love this set up right here (as always use stops).
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WTIC – Oil reversed sharply higher on Tuesday with strong volume. This should be day 42 and I wouldn’t have expected that big of a burst higher, but Oil remains bullish. I did expect bullishness in Oil stocks…
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IN YESTERDAYS REPORT I WROTE: THE XOP can act like the ‘Miners’ at times, bottoming a little before Oil does. This may be bottoming here, so a Daily Cycle Low is also due with Oil Stocks and many may bottom early. Most of our Oil Stocks moved up 100% from their buy point, so this will be a BUY too. Some may simply be holding their Oil stocks through this dip too, since it should resolve with another upside run. 🙂
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Boom! The XOP was up 6.4% in a very strong looking high volume break out. This should be our 2nd daily cycle and all of the Oil stocks were just as strong yesterday. I will show that at the end of todays report, they can be bought here.
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ONE CAUTIONARY NOTE: OIL INVENTORY REPORTS ARE RELEASED ON WEDNESDAY. IT MIGHT CAUSE OIL TO EITHER DIP OR TO TAKE OFF HIGHER. A DIP MAY OFFER A BUY OPPORTUNIY TO ADD TO CURRENT POSITIONS TOO.
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BITCOIN 2 hr chart : Believe it or not, that Bitcoin run continues. After the last run higher it consolidated again and is breaking the downtrend line. I would expect MARA, RIOT, HVBTC, GBTC, etc to continue higher too.
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GOLD pushed a little higher on day 24 and it can continue higher. In fact, let me show you 2 different possible scenarios that will help us to visualize things better no matter what Gold does from here.
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GOLD – A RUN TO 2020 highs is still a valid possibility. I do think that on day 24 Gold can still rally and complete the cup formation that it is working on. It could run to the 2020 highs and then pull back for the DCL (Daily Cycle Low) somewhere around day 33 timing for a dcl as shown.
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GOLD – I can’t rule out the idea that Gold also could pull back to that dcl (Daily Cycle Low) sooner than later as a back test and then rally off to complete that cup formation on the 2nd daily cycle. No matter which one plays out, these are both still Bullish with the ICL behind us.
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GDX – Some Miners made progress Tuesday and yet others lingered a bit, so the GDX ETF was actually red. Mondays strong volume push higher made it look like Gold stocks would catch up to the nice rally that the Silver stocks have had, but it paused at the top of the channel. This gave buyers more time to buy low as Price stalled at the top of the channel.
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BTG– Pushed higher above the 50sma. If you look around at your list of Miners, we see that some Miners were up and others seemed to pause. I am not bothered by the fact that GDX was red for the day since the red miners still look Bullish.
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SPAZF – This one was doing nothing all day and in the last 15 minutes it jumped 17%, so we’re just waiting for Buyers to continue to step in. As for SPAZF, you could start a position here and if it stalled or flags you may want to add to it. That is what it did when it popped in July.
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I have had a lot of ‘stock picks’ in recent reports and most are still valid. I discussed Miners, Biotech, EV, MJ Stocks and more, so for this report I just want to focus on some of the Oil stocks that broke out yesterday. When the Markets dropped on Monday, I pointed out that most of the Biotech Stocks, MJ Stocks and a few other areas actually ignored that drop, so if the General Markets do dip down further, I’d watch for this and see if it happens again. It is possible that we could see a pull back with Oil & Miners and maybe a few other areas resisting the selling.
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Enjoy your Wednesday trading!
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~ALEX
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So when I’m looking at the Oil Sector, I keep in mind that this sector got crushed in 2020. Remember when Oil went to Negative in early 2020? Oil stocks were sold off as if they were going out of business and now we are getting the SNAP BACK RALLY. Let me show you what I mean.
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VET – I look at a stock like VET and see that after a double bottom near $2.25 it then rallied nicely and more than doubled. Now it has pulled back for over 2 weeks and surged higher again. That is a low risk buy as it regains the 8 ema or 10sma and breaks higher, but let me show you something else…
THIS is what VET is trying to recover from. A capitulation crash in early 2020 when No One wanted to own oil Stocks. They based out for 7 months and now we are looking at $2 to $5, and next could be $5 to $10, $15, $20. It’s at least worth a trade in the 2nd daily cycle.
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IN YESTERDAYS REPORT I SAID THIS ABOUT APA – I see some of the OIL stocks that look like a buy set up at support. I wondered if we would get an A-B-C type of drop to support, but this may be all we get.
1. APA is oversold, broke back above the 10sma and looks like a buy with a stop.
2. Others look like this also. They could be bought with a stop.
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I grabbed a chart of APA 1/2 hr after the open yesterday and this was APA, moving up 5% in that first 1/2 hr. Look how APA climbed the 8 ema on that first run, and now it was back above it. These were definitely proving themselves as a buy right out of the gate. It closed up 10% and since it ran $7 to $17 in the first run, I’d say it has a ways to go from here.
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In fact, like I said above, check out the bigger picture for APA. If these are in recovery mode and oil will trade back at $55, these could climb back out of the hole over time.
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CLB – I know that it says ‘Core Laboratories’, but they engage in the provision of proprietary and patented reservoir description, production enhancement, and reservoir management services to the oil and gas industry. They are an oil services stock that no one wanted to hold when oil crashed too. It rallied $14 back to $30 in November to December and then dipped to $25. Back to $50? Very possible and at the least worth a trade even if it went from $25 to $45.
I also grabbed this chart 1/2 hr into trading. CPE did a reverse split in 2020 and then ran from under $5 to $16 in 2 short months ( I Bought this one in November). After a consolidation it looks ready to run again.
You may recall that I also bought and recommended ERF AND LPI. They both broke out and closed up with high volume too, so as mentioned in yesterdays report: These were and are a buy. I know that I can hear someone out there saying, “Well, I was working and didn’t buy, so how do I buy it now?” Notice this…
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This is ERF again: Notice that it isn’t usually isn’t as much of a straight run higher as it looks. It pops and drops often near the 8 ema or 10sma. I often buy a small starter and add when I can. I do this with any stock ( Oil, Miner, Tech) that Pops up 10% above the support level.
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Don’t forget this sector from Yesterday too:
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THE MJ SECTOR RESISTED SELLING ON MONDAY TOO. THE ETF CLOSED UP NEAR THE DAYS HIGHS.
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THE MJ SECTOR started to break out as expected and some MJ Stocks were only up 4 or 5%. They are till a good buy.
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I POINTED THIS OUT ON OGI : OGI has been trapped here above the 50 & under the 200sma for a while, but once this breaks out it can run swiftly too. OGI looks ready to go now, at the Apex of this squeeze. It is a low risk buy.
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OGI has pushed above that 200sma and closed up 6%, but it is still a buy near that 200sma. TLRY AND ACB also started to move higher too…
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THIS IS FROM YESTERDAYS REPORT AND THESE ARE STILL A BUY IN MY OPINION TOO.
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ACB closed up over 14%. These move very fast, so they may not be for all traders ( they drop as fast as hey run), but this can run very quickly as seen on this chart. I wrote in my November & December reports that I thought this sector may be bottoming with the Biden Election Win in the US. They immediately Popped and have now consolidated. The sector looks bullish again, read the chart.
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So this is TLRY and it ‘only’ popped 8% and is a buy too. This looks easy to hold, but these are swings from $10 to $8 to $10. It can be tough to hold them, but I do think that a stock like TLRY could be $12, then $15, etc over time if the sector remains bullish.
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Those 2 charts ( ACB & TLRY) above were in yesterdays report from Monday trading. On Tuesday they were only up a little more. They are still a buy, but please know that the MJ Stocks do tend to move quickly both higher and lower in a normal rally.
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