Thursday June 1st
SPX – I mentioned yesterday that after a reversal candle we usually get a little pullback, so we see here that we did get the follow through lower. We will also be coming due for a dip into a dcl too.
WTIC – Oil dropped again.
GOLD was higher, even though the USD was higher too. When we were supposed to be dropping into an ICL in February and March, we had a bounce that I expected to roll over to new lows, but the Banks failed and Gold then rallied. This may be a similar bounce, but this one should roll over (without the Bank failure rally).
GDX – And we got a Bounce here with the Miners too. You’ll notice that the GDX & GDXJ broke well below the 50sma so far, but…
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You’ll notice that the GDX & GDXJ broke well below the 50sma so far, but some of the stronger Miners actually reversed at the 50sma as support. HMY, GFI, DRD, etc to name a few.
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HMY did reverse at the 50sma and it also closed above the 8 ema, but that doesn’t mean that we are at its’ final low. You can buy with a stop, but this can go lower if we are seeking out an ICL.
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GFI also reversed at the 50sma and is oversold, but like I said…
GFI also reversed at the 50sma and is oversold, but like I said, that doesn’t always mean this is the final low in a sell off. If we are seeking out an ICL, this can do what it did in February. At that time we saw a little ‘bounce’ or ‘reaction’ at the 50sma, but it continued to break lower to the 200sma. LOOK AT THE RALLY FROM MARCH TO MAY THOUGH!
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The General Markets will be coming due for a dip into a dcl soon, and that next dip may or may not be a deeper one. We might just drop to the 50sma again and then push higher, as shown here. This means that for now this reversal at the top may or may not be the ‘peak’ to this rally. I also want to keep in mind that this is the 3rd daily cycle, so buying the next dcl will need a stop that trails higher. I’ll discuss that more when the time comes.
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The USD was green yesterday, and yet GOLD, SILVER, and The Miners were Green too. We can get a bounce to the 50sma area, but I am expecting more downside for a drop into a real ICL. It would seem to me that the USD will put in a dcl and then bounce to the 200sma, sending Gold to a final low. We just have to see how this plays out.
I was asked already, “What if this reversal is the low? Can I buy here?” You can always buy a ‘reversal’ if you feel that you are missing a low, but a stop is still a good idea. Why? If the ICL is ahead ( I think it is), we will see lower lows and the selling can accelerate.
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I want to finish discussing the recovery in some tech stocks below. Enjoy your Thursday trading.
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~ALEX
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Yesterday I discussed how some companies are leading the way higher out of the Bear Market lows and are already near their former highs ( NVDA, AAPL, MSFT for example). Several of these ended up having small very choppy bases at the lows and then a nice run higher that followed.
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For Example: Here you can see how MSFT had that bear market sell off from $350 to under $225, but after forming a base, it is back up near $335 yesterday.
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YESTERDAY I WROTE:
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AMAT – If I had you buy AMAT in January, it was choppy and break even for months, right? Buying in November would give you a $110 price and it chopped around $110 all through 2023, but that NVDA earnings beat ‘trigger’ is causing a breakout from that consolidation and…
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AMAT – If you now look at that choppy period, we have the Bear market sell off into a choppy V-Bottom. It rallied and chopped sideways for 6 months, but now it could rally to former highs. Buying that NVDA break out area ( or any dip after that) could be worth a buy and hold as some of these start to recover the rest of that bear market drop and return to the highs.
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Take a look again at MSFT and its recovery back up to the highs, and let’s compare this pattern with the NASDAQ (The NAZ is slightly lagging)…
NASDAQ – So if this is about to do what MSFT, NVDA, AAPL, etc did, we would likely see other tech stocks that are lagging play catch up after the next dcl.
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META, MSFT, NVDA, AAPL and a few others are nearing former highs already. That was a BIG Bear Market crash, but they’ve started to recover. META dropped from the $375 area to under $100! It is now at $260 since the late 2023 ICL, so the thought is that some of these laggers still in a base or now breaking from a base may recover too, if the 2nd part of 2023 remains bullish too.
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Ed, a trader in the commenting section, mentioned INTC as breaking higher, and when I took a look at it, it looks much like what I was going to discuss here, so let’s take a look.
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INTC was still in the base, as seen here, but it does look to be breaking out. It can run with the markets now and then a general market dcl might be a back test, but my point is that this could be a buy & hold for those inclined to try to ride some of these longer term.
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GOOG (Alphabet inc) was a $150 at the peak, and after that bear market sell off, it was trading under $100. It broke from the base at $110 and is now $123. This could back test that break out or the 50sma with a DCL drop and then reverse as a buy and hold to see if it recovers too.
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TWLO got crushed in that bear market correction. Notice that it ran from this area to $450 in 2020, but then sold off again to the $60 area. It is in a base moving roughly $60 to $70, but can you imagine if this recovers? I know that it doesn’t even really look like it is moving higher right now, but let’s zoom in for a different view…
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TWLO actually has moved from $45 to $70 (100%) in May alone, right after an earnings gap down. If we are close to dropping into a dcl, this is on my watch list to see if it becomes a buy at the 50sma with the next dcl. I tried to start a small starter position at the 50sma, but it never back tested it to trigger my buy (yet).
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Yesterday BOX released earnings and it Beat estimates on earnings and revenue. It gapped open fairly big, but sold off as the day went on. I like this set up a lot and the volume a lot, I just don’t know why it sold off and stayed down, so I am putting this on my ‘watch closely’ watch list – to see if it stabilizes and starts to push higher again. Box was trading at $35, but ropped on March earnings to under $25. This report may help a recovery.
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I’m switching over to current bases now. I have also been seeing some stocks form bases and then leave the bases and rally strongly, so I wanted to switch to ‘Bases” right now.
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ARQQ may not look like much, but this is a nice long base that I have traded with volume starting to come in as it rises. Those small pops are actually BIG up days as it regains the 50sma. Let me show you…
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ARQQ – Each arrow points to an up day that was roughly a 20% pop. yesterdays was a 12% pop. This is choppy with up days and down, but now that it is over the 50sma, I think that it may begin to trend higher. Earnings was released 10 days ago.
MVLA is another base that doesn’t look like very much, but those pops are also larger than they look. It too has moved above the 50sma, so let’s zoom in…
MVLA -had large 17% and 36% pops, but the down days can be fairly big too, so either wait for a dip and keep it on your watch list or start small on a down day and see how it goes. This can drop to $2 at the 10 sma.
I have had GOSS on my watchlist from April, and I like the current base. It is back at the 50sma and tagged it over the last 4 days and bounced. Since The General Markets may drop into a dcl, I have to wonder if this one could go back below the 50sma (?), but it was green yesterday with the markets lower. I am hesitant to buy it here, but I do like the base and will watch what it does if and when the markets continue to dip.
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CRYPTO STOCKS keep chopping sideways and yesterday with BITCOIN RED and the General Markets down, many bounced, so I posted a couple of charts and continue to watch them
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BITF was up at the days highs after a gap fill when I posted this at 2:40 p.m. Bitcoin was red.
HUT dipped to the 8 ema and a gap fill , and then it ran red to green too (with Bitcoin red), so this sector is still acting correctly, but Bitcoin has stalled.
