Thursday June 29th – Dips

Is that the low(dcl)? We do not know.  🙂

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THE NASDAQ has had the last 2 daily cycles last for 50 days, but often they run around 40 days long.  We now have a day 41 low & reversal, so this M-I-G-H-T be the dcl, but we don’t know for sure. It closed at the 10sma. This could drop or rally with Thursdays Jobless Claims report. Yesterday I said that you could buy that reversal and use a tight stop if you wanted to try a trade.

TEH SPX did not get back above the 10sma yet either. This also could go either way.

I just want to remind everyone that I will be away for the next 4 days (a 4 day weekend away), but I will still have our morning report Friday. I will NOT be trading during the day, so the commenting area will be there if you wish to post whatever you see as interesting. Trust me, when I check in at night, I do read all of the posts while I’m away, just to see what I may have missed  :).

THIS IS INTERESTING:  The Markets are only open 1/2 day Monday and then they’re closed on Tuesday for the US holiday, so it is likely going to be Very Light volume Monday. I expect to have the weekend report out Sunday night, but again, in the U.S. Monday and Tuesday may pretty much be a non event day.

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Yes, Oil did what we would have expected. It reversed right off of the lows again. Can you believe this?

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Oil has chopped steadily along the lows, but The XOP is putting in higher lows. This may break and run for that 50sma as Oil bounces off of its’ lows.

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USD – The USD bounced rather nicely, even regaining that 50sma, yet Gold ignored what the USD is doing again. Usually a move like this would drop Gold $20+, but…

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GOLD ignored that strong looking USD bounce and put in a small drop and a reversal. Gold closed down a mere $1.60.  Normally when the USD bounces and regains the 50sma, Gold would lose $20-$30. Like I said in past reports though, I do not think that we are at the final lows for Gold yet.  Keep an eye on the 10sma for now.

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Silver from Yesterday:

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SILVER reversed off of the 200sma and is now up against that 10 sma. The USD was up on Wednesday, but Silver ignored ti and closed green. It also still has a higher low here.

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GDX from yesterdays report:

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GDX landed right on the 200sma. The USD was up nicely, so GDX actually resisted breaking down here so far. We have MACD divergence at the new lows, but I still just don’t feel like this is the final low yet. We could bounce and drop again, but if you wanted to buy at support here ( or if it does a shake out and recovers), you can do so with a tight stop after a reversal.

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So right now we do not have either the General Markets or Precious Metals with price trading back above the 10sma. The General Markets were close to doing that on Wednesday, so we could see that happen if the Jobless Claims report at 8:30 am ET is viewed as bullish. That should signal that a dcl is in place and we could see some upside after that. This next daily cycle would be the fourth one though, and that may have limited upside of 2 weeks or so, before it begins to peak.  I will discuss that in the weekend report. Enjoy your Thursday trading, I will be away for 4 days.

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~ALEX

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Just quickly I want to point out a couple of trades mentioned yesterday in the commenting area. This is important:

AFTER A SELL OFF, and especially when we are due for a dcl ( or ICL) and price lands near a support area, that is when the saying, “Buy the dip” rings true. We don’t just buy anything free falling from the highs. That is called ‘Catching a falling knife”, and that often leaves one with cuts. Instead, we look for support and signs of life. Why? Because a stock that recently had a strong run may pull back and then be more reliable when it comes to having another bounce or move off of support as buyers step in.

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So we were due for a DCL and a reversal was in place. AI has had some very big ‘up days’ in the recent run, so it’s on my watch list(along with SOUN, CVNA, ETC).  I have traded this and SOUN often in May and June. It stalled near the 34 sma, so I mentioned that this reversal near of the 34 sma @$33 is a low risk entry (an easy place to use a stop).

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AI is oversold, it then moved up over 6% and could run to the 10sma. It may then chop or break out higher, but the point is that off of that 34 sma was a possible 10% move, and we got 6-7% and it may continue.

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Even better was CVNA. I mentioned this right after the open here at 9:37 am. It was a buy Tuesday, and then this one held the 10sma and the General Markets were rising up too, so this became another place to ‘add’ or ‘buy’ yesterday. It has put in 20% plus gains in a single day in the past, so you just take the trade and use a stop.

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CVNA was up 10% one hour later, as seen here. It closed up over 15%, so this was a great trade from Tuesday or even from Wednesday alone. That was over a $4/share gain yesterday alone.  This is what I call a ‘Personality Stock’.  It acts a certain way when it reverses and has had BIG up days if you catch it right. Remember though, it has Big down days when it pulls back too.

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When I step back and look at what CVNA has done over the past several months, I see what I am thinking the Crypto stocks could do again. These are by no means easy to buy and hold with such large daily swings, but the moves gave big gains over time. $7 to $28 (300%) in 2 months.

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Looking at this chart, you can see how this could head to $20 if the markets dip further, or it could run to $40 in the near future, if a dcl is in place. These personality stocks are hard to hold, but rewarding if they stay bullish.

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So yesterdays report mentioned that we have that ‘running correction’ look in HIVE , MARA, HUT, BITF, etc etc to keep in mind. This was Hive after the open rising up to new highs after gapping lower.

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MARA also dropped and ran up to the highs, even turning green again as the day went on, so that choppiness continues, but it is bullish.