Tuesday July 18th – Buying The Dips
SPX – On Monday the General Markets had a bit of a pop and drop, as the SPX pushed higher again, against the upper trendline. I am still thinking that even though we see resilience with the buying, we should get a pullback soon. For now, however, buyers are in charge so anyone that is long using SPY, QQQ, or even stocks can just continue to use the 10 or 13 sma as a stop.
The IWM was lagging as it chopped and formed its’ base under the 50sma, so I was actually expecting this to push higher and it has. The EV, Clean Energy , and Solar Stocks are doing well with this run out of the base. I will review a few at the end of the report.
AMD has been a buy at the 50sm, and even with the recent chop, it is still bullish looking at the 50sma. Stocks like this do make me wonder if the markets will just keep finding buyers. AMD still looks like it wants to run higher.
WTIC – Oil dropped after tagging the 200sma as expected. Will this 10sma act as support and cause Oil to crawl along the 200sma? It could, but I was expecting Oil to drop back to the 50sma as a dcl.
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APA – If you bought the Oil stocks in the report when they were lower, like APA at the 50sma (APA, NOG, MRO, ERF, XOP, etc), there may be a place to add coming up if they follow Oil. I can’t tell exactly how this will play out, but when Oil tagged the 200sma, we expected a drop from there into a dcl. Oil stocks may dip too. This is just a guess as to how Oil stocks like APA would pull back too. Some may resist the selling, but some may drop to the 50sma too. You may have lightened up as Oil tagged the 200, you may have sold 1/2 a position, you may have sold it all, or you could also just ride them out. When Oil puts in a dcl, that should be a good place to add to your Oil stocks if you want. (I do not own any Oil stocks).
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As stated in the Weekend Report: In the Big Picture, WTIC is at a longer-term resistance too. Oil could ‘peak’ here, or break out as mentioned above. It we get a breakout, Oil and Oil Stocks should really start to run higher over time.
THE USD peaked on day 9, so the crash into day 15 is too early for a dcl. We may get a bounce or bear flag as a 1/2 cycle low though, and then I expect the drop to continue producing a L.T. Daily Cycle. A bounce here could cause a pause or pullback in Gold, Silver, and The Miners (Maybe, maybe not), but it will not do lasting harm.
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In fact, I said this in the Weekend Report:
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GOLD ran up to the 50sma on the daily chart, but stalled there Thursday and Friday. Often you will get ‘crawl’ along the 50sma before the breakout, and especially so with a possible USD bounce. I just want us to be prepared for a possible chop sideways next week. The set up is currently still very bullish.
GOLD is crawling under the 50sma as expected. It can continue sideways for days or it could break out at any time. That likely depends on the USD.
SILVER sliced right through the 50sma and is pausing too.
The GDX ETF broke out and dropped back to the 50sma. Last week I mentioned a few times that we needed to expect that this could happen, and showed how it happened last March. This remains a bullish set up and it can crawl sideways along the 50sma too, or it may just run higher if buyers step in.
DRD & HMY are also bullishly pushing against the 50sma. This pause is a gift, since it allows those that didn’t buy to enter.
HMY crawling along the 50sma.
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EXK is one of the Silver stocks that I said was a buy with the divergence in June and again in July. It also had 5 waves down indicating that selling was finished and a buy with a stop was possible.
Yesterday EXK looked ready to continue higher, so I posted this in the commenting area after 1/2 hr of trading. It went Red to Green and was up 3 cents…
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EXK closed up 4% and looks very strong coming out of this ICL. It is now above the 50 & 200sma.
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GATO has stalled at the 50 & 200 sma, but when I take a look at it, I see that it has already run up from $3.50 to $5.00 (that is over 40%), so a pullback is healthy and I think it provides an opportunity to enter if you wanted to own GATO.
This was TRX premarket. They released earnings ( it wasn’t bad) and TRX dropped 2%, so it seems to be ready to chop between the 50 & 200 sma.
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As a reminder: I just want to take this opportunity to mention that with our ICLs in October and March, we had some very nice gains in AEM, AU, HMY, DRD, EGO, MUX, OR, etc. The moves may have appeared to be straight up, but notice that they really weren’t.
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AEM – AEM chopped sideways for 8-10 days, and that is 2 weeks sideways! If we chopped sideways for 2 weeks now, would you give up? If we chop around at the 50sma or 200sma on some of these, it is normal.
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The Bullishness continues, even with pauses and dips. I’ll discuss a little more below, enjoy your Tuesday trading!
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~ALEX
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With Bitcoin I was saying that I felt that we should see a dip around day 30, and then continue higher, but…
BITCOIN dipped as expected, but it didn’t drop a far as I had hoped. I want to see a dip under day 15, so this could still dip or meander down here, also allowing some of the overbought Crypto stocks to reset. It is something that I am watching.
In yesterdays comments I mentioned that many of the EV, Clean Energy, and Solar stocks were blasting off again. You can go ahead and look these charts up on your own, but I will also cover a few below.
SUNW put in a higher low after moving out of the lows and then it just took off higher over the last week or so. SUNW closed up 27% yesterday alone.
SPWR, RUN, and several others were running strong too, with SPWR closing up 10%. SPWR just broke out above the 50 sma after a long down trending period. That makes this a buy. If this sector is set to recover, these do have great potential, so let’s also take a look at a lagger.
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MAXN – Do you see the strong gap higher in March and then the one in May? These were strong bullish reactions to their earnings reports, and while other Solars sold off, MAXN went sideways along the 200sma. I think that MAXN lagging yesterday was temporary. It is pinched between the 50 & 200sma, and I think that it is a buy (or wait for a break out for confirmation).
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EV, Clean Energy
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HYZN took off last week and it has not stopped yet. It ran up 100% in 4 days!
To be honest, I sold my FCEL on Friday, because it slammed down and I felt that holding it over the weekend was risky. FCEL was up 14% at one point on Monday. FCEL is actually still bullish.
GP released earnings and gapped open 40%, so some of these companies are looking good. I captured this at 9:47a.m.
FSR has been pushing or crawling along the 200sma, and closed above it yesterday (up 11%). Again, I have been saying that this sector is choppy, yet acting bullishly.
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PLUG – In June Plug pulled back to the 50sma, and I said that we could look for a reversal and buy as support of this uptrend line and 50sma. This was at $9…
PLUG then ran from that 50sma at $9 to the 200sma at $13, and now it might crawl or stall before pushing even higher (This would then become a buy on a dip to the 10sma for example).
