Tuesday March 18th – Is This The Bottom?
Todays report will be slightly different. I usually cover SPX, NASDAQ, SOXX, WTIC, USD, Gold, Silver, and GDX in that order. I want to cover some of them in a different order today, so that I can add additional charts toward the end. Enjoy…
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I just wanted to start with the weak USD: After crashing through support, it has just languished at the lows. We could see a bounce to the 200sma and then it may roll over again, as mentioned in prior reports.
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GOLD is continuing higher after putting in a dcl at the 34 sma. At day 11, tis can continue higher. This sector has been us a very good trade, and the Miners are doing well.
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Take a look at The GDX since the buy area at the 34 sma. We have 5 green days in a row, and the basket of miners is doing very well. I pointed out some Silver stocks in recent reports as laggers playing catch up…Silver stocks are still running well too, as you’ll see.
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AG was pointed out recently (March 11 here) as bullishly closing above the 200sma. I then repeated that 2 days later. And now…
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AG hit $7.07 on Monday and is climbing bullishly higher.
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I pointed out BTG as a ‘lagger’, but it ‘Popped’ on earnings, so that is a good sign.
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Unfortunately BTG pulled back to the 50sma as a lagger, but as soon as it got above that 200sma again, it has been stretching out higher.
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AUMN was beaten down and ugly. I didn’t want to buy it or recommend it, but it just tripled out of that base.
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THM popped over a week ago, and now it has been running, so this just goes to show that some of these laggers and smaller stocks are now joining in and running too. So…
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I think that TRX could be getting ready to go too. I see large divergence at the double bottom & a MACD cross. It has tried to break the downtrend line twice but then sold back off. Of course, a small company like this can do a ‘public offering’ to raise cash and that ruins the trade, but this set up is a bullish one.
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EXK burst higher on earnings and has now formed a pennant. Usually these break out in the direction that they were heading in, if they are found in a bull market.
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AUST – This small move out of the lows is…
1. Happening above both the 200 & 50sma & they are ‘pinched’.
2. This is actually NOT a small move, this is up 10%.
3. RSI is above 50% and this looks ready to run.
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At the beginning of the report, I mentioned changing the order of the charts. Next I’ll discuss why I think that we can go long the General Markets. I will also add that this doesn’t mean that it is 100% safe: FOMC is Wednesday, so even if the lows are in, we could definitely have volatility ahead! We could run up Friday, Monday, and Tuesday, and then slam down Wednesday without breaking the lows, so just be ware of that.
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SOXX – Last week I said that I think the SOXX bottomed first, and I think that I mentioned that you could buy SOXL with a stop. The SPX and NASDAQ made new lows, while the SOXX moved higher. So now the SOXX looks to be on day 4, doesn’t it. What that does is build confidence that the other sectors would be close behind.
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SPX – We have a swing low in place and The SPX was moving above that 10sma, so I posted this in the commenting section midday.
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SPX – Do you recall what I said about all of the past large green candle days? I said that we keep getting 1 green day and then it rolls over. I then said that if I see 2 green candles in a row, I would likely assume that we have the lows in place, since this would be a change in character. It looks like we should have a day 41 low (The ONLY possible problem is the Fed Day Wednesday).
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NASDAQ – I also mentioned that when the downtrend line is broken, that would also be another clue that the selling is drying up and buyers may be stepping in (& Short cover could push price higher). The Nasdaq was also up Friday and Monday, the first time we;’ve seen buying 2 days in a row.
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I have mentioned that some sectors look to be bottoming first. Along with some individual stocks, Semiconductors and the QUANTUM STOCKS also seem to be bottoming, because as the markets dropped lower and lower with only 1 candle green higher here and there, these sectors held up.
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I pointed out this chart of QBTS last week with a double bottom. It was noteworthy that during the heavy selling phase, it was running higher. They had favorable earnings and ran from $4.50 to $7!.
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QBTS then jumped 47% and was at $10!
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This was QBTS midday running again and it actually tagged the $12 area! obviously this is an exception, but my point is that this sector bottomed first, this stock made a mammoth run, and others are following (I pointed out ARQQ, QMCO, QSI, RGTI, IONQ, etc in this sector).
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These stocks are considered higher risk: In January they all dropped 40% in one day when (I think it was) Microsoft mentioned that Quantum computing may not be very useful for 10 years or so, so these can be volatile.
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On March 14 I pointed out RGTI as also popping while the markets were in a sell off. It had resistance at the 50sma.
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RGTI has stalled at the 50sma, but it can run higher. Again, this is higher risk because of the way that it moves but look at where this was 8-10 days ago. The markets were cascading lower and this had earnings and stopped selling off. That makes me think that this will eventually go higher.
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IONQ is in that same sector. It lost the 200sma and recovered it. This doesn’t look like much, but it has moved from $17.50 to $25.50 in 5 days. It may stall here at resistance but buy the ‘dip’ or ‘crawl’ or ‘breakout’—if this is your kind of trade. NOTE: IF THIS DROPS TO THE 200sma, THAT IS NORMAL, but it is also painful.
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Those are higher risk stocks, because even a drop back to the lower support is a lot!
Now let’s move on to stocks that performed very well during the bull run. They often recover quicker, or if we enter a bear market, they bounce better. I discussed finding these BULL STOCKS and keeping a check list. I will share a few of mine now that I think we may have bottomed. I will repeat—it is the Tuesday before the FOMC, and I expect some kind of Fed reaction.
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PLTR was an excellent stock in 2024. I like that it didn’t crash down tot he 200sma like many others did (AMZN, GOOG, NVDA all LOST the 200sma). This is already trying to regain the 50sma and is 5 days off of the low. THAT MEANS that it stopped selling when the markets were cascading lower last week. Buy at the 50sma, or after the Fed Mtg.
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RKLB also stopped selling off straight down a week or 2 ago. This was also an EXCELLENT stock in 2024.
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RR bounced off of the 200sma 5 days ago. I traded it as a trade, but we didn’t have a swing low in the markets, so I sold it. I posted this Monday when it was up almost 20%, and it had now moved from $1.40 to $2.07. Guess what? It closed up 32%! So it may just run to the 50sma, but on your watchlist, if this drops to the 10 sma or 20ema, that would be a buy. In this sector ARBE, RBOT, KITT, KSCP, etc.
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SOFI was also a great stock in 2024, running from $6 to $18, so I have it in my ‘great runners’ check list 🙂 It dropped right to the 200sma and has reversed about 4 days ago. If our Bull market continues and it ‘only’ returns to the highs, it is roughly a double.
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CELH – This stock got crushed, however that big Price Pop in February was earnings based. So CELH ran UNDER the 50sma during its long sell off, and now it Popped over the 50sma and back tested it after earnings. This is a buy & hold base set up.
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CRWD was a Huge runner in 2023, and then it dropped in August 2024 and recovered the highs. Now it dropped with the ICL sell off, but that looks like a ‘shakeout’ at the 200sma. CRWD started to run 5 days ago too (during the market crash). It may stall at the 50sma. If it ‘crawls’ there, that would be a buy, or buy any dip here.
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METALS STOCKS ARE STILL SHAPING UP:
AA – Alcoa has divergence at the lowest low and it also stopped selling off before the general markets did.
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TGB has 5 days straight up, when the markets were still dropping lower. I have listed a few of the other metals stocks that look bullish.
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The General Markets gave us a green Friday and a green Monday, 2 days in a row for the first time in a long time. We have a swing low and price is trying to make a move above the 10sma. Many stocks are setting up as reversals at support. With that, however, I have to remind everyone that tomorrow is the FOMC Meeting and they can be a little volatile, but the markets do seem to be bottoming here. That makes it a little tough to buy and hold through the Wednesday & Thursday markets, but after this sell off, we may get a surprise to the upside. Start with smaller positions may make you more comfortable? Or just continue to ride your Gold & Silver Miners until post Fed Thursday? Yes, we may also get a double bottom with a higher low slam down, but I feel that we already know what the Fed is going to do and say, so the major reaction may already be baked into the cake. The precious metals sector has been a real bonus. Holding a basket of miners paid off well, and we should have further to go. Is Bitcoin bottoming too? I’ll discuss that below.
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I have to leave for the entire day today, but please feel free to leave a comment if you see something interesting to alert the other traders. I know that it gets a little slow in the commenting area when I am gone, but I didn’t want to miss Fed Wednesday, so I’m taking today to help out family. Enjoy your Tuesday trading!
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~ALEX
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BITCOIN is struggling at the 200sma and it is also still under the 20 ema. That gives us a current low at day 57 and we would either be at day 64 if one more drop takes place, or we have the lows and we are at day 7. The MACD improved but I’d really like to see Bitcoin get above these 2 areas (& then the downtrend line) to show us some sign of strength.
