Reversals

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We had some nice reversals in certain sectors today, so I wanted to share a few ideas here with that in mind.  Some ideas are Bullish , and a few cautionary notes in there too. This is your Tuesday morning report a tad early.  🙂

To start, OIL remained in the RED today, but it did hold the 50sma.  Did OIL stocks get smacked down with Oil red?

WTIC 11-2

The XLE – Nice pop higher out of the recent consolidation, with oil down.

XLE 11-2

So the Energy stocks are acting well.  I hope you took the time to buy some OIL/ENERGY STOCKS ( Or got ready to add a position)  when I posted this chart on Oct 28.  I said that I feel we have a couple of weeks of upside available.   We still should.

WTIC 10-28

Lets just post a few charts on Energy stocks to show that they are breaking out.   Some are running ahead of others, so there is time to still find an entry that is rather low risk with our anticipated run higher.  I am flying home Tuesday morning, so for the sake of time I am just listing a few charts here to show you the bullishness.   PLEASE CHECK YOUR FUTURE PURCHASE OR CURRENT HOLDING FOR SCHEDULED EARNINGS RELEASE DATE AN DECIDE TO BUY SELL OR HOLD WITH THAT IN MIND.  Go to  http://finance.yahoo.com/q?s=crk&ql=1  and plug in your ticker and read the news headlines below. 

 

AREX – I have mentioned this set up for a while.  It hasn’t broken free from this base yet, but it hasn’t broken down either. It again looks ready to go.  If you bought it on Oct 28 you would have an absolute low risk entry. 

AREX 11-2

BBG –  This base pattern looks similar to  AREX, and XLE .  Many have this pattern,  so find it and Buy  it in my opinion.

BBG 11-2

PWE –  Similar pattern  with a run up & consolidation  (but stronger because it held up better).  If you bought this Oct 28/29  you’d be up nicely.  I think it has plenty more to go. 

PWE 11-2

GST –   I also  have mentioned this in the past.  I like this set up, it could have been purchased on the 50sma on Oct 29.  I expect it to run higher.

GST

CRK –  Below the 50sma,  I still would buy it here because of the overall sector bullishness. This runs fast if it gets going. 

CRK 11-2

Check out  REXX, BAS, EXXI, WTI, LGCY, NADL, REN, KEG, GDP, etc etc  from prior lists

.

 

  I also wanted to touch on  GOLD SILVER & MINERS

  We had reversals in Miners today with Gold and Silver down.  We are in the timing for a DCL, and Miners often lead with a reversal ,  BUT  I will cover it with a word of caution… It looked good, but follow thru is a must for miners.  Reversals in Miners can fade and fake out fast.   I like to see BOTH SILVER & MINERS reverse ahead of Gold.  Silver put in a reversal candle, but it didn’t go GREEN , so be cautious.  The ENERGY SET UP  is a little clearer.  That said, lets take a look. 

.

GOLD –  Broke the 50sma, but I am not worried. It was anticipated that the Magenta line could get tagged when I posted this.  Gold was slightly oversold. 

GOLD daily 10-30

GOLD NOW –  A little lower?  We have entered oversold. 

GOLD 11-2

SILVER – We did see a reversal candle. Follow thru higher would be nice.

SILVER 11-2

 

GDX  –  Yes reversal, but see how they can fail?  It seems to easy when they reverse on the 50sma,  BUT…

GDX 11-2

Remember this OCT 23  thought? If you compare the above chart with the one below, We are actually pretty close to fulfilling it ,  and …

GDX FED 1

As mentioned in earlier reports,  in 2008 GDX  Only tagged the 50sma,  so we are alert to the possibly that this may be our DCL on the 50sma.

2008 and now

 

So here is my cautionary point, and I mentioned it on Oct 30.   GDX in the past has bounced off of the 50sma, and then failed  ( Blue arrows).  It is best if we  keep this in mind, right? Maybe we raise our stops a bit above the 50sma ?

GDX 10-30

 

Let me show you 3 charts of Miners and they are bullish looking.   The really bullish point is that with GDX being made up mostly of  NEM, ABX, and GG…Only GG looks ugly. 

So we’ll start with NEM since NEM and ABX look similar (Bullish). They’ve held up nicely after earnings.

NEM 11-2

In the comments section today I pointed out that while Gold was still own quite a bit in the early a.m., EGO, IAG, AUY, and a few others turned GREEN. 

 

EGO  – Sweet reversal so far.

EGO 11-2

AU –  This has been very bullish running $5.60 to $10.00.  Nice pull back to support.  This is a buy. 

AU 11-2

SO I just wanted to point these changes out.  I will be flying all day Tuesday,  so these are the areas that I would be interested in.  Energy & possibly Miners.  Best wishes and happy trading to all!

 

~ALEX

69 replies
  2. Cason
    Cason says:

    Alex, I like miners here for a bit, at least. In the 50SMA tag fails above, they still bounced for 3-4 days, so that is tradeable up to jobs report. One could buy now, with stop below today’s low then sell before Jobs to be safe or sell half and tighten trailing stop, etc.

    • chartfreak1
      chartfreak1 says:

      Hi Walter,

      That’s a good observation and it is probably what we are seeing, but see if you can follow this thought too. I wanted to see how Gold comes out of this low once we get one. If we entered a new bull market – it would be possible for Gold to shoot straight up for say 3 or 4 days to a higher high than day 9, and then drop into the real DCL . That would change it to a R.T. with a new high on about day 25.

      That is just something in the back of my mind as I watch how Gold moves up when it turns.

      A weak bounce for say 5-8 days would likely be a new daily cycle ready to roll over, since this would be confirmed L.T..

  4. Bill
    Bill says:

    Alex, why not play GUSH instead of individual Energy ? I’ve never traded it but I have used DRIP with success?

    • chartfreak1
      chartfreak1 says:

      I actually never saw it before. I like the chart, I’ll have to look into it later. That may be a good call, Bill. (It used to have very very light volume, but now that it is being noticed more, that may change),

      I used UWTI & GASL

  6. Bill
    Bill says:

    Sold my DUST position, bought NUGT and GUSH this morning. My UWTI poistion is doing nicely. My 1126 target for gold got hit this morning, still going lower? Should stop soon.

  7. Peter Castillo
    Peter Castillo says:

    Good morning! Question for Bill: do you use the leveraged etf’s trading dailies or intraday timeframes? I ask because in all honesty i was doing well up to early september trading off daily charts only, then I got a little too cocky and started trading off of hourly charts and what I have done is taken a beating of about 15% down in the account. Just wondering if you trade those 3x etf’s with success usung daily tf. Thanks for your time!

    • Bill
      Bill says:

      Peter, I use the nonleveraged charts for guidance and trade leverage based on them. So, with my trade Today of Nugt, that was based on GDX and what I thought it would do. I use the daily charts for expectations. I use multi-hour for entry timing. 2hr or 3hr. Clear?

      • Peter Castillo
        Peter Castillo says:

        Crystal clear Bill! I much appreciate you sharing that. That’s EXACTLY what i was doing. Somehow I got started with lower time frames (1hr and less) and I have given my portfolio a real good drubbing. Thanks again!

      • Peter Castillo
        Peter Castillo says:

        Thanks Bill. Thats actually exactly what I was doing before I got in over my head and messed with ultra short (1hr and less) charts. Hate to admit it, but it did pretty strong damage to my account (15% down). Will have to go a while playing more defense than offense while I get some mental strength back. I appreciate the feedback. Question though, what did you see in gdx today that would make you go long? I personally like to see price above the 9 ema at least, or above the averages in general, but gdx still below…. just curious…?? Have a great night. Thanks again!

        • Cason
          Cason says:

          Peter, I know you asked Bill but figured I’d share and maybe you find it valuable (or not!). If I am going to swing (planned at least 3 days) I’ll use the daily chart. I would use an intra-day for timing. If I am going to day-trade I’ll use shorter time frame, often 30-min, but depends. Also, more important for me is position size based on plan – I’ll use smaller amounts on a swing that has a great % move likely, but if day trading for a few % would use a large position knowing that I am getting out before any real damage could be done, if wrong. Hope that helps.

          • Peter Castillo
            Peter Castillo says:

            Cason, I appreciate the input! For the time being Im gonna have to be very defensive and play small and with very little leverage. I’m already back at using dailies , things were working just fine before trying out intraday. I did go big in position size, which I was doing succesfully trading off daily tf. Found out the hard way that intraday moves a lot faster than dailies, so being big on size is not the most intelligent strategy, for me, at least. I appreciate the advice. Right now, the mental attitude is the hardest to get back. But at least talking about this stuff helps see other points of view. Giant mistake/lesson learned: if you do not day trade, or are interested at all in day trading, stick to daily charts! I am not a day trader, nor do i wish to be.

          • Cason
            Cason says:

            I ocassionally find day-only setups and will day trade them but I’m not so good at it so usually stick to swings as it works better for me. As far as large positions, it’s relative. Not too large!! I’ve definitely gone in too hard and learned the hard way not to do that again!

  8. Alan
    Alan says:

    Considering a significant position in FCG for a long-term investment. Alex, would really appreciate your thoughts on entry timing for this one. Inclined to buy the next dip and hold as an investment – not a trade. I have recently realized that I am better suited to investing than trading so plan is to pick an entry and let it be.

    • Cal Staggers
      Cal Staggers says:

      Since we’re in the same boat, Alan, I thought I’d reply
      fwiw, last week, I put 5% of my portfolio in FCG for a longish-term holding (2-3 years?)
      Sources on which I rely think NatGas is out of the woods or will be soon. Crude is less certain. And these Energy companies hopefully will lead the way up.
      We definitely need Master CF to give us his take on it though!

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