Anything Else?

Well, the past several weeks have been excellent for trading , and we have seriously had reasons to celebrate, catching the lows in various sectors. All good things come to an end, so is it that time yet? Can we keep the celebration going?  lets review!

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SPX ( or SPY) – A few weeks ago I was calling for a rally to get the bulls excited. Those who wanted to play it long should now be a bit more cautious short term. We have reached the spy gap, using a wedge to transport us there. The 200sma is there on the spx too 😉

Lets look at  another indication that the SPX is at least short term topping, and we’ll then look at a longer term weekly SPX chart.

This is a bit cluttered, sorry about that.  The TLT looks to be near a short term bottom, maybe at the  50sma?  That would confirm the rising wedge that I see in the SPX as causing a pull back soon.  They have been running in an inverse manner when you compare the upper box of SPX to the TLT chart.

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 So I expect a pullback soon.  Important-  We are still early coming out of this ICL, so I think that we need more time before shorting a potential larger drop.   Lets look at some longer term wkly charts.

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SPX WKLY – The pullback in SPX, DJIA, RUT, ETC all fell to support and bounced or recovered it. That means we need to see if this can remain a recovery or are we seeing a new bear market,  with lower lows and lower highs.

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If this was a normal correction as shown above, and the bull markets would resume,  the wedge that I see playing  out now might still resolve bullishly?  I wouldn’t heavily short it yet.  It could still play out  like this.

I see the same thing with the Tran, but let me show you the difference between the Log Scale and Linear Scale charts.

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$TRAN – The TRAN broke down first. The linear scale shows the same break down and now a possible recovery.  I was looking for a sell off to 5500 and back test the inverse H&S. Was that just a shake out? Time will tell.

TRAN – If you use a LOG scale, This is ugly and the bounce is running out of time.

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SO I called the top last yr and we saw the correction.  I called for a bear market in the markets and a bull in the precious metals.  Lets continue to see if this plays out that way. So far we are right on the money, but I never become blinded by bias.

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The USD –  I called for a double top in the dollar last year, and so far that is what we have here. This has helped Precious Metals and commodities. The Dollar dropped last week. I expect it to drop further, and  Gold could pop to $1300.

USD DAILY –  The dollar is overbought on this bounce, so it should drop further, I would imagine that Gold would continue its break above the flag pattern.

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 REPEAT : This was my NATGAS chart Friday – Best to wait for upside follow through.

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OIL & ENERGY

WTIC – Oil bottomed as expected, it is getting a little follow through.   It is overbought, but it can stay that way. it also could drop to test the 50sma.

WTIC WKLY – This is quite a bullish looking chart, as though it is just starting its climb higher.

XLE – In my Feb 16  report,  I showed this bullish divergence and mentioned that Oil just broke to new lows, but Oil Stocks were making higher lows  (Bullish).  I pointed to the oil stock  WTI too.  So I was expecting a break out higher.

XLE –  Now we have a possible inverse H&S with a measured move to roughly $65. Fridays doji could mean a pullback first, but my gut says that Energy stocks are not done moving higher either way.

We have been KILLING IT with just a few energy stocks in the past couple of days. All of my recommended picks in last weeks reports popped 10%, 20%, 50% etc  in a day, then continued even higher. I do not think that these moves are done longer term  (but be cautious of pullbacks. They may be as big 5-wise).  

Please review Fridays report ( Thursday night) and Tuesday & Wednesdays for a few ideas if needed, I will post a couple of examples of these types of set ups here.

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Feb 29- I loved the flat base of many oil stocks, and pointed out HK. This jumped from $0.40 to $0.58. Roughly UP 20%. I was saying that just because it is up 20%, DOESNT MEAN you’d be chasing, these are explosive set ups. These can get crazy.

HK March 3 –  Sideways for 3 days after that pop ( a buying opportunity) and then Popped another 11% to $0.64.  Now its up 30% – too late? Would this be chasing? No- Under the right conditions these set ups are explosive.   Zooming back like this, I was pointing out the potential.

HK – up another 60% !  This can do anything now. It can drop 30% or just run higher and higher  ( see “X” as an example of day after day , higher and higher). 

I didnt recommend this one, but I was watching it along with all my others in my list (I didnt buy it). Notice that it was up 25% ,then another 35%. Friday it jumped an additional 200% and dropped to “only” up 91% Friday alone.   Crazy tight wedge pattern after a steep sell off.

I pointed out the same tight pattern in LGCY in the friday report. You want to catch it before it explodes. It broke out Friday and I bought it. It hit $1.00 mid day, ended up 23% at $0.88 Friday. It may also just be starting. 

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****  So let me repeat For safety sake that some in this sector could come out with earnings and get clobbered. At the same time, Oil could recover and drag many of these up A LOT.  Some may still be debt heavy and go bankrupt.  That in mind, for now we are trading some great % pops.   Some of these bases could be The Lows if Oil is in recovery mode. 

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Now lets look at the bigger picture like we did when we look at the potential for AKS, X, CENX, etc.

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BAS – This is one that I mentioned I had entered earlier last week.  It was a tight weekly pattern in this triangle.  Now on a weekly chart, it looks like it is just getting going, doesn’t it?  Thats a 1 week candle.  Look at the run in March of 2015. It ran for 6 weeks. We now have bases at OIL $30. Higher Oil prices may lift these back up.

X– This has become quite extended on a daily chart.

Many commodity (steel / aluminum, materials, etc ) have. The weekly charts show the potential. In the summer of 2014 X popped like this and moved higher for several weeks too. That was when it was already overbought.  We may see a pull back soon on a daily, but longer term these can run a lot higher. 

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I expected a break out in COPPER, and posted this in the report that I wrote on Mar 1.

 

Copper – We broke out and reached a 1st target on Friday. This is bullish and I expect that even after a pull back, it can continue higher.

So lets look at FCX , a Copper / Gold stock.

It just finished  a HUGE a-b-c-d run. $4+ to $10 + !  Well done FCX. 

FCX – This really ran from $3.5 to $10.49. This could now drop to $8 or even $7.60 and it becomes a buy for a possible run to $14.  So I do expect a pull back along the way.  A possible buy opportunity.

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So I do expect that we’d have to see some kind of pullback in many of these commodity stocks that have gone ballistic.  I will show you how that ‘could’ ‘maybe’ ‘might’ unfold, but also show how difficult it is to actually predict at this point. THAT is why I do take some off the table on the way up, yet still let my winners run.   I scale out for a future buy opportunity. 

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 Let me show you how VALE could pull back in a few different ways. This is why it is difficult to answer, “Where do I buy it next?” .

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VALE –  After being away all morning, I sold 1/2 of my position Friday afternoon.  This CAN keep climbing, so I only sold a partial.  The last 2 sell offs dropped to the 20sma ( Green  arrows). So if this dropped to the 20sma or the lower bull horn green dotted line, thats deep, but healthy.  A great buy opportunity down there for the patient trader. However…

Vale #1

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VALE #2 –  This would show a normal drop to the 38% or 50% move of this move higher.  There is also support in that area, so patience may allow a great buy there.  However…

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VALE #3-  This shows that famous Flag pattern consolidation.  The lowest point is on the first quick drop to maybe $3.75. The bounce and next drop becomes higher lows.  Sadly, I may end up re-entering near the apex of the flag around $4.50, and that would be just a little below where I sold it.

 That shows you that I cannot tell you NOW where the next buy is.   I do get emails saying, “I missed the move in Vale or X , where can I get in?”   May this help  you to see why I cant answer that clearly yet.   We must be patient and allow time & price to tell us where we will buy.  It could be an educated guess now, but will be much clearer if I just watch the pullbacks unfold.

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GOLD, SILVER, & MINERS

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Yes, The COT went higher. I discussed last week why I wasn’t overly concerned then. I do use it as a warning signal, not a timing tool.  It is warning that smart money is going short.  Silvers COT actually improved.

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GOLD – Even though this was a very bullish pop Friday, the selling at the end of the day shows selling was overwhelming and it couldn’t hold price.  I still believe we will see higher price, but a pause here may come first.  It may  back test the flag and then run higher, as shown.  Also Miners do look ready for a pullback.

If Gold goes sideways as shown above , that could allow Miners to rest and drop for a bit. We’ll discus miners in a minute. I used this chart on Feb 23  to point out Golds potential if it just flags and this is a 1/2 way point.

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GOLD WKLY – In the long run, I still have a $1383 target if this holds up, and this chart agrees.  Gold can drop to test the flag and make people nervous and still fulfill this goal. Note: In late 2011 & early 2012, Gold failed here and dropped back below the middle trend line.

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Silver-  This  looks good in several ways.  The volume on this chart is wrong, but SLVs volume was good. The reversal is a sign of weakness, so it also could possibly drop further down.  Maybe we see a test the 200sma break?

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I mention the idea of Gold and Silver stalling mostly because the Miners showed weakness on a bullish break out day for Gold.

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GDX – That is a topping candle, so how far will this pull back?  We cant say for sure.  Is this Day 32, with a new high on day 32?  Thats very bullish. Or is it day 3? If so, we dont want to see a drop below the dcl 3 days ago.  On my chart, I show a normal pull back in Technical Analyses, and if its day 32 we could be there on day 35?  You know how quickly Miners can sell off and freak people out. 

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However Miners pullback here, I think they will be a buying opportunity for another run higher.

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Watching things unfold, we will look for opportunity as it presents itself.

On Feb 18–  GDX was at $18.90 –    I gave 2 scenarios for a GDX pull back.  These 2 scenarios are still on the table. 

GDX  hit 2o.88 Friday. That fits this one fairly well – a drop near $17.

This was my other idea on Feb 18, a pop higher towards $22 and then a drop.  It seems close too.

So lets watch things play out this week  ( That was a reversal candle) and prepare for an entry if it presents itself.

Some have asked me over the past 9 days about buying DUST.   I just said, “Dont do it.  I cant see it. It doesnt look low risk. You are shorting a raging bull.”  I did NOT see any signs on the chart saying it would go higher or that GDX would drop.  I also posted on one of my charts that some buying DUST too early would get chewed up in one of these rallies that we are in, even in a sideways move. 

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Well, that said, i am only going to mention this here.  This looks Bullish short term. That is a high volume reversal at the lows.   I am not going to recommend it. I am not going to guide anyone in or out of it. So its a trade for experienced traders, please trade it at your own risk.  That reversal Friday was a low risk buy with a stop right under it.    🙂 

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I looked at the GDX WKLY– If gold just goes sideways at the flag and then runs to $1300 or $1380, and Silver continues higher, then GDX on a weekly basis could just continue to climb inside of this tight column. Thats a GDX drop to only about $19.   DUST buyers beware of that. It would make dust a short term trade, not buy & hold.

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  So That’s a wrap.   What a tremendous run we have had in metal stocks like X, AKS, CENX, AA, VALE, FCX, STLD, etc.  I’m watching them for pullback and possible entries.  The Miners also have been little rocket ships, but I still recommended locking in some gains.   I do not think that the run is completely done, and even if GDX pulls back, some individual miners may still move higher at that time. When I look at the weekly charts, they look like nice bases with good of upside potential.  Also Cycle lows are due to produce these long term bottoms in the CRB, OIL, and Precious Metals.   My thinking is that we are about to enter the next phase of the Gold / Miners Bull market, and commodities are going to join in.  Oil may have found THE Bottom too. 

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  ENERGY STOCKS:   Currently Energy stocks are now Popping from solid bases and I am going to continue to focus on that sector while it is ripe for the picking. Most of these are just quicker trades ( a few days maybe) at this point.  Set ups like CNX that I pointed out in Fridays report may be longer term buy & hold, due to the steady base.

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  What of the Bigger picture with weekly charts of Miners and commodities?   These are so beaten down, we will make a lot of money on the upswing if the lows are in and this continues to play out.  If the Bull has returned, these stocks are set up go up 100%, 300%, even 1000% over the next several months, like they did in the past.     Since Miners are finishing their 1st daily cycle, there could be a short pull back and a second run higher that is also very strong.   I look forward to watching how things unfold going forward from here.  Thanks for being here and I recommend reviewing the last 2 reports for Energy plays.

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 ~ALEX

 

Mini -Lesson

As a trader,  I always mention looking for a place to sell that might be reasonable.  Maria mentioned in the comments that she sold her DNR and I think it was a good idea.  I wrote :  That was a fantastic trade. As it is working its way through resistance ( And doing a nice job) it does near the 200sma and is in the extreme overbought zone. It could just go sideways and flag, but also may drop 50% or to the 50sma or trend line shown, so I think it was a great trade, and a great time to sell, even if it pops to the 200sma and then drops.

 

I just sold all of my SWC, but I may be early. Here is why:

I loved this set up and posted here about buying it under the 50sma , because SWC already released earnings and were doing good. Why did I sell? And why might I regret it? 🙂

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SWC- I noticed the extremes that were former highs, and how it has struggled at the 200sma in the past.  I saw the reversal starting Friday afternoon and sold, hoping to re-buy lower. Now looking at it, I know that it could just crawl along the 200sma and get back inside the channel , then run higher. Why do I think that?

 

SWC –  Is a Platinum and gold miner.  PLATINUM just broke out Friday with conviction.  I see a giant inverse H&S.  This is also bullish for Gold I.M.H.O.  I look forward to owning SWC again, I think it will return to the $20’s if this keeps up.

 

For traders:  You may recall that I mentioned a week or so ago that some SHIPPERS perking up.

EGLE, SALT, SBLK, NM, SB, PRGN, TNK, SHIP, DRYS, DSX are some in that category.  They are acting well , but are a bit risky.

 

EGLE & NM  POPPED and a few others look really good .

TNK & DSX   look ready to go too.

SALT & SBLK are running.