Just Follow the Pullbacks

Quick update on the Pullbacks…

SPX – Remember that Wedge from March 9 below? I still expected it to run to the 200sma , and then a drop to the 50sma in a 1/2 cycle low.

SPX – The 2 spike down days could be changing the way that lower trend line looks. The SPX has the run up /sideways/ run up/ sideways look. It is in a congested resistance area,  this as it heads into next weeks fed mtg.  That is where it bears watching  ( For strength or weakness).

I dont usually have a full market report, Thursdays report should cover Friday, the last trading day of the week. I do write if anything interesting happened, so let me just post a few charts of interest.

Watching the pullbacks in Commodities, Miners , and Energy-  they all may act differently depending on how strong the move is and where they are in their timing.

  Thursday , Steel stocks acted very bullishly and the pull back may actually be over for now. I wrote this in the comments section after noon.  They had reversed and were up 6% at that point.

X –  Reacting at the 10sma or 8 ema

AKS – ( See also ZEUS, STLD) They are extended above their 50sma, so they COULD just go sideways for a bit,but Could they go higher?

Commodities are beaten down, so you can see that it can run still higher in an A-B-C type move to $6, and then go sideways building a handle. 

Since seeing that, I wanted to look at FCX, VALE , etc and see if they are close to flipping higher. It may be time to take a small partial position and buy more if it keeps dropping.   This was the march 8 chart. 

I said that I wanted to buy VALE on support at $3.50, but would add a small partial near $3.75 due to the 38% retrace. Lets look at Vale.  This chart was March 8th showing fib targets.

Vale 3-10 –  yesterday was time to add that 1st  partial near the 38%.   Maybe it dips a little more today to the 50%?  IT may not get to the 20sma, they are strong.

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ENERGY is pulling back on light volume, so lets look at interesting events there.

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I mentioned the possibility of a gap fill on LGCY – and I would watch that as a possible low risk entery, because that was where the break out occured .  See the 2 charts below from prior reports.

If you are in front of a screen , this is how you can watch things play out.  LGCY  did fill that gap- right to the penny.  So this is how it played out in real time,  lets see if it holds.  ( 3 charts as it dropped)

So with LGCY filling the gap and recovering the 50sma, it could be a good place to add with a stop closely below. The 50sma may now act as support.  My stop would actually be below the $1 just because these energy stocks move fast.

OAS _ This is what I wrote in yesterdays report.   I said that OAS already looked like a buy after that back test.

Yesterday – OAS Following through.  It could still be bought in this area of support, since it could eventually run to the $13 area.

WG released earnings and didnt get crushed,  it recovered the 50sma.  It is a buy if anyone is interested.

SGY –  Looked good yesterday, holding up nicely and had great volume on the first run off of the lows.

PQ –  I own it hoping to catch the next run higher .  So far it is acting normally,  yesterday looked like a back test .   It is a lower priced stock,   so maybe its considered  a higher risk stock,  but the upside looks a lot better than the downside  🙂 .

There are more Energy stocks that seem to be acting correctly. I’ll continue to monitor then Friday and next week. Keep a list and check it daily, that is what I do.

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I do still expect GOLD & MINERS to keep improving if the LOWS are in. 

2 weeks ago I pointed out in a report that TAHO  has a great longer term look to it, because I love that bass. It bought LSG and that was a solid miners. I posted this chart, saying it is a part of my core position now that I started a core position. I owned LSG and sold it and flipped it into TAHO.

TAHO is still improving, though it is at a resistance area.  I like the longer term potential.

And GOLD –  Still grinding higher towards that $1308 area.  Possibly a running correction until that bottom trend line is broken.

I know that some do not want to buy  & hold over the weekends lately, but there are possibly opportunities forming in the commodities and Energy pull backs.  I just wanted to point a few out and show you what I look for when ‘Window Shopping’  during  pullbacks.

Enjoy your Friday trading and have a great weekend!

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~ALEX

Interesting point.

If someone bought the GOLD FLAG break out as shown in this chart ( lower left corner),  they would still be in it.  The lows have been higher lows and the stop never would have been tripped.  : )