Stretching It Out

The various sectors of the markets continue to chug along and stretch out, ahead of the FED this week. The Fed Minutes are released Wednesday.  Obviously since the weekend report was posted,  not a whole lot has happened, but lets review our expectations anyway.

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SPX- An idea from the weekend report.  A pullback similar to the OCT -Nov run higher.

I captured this chart of the SPX Midday today. Notice…

That the MACD looks a bit better this time.  The pull back may not be very deep.

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Oil continued to stretch down into its DCL.   I’ve been pointing out the $34 area. We may be close to the daily cycle low.   YOU WOULD THINK THAT – with OIL down about $1 AND down 9 days straight,  we shouldn’t see strength in any Oil stocks,  right?  Look at BTE, WG, BGG, MRO, etc

AREX, CRK, ARP, LGCY  were holding up for junior oil stocks ,  and the XLE ( mini h&S?)  has also held up well in the Oil selling recently.

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NATGAS –  Broke out higher by quite a bit – 6% at one point ( 12 cents) , but couldnt hold the higher price. Usually leads to  further selling or possibly consolidation.

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CRB-  I mentioned this drop should be close to finished. I did spot this mini H&S and pointed it out here on March 31.

CRB April 4th –  I dont like to see the CRB drop below the 50%, and especially not the 62% retrace,  but it should still be ok.  

Commodities like VALE were  selling down today, but still holding up nicely overall. Could it drop further? Yes. Consolidations take time and can be tough to ride out.

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GOLD –  I’m Still expecting Gold to pull back.   I know, I know – Friday  it bounced right off of the 50sma,  Monday it held that level,  and as I write Gold has popped about +$15.00. 🙂   It looks strong, but if you are tempted to jump back in,   just look at the Magenta line overhead. I dont think we’ll see GOLD close above $1235.  Even if it did,  I see lower prices in the near future.

GDX – Many “Pops” that didnt have follow through.  Remember the FED POP last Tuesday?  No doubt these POPS suck people back into the sector,  but the lack of follow through is probably smarter money selling into those pops.  Will we get a POP with FED MINUTES WEDNESDAY? 

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We are exercising patience for now with Miners,  but I do like how many of these are acting.

For example, I posted these 2 charts last week.  

EXK at $2.49 last Wednesday.  Not quite oversold. I mentioned a possible BOX consolidation would keep some of these strong.

Today EXK is still in the area consolidating.  I really do like the way some of these miners are acting.

–  IBB XBI –

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In the weekend report I mentioned the IBB, XBI area. I used a few charts to show that we were breaking above the 50sma, but I also said,  We need to see if we get follow through.  If not, we might still be caught in a base.

LETS REVIEW

March 24 – This is the base

Fridays break of the 50sma,  not a break from the base

TODAY – a break and reverse back inside.  That MIGHT be a false break out and the consolidation / base can continue if selling overwhelms buying.

XBI  –  That candle is often a reversal / topping candle.  This isn’t “bearish”,  it is just a continuation of the base unless buyers can overwhelm sellers and shorts start to cover.

SO I get a lot of questions about LABU lately – If you bought LABU when I mentioned it here at the lows-  you are fine. It should be used as a trade inside of a base ( It hit $33 today).   I can’t guide people through 3x ETF trades  day by day.  If you entered that trade, please have your whole Buy, Sell, Stop in mind.

I looked at MANY MANY biotech stocks and they almost all have BULLISH looking set ups to them.  This would lead me to believe that the IBB and XBI should continue to base out,  or break out . Let me share a few charts.

FLXN – Nice break out

NAVB –  I love this set up. 

IDRA –

ZIOP

LJPC recommended in Feb as an Inverse H&S and March 21 as a back test.  I want to use this chart to make a point.

LJPC NOW-  Still looks good, still moving higher over time.

  To make a point – Look at when LJPC broke from its base around March 1.  4 Weeks later it was still at the base.    This can happen and 3xETFs can be affected.    I use this just an FYI.  I get a lot of email  questions about every movement that IBB is making due to LABU or LABD,  or Gold and Miners due to NUGT,  JNUG or DUST.    So my point is that BASES and CONSOLIDATIONS can take time and are frustrating.   3xETFs may exaggerate that feeling.

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One other example that I remember well was when ABX recently broke from its base.  Look at these false jumps ( Many false breaks higher) and then finally the Jan 7th break out.  SWEET,  but…

No.  Even THAT Jan 7th break  failed for 9 days before the real launch. 

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So the IBB has been bouncing and breaking higher and dropping for weeks, but it remains in its base. Some of the individual Biotech, Medical, Pharma stocks are popping and running, so I would expect the XBI & IBB will break out upside, but when will we see follow through? No one knows that for sure.   

It’s a FED WEEK again,  lets see how the market decide things should play out.

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~ALEX

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P.S. Stocks like TWTR and GRPN look pretty good right now.

GALT –