May 20 – Friday
Lets do a market review and then I’ll discuss what will be in the weekend report.
.
SPX – We’ve been looking at what looks like a H&S. EVERYONE is looking at it and the group think is seldom correct, so I have to wonder if it’ll play out. The reversal could be a DCL and may be setting up for a rally back to 2100.
BANKS pulled back Thursday, still looking like a buy.
.
USD – I wanted to point out that the $USD has put in the rally that was expected, and Gold has pulled back. The USD daily cycles run a bit shorter , so todays reversal candle could signal a daily cycle top. The dip into a DCL might even push Gold and Miners higher. You’ll see reversals on those charts too.
GOLD – Gold reversed at the 50sma. If the Dollar dips, Gold can rip- BUT HOW STRONGLY? I have to remain cautious. I know that this will be tempting, making many think that Gold is taking off again. The $USD daily cycle could put in a DCL rather soon. Gold could just work sideways like it did at the first green circle, and then still dip down into an ICL. This would make lower highs and lower lows, as shown. IF it breaks to new highs, that Cup & Handle could play out, and the $USD could roll over.
.
GDX – GDX put in a reversal, with that USD reversal too. This also made a lower high and a lower low in May. If the prior highs are not taken out, this could begin the move down with lower highs and lower lows. I remain cautious, that HUGE volume day is usually a warning sign. Topping can be a [rocess and not immediate. I will be monitoring these events daily. It looks VERY BULLISH at a glance, but it isnt oversold and the MACD is weakish, etc.
Anyone “Trading Miners” : Please remain alert until we see how this unfolds. Yes, this could be trade-able and individual Miners may respond well for a few days, but IF we are starting a series of lower highs / lower lows, that has to remain in the back of your mind until we break to new highs. 🙂
.
WTIC – Oil should be nearing it’s 2nd daily cycle high and I projected that to be near $50 ( Actual $51.68) . I’ve drawn a drop into a DCL, and then a 3rd daily cycle run higher. In the comments section, I mentioned that UCO and USO closed their gaps and reversed higher. Very nice looking action.
ENERGY TRADERS: ENERGY STOCKS could suffer when that drop in oil comes. Some seem to be weakening now, so even though I expect that Oil could drop to maybe $45 and then run higher again, consolidation of stocks may take place between Oils $50 & $45 move. This is why I have been mentioning that Late in a Cycles advance, we should be selling partial positions on the way up, and keep positions smaller.
.
I am going to do a small special lesson in the weekend report to address my trading at this stage of the game. We have seen some small Oil stocks go bankrupt or drop hard after earnings, while others have rallied after earnings. This spring we saw SD,CJES, GDP, BBEP, and now HK get crushed. The later we get into OIL/ENERGYs Cycle, the more this can happen. THAT WILL BE IN THE WEEKEND REPORT. NOTE: At an ICL , most rally due to short cover, so I trade everything set up properly. That changes later in a cycle.
.
Briefly let me address HK – I had recommended a stock set up in April for HK. I have 9 charts of HK in my collection, all from Feb to April.
APRIL 12 – This break of a down trend was bullish. NOTE: We were still fairly early in Oils cycle. At this point, Oil was at $37 and I expected over $50.
Here I was pointing out that I had owned it for a while, and I liked it above the 50sma, but “I am spoiled” , meaning I am used to buying in time for an immediate upside pop. OIl was now at $46. Where is the Pop from this base? It looked ready to POP.
Close up same day. It looked ready to break out from this range. It was basing.
This is the last chart that I have for HK in my collection. We got the expected ‘Pop’ and the inverse H&S fulfilled. I didn’t sell the pop , I missed it thinking that it could still go higher. So I held it, but days later it then broke below the 50sma.
It closed below the 50sma day after day. It kept tagging it, but couldn’t CLOSE back above. That is when I gave up on this trade. I mentioned in the comments section ( Monday or Tuesday this week? ) a few times that I had been lightening up, and I was only holding 5 or 6 stocks. Off hand I think it was BTE, BCEI, LGCY, IPI,CLNE ,EXK etc. I was holding the ones over the 50sma , but Oil was getting close to $50, and a DCL would follow.
.
As a ‘trader’, I am in and out of stocks and it would be almost impossible to say what I bought and sold every day of the week. SO- I try to post my reasons that I like them in the reports, because I cant discuss everything that I buy & sell each day. For example : I often post a chart and say, “I own XXXX, I bought it on a break over the 50sma, I like the volume and the RSI above 50% . I will place my stop under the 50sma .” I may sell a POP, or a drop, if it no longer meets that riteria. If I get out, it is either I took profit or got stopped out ( Or I got bored) . HK Popped, then fell below the 50sma, and the RSI dropped way below the 50% and tagged it and dropped again. Oil was late in the daily cycle. It no longer provided me with the actual reasons that I bought it. I mentioned that it becomes like Musical chairs too, when the daily cycle tops or the intermediate cycle tops, the music stops and chairs of support are taken away. LET me repeat, the smaller energy stocks become “Trades” only, not buy & Hold, unless they released earnings and had a good report and act correctly. For example, I would NOT be holding BAS, REXX, KEG, etc at this point.
.
A GOOD WAY TO AVOID DANGERS, ONE CAN ALSO SWITCH TO USING ETFs in a good sector .
.
In all honesty, I didn’t hate HK as a set up even now. Yes it was just struggling under the 50sma and the RSI was very weak, but like other stocks, HK could have re-gained the 50sma. I often give them time ( Like my HBM) if they seem to be acting OK. For HK, The RSI may have been forecasting insider selling? I actually just left it because this late in the stage of the Cycles, I do NOT want 10 positions. I like to only hold smaller size positions and less positions, and cash. THAT will be in the weekend report too. I feel badly that some owned it when they went BK, it could have happened when I owned it too. So I want to write a special portion on all of this in my weekend report.
.
NATGAS – This also had a nice reversal Thursday along with UNG , UGAZ, etc.
.
So that is the wrap up for Friday, and the weekend report will cover my trading throughout the life of a cycle. My trading style differs when I’m at a DCL vs a top and I thought that I made that clear. At an ICL, I go heavy and even could use leverage, but when an Intermediate Cycle is nearing its top in the 2nd or 3rd daily cycle, I dont fight it. You see volatility and I am more selective. I trim the fat. I also did mention only holding energy stocks that released earnings already and had a favorable response on that day. Hold smaller positions, no leverage , etc.
.
I got an email maybe a week ago where someone is holding 25 stocks and asked , “Which ones do you think are my best ones and I’ll cut back a few?” I understand that they think they all look good and dont want to miss a good one, but I NEVER EVER have that many positions open. You need to be able to watch and manage your positions. 25 positions is like raking leaves in a hurricane. It’s almost impossible to manage, unless they were in an established uptrend for a year and you were holding for long term. More in the weekend report.
Have a great Friday and a great weekend!
~ALEX
I was looking at SWN & ORIG yesterday, bull flags, but ORIG broke down , so I didnt buy either. ORIG is up 44% pe-market after releasing earnings 🙂
P.S. Many were crying that you should never buy Miners after that bear market sell off. Wait until they are well over their 50 and 200sma and the 200sma turns up. So many times I heard that they are going bankrupt, struggling with rising costs and debt and a low Gold price. “You are crazy to buy them!” Well their 200sma is just turning up now. Should we buy them now based on that criteria? In 2008 I made huge %-Gains coming out of the lows. Simply Huge. It is a very rare event to be able to do 600% in 4 months.
.
AT an ICL, I go in very heavy and I do own a basket of positions and in 3 or 4 short months …
Thanks for clarifying…I look forward to the weekend report.
Hi Nancy, I’m not even sure if that clarified much, and I feel badly about what happened.
If we ever get that pullback in Miners, we will make good gains there on the next run higher. That will help.
It is tricky and risky at times. I’ve owned TECK STOCKS that got clocked after earnings when they were doing great the quarter before. I owned a Miner that was doing excellent once ( RBY) and I added to my position on the way higher. They did a public offering to raise money, they were offering a large amount of their stock at a huge discount. The price immediately opened at that price. I owned a Bioteckh stock that got cut in 1/2 with a rejected FDA testing. So it can happen, but in time, you can make it back. That is the good news.
Also to avoid risks, one can buy an ETF, but they tend to offer very muted gains unless you use options.
I appreciate your personal care. I am not here for muted gains. I got KILLED using options when I last was trading and just don’t trust the market makers in that game. HK was a big hit and painful learning experience. I got too comfortable trading with you through the romp in miners starting in Feb. I still have my core in them. But the market is not always that way. Also, I was used to trading gold/silver and was familiar with the companies. Oil, and commodities and to some degree energy…those were less familiar to me and I had no experience with cycles and their different lengths. So I am learning my lessons. And, I am certainly one who has too many positions [!] and I tend to hold too long and not take profits when they are there…and I don’t have fees to stop me from trading frequently so I don’t have that excuse anymore. PS.. Thanks to everyone yesterday who helped out. It is nice to be in such a nice group of people.
My teacher used to repeatedly say, ” Options are like dead fish, they can be ok when you first hold them, but the longer you hold them, the more they are going to stink!”
Maybe that is how these junior Oil stocks can be 🙂
I dont use options anymore, but some are very good at it. At an ICL they’d work well.
I could see that at an ICL [now that I know what they are!] I had some good plays but was following someone who I now see had a definite down bias..he liked to short things. Really goes against my nature. I lost SO much on SDS and shorting it with options.
Hi Nancy, I’ve been in the same boat. I had HK, CJES, SXE and SRPT. The last two came back, the first two probably won’t
Wow, that SRPT. What a chart.
That one has a drug that really is promising, I think I posted a link before. The FDA is holding it back, and that was a set back, but I have read that the trials all had positive results. Also all people that tested the drug had no bad side effects. People are outraged that the FDA didnt approve because they said it was too small of a test trial done. Not enough people tried it yet.
So I think it has good potential once the FDA is out of the way
FDA will approve or not next Friday. Its a coin flip.
They got some serious flack last time. Massachusetts officials got involved , because the drug is for Kids that wont live to see their 20’s, and this drug has helped them.
BUT- Do you hold waiting for the FDA? THAT is a tough one.
I sold last week. I made a few hundred, but what a roller coaster.
For sure. I’ll be watching it next Friday – thx for the heads up
This round I also felt the pain in ARP and SGY. Fortunately, I did well in so many others with Alex, that my gains still way outweigh my losses.
THAT is good to know, I’ll bet it was the Miners in Jan – March/ April. That was a great trading period. I am thinking we will see it again in the coming weeks
Yes….I thought I would take advantage of these new [to me] sectors and have MORE $ to add to my gold/silver cores. Too much of a smarty pants. And I took bigger stakes. And too many. And…oh ok , I screwed up. LOL
Honestly Nancy, In my experiences is the same resume. And on top of that, I am still / always learning from my mistakes, but it will make you better. It will sharpen your skills.
I used to see so many good looking stocks and I didnt want to miss the move if they moved, so I’d buy 20 positions. I just noticed over time that it wasnt to my advantage.
And I have been positioned too heavily at the top of a cycle and rode it all the way down expecting a bounce, etc etc . I have done it all and the money that I lost …. I have to consider it ‘tuition’ .
A doctor, lawyer, etc pays big $$ in college to learn his/her skills. I have done that too. It’s ok as long as we get better , then we can make the funds back on future trades 🙂
Good report Alex. I didn’t like the way HK was trading and sold it the day prior to its big selloff. That was a blessing, not skill but I’m thankful all the same. I think I’ll lighten up on my oil holdings today.
Hey CS –
I like the days like we had in February, Match and April…. when everything is Green and the board is lit up like a firefly with talks of meeting on an island and singing Kumbaya 🙂
I’m still holding LGCY, BTE, and BCEI , I like the weekly charts and wanted to see how they play out, but I sold a good portion on the way up in LGCY for example, so it is ‘house’ money as they say.
Lucky/smart you!
Thanks Nancy. Not smarts, luck or blessing. : )
ALEX…. Thanks, you said and explain it very well.
Keep the way you doing it.
G-Morning Geurt, Thanks,
I am already thinking of the weekend report to really try to paint the picture clearly.
Alex, got stopped out of HBM but I like it longer term but not sure I want to get back in–RSI<50, MACD turning down and stock looking bit sick–also sitting <50dma. Are you still positive at this spot?? Thanks!
I still own a portion of mine and I really like the weekly chart, but I have watched this everyday and playing around with that 50sma does bother me. I am debating cutting it loose, with the possibility of a pullback in Gold and Commodities moving in, I dont see strength for this to withstand it. TIMING may be calling for a pull back in GOLD and Copper.
Sometimes a stock will climb around the 50sma & building energy to pop over it on the way up, but it can do the same on the way down.
Your being stopped out may be saving you , if we get a pullback in GOLD & COPPER. I wouldn’t jump back in, unless real signs of strength come in. I may cut mine since it is lingering under the 50. WE can always get back in and miss a little gains, but we cannot always make it back if it drops quickly while holding it.
Alex thanks for the report. I’ve been waiting and expecting the USD to reverse and give us some more love, but it hasn’t happened yet and in the meantime there is some carnage – especially with what seems like acceptable corporate behavior to bankrupt heavily indebted companies.
So I went back through the reports for all the stocks I have looking for the weak and heavily indebted as possible b/k candidates
These are two that are on intense watch and just wondering your thoughts
FCX – they have a massive debt and are below the 50dma.
CNX – same story but bouncing of the 50 dma
Haven’t had time to finish reading the report and just glanced at my account…..wow, anyone else holding ORIG? Good news yesterday in their report….which I haven’t had time to read yet either….!
ORIG up 34% – is that what we will miss out on when SDRL reports next week – rather an in-exact science isn’t it?
I mentioned to Crytal yesterday that I was looking at that chart as a bull flag, and then it dropped yesterday , so I didnt buy it.
And to answer your question: Its an in-exact science when it comes to earnings for sure 🙂
Its like if they do good, up 40%. They do bad, Down 40%. Coin toss anyone?
Hi Alex, the cycles in NATGAS have always confused me. Do you know the current DC counts? Could this be the start of the 3rd DC?? Thanks
Hi Rob, in my mind ( I didnt back test this right now) I seem to recal NATGAS cycles being a normal 20 -28 days. So I too was thinking that we may be started the 3rd dcycle. Maybe a run to the 200sma would finish it.
Alex, stocks are moving higher this morning. Energy up. Are you buying any of this?
Not for long term, but I’m watching for a trade. I’m watching SID because a bounce would be pretty good after the recent selling, but I’m mostly holding what I own, and MAYBE a trade
Let me clarify, SID could be an abandoned baby if that gap doesnt fill. The steep sell off ( Almost $4 to $2!) could at least bounce 32.8% – so I’m looking at it that way , Bill.
Financials look good. I had to look it up, SID=Steel maker
Yes, the funny thing is I owned it on the first run and told everyone how I sold that gap up in April – And then it just kept running higher and left me behind.
Now it came back to get me again ? 🙂 THAT is what I think MINERS can do.
I’m mostly in cash. I don’t want to jump in early. Keep us posted. I see from above you are still seeking $50 oil, but we are so close, may not be worth the risk of trying to ride it to the exact top. I’m going to add to my LABU this morning after 10:30. Maybe try TQQQ as well.
Exactly how I feel. We could be close to a dip in Oil and Miners, etc – so I want to have cash and be patient.
Same page!
shame they’re not in diametrically opposing phases (if thats the right terminology?)
out of one top into the bottom of the other
That is exactly what I was hoping for. Ride Energy and commodities up, while Gold/ Miners pulls back, and visa versa. Repeat repeat repeat like pistons in an engine.
A traders paradise, that’s why it cant happen 🙂
… yeah .. more like ….
*poor lady… ouch 😡
No way- is that real?
lol.. pretty sure the stop sign was added….;)
Hey, you posted a .gif of my trade in CLF. NICE!!
Was also hoping as well but FCX, HBM and friends seem to be following them down. X looks tasty with big pullback but with everyone else flashing caution hard to jump on any commodities, ya know?!
same here – waiting for that big drop in miners and having cash on hand will be exciting! I would hate to tie up my money and miss the boat.
Bill, the chart of XBI looks good today, could run another 2-3 before stoch starts to top out.
I’ll look Monday. I got in LABU and a small cap wtf moving higher
Bill, let me know what you think. I got some on Tues/Wed, was thinking real short-term but it looked really good today so May switch limit sell to trailing stop, but trails can be tough on 3x.
Funny, I only do this nights/weekends and you like to look at only during work. 😛
Cason, looks good to me. I’m in LABU which is leveraged. Moving higher off the lower trend line. MACD is crossing bullish. I like it.
Please come back! I feel so left out. And I am TERRIBLE at this stoopid patience thing.
IOC – Another Energy lottery ticket paid off ( I dont own it)
LOOK AT SID –
You may recall that I owned it and I sold the gaps up in March ( I wanted to buy the gap fills) and then it just kept running higher and higher. It seemed like it would never come back.
I say this because this is the feeling that we have with MINERS.
Look at SID or X now, because that could be what Miners do. It does happen, even though as they run higher it seems like they are way too strong to pull back.
Looking at SID the TA looks good, oversold RSI, MACD could be turning up, I just got a buy on the Stochastics. BUT the volume isn’t there. Didn’t quite get to the 61% retracement?
“(Or I got bored)”
I can relate. Sometimes I think I’m in it more for the thrill of the gamble than to make money.
LOL-
When I see a trade set up, I want instant gratification. I think it should POP and when it doesn’t , I do get impatient,
A good example is LGCY right now. I sold a partial on the run higher and was thinking of adding on the pullback. Now we had the pullback and it has formed a flag, so this is where I would normally add, but it is taking so long to play out and nearing a possible pullback in Oil, that I am bored and think that it could drop if Oil pulls back.
If I never owned it, I’d be looking at it as a nice triangle / flag, and worth a shot. Now I am bored with it. Perspective is funny.
I was just looking at LGCY. I have a position from $1.25 that I’m tempted to hold forever. But the next move will be big, that much I can tell.
Stick save again at the 50 for HBM, so far…. at some point this thing is gonna break. Up or down though??? I wanted to see a 3% up day today, maybe still time for it to happen…
Up please! I still have this too.
The bull flag in ERX broke, but has been very weak. Thinking like you Alex, whatever energy has left upward might be a little weak. Not holding my breath that ERX makes it to that reverse h&s target near $38.
I have BCEI still but only bc I’m at breakeven. Hasn’t hit stops and there’s nothing to take off the table. There was Tues but I don’t want to talk about that anymore, now do I?
I took my money off the table with fcx and got out whole, now the only one of concern is CNX.
I stopped out FCX on Wed. Should guarantee a shot higher next week. 😛
LGCY has lots of debt too – over 1.5 B. The balance sheet is tricky – and difficult to understand the current ratio, so they may or may not be masking a cash problem.
Anyone know what is up with SWN?
Bio-tech –> check out XBI, breaking above 50- dayand we got a MACD crossover and RSI above 50 today. IBB still struggling a bit below 50-day. Reminder, LABU keys off essentially the XBI, not the IBB. As long as NAZ doesn’t call apart, this chart looks good into next week. XBI back into high end of original base as charted by the Master.
Comments are on the chart. *Refresh*
Potential support and resistance, but didn’t get a ton of clues here from the GDXJ 30-min.
Watch open interest on the COT…!