Thursday January 19th- I Don’t Think So

I’m looking at the General markets and I’m rather neutral going into the U.S.  inauguration.  The Markets rallied very strongly when Trump was announced the winner of the U.S. elections in November, so they could break higher and rally again, but let me point out a couple of bearish signs now.

1. The indicators are divergent in the above SPX chart.

2. The VIX is still quite low (although it is now at 14 and no longer at 11)

3. The Nasdaq chart below

NASDAQ – I see a bearish Rising wedge.

USD – It is possible that we will get a bounce in the USD now, but I expect it to roll over into an ICL drop.  In Fact, the USD is at short term resistance too.

WTIC – Oil took a hit Wednesday, but the XLE and many energy stocks still seem ok so far.    NOTE: I am not invested in any energy stocks right now.

IS GOLD ABOUT TO MELT DOWN?  I DOUBT IT.

GOLD – This was Jan 10th and I gave a couple of possible ideas of how I could picture Gold playing out. This showed a break above the 50sma for a couple of days, and then a drop to back test it for the dcl. Here I showed a run to $1220ish, and then a dip.

GOLD DAY 21 – We ran to $1220ish, and are we starting to dip? Listed are the numbers of the current potential target areas ( 10 & 50sma) if it continues. I WOULDN’T BE SURPRISED if we just tag the 10sma and continue higher. WHY?

GOLD – Notice Gold here just steadily rising in the manner that it fell. Also note that so far we see an occasional 1 day drop and then it continued higher.  I don’t see 2 down days in a row since the vertical climb began. Thursday will let us know if that has changed. If we open down and close higher, this channel has held.

GDXJ – I was looking at the GDXJ and noticed that it has been Pinned under the 200sma and above the 10sma. Being pinched here, it looks like a bull flag.  Normally I would expect it to just break out, but if we dip to a dcl here, we may back test the 50sma and then break above the 200sma.

Reminder chart: This was 1 idea of how a drop into a dcl could look.

GDX – So far, GDX only dropped and filled the gap Wednesday. The 10sma supported.

GG – read the chart, that should say that NEM did not turn Red. GG looks bullish.

So we are still holding some Miners and will watch how this plays out, I wanted to point out how bullish Steel stocks acted this week too.

X- Strong reversal off of the 50sma. This is a Low risk buy set up, because your stop is under the 50sma

STLD – Same here

AKS – And here

CLF –  And here. These are holding up bullishly and low risk with the 50sma right below.  IF the markets sell off , will they hold up on their own merits? They could in an inflationary environment.

CENX REVIEW –  I posted some of these trades in November and December. Buying the dip made an entry low risk.  CENX was dipping back down after a break out, here at $8.66.

CENX – My Jan 12th chart last week, we were watching for that reversal. Now at $10 the back test was complete.

CENX – Yesterday ( CENX continues higher). The buy e=was at the 50sma and that is my point, X, AKS, CLF, etc are there now.  My MTL trade is lingering so far 🙁 , but these look ready.

 So along with the nice moves in Miners this past month, the metals companies are still bullishly setting up and breaking higher. We see that with NAK, TGB, X, AKS, FCX, AA, CENX, and so on.

 Today is Thursday and we have been wondering if the daily cycle low in Gold and Miners would be a deeper pullback or just a sideways consolidation, and so far we hardly have a dip. Look again at that Gold chart and you’ll see that we haven’t closed red for more than one day lately. Let’s see how this plays out, and be ready to buy the dip if it does dip deeper and you still have cash.  If we do have a larger dip this time, I will post charts of set ups in the Mining sector as they present themselves. I also have another trade idea at the end of this report ( for the active and experienced traders only please).  🙂

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~ALEX

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A warning : This sector has moved unpredictably fast in the recent past. Do NOT trade this sector thinking that I can answer questions regularly to help you through the trade. This is for experienced traders only and I am just pointing out a sector that I noticed last week as acting bullishly again. If you enter this trade, know your exit point in advance.

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In the weekend report, you may recall that I mentioned that another sector appears to be acting bullish. I was watching this sector all last week and it was setting up rather bullishly.  It is the (Dangerous and fickle ) Shippers again.  I have discussed these in the past, they sail swiftly through the markets in both directions, up & down. They can be that lottery ticket buy & hold trade,  if you believe that they are recovering. They can be a trading vehicle for the experienced traders looking to scalp.  Know your risk threshold! Let’s take a look.

SBLK–  As I said, they sail swiftly. In August I pointed out this base and move out of the lows.

SBLK – Suddenly it broke from a base and doubled . DO not buy this, it is an example of what has caught my attention last week. It was only $6 then.

SALT – Another example of what caught my eye. It also doubled from November to now, and Yesterdays volume surge was notable.

GLBS –  And this is a CRAZY example.  When I saw this last week it had tagged the 200sma near  $3.00 on tiny volume. I did not buy, but it just ran from $3.00 to $10 in 3 days!   DANGEROUS ( but I wish I had bought it – lol ) .

SO now let’s look at some shippers that may be setting up or moving in a bit more of an normal manner.

GNK –  Last week this was sitting on the 50sma and was a buy. It almost went in the weekend report, but I wanted to monitor this sector for just a bit longer. We see a normal rise out of a base since August and a consolidation of those gains in the form of an inverse H&S forming.  It has also doubled since November. This one may just keep running higher, but I would only buy it if it tags that 50sma or the 10sma in a sideways move again.  ( Watchlist?)

DCIX – Ok, yes this was crazy in November too. It popped from $2 to $26, likely a serious case of short covering. It has based a little since then, so I wanted to zoom in on it. It may just continue sideways for months, but if the whole sector is popping, it may join in too.

DCIX –  Zooming in, you can see some bullishness to this set up.  I hate to say this, because I don’t want people to follow me into this trade thinking that it’s a guarantee, but I did take a position at the close. I AM EARLY – USUALLY I WAIT FOR A BREAK OUT AFTER A REVERSAL. I want you to see that this was $2.50 when I looked at it last week, so it is risky, it could go back down there!  I was encouraged by the volume pops on up days. Please do not follow me thinking that I will be giving a play by play on this one.  I don’t worry about the ‘wiggles’, it is just a trade.  I like the base in the ABOVE chart and took a small position because this sector is popping. The ABOVE chart and bullish activity in the sector drew me in. I may be early.

SINO – This has a very similar set up.  Ridiculously huge pop in November, and now a base. I’m just watching this one to see if it breaks out, since it could go sideways for months.

SB – A slower mover, I traded this one the last time I mentioned shippers and it was a slow progressive mover, not as crazy as the others in this sector.

I am focused on the Precious Metals and the industrial Metals sector primarily.  That is where most of my readers should just stay patient and in the trade. This is just a sector that I had mentioned in the weekend report as setting up bullishly, some have exploded since last week and may offer active traders / scalpers an area to be a bit more active in.  Please know your trade before you take a position, have stops in mind, exits on the way up, etc, because I am not going to discuss these trades often.  You must be experienced enough to know how to trade these on your own, so I can focus on other things.

 You can also see NM, DSX, SHIP, EGLE, etc. for a few more trade ideas that could set up over time.