Friday March 31

SPX – 3 days ago I was noticing how similar this pullback was to the one in December

SPX – The follow through is good and the RSI looks promising. The one in December went sideways for a while, but this one is coming right off of the 50sma and would be more likely to run higher instead of sideways if it continues higher.

This next chart looks very good…

I was going to wait for the weekend report to show this chart, since we still have one Friday of trading left.  So barring any substantial sell off Friday,  this WEEKLY CHART  looks very good, recovering the weekly 10ma.

XLF – My concerns were with Banking

XLF –  And Thursdays surge was nice, but this hasn’t recovered yet. I’d like to see a big surge higher to push through multi resistance points,

Quite a few Bank Stocks are still ugly. This is Goldmans.

The USD has moved quickly out of the recent lows. Gold has not dropped as quickly as the USD has moved higher, but that is fine.

I’ve been saying that I expected Oil to eventually roll over again, so we would need to watch it.  Resistance is overhead and it would look a bit like this.  We would see a 3rd daily cycle roll over to about $43.  This is why I will remain cautious until either OIL breaks higher and trades above the 50sma & above the break down. Until then, we could be seeing a normal back test.  There is nothing wrong with taking a trade out of a daily cycle low and being cautious until further bullishness is proven to be in place.

XLE – So we take a look at XLE, because Miners usually lead GOLD and XLE often leads OIL.

Quite a few energy stocks have run up to their 50sma or other resistance points and then stalled. Oil had a nice day Thursday, XLE reversed at resistance.

XLE – A back test at this point.

We quickly find ourselves at a strong resistance point, a back test of a break down too.  A break higher would be very encouraging, but this may just stall here for a bit.

SO is it Bullish or Bearish?  It is rather neutral at this point, because it is a point of indecision. This could be a back test and drop, but we still have a lot of time to break through it higher.  In the long run I am  bullish, and if OIL does drop again, I think that the energy stocks ( XLE) may even resist the selling and just put in a higher low .

Right now: This could stall to build energy to break through higher.   Lets just take a quick look at a couple of the recent energy trade set ups.

SWN –  This was SWN as a set up for a long trade, so I was bullish for this set up.

SWN –  It broke out and ran to the 50sma and stalled. Now it looks neautral, right? It COULD break out and run,  and …

SWN– It might even do this, after a pull back.

OAS – a Nice run to the downtrend line & 50sma, $12 to $14 roughly. Now we wait and see.

WPX –  We traded this one well last spring.  I like the recent run up, $11.50 to $13.50, but its also at a stalling point.

So we see several energy stocks run quickly from a bullish low risk entry to a resistance area.  Now they may need a small rest to break out higher,  or they continue to consolidate.  If I owned a BIG position on WPX above for example, I would have sold 1/2 today at the reversal.  I did sell some SWN today, but only because I went in pretty heavily.  Then it becomes a possible ‘buy the dip’ as shown, or even ‘ Add on a break out’  if it doesn’t dip.  Sometimes we see stocks crawl along the 50sma for days and then break higher, we want to look for that too.

GOLD – As expected so far.  Day 14 on a 3rd daily cycle, I expect a drop. If this crawled along the 200sma and did break out, it would be very short lived in my opinion. A fake out that sucks in the Bulls, but so far this is exactly as we anticipated.

GDX – If this bounces again, I will add to my shorts.  I have been shorting the 50sma.

It’s Friday and currently things continue to play out as expected. The USD put in a dcl and I am expecting the precious metals to look tempting, and then pull the rug out on the longs. Oil is in the middle of its move higher and Energy stocks are acting well at this point. Oil has plenty of time to break out, so we’ll see what happens in the next few weeks.   The general markets are moving along, and I do like how things are looking, but I remain cautious until we break through some barriers.  Banking is a point of caution for me, and there is nothing wrong with being cautious as things unfold.   It has saved my funds plenty of times over the years.   I will discuss all of this further in the weekend report and monitor things all along the way.

Enjoy your Friday trading and the weekend!

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~ALEX

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MACK – I posted this chart on MARCH 27 and said that I like this base. I wanted to buy it on a break above the 50sma, since many of these have been flying.

MACK –  Same price, same base, the only difference is that I bought this on Thursday. Some of these are just exploding higher  ( See  CGIX, PRAN, VSTM, OVAS, etc) .  I want to own this inside of the base and add on a break  ( or close)  above the 50sma.

This sector is setting up and popping in a big way lately.  It has become a shorter term traders paradise.

Some that have been here for over a year may recall that I used to short term trade good set ups that had formed in EYES,  ZIOP, PRAN, IDRA, MACK, GALT, LABU and a few more when Biotech was running properly.  IDRA has done very well,  ZIOP  is looking interesting.I have my eyes on EYES, and   MACK is on my radar.

So I also had  PRAN on my watchlist, since it POPPED weeks ago and formed a nice base.   I thought of buying at the move above the 50sma, but I didn’t want to hold more than 2 at a time. I missed this move.

I am obviously keeping an eye on this sector going forward, and I like CGIX again too.

I want to be clear about something on this trade for myself personally. I sold it around $4.40 & $4.80 if my memory serves me well, and that was just about double my money, it was a 100% move in over a week.  Since I locked in those gains, but still wanted to be in CGIX for the bigger picture, I re-entered with a starter position yesterday here. Am I early?  maybe. Do I care?  No, this is why…

CGIX – This is how I traded NAK since it only went sideways after big surges higher, so I took a position just to be in it.

NAK LAST DECEMBER –  You may recall that this is how I bought NAK at the 13 sma.  It never dropped extremely deeply after a surge higher, it went sideways a lot.  This takes patience, not everyone likes this trade.

CGIX BIG PICTURE – This is why I want to be in it. The weekly chart is also very nice. Notice that it CAN drop to the 50sma, so I didn’t grab a huge position and I don’t recommend that everyone follows me on this trade.  It may take time to play out profitably and it is just a starter position.  It helps me to track it daily.