Friday April 28th

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Good question, Danny! That is what we will be discussing in the weekend report.

 

WTIC – Yesterday Oil broke the 200sma and recovered it , putting in a reversal candle.

I have a few thoughts about this…

Normally that is a bullish set up and can be bought with a stop under Thursdays lows. Is it a dcl?  It is a little early at day 25 for that, since daily cycles in Oil can run from 30-50 days, but we see oil oversold and with a reversal candle as a higher low from March lows it may be worth a trade for those looking to go long oil  ( USO, UCO, etc).

 

NATGAS – The chart is Bullish.  I have been wanting to take my long position back in NATGAS and this consolidation looks much more constructive than destructive. I was hoping for a simple drop and back test the 200& 50 sma, but they are now crossing upward in a bullish manner and price may not drop that far down.  I may take a 1/2 starter position today, now that the Thursday inventory report is behind us.

SWN – This is mostly a NATGAS play, but I noticed that a few other energy stocks look similar.  Many reversal candles appeared on the daily charts. This is known as a ‘Complex Consolidation’.  It can be a very bullish bottoming pattern, but ‘when’ it will break out is a tough call.  They can linger at the lows with the right hand side matching the left, but they also do not have to.  When these consolidations happen though, Lows are usually in. So yesterday was a buy, but it may or may bit continue to bottom out.

 

PRECIOUS METALS – Gold, Silver, and Miners are LATE in their daily cycles. Did they bottom and will now top out on FED WED for a very L.T. 4th daily cycle? Or are they still dropping into lows until FED WED, where they will then bottom and move higher ? Either is possible, let’s take a look now and this weekend .

 

GOLD – Gold has been strong, this pull back is no where near as deep as Silver or the Miners. At day 33, this could be all we get for a sell off. We see Gold holding above the 200sma. This also MIGHT be day 2, because if Gold breaks higher, the swing low would have been on Wednesday at day 32.  The key Numbers that I am watching are on the chart.

When starting a 4th daily cycle, I do NOT recommend a long position for everyone. Why not? A 4th daily cycle can meander sideways and then top & drop rather quickly, but I know that some will try to trade this, so just Stay Frosty ( Alert).  The strength of this 3rd dcycle has me wondering if we need a 4th and a 5th to reverse sentiment?  Maybe, maybe not, I will discuss it in the weekend report.

 

SILVER –  You can see that Silver has dropped much deeper than Gold has. Gold could play catch up in the 4th daily cycle. The drop looks very similar to the March drop.

 

GDXJ – I have some say that I should use Bollinger Bands and BUY A BREAK DOWN AND RECOVERY OF THE BOLLINGER BAND.  I do not believe that that is good advice in a real sell off and have seen this fail many many times.  Look at March for example.  A break and recovery does not mean the lows are in.  Price can just ride down the B.B., and it has been doing that this time too.

 

GDXJ #2 – I will discuss possible price paths in the weekend report.

 

We had several trade set ups in recent reports, so I am just going to monitor those. I am in about 7 positions and over 50% cash. As an active trader,  I do look for bullish set ups and execute a few extra trades to try to scalp some gains here and there, but the BIG TRADE is coming up.  For most it is best to be patient and try not to over trade the precious metals sector at this point.  It can get very whippy and tricky and chip away at funds in the process.  Having Cash on hand to deploy during the next Intermediate cycle will be very rewarding.  Many Miner run extremely well out of the deep sell off lows, and in the past many have run up 40, 60, even 100% and then some.   WELL WORTH THE WAIT. I cannot emphasize this enough,  you should be able to make more than enough to be able to pay for a years worth of Chartfreak membership, several dinners out with someone special, and whatever else you like to do with your extra money.  You should be able to make great gains if you are here when the ICL stikes!  It is usually the best trading of the year and only comes along about twice a year. Stay tuned!

Enjoy your Friday and weekend , and as always, thanks for being here at Charfreak.

~ALEX

139 replies
    • chartfreak1
      chartfreak1 says:

      Well, it means to Stay Alert, changes are coming or in the event that something seems ‘suspect’ or out of place.

      My friends and I got it from a song while shooting a game of pool, and we just started saying it all the time as a farewell ….instead of ‘good bye’.
      like…Take it easy , Joe…and Stay Frosty!” 🙂

      Especially whenever unexpected circumstances popped up where the outcome was unknown, or when something new was coming our way, Then rather randomly- I’ll get a TXT out of nowhere saying something like
      – “Watch your back & Stay frosty my friend”
      – “Trump won the election, Stay Frosty”
      – “Snow storm Friday, Stay Frosty Buddy!”

      Stuff like That, and it stuck- now I use it all the time… The song was Van Halen, but the rest of the lyrics do not mean anything, other than “Stay Frosty Now”

      https://www.youtube.com/watch?v=Y7U6fopoMaQ

  2. Zoli Nep
    Zoli Nep says:

    Hi Alex, this is a question for the weekend report really regarding the general markets. The NASDAQ has been relentless lately however as per Sentimentrader small investors are positioned bearishly (put buying) which could add further fuel higher. The current NAZ chart looks very similar to NAZ at the end of Oct 1999 when it broke out and never looked back until the bubble top in 2000. Do you see a chance the same is happening now?

    • chartfreak1
      chartfreak1 says:

      I’ll take a look at those dates and see, but I may not be able to answer definitively. It seems that the markets can do anything , especially with Fed Backing and after a break out ( And maybe a back test) they can continue higher after consolidation. Anything can happen I would say….how it happens can vary

    • chartfreak1
      chartfreak1 says:

      I just took a quick look, Yes it can. I have been toying with the idea of a blow off top, I just dont know when it will start and when it will peak, but the idea is valid in my opinion.

  3. Shermo
    Shermo says:

    Thanks Alex. Thought to share with the group since I too look at BBands. An imbedded BB can continue until it doesn’t. Meaning I do not buy until we break the down trend line and when we break the down trend line we will no longer be inbedded and will be hitting the 5 DMA…first target and likely top on wave 4,5 is the middle BB or 20 DMA…where I take the profit and get ready for Dust….we’ll see. ( most of what I know I learned here from Alex. I cannot overemphasize for new people the compounding effect of the ICL’s.)

    • chartfreak1
      chartfreak1 says:

      Yes Shermo – I agree! There are good ‘plans of attack’ on B.B. trades that I definitely do agree with. Using those methods are more favorable than just taking a trade because it dropped below the B.B., which is what I often hear. I have heard of a couple of good statistics with BB’s that I could agree with.

      At times We’ll be looking for a dcl, and someone will say , “Price dropped below the B.B., I’m buying based on a B.B. trade. DCL must be in “. Well , I’m not going to come out and say that ” B.B. trades dont always work on a drop into a dcl ( or ESPECIALLY an ICL)” , but I do want to help. Maybe in the next report I’d try to show an example like the one above to help people see things like…. “oversold stochastics” does not mean we have a dcl, and a B.B. break doesn’t mean we have reached a dcl either, etc. Those technical methods are valid in other circumstances, but not all.

      and YES, the Compounding affect of an ICL is a sweet spot in the year of trading! 🙂

  4. Crawdaddy
    Crawdaddy says:

    Alex& Ken, TRAILING STOPS. I want to thank you fellows for addressing my inquiry into the use of trailing stops, it was truly appreciated . I wish not to be married to the screen all day as I had a job for 50 years and am not interested in creating a new one so I sometimes look to them for protection. Alex you alluded to them sometimes tripping you up,this is what tends to happen to me to often and the reason the inquiry. I have found that the exit is the tuffest part of a trade and am often late.
    Ken I use your idea of a hard stop that gets checked and adjusted as needed a couple of times a day , and think you to be correct in recommending it.
    But, my question still goes unanswered. When using a trailer what size of percentage is appropriate? This is nothing I would ever hold one to,, but this is roughly what I use,am I anywhere close?
    Blue Chips; 5%
    Gold; 10%
    Gdx; 12%
    Nugt; 25%
    Again the protection I seek is insulation from a flash crash while I’m away from the screen.
    Many thanks again!

    • chartfreak1
      chartfreak1 says:

      Hi Crawdaddy,

      You mentioned that Ken mentioned a hard stop that is checked and adjusted as needed.

      Well, That is what a trailing stop is actually, right? It trails the price as it moves higher, it isnt stagnant. I kind of thought that that was a known. So a ‘Trailing’ stop rides under the price on the way up to at least lock in gains. As price continues higher, the stop continues rising too ( That is because it is adjusted by you ) over time too. That is what I did when I was working full time. I was away on the road day after day, so I would reset my stop if price kept rising in Miners. Look at the CDE run for Jan 2016 – AUG 2016. You want to trail that in case something happens, but you dont want to lose position… so a loose trailing stop in a Bull move out of an ICL worked well there.

      WHERE to put that stop for me depends on the stock that I am tracking. We all know that Miners can drop 8% in a day, other stocks will just fluctuate 3% / day…so for me , like most everything, it is always situational.
      I ask…
      -Am I early in daily cycle ( loose stop, because there is time to recover a small dip) .
      – Am I Later in a daily cycle ( Day 25 my stop would be tight, because a drop is coming, I want to lock in closer to highs).
      – Are we Breaking above support like the 50sma and runs for 2 day …my stop is under the support for days due to possible backtest, I dont want to lose position on a back test with a stop above support. I will raise the stop and begin trailing again after a back test, etc etc

      Stops are personally something that I have learned by experience. My old teacher used to say to get an entry and place a stop 8% under it, and then gave the idea that 4 trades with 2 8% losses, and the other 2 run up 30% is a nice win. I tried that at first, but that doesnt work for me. I make up my own rules based on my trade set up & experience.

      • Ken
        Ken says:

        Could not agree more with CF. In fact I had the same question for CF a few years ago….lol.

        I have learned from CF and some experiences the last year or so that we are now Dealing with Big Banks and there Bots with algorithm’s, TL’s no longer can be trusted as stops for example, they need to be deeper because it seems to me anyway that the Bots will try to hit those TL’s to trigger stops where then they reverse price. Break outs / Break downs to new highs or lows…..same thing. jmo

        I will say, for me, I never have a set % stop loss for any purchase, it is all individual based.

        • chartfreak1
          chartfreak1 says:

          All that you mentioned…it’s funny how experience is the best teacher , right? The “trendlines can’t be trusted” idea … yes, I’ve seen that more frequently. And I can’t recall how many shake outs below the 50sma bit me – but experience helps you to consider all things.
          Even re-entering after a shake out, which I used to think was a bad idea.

          • Ken
            Ken says:

            Yes…experience is the best teacher, for me anyway….somewhat expensive at times though. lol

            IE: Yesterdays USO Call purchase was bght. at the major lower TL “Expecting” it to overthrow hit stops and reverse….not to mention that Crude is oversold but still…..so far so good.

    • nancytheartist
      nancytheartist says:

      I have one account with Merrill and one with Options Express [now with Schwab]. I trade in Merrill because of the free trades, but OpX had a great trading platform that would allow you to set a training stop, either by % or by cents, AND set a trigger….so your order would only be sent when your trigger price was hit. It was wonderful when I had to be away. Wish Merrill had it.

    • Ken
      Ken says:

      Craw,
      I have also used the PSAR at times as a trailing stop for years, that also is an option for you ?

        • Ken
          Ken says:

          automate….kinda like that word. lol
          you can atleast at stockcharts,com…..i use the default setting….although you still will need to manually change your stop daily as the PSAR changes daily.

  5. MM
    MM says:

    Any thoughts on TQQQ? Sold it yesterday as it is overbought on the daily and very overbought on the hourly. Thinking with AMZN and GOOGL out of the way, maybe we get a pop and drop to reset sentiment a little? Hoping to buy back when/if the hourly’s dip back into oversold territory.

    • chartfreak1
      chartfreak1 says:

      On QQQ- we could see a back test of the break out / back test of the 50sma ( In the same spot) and a Gap fill. That would be a nice re-entry, but no guarantees that we get that now.

    • chartfreak1
      chartfreak1 says:

      I like it, but that stop is probably way too tight, it already went below it.

      I would not sell unless it broke back below the 50sma . It may even do a 1/2 gap fill later today (Maybe / Maybe not) and try to tag that 50sma. Often we get a little dip at mid day and then things get bought back up.

      I’m going to take a position, maybe 1/2 position.

        • chartfreak1
          chartfreak1 says:

          I took a 1/2 position right after you posted and got in at $7.95. That way if it just keeps going higher I’m in, if we get a tag of the 50sma I may take the other 1/2 .

          We did get the partial gap fill on the initial drop at the open, so it may not drop again.

      • Malcom
        Malcom says:

        SWN broke back below the 50sma….if it closes here, do you still like staying long your 1/2 position into the weekend?

        • chartfreak1
          chartfreak1 says:

          I will hold it, it was 1/2 of a starter position & I would have added on the way up…now I will just hold it in this consolidation for a bit and see what takes place. It is NATGAS mostly & I do like the natgas set up, so I am going to see if it runs with NATTY .

  7. Edward Bernhart
    Edward Bernhart says:

    ZEUS gapped up 17% at open, breaking through the 50 and 200 SMA. Possible candidate for a buy at a fill of this gap.

  8. Edward Bernhart
    Edward Bernhart says:

    Alex, You mentioned FCEL yesterday as doing well despite trouble by its peers in energy. It just had a public offering of 15.4 mln. and is down 31% this morning. Would it be attractive as a bottom fish?

  9. chartfreak1
    chartfreak1 says:

    This kind of looks like a similar low in GDX / GDXJ as we saw in early march.

    Refresh _ I am still holding my JNUG purchase from yesterday as mentioned in the comments

  11. dsaulw
    dsaulw says:

    If stocks close down today, I would expect a sharp selloff into the Fed meeting and a solid move up in gold.

  13. Ann
    Ann says:

    If you buy JNUG today, it reverse splits on Monday. On fidelity(other brokers perhaps too), you can’t sell it until the split clears, which takes 3 days. I’ve been stuck in that position a couple of times. Very unnerving if you are only in it for a bounce.

  16. Rob
    Rob says:

    I was locked out of CF all morning. Just had my account unlocked from their support team. Gotta read the report now.

  22. Steve Tytler
    Steve Tytler says:

    Alex, at this point, what is your best estimate as to when the PM ICL will occur? If I don’t have skin in the game, I tend to get complacent and not pay close attention. I want to make sure I don’t sleep through it as I have done on other buying opps in the past. LOL.

    • SonOfGud
      SonOfGud says:

      yes i was gonna ask same Q…
      and i know what youre saying Steve… i fall asleep on sentry duty too.
      i’ll make sure i buy $500 of crud (yes, SOXS suxs) just to ensure i watch the charts for movement in other sectors.

      • nancytheartist
        nancytheartist says:

        I joined as it was coming down at 7.92…..poo. What do you look at to decide when to jump in? I always get too impatient when it is something I want.

        • Hawaiifive0
          Hawaiifive0 says:

          No real specific plan here. Just trying to get it as close to the stop as possible, so that the downside is acceptable if I should stop out. I’ve learned that hard way to look at how much I might loose versus what the gain could be.

          • nancytheartist
            nancytheartist says:

            So, where would you consider your stop to be? On my 6 mos. chart, price is under the 20 and 50 sma…so where? Thanks for the answer.

          • Hawaiifive0
            Hawaiifive0 says:

            I have my stop below the bottom which is 7.31. So that should be sufficient if it has bottomed and if it’s a complex bottoming process or a double bottom. In that way I’m giving it maximum room to work. but because that’s so wide, I’m subtracting 7.30 from 7.80 = .50 and multiplying that by the number of shares I choose to determine how much I’m willing to bet on the trade. If it starts to work, I’ll move my stop up gradually. So that’s just what I do now to not loose too much. But I’m not an expert by any means.

    • Cason
      Cason says:

      Great discussion all on SWN. I saw the 7.92 point but then it was selling down so I waited and entered near the lows of the day, about 3:30 or so. Stop is only a bit below so R/R solid here with a good entry. Thanks all!

  25. ray
    ray says:

    bougth jo earlier today
    Alex, why did you gave 12.75 as a possible low / decline for URA ?
    tried to look for a clue , but don’t see this
    thanx

    • chartfreak1
      chartfreak1 says:

      Its a measured move, but they dont always play out. I was just saying that I had a measured target there, but I thought that the 200sma would prevent it. Now I see a break of the 200, so it may play out after all.

  26. Crawdaddy
    Crawdaddy says:

    Many thanx to Alex, Ken & all for the excellent response on stops. One never quits learning when it comes time to trade, in order out. At least one better not quite learning.

    • chartfreak1
      chartfreak1 says:

      Hey Malcom

      I’ve been out with family all afternoon, I just got back in front of the screen so sorry for the delay. I’m not really happy with that big reversal and now under the 50sma, but in my report I pointed out that it is a ‘complex’ consolidation, and this is often how they work. That was a beautiful gap open and run, and it looked strong, but now some selling has taken it down. This is why I took a starter position & would add if thr gap closed. NOW WHAT? …

      I think it is still basing out, but I didnt add and may not add to this mornings position until I see more strength.

    • chartfreak1
      chartfreak1 says:

      I have such a hard time with quesrtions about ‘stops’. I am a big believer that everyone shopuld have their own stops identifying their risk . How much money I am willing to lose on a trade may vary from how much another might worry about.
      My position size might be quite small, and someone elses may be very big.

      Also it depend s on where you bought it – how big your positions is- pain tolerance, etc etc

      For me…I think the lows should hold, so I would ride my position and see what happen next week.
      I would have mine at recent lows or draw a trend line along the bottom row of lows.

      • chartfreak1
        chartfreak1 says:

        I just read your coments below about entry and stopping out…that thinking is on the right track.
        How low could it go & how much pain can one take if it drops yet still looks ok.

        SWN kind of looks like AKS did 3 days ago, so you see how this can just continue to base out. Complex consolidations.

        • Hawaiifive0
          Hawaiifive0 says:

          Yes. Thanks for the response. As you can see that was my thinking too. I don’t like a violation of the 10 day unless it’s “fake a move to make a move” which it may be doing now. I hope!

  31. chartfreak1
    chartfreak1 says:

    Just an FYI – Call your nroker if you wonder about the 3X ETFS Splitting Monday and availability to sell or not.

    SO I CALLED MY BROKER ( TD AMERITRADE & SCOTTRADE) – I mentioned the JNUG reverse split and asked if I could sell my shares Monday or Tuesday if the reverse split Monday.

    He made a few calls and said that sometimes a split takes time because they need to issue new shares, etc, so an * or a # sign will show up next to the stock and when you try to sell, it tells you to call the broker. He said the broker can do the selling, and will not charge additional fees if the trade cannot be made my the customer online.

    • chartfreak1
      chartfreak1 says:

      After all of this, I just sold JNUG. I just dont want to play chicken on FED week. Gold COULD drop Monday to Wed & then bottom. I play with a fresh hand next week, but EGO & AEM sure do look bullish 🙂

    • YS
      YS says:

      Last year when GDX changed its name, I needed to call Fidelity to sell it. You definitely can sell it. You just need to tell them how you want to sell it.

  33. chartfreak1
    chartfreak1 says:

    And then there was FUEL.

    DOWN BIG, BUT…. Lighter volume and is finding support at the 10smam still looks like a cup formation

    Weekly chart is a bit freaky, kind of toppy looking, so I’ll have to see what happens next week.

  35. Cason
    Cason says:

    Great discussion all, I’m just getting to it now on Saturday. I was getting chopped up there a bit in March/April until we FINALLY got the move down in miners & up in SPY. I had a really large position in JDST so was able to cover up my papercuts. Alex, thanks for staying on top of that trade in chat. I had a horrible exit (oops!!). But still made enough off that trade to pay for 5.2 years of CF at my current plan! :O

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