MAY 6th Weekend Report

Keeping in mind that we have the French Elections on Sunday and the results can cause a short term reaction, let’s review the market action from last week and our current expectations.

SPX WEEKLY – The SPX finally broke to new highs last week ( We know that the Nasdaq has been running like a bull).

SPX –  The SPX will be due to drop down into its own ICL soon. In the past the 200ma has been rather reliable as a support.  Since the 200 is rising, maybe the SPX will see 2300?  As you can see from previous drops down into an icl, a drop like that can take a few weeks once it starts to roll over.  “Sell in May and go away?”

NAZ –  We don’t want to dismiss the idea of a parabolic blow off top in the markets.  It seems that they have a hard time selling this think ff these days 🙂 THE RED ARROWS ARE THE STARTING LINE.

The USD broke and closed at the lows. It has been weak, and it has been selling off with Precious Metals and oil too, so I’m not covering it as often. It is not affecting current trades at this point.

WTIC #1 – Big reversal for Oil Friday after a slam down day Thursday. Can this be a dcl? We would be wise to wait for a break above the 10sma and for a swing low to be put in place. Look at the November lows and those reversal candles off of the 200sma.  There were several that did NOT mark the lows yet….

WTIC #2 – Look at Novembers low.  What looked like a low and a reversal candle did roll over for another week. I actually have been expecting those lows to break on this drop for a failed weekly cycle, but we’ll see.

WTIC WEEKLY – And the weekly DOES look like a form of capitulation into a weekly reversal candle, but the stochastics is not oversold, so we could get another daily cycle that breaks down later.

NATGAS – I finally took that NATGAS trade, but I was away from my desk from roughly 12- 3, so I bought it closer to the highs of the day when Natgas was at $3.25.  I watched it all morning and didnt really see any signs of life, and as soon as I left for the afternoon, it ramped up. Such is life. We see a multi week consolidation, and I think that this can run higher in a 2nd leg up.  The first leg up was very rewarding using Boil or Ugaz, but these are leveraged and certainly not advisable for the inexperienced trader.

NATGAS WEEKLY –  I would go out on a limb and call this a form of a 6 weeks tight pattern. It really is NOT technically tight enough, so we view it as a sloppier version, but the results can be the same.  Technically, you look for 3 or even ‘4 weeks tight’ , where price closes very close to the same price each week like the last 2 weeks did.  A 4 weeks tight pattern can be very rewarding when it breaks out.

GOLD, SILVER, & MINERS

GOLD – This looks like a gravestone doji, and those are short term bullish reversals at the end of a sell off. It may just lead to a bounce, and that would be a 4th daily cycle that I expect to roll over again. 4TH daily cycles are hardly ever trade-worthy.  They can kick & buck around sideways for days too.

SILVER –  Gravestone Doji.  Silver broke the March lows decisively. When I look at this it honestly looks like a sell off into an ICL with some capitulation.  Gold does not.

SILVER WEEKLY – Silver is almost breaking below the Dec lows already. We could get a snap back bounce and roll over again, based on Golds pattern of 3 r.t. daily cycles and now a 4th.

GDX WEEKLY –  Miners show the weaker side too. That weekly chart shows a weak daily cycle when Gold was strong. Notice that the stochastics has room to drop furtherafter a possible bounce ( 4th daily cycle).

GDXJ #1 –  Please note that during the last daily cycle,  GDXJ looked VERY STRONG out of the gate, yet peaked on day 7. Day 6 was rather huge. THAT is important to keep in mind, because if we see a strong Bullish reaction to the French elections, it may look like that day 6th type surge again.  See the chart…

GDXJ #2 –  SO Miners could rally here and peak early again, but when I say they could “Peak on day 7-11,  IT DOES NOT MEAN RALLY DAY AFTER DAY, as shown below.

GDXJ #3 –  Some have told me that they will just ride it easily for 10 days and then get out. Well, it could look like this, and that is a day 7 peak.  by day 10, you could be back at the lows.  4th daily cycles can be tricky & frustrating.

GDXJ #4 – Read the chart.

This is just an example of a how even a strong rally  ( Like we saw out of the Dec lows in Precious Metals)  really can eventually come all the way back to those lows.  On the chart I point out where we could possibly be now ( A dcl) .  Notice how strong day 3, 4 , & 5 were out of the lows and then it topped? I just mention that in case we get a strong couple of days next, and some will ask if this changes my thinking. They still roll over if it is a 4th daily cycle.

 SO the General Markets have held up, the NASDAQ has rallied nicely, but many individual stocks are doing their own thing due to earnings.  Playing the ETFS may be working well, but some earnings surprises have sharply dropped formerly good looking stocks. AMD is just one of many ugly surprises.

I finally took a long NATGAS trade and I only know how to trade NATGAS with Boil or UGAZ, so I caution readers there. I used to trade  LNG, SWN, XCO for Natty, but they do not really follow NATGAS.  ( LNG did have good earnings release on Thursday though).

For anyone trying to trade Miners during the next daily cycle, please know that 4th daily cycles can be tricky & frustrating.  I try to trade here and there in a 4th daily cycle, but it has never been my strongest success story at all. Some Miners POP for a week or so and then drop quickly, but when I am home I am a trader at all times and I do try to find a set up to just scalp a pop.  It is not a buy & hold thing.   And really, we have been trading in choppy areas recently like Energy stocks   – SWN, OAS, WPX, AREX,  And Metals – AKS, X, CLF,   & Miners, Etc.  It gets frustrating when the follow through is minimal.  Good set up are forming during this consolidation time period thought. It is tough to get in and out with profits, so please just keep that in mind.

Waiting patiently for an ICL is always my best trade of the year, I will point that out again at the end of this report.   It is possible that Over trading now can chip away at funds that you will use later. I keep current positions in any trades small. At an ICL, most of my trades end up higher by 50% – 300% .  That is not a joke, and that is worth having CASH ON HAND to take advantage of.

Also, The French Election results may cause a knee jerk reaction in any sector.  Enjoy your weekend and happy trading on Monday!

~ALEX

Reminder:  I am away from my screen for most of the days this week, so my trading has to be minimal and my advice in the comments section will be minimal too.  My reports will have to be a bit shorter, brief and to the point, but can still assist you with your trading plans and analysis.  Please consider all things and trade at your own experience level.  Waiting for the ICL in the coming weeks can be very profitable for all here!

BEST TRADING OF THE YEAR : You do not even have to catch THE LOWS at that time, when they start trending higher, even the most cautious and patient ones will make good money.

GDX ICLs – ETfs move slower than the stocks that I pick up on, but even with that, these gains are solid even if you are very cautious and want to wait for the “ALL CLEAR” signal. 🙂

BTG – This is a miner at that same time period.  100-200% gains out of ICLs.  This is not THE BEST miner, but it is one of several that I have used to make some real gains add up in our accounts.  I am constantly searching for the best miners at the ICLs, to give you more bang for your buck, especially for those that do not like 3x etfs.  Imagine just a $1000 investment in BTG at the Green arrows. $1000 in Jan 2016 would have been $4000 by the summer.   $3000 would have been $12000.00, Etc.  One trade could  easily pay for your subscription, dining out a few times with a loved one, and a few extras.  🙂    THIS IS WHY I try to encourage not over-trading now, saving some funds until we see an ICL.

NAK UPDATE –  This may just keep running higher, or next weeks news should help it along, but I am holding it and viewing it as bullish.

It does like to tag that 200sma , as shown Friday here

I was asked about AKS. This could be a temporary low on a down trend. I bought the last rally but sold it for a small loss and SID for a small gain. Basically a break even scenario. This sector  ( So far)  has been a good example of bullish looking at lows, choppy and weak after several days.