Wednesday May 31- Back To Work

I spent much of Tuesday catching up on charts and various news articles that I may have missed over the long weekend.  After all was said and done, nothing has really changed in my expectations going forward. Let’s review…

SPX – After a shake out below the 50sma and recovery 8 days ago, the markets seemed to have put in another dcl and are near all time highs. These small pauses or flags may just continue higher so…

I said in the weekend report that I personally would not be shorting this bull market, since surprises do keep coming to the upside.  That said, I am still keeping an eye on this…

XLF – The Financials still just cannot get a break & healthy close  above the 50sma.

Take a look at JPM, BAC, GS, and so on and the picture is the same. It may be foretelling a future drop into an ICL, but for now the markets are in buy the dip (if you get one) Mode.

WTIC –  I wanted to show 2 charts for Oil. This chart shows that Oil has closed above the 50sma twice on this bounce after the steep drop. Is that Bullish?

WTIC – Well this chart shows that Oil has not moved above the 10sma yet, and the stochastics has room to drop further.  I am still short Oil from that doji high at resistance.

OIH (and the XLE) both made new lows Tuesday,  so are we missing important buying opportunities  in this sector?  No, Oil & Energy stocks remain weak.

NATGAS –  Recently I have been cautioning about the Bearish COT in NATGAS and Natty broke down pretty big here.  The chart looked rather bullish a week or 2 ago, but that COT report was indicating  that a drop may be coming. I actually went from Long to short in NATGAS last week.

NATGAS BIG PICTURE-  I went back to take a closer look at the Big Picture of NATGAS last week. Natgas here appears to have broken down and simply back tested an up channel. The MACD at the recent highs had me try a short trade.  I didn’t recommend shorting NATGAS to readers here, because with the constant Up & Down,Up & Down movement, it was not an easy low risk trade.

GOLD –  Day 14 and we saw new highs Tuesday at 1273.40.

SILVER –  Silver went higher too, but it may be at resistance with the 50sma right there.

So  GOLD & SILVER moved Higher on Tuesday, and Miners continue to show red.

EDIT: With GOLD going higher this morning, watch the Miners.  They are not buying the move higher.  I think that we are going to get Miners at a much lower bargain price.

That is the noteworthy market movement from Tuesdays activity. At this point we can discuss a few trades.

CYTR– I mentioned this a few times in the 45 -50 cent area.  It was a difficult trade to take, since it is a biotech stock, but it acted correctly after gapping open above those moving averages.  It was holding above the 10, 50 & 200 sma, and suddenly a burst of volume took it higher, as shown in this chart.

I loved the base and showed that back then. This is CYTR now and because of the length of this base, it has an opportunity to become a giraffe neck type of a move.  I WOULD NOT CHASE IT HERE, and I WOULD NOT ADD, but if you bought it with me, I would ride a good portion of this trade, because this does have the potential to fill that gap on the left.

From the weekend report, you can see that this is not overbought on a weekly basis. resistance is around $1.50

CLF – Some of the steel stocks started to look active again.  AKS & X were up on Tuesday. CLF is back at the lows and could move higher in this base  ( Low risk if you place a stop at the lows).

VALE – Vale actually slammed down on the new last week and put in a reversal that day that actually marked the lows. now VALE is trying to close above the 50sma for the first time since March. This could be a good sign if it recovers the 50sma.

CSTM – I bought CSTM because it is breaking out from that magenta down trend line and it held the 50sma for weeks before experiencing what could be a small shake out & recovery.   This is a buy right here in my opinion, with a possible short term run to the $8.75 area.  However…

CSTM WKLY – I like the longer term potential too.  This is a nice Base to launch from, if commodities ever get going again.

JBL –  Back to JBL 🙂  The set up is still good with that recent shake out, it just seems to be taking it’s own sweet time. A 2 month consolidation can lead to much higher prices.

I have been watching the commodities stocks like Steel and Copper for possible bottoming action.  Here you can see that some of these, like CENX, VALE, TGB, AA, CSTM, etc.,  have started to regain the 50sma…

others seem to need a little more time. I want to see if they can gain some traction and continue higher too.  If they do, there may be some good trading opportunities there.   Enjoy your Wednesday trading.

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~ALEX