Thursday June 6 – Are We There Yet?

NASDAQ – We did see a small reversal , but we are still under the 50sma. I just don’t think that we are there yet, so I expect further downside.

VIX – This almost looks like the markets are going to top as this wedge reaches the apex, but I did a little study on this and the Markets can continue to climb for a while even after that Apex is reached.   This does show that a large VIX SPIKE could occur however.  For now, I’m watching to see if the markets give us an ICL type sell off.

WTIC – That was a BIG drop in Oil, it was on Huge volume, and it was not completely expected.  I did expect a small pull back at the 50 sma resistance, but not a 4% drop. Thursday is the inventory report, and it will be important to see if the 10sma holds price.

I am also watching this trend line to contain or support the daily cycle. This would be slightly below the 10sma.

So we know the story with the Oil & Energy stocks  ( XLE & OIH).  Mondays break higher was not a break out above the 50sma,  but it sure did look convincing with a full days volume on a 1/2 day of holiday trading.  Well, with Oils drop,  the XLE dropped 2% and  it needs further watching too.  It did NOT break out above the 50sma and hold. Are we there yet? Maybe,  another day or two will let us know.

With the strong drop in Oil,  some energy stocks dropped, others held up as seen below. We do need another day or two to see how this sector plays out.

NOTE:  The NATGAS inventory report has a delayed release this week.  It will be released on Friday,  and OIL is being released today.

NATGAS – Natgas broke to new lows. I mentioned in yesterdays report that I felt that NATGAS was going to break down, because I was seeing signs of weakness.   This looks like it could drop quite a bit if it keeps selling off.

NATGAS Megaphone pattern?  They eventually break down or out, but I wanted to show this because they can cause price to bounce around for a bit too. Yesterdays volume  ( if the chart ABOVE is accurate) could indicate that it is ready to break down through the pattern.

From June 27th  again –  Double shoulder H&S.  Again, the Inventory is released on Friday.

GOLD – Wednesdays reversal with the Fed Minutes does not amount to anything at this point.  You could be looking at a bear flag forming. Even a bounce to $1240 would only amount to a back test as shown.  I expect more downside.

SILVER – Silver broke down rather sharply Wednesday, breaking the May lows.

GDX – Interestingly,  GDX reversed higher and actually looks like a bullish engulfing. We can get a bounce from here, but I am expecting further selling.

SA – We have been seeing this for months –  Some Miners do look bullish,  like SA for example.

AG –  Others are still near Decembers lows, March lows, and Mays lows.  This means that we actually haven’t missed a huge run higher, but after a 9 month consolidation like this,  the break out & run higher could be spectacular.  Are we there yet?  No, We are still probably consolidating and this pattern could break down over the next few weeks.

-If the General markets are going to drop into an ICL, they have further selling ahead. The charts of the SPX, DJIA, & NASDAQ have been choppy.

-Oil & Energy seem to be bottoming, but with Wednesdays surprise 4% drop in Oil,  I want to continue to watch and see how things play out. Especially with the Inventory reports coming out for both OIL & NATGAS today & tomorrow.  We actually saw a similar break down when X, CLF, and our other commodity stocks were bottoming. They were moving higher off of the lows, and suddenly they  slammed down for just a day or two.  It was brief and The Lows were still in place. I’m looking for this to possibly happen with the  Energy stocks (XLE). 

-Patience for the precious metals sector has kept us from getting tossed about and chopped up a bit, but it is certainly NOT fun just waiting on the sidelines and it certainly IS boring.  That said, I have seen lengthy bottoming consolidations lead to enormous runs when the time comes. Some of these Miners have been consolidating for 9 months, like the chart of AG shown above in this report.  Even though I am actively trading various set ups in other sectors,  I am continually holding over 50% cash, waiting for the ICL in Precious Metals.

~ALEX

NOTE:  I was away from my screen and got stopped out of SPWR yesterday.  I actually just think that I had my stop too tight, just below the 10sma.  I may even look to re-enter if the solar sector remains bullish.

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 I wanted to remind the readers here again of something that I have mentioned quite a few times in the past.  All Bull stocks, like AMZN, AAPL, GOOG, NVDA, etc. always look straight up when you look at a 5 year chart.  People think that they should have just bought and held on to those stocks, but doing so ‘real time’   is not as easy as they think.    In reality,  after a good run higher, they often drop & begin to spend many months going sideways.   For example:

TTWO – Look at Feb March & April.  After a nice run higher, it went sideways for months. I pointed this out as a buy back in April around $58.

TTWO –  Look how well that ran.  $57 to $80, and now back to $70.  It is starting another consolidation period with the recent market pullback.  It is also holding up at the 50sma and if I still owned it,  this is where I would add to my position.

Speaking of  long consolidations, look at XBI from February to June.   BUY & HOLD WOULD HAVE BEEN BORING!   However, once the break out takes place, you can enjoy some gains.

XBI WEEKLY  –  Possible bull flag forming on the big weekly chart.  So…

VSTM –  VSTM broke out Wednesday and has been in a consolidation after running from a solid base at $1.10.  This could be ready to make another run higher.

I posted a weekly chart of this back in March.  I like the longer term potential if it can stay in Bullish mode.

VSTM –

CGIX –  Another one that I mentioned &  bought for a nice trade was CGIX. It ran from around $1 to $5 and has also been in a consolidation since March.  As you can see, this is not an easy ride,  but I do expect that it could make another strong run higher.  I also posted the weekly chart for this one…

I also posted the weekly chart for this one back in March as it continued higher after a back test buy at $2.  You can see the upside potential if the company remains bullish.

AMD-  AMD was up $1.04 on Wednesday.  This is also one that I have been pointing out as a long term candidate,  but this is not easy to ride either, is it?

AMD WKLY —  They look easy to ride out in hindsight, but this has been a very rough ride.

CRMD –  I own this base,  the company is not great,  but many pharma stocks do not have excellent balance sheets.   If it breaks down,  I’m out.  If it breaks upward, I ride it. It may just continue sideways and bore me to death, but as price approaches the 50sma,  that is usually when ‘something ‘ happens.  I’m hoping for a POP above it.  I like the MACD rising steeply as it bases out here.