Weekend Report – Things Are Still Lining Up Nicely

The various Market sectors acted as expected this week, so let’s take a look and see how things continue to line up in a way that we can profit from.

 

SPX –  The General Markets put in another high DCL, and we’ve discussed how the pull backs are more shallow lately and what that implies.  This would only be day 7 of a new daily cycle. That dip was sharp , but shallow, so ‘longs’ may not have even been stopped out with a trailing stop.  If one was stopped out, this sideways stall has allowed many to re-enter long positions.

 

 

NATGAS – The NASDAQ has also lingered, allowing ‘longs’ to re-enter if they were stopped out.  This is also day 7 and these daily cycles can be over 30-40 days long.

 

USD–  The 2nd daily cycle of the USD peaked on day 11 and formed a bull flag in this chart that I had drawn for Thursdays action.  I drew that I expect it to break higher…

USD– A reversal from that bull flag Friday and we should expect to have a new peak on Monday – day 17.  That would give us another right translated daily cycle.

 

WTIC – Oil broke even higher on Friday and our energy trades continue to climb higher. Some are moving out of double bottom lows, others out of higher lows into what could end up being a 3rd wave  (following a very nice 1st wave). Please read the chart. I called day 25 an early daily cycle, but maybe its a 1/2 cycle low? Either way, this is lined up bullishly as a peak on day 19 or day 38.

 

WTIC – I actually drew this weekly chart on Thursday of a possible longer term Cup & handle developing down the road. I drew this before Fridays pop above the red dotted line, so Oil  now has moved above ALL highs in this picture.  Oil is a Bullish 1&1/2 yr consolidation.

 

WTIC – I drew this weekly chart after Fridays close as it broke to new 2+ year highs. Consolidations build pent up energy – Can you picture how fast & high this could run if this break out is from a 1+ year consolidation?  A back test may be in the future and then higher Oil prices  ( You may want to Fill your Oil tanks for the Winter, if you haven’t yet and you live where cold weather is approaching).

OIH – SO in the last report on Friday, I mentioned that I am not afraid to buy new positions (and I would not short this), because it is not overbought.  I used this chart below to show that we could be at a 1/2 way point based on the first leg up.

OIH FRIDAY : To try to help us to see that again, please look at the matching Magenta boxes. The current ‘pause’ is not even as overbought as the first Magenta box ‘pause’, and that was only 1/2 finished.  To me, that ‘pause’ is like a Bull Flag, and is NOT a good place to go short.  It would also still be OK to take a long position in an Energy Stock that is not overbought.  I’ll discuss that later.  OIH $27 is do-able, and if this was wave 3 of 5? Breaking over $27 is do-able. It could break that 200sma and back test it on ‘4’.

 

NATGAS –  This is how my brain views the Natgas trading lately…  “This is Choppy, difficult, tons of ‘running the stops and reversing higher’, frustrating at times, this has been tough to trade and I barley get out with a roll of quarters in my pocket after 2 weeks? So I have moved over to Energy stock trades and the money is far easier to lock in over there.”  Eventually I think that NATGAS will break this LONG consolidation & trend and be a good trade, for now I will pass & graze in greener pastures.  That is how my Brain views NATGAS 🙂

 

 

 

UGAZ –  I drew this for someone on Friday morning, and it moved a bit higher on Friday, but my point was…. If Natgas only makes it to the top of that black line in the ABOVE NATGAS CHART, then UGAZ may not be able to break back inside of this channel, making Fridays move just a back test.  A break back inside the channel, however, could run to $11, or even $13.

 

PRECIOUS METALS–  We had the ‘Jobs report’ Friday morning and GOLD & SILVER POPPED staright up,  the USD  DROPPED sharply.  That was a head fake, so Gold Bulls may have been excited and started jumping in, only  to get stopped out.  🙁   The picture below was captured 1.5 hrs after the market open. At Chartfreak, we wouldn’t be fooled, we’ve expected lower prices in Gold & Miners to a dcl & then an ICL.

 

 

GOLD – Friday Gold sold off and looks like it may be ready to break down below the Dcl on Oct 9 & the day 15 recent higher lows. At day 20, a drop may just be a ‘shake out ‘ at the 200sma, and that could be our next dcl, or this could flush out and then bounce out of a dcl. I am not in this trade ‘long’ or ‘short’.

 

SILVER – In Fridays report, I mentioned that we were expecting Precious metals to drop, but couldn’t help but to notice how bullish Silver looked. It looked ready to break out above resistance and had a higher low above the Oct dcl.

SILVER –  And then came Friday. Resistance was resistance and the ‘timing’ is due for a dcl.  Now this looks like a H&S.   Next week really should see the USD move higher and Gold & Silver move lower. Those are my expectations at this point.

 

GDX –  Friday I pointed out the weakness in Miners. So far GDX was unable to push higher than the 10sma, and if they couldn’t, the daily cycle would continue on day 24.  If they broke out higher, we may have a day 18 dcl on a shorter daily cycle.

GDX #1 – Friday GDX  broke below the day 18 low and Friday was now the lowest low of this 24 day daily cycle. This H&S targets the $20+ area, but a bounce could come anywhere in between too, so I would not be fooled into buying a dcl or bounce.  I think that the ICL lies ahead by another couple of weeks.

GDX #2 –  So lets just picture it this way ( THIS IS NOT A PRICE PROJECTION,  JUST AN IDEA OF WHAT TO LOOK FOR).  GDX drops , puts in a dcl, bounces in a new daily cycle, but THAT would be expected to be L.T. too, so it could ‘peak’ early like the last one & roll over into the real ICL Buy Point.

 

GDX #3 – Even if Friday was a day 24 dcl, I really would only expect a back test of the 50sma / trend line break, a peak early, and a drop as shown.

Review: Weeks ago I saw many people saying that Octobers rally would break to new highs, but I mentioned repeatedly that even though I Did expect a bounce at that 200sma, I wanted to be cautious of a peak within roughly 7-11 days.  I played it using leverage, and said that I would only stay in for 7-11 days.  I got out on day 9 and the peak was in.  I repeat this because I feel that we are eventually going to get a similar set up,  and now you know what that looks like when Miners start to bounce.  Usually in other blogs, many want to start buying and say that you are missing out, but I think that it will peak early too. Unless I see signs of something different, this is my outlook.  I will keep us posted in the daily reports and weekend reports.  For now,  I am mostly focused on the Energy sector  ( and still have a few biotech trades on, and I do own  NAK).   So…

1. General Markets remain bullish and somewhat early in the daily cycle. They could be heading toward a parabolic blow off top, since the pull backs are becoming more & more shallow.

2. The USD remains Bullish since calling the ICL  in Early September

3.  OIL and ENERGY remain Bullish.

4. NATGAS is too choppy to provide good reliable outcome for my preference so far. I did try and I spent 2 weeks in UGAZ, and made a bag of nickles.

5.  Precious Metals do keep bouncing and Gold & Silver have really gone sideways for a while, this is likely drawing in Buyers, but GDX has remained unable to break above the 10sma and keeps falling to new lows.  I expect a bounce  (Dcl) and then more downside before a real special Buying Opportunity presents itself.

Note:  Some Miners are impressing me with their bullish set up despite all of the selling.  SA was actually at new 1 yr highs,  NSRPF is strong, and GSS and EGI were breaking out this week on 3 month charts.  I am still trying to be patient in this area to avoid draw-down, but you of course can make your own decisions in this area if you feel that you are going to miss an opportunity, want to start a small position, whatever your style is.   Some of these mentioned Miners may not pull back to new lows from here, but some of the gains from the Energy stocks can make up for missing THE lows in any miners, in my opinion.

That’s a wrap for now, things continue to line up nicely. I will also discuss a few Energy trades below.

 

Enjoy your weekend and thanks for being a Chartfreak with me!

 

 

~ALEX

 

OAS -I want to point out how some of these trades are working out to build confidence in the sector.  Oct 26 ( last week) I pointed out this BUY.  I expected that a break out would run to the next resistance area, the 200sma.

OAS  1 week later – And so far it has headed right for that overhead 200sma.  It also could just break out & continue higher after bull flagging here, time will tell.

 

WLL OCT 26 –  I mentioned that I was mainly looking for companies that had already released their earnings, I felt that was safer.  So WLL released theirs and I bought it breaking out here with the same idea. It should run in a way that  might equal the length of the first run higher  ( or more if it turns out to be a wave 3, following wave  1&2).

 

WLL  1 week later – SO far the Run is following through.

So in my daily reports, I have been pointing out which ones have released earnings and which are due to release theirs soon.

 

HOS –  I  re-entered HOS, because I traded this when it ran from the 50sma to the 200sma, and the gains were FAST. It ran from $2.50 to $4.40? I sold at $4.23. This consolidated above the 200sma last week & earnings came out Wed night, & it popped Thursday, so I am back in just below $4.  Where is this going?…

HOS WEEKLY – I’ll take $4 to $8 or $12 please 🙂

LGCY – LGCY slammed down on earnings, but it basically held the 50sma and then on Friday it shot higher by 11%.   Is this bullish or scary?  The weekly is…

LGCY WEEKLY – VERY BULLISH at this point. It is important for a weekly chart to hold price at the 10ma,  and gaining the 30ma is a bonus, so take a look at LGCY after earnings.  This is a bullish weekly reversal buy with a stop under the 10 week ma.

 

LGCY WEEKLY – And that big picture is not too shabby either.  We at Chartfreak rode this from the $1 area to the $3 & even the $4 area last year. It looks like Energy is perking up and LGCY is too.

FCEL – This is called a ‘3 weeks tight’ pattern. They also can turn into a ‘4 weeks tight’ pattern, this may be 4 weeks tight.  It is basically a Bullish Weekly Pattern above the 10 ma if the volume looks like that, and so I bought it. We’ll see if this turns out well in the coming weeks.

 

I was asked about buying SID, a steel stock. I made great money on SIDs recent run higher last summer, so I would be interested in going long if it was a good set up. Can we look forward to another great run higher in Sid?  Let’s look at 2 charts, a daily & a weekly.

 

SID – This is not a low risk buy really, this is an ugly break down.  Yes, It could bounce higher, but I feel that it will just be a bounce /  back test.

SID WEEKLY –  NO SIGN OF STRENGTH AT ALL YET. There are way better trade set ups out there, with far less risk of being washed out, unless this regains the blue moving average immediately.