Feb 28th – Reminders

 Market chop, Pop & Drop. Let’s review the markets with an occasional reminder thrown in there too…

 

SPX   – These markets may eventually  “get over it” , but so far they seem to have something against the New Fed Chairman.  It could be his discussing 3-4 interest rate hike plan for 2018.  Read the chart. So far this is a day 11 gap fill above the 50sma,  let’s look at the NASDAQ…

 

 

NASDAQ   – Gap fill, Tag of the 50sma?  Not necessary , but possible.   The markets are choppy at times, and the lower indicator is not as strong as the move higher was. That may resolve itself with choppy consolidation.

I’m not ‘sounding the alarm’ here, just a reminder:  At the end of the weekend report I had a lot of charts of past sell off/ recoveries that rolled over again  even after a rip roaring run higher. See below.  I think it is too early in this daily cycle out of the lows for that, but it is just a good Reminder going forward that it can and has happened.  Look at these strong rallies out of the lows- they rolled over.

 So for the General Markets, their daily cycle could be over 40 days long,  so I do not think that they are rolling  over here on just day 11. I just wanted to remind readers that we want to watch ‘how’ they move higher as this rally continues on.

WTIC   –  Day 11 and Oil dropped. This may also be early for a swing high peak, since Oil cycles can run 30-40 days long. I did notice this however…

 

XLE ( XOP & OIH too)  – Oil ran straight back up toward the highs, the Energy sector etfs have not.

DRIP –  This is not a ‘buy’ yet, but if it breaks out higher it could be ( maybe for experienced traders).  It is choppy, but this looks like it could run into the mid $20’s if it breaks and runs.

 

USD   – The USD popped on Day 6. The RSI is running higher &the MACD has been bullish.  If this is an ICL like September, it will have a few weeks of  upward bias, though it may be choppy & sideways at times too. See Sept/October.

 

If the USD  Popped,  Did GOLD drop?

 

 

GOLD  –  IN THE MORNING, I posted this at the opening bell.  Pre-Market Gold broke  below the uptrend line and that is usually a sign that the intermediate cycle is starting a deeper decline. This is bearish longer term.

 

GOLD  –  Gold closed slightly below the 50sma.  It may be a short term shake out & recover temporarily, but again, that trend line broke and signals an intermediate cycle is starting to decline.  Look at Golds MACD  with a double top.  RSI dropped below the 50% area too.

GDXJ 1 hr into trading –  Monday GDXJ closed above the 10sma, but in pre-market it dropped below when Gold broke down below that trend line,  so I posted this 1 hr into trading to show that GDXJ ( And GDX)  were now rejected at the 10 & 20 sma.   GDXJ was down 2% at this point.

 

GDXJ  – GDXJ closed down almost $1.  I do not think that Miners will break higher above that trend line now.

 

 

GDXJ –  So I go back and look at this.  This idea was touched on by me back in January too, but I didn’t think that it was correct…

1. A 21 day daily cycle with a trend line break & close below the 10sma The peak on day 16 is R.T., so we would expect a new high on the next daily cycle.

2. A second daily cycle peak on day 10 at new highs & a low on day 22 ( L.T.)

3. Now we would be on a weaker 3rd daily cycle that may have peaked and could drop as the USD bounces higher.  That CPI Number burst higherinto day 4, but it  did not have the follow through that I thought it should.

Honestly there is no sense in looking back in hindsight for an alternate count, other than to try to learn from that. If this above count was correct,  the next drop could easily take out the Dec 2016 lows. Let’s look at that…

 

 

GDXJ WEEKLY  – The Dec 2016 lows are not too far from here at all, if Miners got into an accelerated drop after chopping around sideways some more.   NOTE:  CHOPPING AROUND UP & DOWN is basically what we are getting with Miners.  IT IS VERY HARD TO MAKE MONEY IN THESE CHOPPY MINERS MARKETS LATELY , unless you enter and exit in a 1 or 2 day time period. Please read this chart.

 

GDX –  This chart was in the weekend report, with a space in there for more chop.  I did think that Miners would run up to the top Red dotted line before dropping, but that run is getting less and less likely.

 

GDX –  Also in the weekend report, I said that I NOW expect a sideways chop similar to the  May – July period of time in the box.  So far,  that is all we are getting.  This is not good for leverage. The sidelines may be best at this point.

 

DUST – When the CPI numbers came out & miners took off upside,  DUST dropped from $31 to $23 in 4 days (Not an easy ride if you were in it, right?).  Now with Miners dropping, it seems to be starting another leg higher.  Or…

 

DUST   –  The bigger picture for Dust shows a run in late January and then that pull back.  Another leg higher would look like this if the 2016 lows in December are taken out …

 

 I am not really recommending DUST, because these markets are so choppy,  but what I wanted to show was how fickle and choppy this sector has been.  Dust ran from $19 to $32 , and back to $23.  It does look bullish again, Miners do look set to drop, but these Miners are so choppy that it might just be best to sit on the sidelines and wait for a final low.   This sideways consolidation is about as tough as it gets, but it will end, and the rally will be Very Strong coming out of this base.

 For now I am simply trading, and I have pointed out a few trades here too.  I am basically 70% cash, and I have recently been trading ENPH, MU, GGB, I bought TRXC yesterday, etc etc.  There are trades out there, and I had some in yesterdays report too. You also can take position in TQQQ, UPRO, UDOW, etc i, if you feel that the drop yesterday was temporary.  I think as long as they remain above the 50sma, we have more upside, and I will be watching things along the way.

 Enjoy your Wednesday trading,  or take to the sidelines with a good chunk of cash and be ready for any real bullish move that may come about  down the road.  I might even short Oil if it rolls over for a 2nd leg down, as the COT seems to indicate.  I have a few of our current trades in a discussion below.

 

~ALEX

 

 

DRV   –  With interest rate hikes in the pipeline, housing may already be suffering.  Look at DRV.  It may work its way to the red line 50sma, and then break out higher.  It is on my watch list.

DWT –  When Oil drops,   DWT is leveraged and pops.  It looks bullish, but I am trying to be patient since Oil has been pretty strong. On the Watch List.

ENPH _  We Bought weeks ago  & added at the 50sma,  it is up 12% in premarket…

ENPH WEEKLY   –  Looks ready to continue higher, after earnings release last night.

 

BIG PICTURE FOR MU-  MU pulled back at the end of the day,  but still closed up higher by another 80 cents. Can it pull back?  OF COURSE,  it has been up 9 days out of 11.

 

MU WEEKLY  –  Can MU pull back?  yes, and form a handle.  I expected it to tag close to $50 first . So this is a cup & handle possibility ,  however…

 

MU WEEKLY  – A ‘W’ pattern can be very bullish and just continue higher.  Also …

 

MU WEEKLY – An A to B = C to D pattern would be a run to about $60.  If the Markets remain bullish,  MU should also , barring any surprises.

 

TRXC –   At 11:17 a.m. eastern I posted this tag of the 50sma and bought it, hoping that it would hold and the 10sma would rise up to it later… –

 

TRXC  – Maybe we should prepare for the idea that this could do this a few more times too? Often price will ‘ride along’ the 50sma.  I will add if it does, I have a small position.