4-25-2018 – Hanging On

 It is earnings season this week and suddenly we are seeing the Markets sell down, even when reports do not seem that bad.  Let’s do a quick review…

 

 

SPX APRIL 20–  Last week I looked at the move out of the Feb lows and noticed a pretty drastic sell off on day 13 & 14 below the 50sma, so I drew the SPX chart with a similar drop into day 14, a bounce, and then possibly another drop.

SPX APRIL 23 – Monday I thought that by day 15 we would get our 1/2 cycle low, and then a bounce higher.  The markets were so strong in Oct, Nov, Dec, and Jan that I would expect them to at least make a double top, eventually running to the former highs.  On Tuesday…

SPX – We are REALLY seeing a struggle here to gain some traction.  2553.80  IS CRITICAL in my opinion. If those lows break, this would appear to be  a failed daily cycle.

And in addition to that, I posted this chart in the comments section yesterday.

 

QQQ –   Suddenly the NASDAQ looks like a H&S may be forming.  This run up in 2017 went from people screaming  “THIS WILL NEVER DIE!”  to ” Wow, Where did the Big Buyers go?”  This feels more and more like distribution at the top.

 

NOTE:  When markets start to ‘surprise to the downside’, sometimes you can just hold positions with raised stops.  I mentioned tightening stops last week in Thursday or Fridays report when the SOX broke down sharply and AMAT, CY, MKSI, etc sold off on heavy volume.  I wrote this in Fridays report….

  I said it might be time to ‘tighten stops‘.   With that, I ratcheted up my stops from the 50 sma, to “I’m out if we CLOSE below the 10sma on my positions”.  I got stopped out of some Friday due to that, but I expected a 1/2 cycle low, so I was a bit sad about losing those  positions.  Now I am not, and I may even sell my SAIL today, which did NOT dip below the 10sma.  In fact, SAIL is up over $1 in premarket, but soon I MAY BE  OUT OF TECH personally.  You may do as you see fit.  I have mentioned that I do not like to have too many positions open at once, and I have been buying block chain and Medical Marijuana positions and trimming tech.

CREE, SAIL, AND INTC were up after hrs, so maybe we’ll get our bounce now?

 

Is this WEAKNESS a surprise?

 

Honestly, it is a mixture of yes & no.  My Big Picture Report at the end of March called for ‘CAUTION’.  The Quarterly chart and Monthly charts that I focused on then called for lower price by June, the end of this quarter. I pointed out topping candles on those charts .  As a reminder from that report, Look again at the DOW JONES QUARTERLY CHART. That is a heavy volume reversal candle at the top.  This seems to be saying that our next quarterly candle will be lower, so I wanrned that we would need to be a bit more cautious going forward. So far, that market weakness is evident.

  To be honest,  I DID think that we could run higher out of this low & maybe double top even  if the Bull Run was really ending. I was at least expecting a double top, or a nice run higher through earnings, but we saw some pain in the SOX last week and some more weakness on Tuesday.

Lets look at a  few charts.

 

AQ FROM APRIL 5th –  AQ was one of our bullish performers.  Here we see $10 to almost $20, but now…

AQ – A break down below the 50sma and closing below the 10sma with no quick recovery ( shake out), is concerning.

SQ –  SQ was also on a nice bull run and consolidated here. It had just moved from $37 to $51 , and was breaking to new highs, and then

SQ – It ran to almost $60.  I made good gains on this one.  Here I called for this pull back to possibly drop below the 50sma like we saw in February, and then recover.  What has happened?…

SQ – We did move there, but I DO NOT like the higher volume $4+ Sell off yesterday, the weak MACD cross down, and the RSI losing the 50% line. An  A-B-C drop from here is right to the 200sma.  I never bought this one back, but I know that some may have.

SAIL – SAIL was a winner , but I am considering stepping aside for now.  Even though it didn’t even break the 10sma,  I feel that I should lock in some nice gains.   I do not want to own any Tech stocks until we see some strength.

 

XLE APRIL 11– As this broke out, the 50RSI Line crossed and this looked bullish. When price breaks from this type of BASE, it often travels back to prior highs.  It is a buy.

 

XLE  we had what looked like a mid point pause, very normal and often a bull flag and continuation higher.  I pointed this out in yesterdays report as bullish.

I bought AREX yesterday with that reversal. Did we get follow through higher?

 

XLE –   Suddenly it dropped and looked to do a bearish engulfing! Today is OIL INVENTORY REPORT, so we’ll see what OIL does today.  I may need to stop out of AREX if it drops much further.  The markets have become quite  choppy.

AREX– I had been watching AREX, and pointed out this POP as bullish, but I didn’t buy it.

AREX APRIL 18 –  It then Popped & sold off, so I posted this and it remained on the watch list.  I liked how it crawled along the 200sma& 50sma, and it was a buy if it runs higher.

AREX –  Yesterday I posted this chart and said I may buy it if it recovered the 50 & 200sma..  Look at the high volume pops for example.  In the comments I said that I did buy it at this price  ( $2.76).   I need to watch this closely, because it closed down slightly from my entry, it did not break higher & run.

 

 

GOLD  – We are still inside of this sideways consolidation, and I am expecting an eventual  drop into next weeks FOMC meeting.  THIS DROP  Could be a great buying opportunity if it turns out to be an ICL. I also have sold TECH to raise CASH more this possibility.

GDX – Miners reversed and are tagging the 200sma and 10sma. This is day 24 and it is unlikely that this is going to move even higher.  If it does continue higher, then we have to consider whether or not we saw a very R.T. Daily Cycle, and  a DCL on day 23. Unlikely under normal conditions, but if miners are under accumulation, surprises start coming to the upside.

 

GDX – So  Miners pushed higher, but I also expect them to drop or chop.  This would be day 24 and day 30  lands on the FOMC meeting.  That is usually right around the time for a daily cycle low  ( 30 or so days).  I have drawn an idea of a mild pull back here. THIS IS NOT A PREDICTION, it is to give a visual idea of how things MIGHT unfold into next week.

 

So the markets during this earnings period are off to a shaky start. Surprises have been to the downside.

The General Markets  still need to recover the 50sma, and if they keep dropping, this was a very weak daily cycle.  the QQQ looks like a H&S top.  The SOX and semiconductor tocks did warn us last week, so I raised stops.  More time will tell, but I remain cautious.

OIL & Energy has been strong & is early enough in the daily cycle to make another run. Today is the Inventory report.

The USD should move higher. This would drop Gold.

Precious Metals  will likely drop further as the USD runs higher.  The timing for the Gold , Silver, and Miners seems to match right around the FOMC Meeting next Wednesday for a possible low. That will be day 30.

 As mentioned yesterday, right before yesterdays GDX/GDXJ bounce, This possible drop for the Miners does NOT mean that they drop straight down for the next 6 or 7 days straight.   What it means is that we should expect to head lower over the next week.   I drew a chart showing a stair-step type drop. I do not really expect a low in GOLD until sometime around that Fed Mtg.  The Miners have  been a bit slow, sideways,  and boring on a day to day basis, this is how good buying set ups form.  The precious Metals / Miners may be setting up over the next several days for a buying opportunity. We will stay alert to opportunities that may develop.  Let’s see what Tuesday post market and Wednesday pre-market earnings do for the general markets …

 THE MARKETS ARE CHOPPY, AND FUNDS CAN GET CHOPPED UP. It may be best to stay on the sidelines if you got stopped out, and wait for the next best set up.  The Miners are coming due for a low, and next weeks FOMC MTG Wednesday seems to be perfect timing for that.  Good gains can be made then, if you have the funds ready to deploy.   I made great gains in TECH over the past few months, but now I am getting small paper cuts & losses chipping into those gains, with the exception of SAIL.  My block chain trades are actually helping a lot.  It may be best to try to be patient and not force any trades, just wait for the set ups to form and give a proper entry.

Enjoy your Tuesday trading or maybe you will want to stay on the sidelines if you were stopped out, waiting for a better opportunity or until we get some clarity.

 

 

 

 

~ALEX

BITCOIN AS POSTED ON APRIL 20th

 

I have been discussing that I thought BITCOIN Bottomed, at least temporarily.  That had me buying some Block Chain trades a few weeks ago

 

This was BITCOIN as of Midnight lat night.

HVBTF –  From yesterdays report, I owned this and was going to add.  Even a small run to the 200sma is a good %-Gainer.

 

HVBTF WEEKLY – The weekly potential was also pointed out. IF we break above $1.23 & $1.31, this could take off a lot higher over time. Last year it ran up in a big way.

HVBTF YESTERDAY – We pushed up to $1.37 and it was a 12% gain. I expect this to at least get to the 200sma, but some of these have been blowing right thorough that 200sma.

 

MARA–  Recently  I mentioned MARA (in the comments)  as riding the 10ma after popping out of the lows.  That was another bullish set up, so I bought it.  It burst higher 25% yesterday alone.   I would expect this to get to the 200sma, but if it doesn’t break through, then it could do as drawn here. That may become another buying opportunity later if the sector stays hot.

 

MGTI  –  This was the low risk buy, posted last week, at $1.30 on the 10sma.  I did warn that these are high risk, gaining & losing 10% a day, but I owned it this one too.

MGTI  – Up 24% yesterday alone, it broke above the 50sma and my position is now up almost 70% from last weeks buy point.  This run may tag & pause at the resistance of the 200sma.  Some may want to sell there to lock in gains.

 

 

XNET – I am still thinking of buying this one, posted in yesterdays report.  I wanted a tag of the 50sma, and a reversal first.  I also would like to know when they release earnings before I buy, and I haven’t looked that up yet.   I may just add this less extended one, if I sell another position that is getting extended.  When these POP, they just go & suddenly they are up 20% when I’m not looking.

 

DPW – DPW also popped out of the lows. I am watching this one , and noticed that volume increased yesterda.   That is what they need as  they take on overhead resistance.

DPW – Even if this only does an A-B-C type move higher, this would run to $1.75ish.  That is a good %-Gainer

 

SO AGAIN, these are fast movers and may not be for everyone.  THEY ALSO SHOULD ONLY BE BOUGHT NEAR SUPPORT,  AND I MYST WARN AGAINST  JUMPING IN AFTER AN EXTENDED RUN THINKING THAT BUYERS WILL JUST KEEP PUSHING IT HIGHER.  YOU’RE RISK IS DRASTICALLY INCREASED THAT WAY.  BUY LOW / SELL HIGH.

 

THIS WAS BUY LOW NEAR SUPPORT

    BUYING THIS NOW COULD BE VERY COSTLY, BECAUSE IT IS EXTENDED.  This could drop to the 50sma in a day or 2, and that is $2.20 to $1.75, a 20% loss.