Thursday April 26th – Bounces

We saw  reversals in the General Markets yesterday, and it does look as though we had a 1/2 cycle low and next would be a move higher.  We will probably put in a swing low on Thursday.  The question is, will it just be a bounce or a decent rally?  I am leaning toward just a bounce, maybe for a week and we will know how strong it is after it begins to gain traction.   I see internal signs of weakness so far, and it takes energy to get a sustained rally.  Until we see buying power step in, it will probably just be a bounce, but it could be a trade-able bounce for those that want to play it on the long side or still get out of current positions.   Let me show what I am thinking…

SPX – I see strong divergence at these lows and a reversal off of the 200sma, a good set up for a bounce here. That first run off of the 200sma in April was weak.  I think that the next one could be weak too, and  Let me show you something that is good to keep in mind…

Let me show you something that is good to keep in mind…

SPX HISTORY WITH  THE NEW FED CHAIRMAN – SO FAR, the markets have sold off around any Fed News or speech, and that includes both 2018  FOMC Meetings.  Now we have the next one next week on May 2.  That is at least something to keep in mind, right?

So at this point I think that we could get a weak bounce and the markets may rollover around the MAY 2 FOMC Mtg.  THIS OUTLOOK CAN CHANGE, but for now, that is what I will be looking for going forward, and the cycle timing fits that idea.  You can go long an ETF or maybe your favorite stock, or you can simply wait and see how things play out.  Maybe even wait for a better set up in other areas  ( Miners).

WTIC  –  I have mentioned recently that I would think that OIL can get to the $70 area, but I also expect this to be a L.T. Daily cycle.  Time will tell, but lets take a peak at energy stocks.

XLE – I feel that this is a bull flag, a mid point stall in the climb out of this base.

USD –  Upside until the FOMC too?  That is what I have been pointing to. Gold dips as the USD pops higher.

GOLD – So Gold could bounce around or drop into the FOMC MTG too. We are already within the timing for a dcl, but lately they happen closer to day 30.

GDX #1 – Day 25 and even when GOLD & SILVER Drops, Miners are holding up better than they used to. I have drawn a channel, but …

GDX #2–  During a dip into a DCL, channels can be broken, so be aware of this type of move as a possibility too.

GDX #3 – Or it could hold on the 50sma , in more of a bullish manner. I say this because…

I say this because even when GOLD drops $10/day, some Miners are not really selling off in a bearish manner.  For example:

CDE ON APRIL 13 –  Some Miners have been acting bullishly, even on days when Gold & Silver sell off, as shown here back on April 13th when Gold dropped sharply.

CDE – And CDE also closed green yesterday too, with Gold & Silver selling off. If you examine the chart, it is a normal bullish ‘ Break out and back test’.  I own this and almost added yesterday, but I’m going to wait and see if we dip again going into the FOMC.  This dip MIGHT be all we get for CDE, that is a good triple support area.

HL – Hecla Mining also closed green yesterday, and held support too.

AG – AG was green too, now pushing against the 200 sma.

 Just look at those charts of CDE, HL, and AG  ( and there are others) and compare them to the sell off in the base metals.   It does seem that some Miners may not sell off as much as we used to see when heading into the timing for a dcl. Weeks ago I mentioned buying Miners , especially silver stocks ( I bought TRX, CDE, HL, FSM, AXU, ) and I am still holding them.  The way Miners are holding up when the metals sell off, I do not plan on selling them.  I have repeatedly mentioned that ” It would not hurt to at least own a Miner or two’ , and surprises to the upside in TRX, AKG, THM, and a few others have been rewarding.  CDE is at support and back testing a break out, a starter position there is an easy purchase with a tight stop  ( or even a looser one at this point). Many miners now look like Bullish set ups.

   The markets have been choppy and difficult to enjoy recently, as they have bounced around for most of 2018 so far. I have made money In CASA, SAIL, AQ, SQ, HCC, SGH, and a few others in 2018, HOWEVER, it is so choppy & toppy lately, that I have given some of those gains back too.  It has not been a good BUY & HOLD relaxing environment, it has been choppy, so if you ‘buy’ reversals today, keep that in mind.  Investing long term remains a bit difficult until the markets find a directional trend, and we need solid buying and accumulation for that.  Short term trades may work best for now.

  With Interest rate hikes possibly threatening the balance, but corporate tax cuts designed to help the bottom line, we will need more time to see how this sector will play out longer term.  My Big Picture Weekend reports will keep an eye on things as they play out.  It could be any of the following in the long run…

1. Are the General Markets  topping? Maybe a double top from here as I originally anticipated?

2. Or are they starting a prolonged consolidation period, as mentioned in the past, similar to 2015-2016 area within the purple lines?

3. Or is this a Bull Flag with another leg higher to follow?  We look to be at a short term buy , and we’ll see if it turns into a longer term buy or a failure.  Monthly Charts pointed toward a topping process.

Above is the big picture view, just to give us hope that clarity isn’t that far off. For now we take it step by step, and trade according to the current set ups and timing within daily cycles.  Currently, We do look like we have a 1/2 cycle low ( selling was a bit deeper than expected) and with yesterdays reversals, we should get s bounce.  We will watch how this bounce unfolds to see if it can gain traction and rally higher, or will it roll over.   I am leaning toward weakness after the FOMC, but that remains to be seen.

Enjoy your Thursday trading, I have a few ideas below.

~ALEX

CAKE  – I love this chart set up ( AND THEIR PRODUCT) as a break out an back test. It reversed and may be done selling down.

TQQQ  (Or UPRO , UDOW, TNA, ETC)  – The reversal is a trade set up considered low risk, because you can use a tight stop. The possible outcome is shown in a bullish and bearish manner. The recent choppiness has made these trades difficult.

XNET MONDAY – I said that I was thinking of buying this if it tags the 50sma

XNET – It tagged it and reversed, yet I did not add.   I already own a few block chain trades and they move so quickly, I want to be able to track them clearly.  I still may buy this in the near future, but I am also trying to prepare for a dcl  ( ICL?) in precious Metals, and need to focus on that too.  Basically,  this is a buy with a stop under recent lows.

KMI -Kinder Morgan engages in the operation of pipelines and terminals that transport natural gas; gasoline; crude oil; carbon dioxide (CO2) and other products and stores petroleum products chemicals; and handles bulk materials like ethanol, coal, petroleum coke and steel.  I would say that yesterdays reversal is a buy on support with a stop under maybe $15.50 – $15.75ish.

MGTI ( Blockchain) – I own this from the $1.20 area and I know that others do too. It dropped to support & reversed yesterday.  It remains healthy, but as I warned, this was about a 20% drop, and closed down 9%.  VERY difficult to ride unless you buy low.

AREX ( Energy)- It continues to sell off and recover with large volume up days.  I still own this.

CLF – CLF, AKS, and a few other commodity stocks reversed and did not sell off with the markets yesterday.  CLF is above the 50 & 200 sma and looks ready to move higher.

HVBTF  ( Blockchain) –  From yesterdays report.  Laned on support and bounced.

GROW – Could dip to the 50% retrace and the 200sma, but remains healthy looking.