October 10th – Nothing New Here
We really didn’t see a lot of changes take place that were not expected on Tuesday. As the markets pull back, things do get choppy and sloppy. At this point, let’s do a market review and then discuss a few possible trade ideas…
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IWM – Expecting the markets to dip into a DCL or ICL, we find IWM and The NASDAQ ( shown yesterday) dropped first and are at a lower trend line. This support could be an area for the ICL. We look for a reversal and move higher.
JUST A HEADS UP : NASDAQ – I did mention the need for a stop after going long though, in case it is just a back test, rolls over and something uglier develops like a deeper ICL.
NASDAQ – A close up shows that Tuesday the markets rallied in the morning, and ended back at the lows. Not quite a swing low and definitely not a confirmed one, but this adds to the choppiness.
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OIL Review: My analysis flipped to Bullish after the bounce off of the 50sma took out the day 12 highs. With Oil bullishly running higher, it is now on day 37. This means that Oils cycles can find a dcl at any time now, but they do also extend to 50+ days at times, so Tuesdays bounce may give 1 more push higher.OIL INVENTORY may give us a bounce higher too.
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WTIC – Back test? The Oil inventory report comes out on Wednesday, so this could Pop or drop from here, but right now it looks like a bullish back test. Since Oil is in the timing to look for a drop into a dcl, I’d be aware of that , but it could push higher 1 more time too. This doesn’t look bearish and a lot of energy stocks look bullish too. We may see a short lived move higher and then the drop. In a recent report when OIL bounced off of that 50sma, I mentioned some nice set ups seem to be forming in Energy stocks, so after the dip, we may see some nice buy set ups in Oil & Energy again.
XLE – A pull back in Oil may lead to a back test in XLE. We’ll see if this topping candle signals a top after the Oil inventory report. Read the chart.
UUP – Bearish engulfing on day 12 for the USD. This could start to drop into a dcl too, or a 1/2 cycle low.
GOLD – Sideways Chop for weeks basically, right? No break out rally above the 50sma, No drop below the Aug lows. This is a crawl under the 50sma, 1 of 2 scenarios that I expected could happen. Tuesday was an inside day, and Gold could move higher to the 50 sma again.
So Gold is in the timing for a dcl. I really wouldn’t expect it to break the lows and at day 37, and also I wouldn’t expect a drop to last very long. Price has been running under the 50sma, a scenario that we have discussed.
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GDX Day 19 – I drew this chart for yesterdays report. GDX could crawl under the 50sma in the first daily cycle.
GDX Day 20 – More of the same
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Sometimes there are no real big changes in the markets on a day to day basis, we are just waiting for things to finish playing out. That may mean being patient and waiting for trade set ups, but for others (Stock pickers) there may be some developed trades. I have had many ‘picks’ in past reports that were mostly in the MJ Sector, so I want to just post a few different sector trades below.
It may be best to wait a bit if you are not in front of a screen, because the markets are still choppy while pulling back. Oil is due for a pullback, but it may have 1 more run higher. Miners held up and may continue to do so, but they too have been a bit choppy & sideways. Gold could do a quick flush here on day 37 to a dcl too. That said, I am just going to post a few trades that look good below, but for some it may be best to wait. The UUUU trade is still acting well, so I am thinking that some below could do the same.
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Just like the cars in that opening picture, there may be nothing new here, but that doesn’t mean that everything is all that ugly. Some sector just may need a little more time, or you face a bit of choppiness.
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Enjoy your Wednesday trading.
~ALEX
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DO NOT FORGET COPPER – I pointed out a bullish break in September and now after a pause, this remains a bullish set up. Notice though – it is Bullish, but also has been a bit choppy & sideways, right? So that can be tough for some until it gets moving higher again. Thats why we buy near lows , place a stop, and just let things play out. We have discussed Metals stocks HBM, FCX, TGB, WRN as copper stocks. Some are pushing on their 50sma.
UUUU – I have been discussing UUUU and still own it. It looks ready to continue higher, but this too has been a bit sloppy & choppy. Once it breaks, it could do a straight line move higher.
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Oil may have 1 more push higher, but timing-wise it is due for a dcl any time now, but I did find a few Oil / Energy Stocks that looked good, so I will just point out a few for now.
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CHK – This is actually more of a NATGAS / Energy company. It is a BUY with a stop under the 50sma area. After losing the 50sma on a healthy pull back, it regained it & held as support. The run in May was very nice.
LGCY – I mentioned this days ago, but I still like this set up a lot. This could run $5 to $10 if the sector stays bullish and no bad news comes out. It is forming a long inverse H&S so far
UPL – UPL is in a BASE and if it breaks out , it could run higher.
1. If Oil drops into a dcl, watch this , it may drop to the bottom of the base as a low risk buy.
2. If Oil pops after oil inventory, this may break out as a buy.
HK – This looks like a very nice bullish set up too. After moving out of the base, it is gently pulling back.
HK – Look at the 50sma, MACD is about to cross higher, and it is not overbought. THIS IS A BUY.
CCRC – HIGH RISK/ Maybe HIGH REWARD. FOR ACTIVE TRADERS WITH SOLID STOMACH ONLY. This small run is already $7 to $14 since August, and the set up looks bullish on the 13 sma. This Could run to former highs of $35 over time.
OHGI – I posted this in the morning as a long base pushing on the 50sma with massive volume. I love these set ups for a quick trade, but I got sidetracked and did not take the trade …
OHGI – It shot up almost 100% yesterday. This is how some of these bases are breaking higher. I could show MANY here, but they are not low risk and after the pop, they also can drop.
FLKS – Also HIGH RISK, not for the feint of heart. I mentioned FLKS over a week ago. it POPPED to 75 cents and closed at 57 cents. This could break from the base. Well, this was over 1 week ago, what if you bought it?…
FLKS – still 55 cents and what a crazy ride if you look on a close up chart. this has been choppy & poppy, but it still could break & run. Again, experienced traders on;y, small position size, higher risk, possible higher reward
