Thursday – Hanging On
I have been mentioning that the markets were due for a drop into an ICL, and I used this chart to show the potential downside –
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NASDAQ AUGUST – I thought that we might run to the top and then drop into an ICL just like the drops we saw in the beginning of 2018, and …
This chart looks to be a lot of what I was expecting, but I wouldn’t just jump in here. The NASDAQ broke & closed below the 200sma. Even though this could be a shake out, there is no need to try to catch this falling knife. We’ll monitor it along the way.
DJIA – The DOW was down 800+ Points! It sliced right through the 50sma. It was also down another 300 as I write ( Wednesday night).
IWM – The IWM broke to new highs in August and then topped. That is a false break out. I DO remember the BULLS saying that these market were SO STRONG, they will probably not pull back until mid 2019. Notice : Price is back at January 2018 highs.
IWM – And by the end of the day, it closed well below the 200sma/
SPX – Another big 1 day drop. This is panic and everyone is heading for the exits.
WTIC -The Oil inventory report dropped OIL on Wednesday. As mentioned in Wednesdays report, we are in the timing for a dcl, but the drop can also extend out to 50 days, so we’ll just see where it goes. I would expect a trend line break, and it could tag the 50sma or 200sma. We’ll check it out along the way, I was expecting an ICL drop recently and it doesn’t look like we had one, but we’ll see how this plays out. This has been a strong daily cycle.
DWT – I bought DWT today, expecting a drop further below that trend line. If OIL drops to the 200sma, this could tag the 50sma.
XLE OCT 9- So along with OIL dropping, I pointed out that this is usually a topping candle. I thought maybe a back test to that blue line? Well…
XLE– WHOA! Big volume and almost straight to the 50sma. Some energy stocks were shaping up nicely, but now they’ll need time to set up again, if if if they are going to be long candidates as discussed.
So for example: I pointed a few Energy stocks that looked to be setting up bullishly. HK, LGCY, UPL, CHK.
HK This was HK, bouncing off of the 50sma.
HK – As you can see, after yesterdays drop, these will need watching. LGCY & CHK did pretty much the same thing, dropping right back to the 50sma. UPL popped and sold off a bit.
We’ll see if it does a shake out, a break down, or finds support.
GOLD – This is captured from yesterdays report. I was thinking that a quick drop & rebound would give us a dcl. I drew it that way here. Click to enlarge if necessary.
GOLD – not a lot of movement in Gold Wednesday, but Miners sold off. Well, they sold off and…
GDX – Well, they sold off and recovered again. So we have a couple of things happening here.
1. Each sell off is being bought back so far.
2. We are crawling along under the 50sma, and that is normal and was even expected.
3. We still have an inverse H&S in play
4. They did NOT crash down with the markets
SBGL – We still have quite a few Miners acting correctly, like SBGL, AU, ABX and so on. I Bought SBGL Wednesday morning, and wanted to buy AU, but the 200sma is right above it. Lets look at ABX too…
ABX – This is acting correctly too.
So the General Markets are dropping sharply into their ICL.
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Oil (& Energy) is also getting late in the daily cycle count, so it dropped too.
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Gold, Silver , & Miners did not follow the sell off. I like the way GDX & GDXJ sold down and reversed to green again. They are crawling along under the 50sma, and may be preparing to break out higher. That would be a good sign of confirmation to add if you wanted to, because this sideways chop has left many cautious, and that is fine.
We will continue to watch how things play out, but you can see that what we are seeing now pretty much matches the Big Picture Weekend Reports that I have been writing for weeks. When ‘Time’ is up, it is best to tighten stops and remain cautious. Often, though, pull backs can lead to opportunities. The General Markets & Oil may need more time to settle down and form a proper bottom or reversals, but a watch list can be made up to keep track of what your favorite stocks may be doing. MJ stocks sold off and may present another buy in the future too.
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Enjoy your Thursday trading ( or market watching).
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~ALEX
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Many MJ stocks sold off , and some recovered while others didn’t, so I thought that I would mention just a few.
NWGFF – This doesn’t look like much, but it is actually a 10% drop. It is not damaged, it closed above the 50sma and on the 200sma, so I own it and am still holding on.
OGRMF – OGRMF dropped about 26 cents at one point and I was asked about it in the comments section, so I mentioned that I use the 34 sma for this one. It actually reversed right off of it and went green. That was great, while it lasted 🙂 It closed down 1 penny. I am still holding on.
