Thursday May 9th – Short And Sweet

 

No doubt you have noticed that trading has been quite Choppy again.  Even good set ups are stalling  (some failing). Due to the extra ‘chop’ in price, I have been stopped out of a few good set ups, and I am still in some trades that are just tossing me around with Gains one day and down the next.  The next 4 charts are examples of those types of ‘Good set ups’ that have been a bit choppy and not moving ahead with solid gains yet’.

 So, due to the current markets  continued selling down into the DCL, we have been expecting and experiencing some choppiness.  With that expectation, I am not going to post a lot of new trade set ups in this report, since the current ones are still playing out.  This report is just going to focus on our main sectors of the market, and allow current set ups to play out.

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In other words,  I’d like to keep this report Short & Sweet.

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SPX – The General Markets dropped and I have said that they will likely be volatile or choppy this week as we wait for a dcl to form while talks of China tariffs pushes the markets lower too.  This is NOT a swing low in place yet, it is a pause and yes, this can break down further and do a shake out for the bulls.   That is why I showed you the VIX yesterday.  YES,  this can also be a bear flag & drop to the 200sma, so patience may save you money.

 

VIX –  I will explain further what this VIX could mean in the weekend report, but I already mentioned that you may want to take a look at how the OCT market sell off started on the VIX.

WTIC – Oil may have a swing low, since it fell to support and reversed for 2 days.  We had Oil Inventory Wednesday, and Oil was GREEN after that release. This looks Bullish and a break of that overhead down trend & 10sma could be bought. This could be day 2 for Oil. 

 

 

XOP  – I Bought GUSH, but I decided to sell it due to the choppiness and inventory report.  Notice that I did Not get stopped out- the lows are in tact so  I should still be in this trade.  I simply sold it with that inventory report coming out.

I could have actually re-bought  it right back here if I want  ( it hit the 10sma and was rejected). This may be the lows, so buy with a stop or wait for a break above the 10sma for confirmation.

 

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GOLD FINDS ITSELF 9 MONTHS AFTER THE AUGUST ICL – So we are DUE for an ICL,   but it has been a mild sell off.  That leaves us a slightly mixed picture.  Is this DCL an ICL?  Or will it roll over?  Watch the trend line…

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GOLD #1  –  Gold popped higher and sold off all day to the 10sma. This chart shows the MACD rising and bullishly crossed, so there is hope that this dcl will have follow through higher.   If it breaks the lows, that could lead to weeks of sideways & downward chop.  This should be the dcl.

 

GOLD  – This chart shows clearly that GOLD hit solid resistance so far at the 50sma & a down trend.  We’ll now be looking to see if Gold can

1. Break out higher above $1295ish ( 50sma & trend line) & start to rally  or

2. Will it roll over as one more failed daily cycle (day 4 peak so far).

 

GOLD CYCLE COUNT FOR AN ICL – We are on Month 9 from  the last Aug ICL.  Please understand that I use cycles to help with the ‘timing’,  but I do not rely on them as a RULE.   We are due (or overdue) for an ICL,  but this has been such a mild drop that we may need just one more slam down to shake out Bulls.     So it is a MILD LATE ICL?  Or will a final drop give us a LATE ICL?  I can live with either.   IN PAST REPORTS I Pointed out prior ICLs that stretched this far,  so it is not impossible and that can be seen if you do the research.

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Which leads us to Miners and their outlook looks the same as Golds outlook.

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GDX –  Miners also look like day 4, but they sold off sharply and this concerned many.  Of course,  it does concern me too,  I don’t want this to break the lows, but so far it is a swing low that did barely close above the 10sma and we have to see what we get from here.  We want $20.14 lows to hold.

 

 GDXJ – Well, it just isn’t pretty,  that is true. We don’t want to see it lose the recent lows at $20.04 and it was rejected at the 200sma and lost the 10sma.  It COULD be back testing the break out line.  Is this quick drop alone extremely abnormal behavior?  Is it automatically bearish if it breaks above & then below the 10sma?

 

 GDXJ – Coming out of the October 2008 ICL, GDXJ was not a straight run higher.  Miners chopped around and almost took out the swing low twice then too. Notice that it did close under the 10 sma twice after gaining it then too.  I’m sure many thought that this was going to break down again, but somehow it survived & took off higher.

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 WE ARE NOW 8 MONTHS LATER THAN THE SEPTEMBER ICL, SO WE ARE DUE-  but again, I don’t use cycles as the “law’.  In my experience, I have seen the TIMING of Things can stretch under circumstances.   We are seeing that now at this dcl.    Either this is the ICL, or we have 1 more drop, and I can live with either scenario, because the rally that follows should be a beauty.

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   So basically,  If we took the trade at a potential swing low,  we just need to have stops in place under the lows, and see if we can get some upside buying.  POSITION SIZE IS KEY TO BEING ABLE TO HOLD YOUR POSITION IN CHOPPY TIMES & ALLOW FOR SOME WIGGLES,  but you don’t want to see the lows break down.    The time is late for an ICL,  but going ALL IN LEVERAGE will cause fear on each wiggle or 10-20 cent drop.  It is best for many to take a smaller  when position expecting the lows to be forming, and see if the lows do hold.   You can also wait for further confirmation to be safe.    TRADE ACCORDING TO YOUR STYLE & RISK TOLERANCE.  Yes, we are at risk of being stopped out of the trade,  but for now we are dealing with choppy, volatile, sideways Markets and that may be part of what we are dealing with.

 

  Time will eventually reveal the lows when (or if)  they are in place, like it always does.  Clarity will come when we get some more upside or downside.  Oil, Gold & Silver  do have small swing lows in place, so now we just need a little more time and a little less choppiness to know for sure if they go Higher or roll over.  For now,  despite this choppiness, I hope that you can Enjoy your Thursday trading.

 

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~ALEX

 

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BITCOIN – Bitcoin finally got above $6000 overnight.  There is a lot of resistance areas to the left of this chart,  so it may struggle and drop in the short term.   🙂