May 20 – Still Choppy
One thing that the markets do not like is indecision, and lately with the China Tariff ’cause and effect’, the Markets are having a tough time gaining traction. I believe we also get the release of the Fed Minutes this Wednesday, so it seems like we are in for some more choppiness. Let’s just take a look at what the week started off like…
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SPX – We had the break of the short term downtrend recently, but the upside follow through has been lacking. The SPX lost the 50sma, but this may just be a back test of that trend line. We’ll see if we get a bounce Tuesday.
NASDAQ – We see the same thing with the NASDAQ and other sectors. I believe that we have a dcl in place, but IF this dropped to the 50sma, it could mean that we needed that 200 sma back test too, so in that case, Monday was really day 50. Another Choppy Sector out of the lows.
WTIC – Even Oil, which has looked like a dcl and acted like a dcl while holding reliably above the 50sma, lacks a bit of upside buying. I pointed out here that prior reversals ran straight up and then went sideways. This reversal has moved sideways. Another choppy sector.
USD – In the weekend reports I have been showing where the USD Peaked and that is where Gold, Silver, and Miners have also bottomed. We still look as though the USD has a bit more upside potential into the end of May. I guess that should keep us alert to the idea that Golds daily cycle COULD have more downside into the end of May. It may also be sideways, choppy, and then a dcl.
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GOLD #1 – Gold looked to have an ICL, when the short term down trend line broke. Gold then dropped back inside, and with the USD having some upside room, this COULD drop to new lows. Basically, Gold has been choppy for 2-3 Months.
GOLD #2 – IF GOLD has an ICL, gold could spend the whole first daily cycle chopping sideways and ‘back testing’ the 50sma as it rises to the Gold Price. I throw this idea in there because Miners didn’t sell off with Gold last week, so maybe Gold still does have an ICL and the first daily cycle is just going to be a choppy mess. Sound familiar? Let me show you this idea of a choppy first daily cycle in action…
GDXJ SEPT – NOV 2018- LOOK AT HOW CHOPPY AND UNPRODUCTIVE THESE LOWS WERE. THEN COMING OUT OF NOVEMBER LOWS, IT WAS STILL A CHOPPY FRUSTRATING MESS ( Right before Lift Off). There is nothing wrong with waiting for Lift off to avoid a choppy mess, but October looked like lift off and it died again. These can be frustrating until the real run comes along.
SILVER – No change with this choppy mess, but one thing that I forgot to put in the weekend report was the Silver COT. It was far different than Golds. In the COT, you will see that in March at Silvers peak, the ‘shorts’ were very high. Smart Money has now drastically reduced their short positions as Silver breaks down here…
SILVER COT – Near ICL levels, Smart Money Short was high in Gold, but drastically reduced in Silver.
GDX – In the weekend report I presented the observation that Miners didn’t sell off when Gold did last week, so maybe they’ll hold up. THAT IS A POSSIBILITY, see the weekend report. However, to keep us on guard, I want to mention again the other side of the coin.
In August GOLD Bottomed first, then Miners bottomed in September. So if these lows break down- PLEASE USE STOPS IF YOU ARE LONG. So far, this is just a frustrating choppy mess, like all other sectors.
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So at this point, we really need to be patient and watch how these various sectors play out. I do own several positions and I find that my account is green at the open, goes red midday, returns to green by the final hour of trade, and ends the day slightly red. That is just sloppy choppy movement. Yes, there will always be a number of trade ideas that do well, but all together , catching those trades and holding choppy ones can still be unproductive. We currently have a sloppy choppy market. Keep positions small and reasonable, and have Cash ready for when a good opportunity arrives.
I am going to continue riding my current trades until I am either stopped out or moved to sell, but for now let’s see what happens Tuesday and maybe even Wednesday when the Fed Minutes are supposed to be released. MAYBE THEN we will get some directional moves.
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Enjoy your Tuesday trading, and stay frosty in the choppy sea of trades!
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