June 12th –
SPX – MONDAY the markets looked like they may start to pull back, I posted this chart…
NASDAQ ALSO MONDAY – The NASDAQ seems to have stalled at the 50sma on day 5 and if the recent lows hold up, we could see a higher low and then another move higher…
SPX TUESDAY – So we have a break out & reversal that may lose that 50 sma. That alone isn’t a big deal, but we want to see whether this was a strong rally that fails or continues higher . We have seen a strong rally that fails recently- see the chart.
NASDAQ – NASDAQ is also either back testing & losing the 50sma, or just building steam to get above it.
Lets see how this General Market pulls back from here. Oil is concerning though…
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WTIC – With Oil failing to move higher, it does add a little concern about the Market bounce so far. Oil and the Markets were running together fairly closely, but that could change. Oil looks weak.
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ALL THINGS CONSIDERED: We could be seeing a rotation out of certain sectors and Money starting to flow into other sectors. Recall that at the end of 2018, we saw
1. GOLD & MINERS bottom in Aug/September, and recently put in higher lows at the recent ICL. We also saw
2. The Stock market and OIL sell off together from Oct to December 2018, and then put in a recovery run at the start of 2019.
3. The markets looked weak in the recent sell off, until the FED changed the game a bit with Rate CUT talks, but is that enough?
4. Now we have the USD breaking down, GOLD & MINERS putting in higher lows at their ICL and looking ready to break out, and I am also seeing other ‘Metals’ or commodities perking up too.
5. Is this market rotation, where Big Money slowly moves money from one area to the other? We’ll see…
It will take some time to see how these sectors all play out, but we may be seeing Sector Rotation for Big Money, and time will tell. For now, going long the general markets or its stocks at the recent low is fine, just use stops along the way, a pull back may be starting.
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GOLD – Gold dropped to about $1320 and started to reverse Tuesday morning, so I posted this chart and then the following chart in the live trading area…
GOLD – The 1320 area is 38% Fib retrace, perfect for a bounce. I would still only consider this a bounce in the selling, but we’ll see. There are reasons that I expect more selling, but a bounce at the 38% is Bullish …
GOLD – So gold held the reversal on that 10sma & 38%, and may continue higher Wednesday , especially if the markets drop. DCL? No, I doubt it, but it can go higher and DCL next week. NOTE : Gold did not break the 10sma, and that is usually what happens in a drop into a dcl. so I am assuming that this is a bounce and…
You may recall that last week I actually drew Gold bouncing off of the 38%, and then dropping further to a dcl, so we’ll just be ready for anything, and for now we’ll just watch this bounce for clues.
SILVER – Silver bounced slightly and may just get choppy.
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YESTERDAY I WROTE THIS:
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GDX – So I just wanted to give my readers a visual idea of what this may be like dropping to that 50sma. Many Daily Cycles have been 30-34 days, so let’s go with 32 days, we are on Day 27 Tuesday. With a day 25 Peak, this will be right translated and those highs should be broken on the next run. Day 32 is next week, and this COULD go to day 32 or 34 , even 36, so we usually try to wait for a swing low. INDIVIDUAL MINERS MAY BEGIN TO SET UP BULLISHLY, I WILL COVER THIS IN FUTURE REPORTS AS THAT HAPPENS.
GDX – GDX had a small reversal on day 27, but like Gold, it didn’t break down through the 10sma, which usually signals a dcl. I do want to show you 2016 though. Why? GDX in 2016 was a Strong Bull Run, and it formed a dcl in a very bullish manner. Did the 10sma break ? Let’s take a look…
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IMPORTANT :
GDX 2016 run – All of the dips along the run were supported at the 10sma. GDX bounced at the 10sma a few times and then went sideways late in the daily cycle, and on day 33 it slightly broke the 10sma. It closed below on what would be day 37, but day 33 was actually the lowest point, so here the DCL formed very mildly in a sideways drift or chop. That is Good to know! We need to expect GDX to drop, but be ready if on day 32, or day 35 , we are just going sideways and the 10 is only slightly broken. If it happened here, it can happen again.
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So we did get a bullish looking reversal at the 10sma in Precious Metals, but that doesn’t look like a dcl, it could be a bounce. Watch the bounce for clues, since the rally in 2016 ran higher & higher along the 10sma , as shown in the report. It went sideways late in the daily cycle & that was the next dcl. We will watch for clues, but THIS IS WHY I have been saying that you dont want to sell everything – surprises to the upside may leave one unable to buy a clear dcl.
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I will discuss a few things below, enjoy your Wednesday trading!
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~ALEX
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INTERESTING UPDATE: This was Golds ‘Bounce’ on a 1 hr chart yesterday. CAN it break above this area or just a weak bounce? It tagged the upper line later in the day, pulled back a bit, and now…
INTERESTING UPDATE: GOLD Broke even higher, so now we’ll see if this really does start acting like 2016, riding the 10sma higher on each pull back until we finally get a dcl in a week or 2. This MIGHT just be filling that overhead gap.
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Searching for entry points on pull backs : These are the things that I look for to add to a position or maybe start one. An entry can not be expected to be PERFECT every time, but your goal is to ‘buy low, sell high’. 🙂 Since I will be away from the Live trading area on Thursday & Friday, I wanted to show basically how I look for certain entries after a Miner rallies and starts to pull back.
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VGZ – VGZ was a buy on June 1. It is low risk breaking a downtrend because you can use a stop to lower risk. It then continued higher, and now…
VGZ #1 – This was VGZ Tuesday morning. It CAN drop further, but so far it is reversing on the 10sma & just above the 50sma …
VGZ #2 – It did continue higher through the day and looks like a solid bull flag. If we get a run like 2016, this might not drop any further, so adding CLOSE to the 50sma may be the best that we get. Watch for a break out or dip going forward.
Recently I mentioned that CDE could drop to a double bottom low, and I used this chart to point out that it could also just find support and flag like this…
CDE #1 – CDE rallied to the 50sma & reversed. If it could stabilize at that 10sma, we could see a choppy bull flag. That may be a nice place to add
CDE #2 – So far, it found support. This could still go either way, but if we get a mild dcl ( similar to 2016), these may find support at the 10sma. You could START a small position here & add on a drop or break out? Just buy it with a stop at the lows? Wait and see? We won’t get a ‘Perfect’ entry, but buy low, sell high is the goal.
KL – Monday saw KL drop , reverse at the 10sma and look like it wants to recover already. This is strong and honestly it could be bought on any dip, but it still could play out as shown here, so if you can take the chop, starting or adding in this area should be fine.
KL – This was KL Tuesday. See how it hit the 10sma Monday & reversed. It may not go much lower than this.
SBGL – I have been pointing out the upside potential on SBGL. This ran from $4 to $19 in 2016.
SBGL – This is also forming a bull flag along the 50sma, and could be bought with a tightish stop, or just start small and add if it drops even further.
Surprise to the upside.
GORO – GORO Popped over 12% on some good news. This is at the lows, so it could be bought with a tight stop.
NGD – NGD was the same. It slowly moved higher all day right up to resistance. It can be bought on a dip or if it breaks out, that could be a buy too. JUST COMING OFF OF THE LOWS Might be a choppy stock, so keep that in mind.
So those are just a couple of ideas at what to look for. Many Bull Flags seem to be forming too. Price found near a support area offers less risk downside, because your stop can be placed there. IF, AS MENTIONED IN THE REPORT, WE GET ROTATION INTO OTHER METALS, THEY MAY BE COMING OUT OF THEIR LOWS TOO. Look at RS, AKS, SID, WRM, TMST, FCX, HBM, TGB, etc
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RS – This is a Buy in my opinion
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WRN – Copper, this looks like a bullish rise in a base. It moved above the 50sma as a buy.
FCX – Copper. This is a little difficult, because it could chop around or just keep moving higher. You might look for a reversal at the 10sma. It Gapped open & dropped during the day, so it also may just start moving higher again.
TMST – This steel stock sold off due to lower prices on their product according to their earnings report. It is in a tight base, and I would wait for a break higher, but it should firm up if this sector does.
TMST WEEKLY – TMST Sold off with the general amrkets, rallied with them into February, but then earnings proved to be damaging. That is now lower lows in price, but higher MACD & RSI ( Weekly Divergence). I would imagine that this will recover if the sector finds money rotating into it.
HBM looks to have bottomed and could run to the 50sma, crawl, and break out. Look at the rally in December to April. That was $4.50 to roughly 100% higher in 3 & 1/2 months.
CGC – I grabbed this for someone in the first hr of trading yesterday. This was the MJ Stock CGC. It may be trying to recover and this sector may shape up & start another run higher. THIS IS JUST THE START, SO IT IS A BIT RISKY…
CGC – As of the close, it broke out from a down trend, but it is possibly going to struggle a little at the 50sma & 200sma. It is good for the watch list, or start a small position if it holds up & you like this sector.
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After Monday & Tuesdays General Markets reversal near the highs, I’m a bit hesitant to Buy stocks in that area until the pull back reverses. I want to see how the markets pull back or move this week. Some say that the economy is softening or slowing down to the point where the FED Rate Cut is too late and wont help. That said, let’s look at a few things in the General markets. These are interesting & Bullish looking set ups that could go on a watch list.
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GRUB – This caught my eye. GRUB broke above the 50sma , and out of a base. It has been choppy, but it may be ready to run. It can be bought here or as it proves itself.
TWLO – Yesterday I was asked why I don’t feature more stocks like TWLO- its in an uptrend & not selling down with the markets. Yes, this looks Bullish, but notice that this also has been very sloppy & choppy, going sideways for months. Most do not like riding that chop, but you can just put this on a watch list as a bullish stock that may break higher if you like it. If you bought this months ago, you really have no gains, unless you are trading it. That said, It could be bought at the 50sma if you like it, or on a break out for another run.
NFLX – NFLX did start to recover after the market sell off too, but this also offered no gains over the past few months. It is holding the 200sma, you could watch for a break higher, since a break out could run but again. AS A CAUTIONARY NOTE: The markets still need watching and even NFLX could break down…
GOOG – Even good looking rallies like GOOG out of the lows may suffer if the economy is softening . GOOG is back near the lows after a strong rally out of the lows.
I have pointed out that SOLAR STOCKS are bullish. Lets take a review of a few.
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VSLR – This is a bullish set up, and many Solars are setting up this way. I recommended it as a buy & bought it.
VSLR – It has had a nice run, and may continue, but it is choppy in the consolidation. I sold mine when it got choppy. I just wanted to point this out to show how that break out from the wedge followed through, because…
FSLR was recommended at the 50sma, with this set up similar to VSLR. This can run like VSLR did.
FSLR – I still think that it looks good.
JKS – This was also recommended at that break out point, and it is finding follow through, so the SOLAR SECTOR is still acting Bullishly, but it does get choppy too. I no longer own any, but We discussed SPWR, RUN, & CSIQ and I traded those quickly too.
