Thursday September 12th – Following Through
I expected at least a run tot recent highs. I was asked, “Can I short that area?” I don’t know if that is a good idea yet, so let me explain.
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SPX – After a little sideways Pause above the 50 sma, and with Tuesdays reversal, we got the follow through higher. I expected at least a run to the former highs as we put in ‘higher lows’, and some took the TQQQ, SOXL, or UPRO trade.
1. We are on day 26, but this can run even higher if it gets going . 40 day daily cycles are realistic.
2. Also, since this should be a right translated daily cycle , that makes this at least short term bullish, and a dip to the 50sma may be all we see for that dcl. I would not short it.
3. I have expected markets to top, but what if this breaks the highs on day 28 and just keeps going through day 35? The dcl could be a back test of the highs.
4. I would not short this set up
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TRAN – The TRAN & RUT had Bullish follow through too.
XBI – XBI looks ready to follow the markets higher too. LABU is a leveraged etf for Biotech, and when Biotech breaks above the 50 & 200sma here, LABU can be considered a long trade with a stop.
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Oil got just a little confusing, and time will have to clarify it.
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WTIC – Oil was fine after the inventory report, but then started to drop a while later. Oil then closed down almost 3%, but XOP, XLE, OIH closed green? That is confusing. MAYBE the stocks are leading Oil, and it was a false break down? We’ll see.
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WTIC – Oil on day 24 can be about the midpoint. We have seen 50 day daily cycles, so are Energy Stocks telling us that this is a false breakdown? Just more sideways chop while the stocks lead the way? Use stops in Energy stocks and I will discuss this further at the end of the report.
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XOP – XOP held the 50sma, closed green, and has increased buying volume.
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GOLD – No real change here. We are on day 29, finally oversold stochastics, and we are in the timing where a DCL can form. The last one was Right translated, so we could make new highs, but there is a chance that the next could become L.T. & roll over, so I will be buying with stops trailing.
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GDX– GDX has broken down more than Gold, it even broke the uptrend. This often happens when an ICL drop begins, so I have to become cautious. The last daily Cycle WAS R.T., so this may double top with slightly new highs & roll over into an ICL drop. We need to be open minded to anything, I will cover this area more in the weekend report, the FED is next week.
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WATCH COPPER, IT LOOKS SET TO BREAK FROM THIS CRAWL
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GORO – INTERESTINGLY, GORO has broken out above the 50sma. It was a lagger, so it may be playing a little catch up. It may start leading the way. I don’t see anything wrong with buying this with a stop and watching it closely for a bit.
AU – AU reversed at a trend line, so as we approach time for a dcl, SOME LEADERS may lead again. They may bottom ahead of GDX / GDXJ.
DRD – DRD reversed at the 50sma support, so is it bottoming before GDX / GDXJ? Possibly. It COULD also bounce & double bottom as shown with the fed mtg/ GDX dcl ahead.
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So Markets look like they want higher prices. Oil dropped 3%, but Oil / Energy Stocks look bullish. That will become clearer over time. Gold, Silver, and the Mines are getting late in this daily cycle, so a swing low ( DCL) is coming due. That can be bought with a stop that should be raised over time, just in case we take off higher. We do have to consider that an ICL drop could follow this dcl, and I’ll discuss that this weekend. The Fed is next week, and that can be a pivotal time. I have more to discuss below,
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Enjoy your Thursday trading!
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~ALEX
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While Oil closed down 3%, some several Energy stocks were up 5-10%, others paused, and some fell into the red. That is a bit confusing, so let’s take a look…
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BAS – BAS simply put in a doji ( indecision candle). This can go either way really, but it did not close red when Oil dropped 3%. Tag of the 50sma may be a nice buy.
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PLUG – Another Doji, but Plug has had a pretty nice run from that 200 sma & 50 sma.
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PLUG – A back test & buying opportunity is not out of the question, but it could also just run higher.
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KEG – KEG closed up 8% and still looks fine.
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DNR – DNR ran higher, sold off, and then almost recovered to even, so basically another doji has formed in Energy Stocks. It is a sign of indecision, but it isn’t really bearish with Oil down 3%.
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GTE – GTE tagged the 50sma and held up. The MACD & RSI Look bullish.
VOC 1 hr into trading – I ALMOST posted this in the live area as a bullish lagger worth buying above the 50sma (not shown). Then when Oil started to sell off, I held off to see what would happen…
VOC– By the end of the day, it was actually closing above that 50 sma. It may be a buy Thursday, but I want to see what the entire sector does first.
WLL – WLL ran from $7.93 to $8.68, and then down to $7.65 and back on Wednesday alone and then closed break even. Doji again. Volume was high & this looks pretty good above that 10sma, but THAT would have been a hard ride. $6 – $9 in 5 days. This may be great for some, too choppy for others. You can decide.
Those Retail Stores – They had some follow through too. We discussed RAD, EXPR, PIR, M, JCP, GPS, etc. If we get a pull back, it may be a nice buying opportunity.
JCP – More follow through with increased volume.
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GPS – More follow through with increased volume, but this is not as extended as others. It could have been bought as it dropped to the 50sma Wednesday.
DF – Up another 23%, these are really moving quickly out of the lows.
MAXR – This is the one that I really liked the Base. It was up another 13% at one point, but closed up 10%.
UPDATE BY REQUEST : WTER – After a massive surge higher above the 20sma, WTER was exhausted and profit taking took over. Often price chops around from here and continues to work its way higher over time. It dropped to the 10sma & reversed there. It can just run higher or chop around as shown.
NBEV– NBEV looks like it may leave these lows too. It broke the down trend with increasing volume.
QTT #1– I’ve been watching the tech sector a bit more, and especially the Chinese companies lately, since they’ve been beaten down with the tariff talks. This stock caught my eye as it started to move above the 50sma, and I may buy it if this continues …
QTT #2– I’ve mentioned VIPS, JRJC, HUYA, IO, etc – so keep an eye on these. Look at the bases forming on some of these. If they do recover, the upside potential is great.
WBAI- This one has a double bottom low with divergence & volume, so I do think that these are starting to look good again.
