Wednesday October 23
SPX – We have a day 13 peak and the market hit the upper trend line & turned down. While SPX & NASDAQ turned lower, something interesting happened…
.
TRAN – The Transports and Russell 2000 pushed higher as volume increased. This looks as though it wants to break out from that LONG 10 month choppy consolidation. It would be interesting to see these sectors break out & take over on the bullish side.
.
BRZU – Brazil broke from a down trend last week, and Tuesday it had a big surge of volume as it broke from a sideways choppy pattern. It is breaking above the 200sma and this looks bullish too. An eventual run to $40 would not be out of the question. A Gap-Fill drop to the 10sma would be a possible cheaper buy, but this looks like it wants to go higher now.
.
WTIC – No change with Oil, it moved higher but has been choppy, and we are on day 13 . XLE & XOP did run Tuesday, but they sold off a bit into the end of the day. Some Energy/ Oil stocks are perking up and WED IS OIL INVENTORY REPORT.
USD – Now we can clearly see the reversal in the USD after tagging the 200 sma support. This is likely day 1 and I expect a bounce to back test the break down.
.
GOLD – Gold should be on day 30, so it is getting late in this daily cycle. The Fed Mtg is next Tues / Wednesday, so a low can come at any time really. A break & close above that downtrend has to be viewed as bullish. A break above $1505 is also a break above the 50 sma and would be bullish.
.
GDX – GDX & GDXJ sold off for the morning, but then they started to find buying heading into the end of the day. We have small reversal candles. This shold be day 27, because I just do not think that day 22 was the low. A strong break above the 50 sma or down trend line would be pretty Bullish at this point though.
.
I am still seeing a lot of really good looking set ups in the Miners sector. Some Miners are holding up well, as pointed out in past reports. I love the way HMY, FNV, HL, EQX, NG, and so many more are lining up. I am keeping an eye on the strong & the weak ones for clues. Though it still remains a mix with the miners, some really do look Bullish.
.
I’m going to say something that no one wants to hear, but please Don’t shoot the messenger =) At this point it is just a thought, so why not mention it? As we get later & later into this daily cycle, it is still holding up well. I expected that by day 30 we would at least start seeing some cracks in the armor. Most precious metals are holding up so well, that it doesn’t really feel like a ‘Final Daily Cycle’. So what does that make me think wonder?? What if…
.
So far it just feels like this is more of a normal drop into a bull run dcl, and maybe not a final drop to an ICL. We have the failed daily cycle, but as we enter day 30, things just seem to be holding up better than one would expect in a final drop to an ICL. I’m not saying that we can’t have another Mild ICL, but I want to expect the worst, and hope for the best. What would we do if this was just a dcl & the ICL was still ahead in Nov? NOTHING DIFFERENT. We have to buy a dcl and use a stop & raise a stop and give it a try, just in case it is a Mild ICL. If we get 1 more final daily cycle, then it”ll be L.T. , and probably peak rather quickly ( Day 5-10) . I have seen MANY ICLs in December & November, and that would only be 7 months from ICL to ICL., so that also lines up with that idea.
.
GDX- THIS is an example of how that might look. It would absolutely drive both the Bulls and Bears ( and me) crazy, but we can’t control the markets, they will play out the way they want. All we can do is be ready to profit from it when the opportunity of an ICL arrives. THE GREEN BOX shows that this final daily cycle drop happened at the last ICL after chop.
.
Only time will tell, but it is getting later in this daily cycle, and so far things seem to be holding up well. Enjoy your Wednesday trading !
.
~ALEX
.
CLF Yesterday, I wrote — Some Steel stocks also look to be bottoming. With the USD poised to drop after a bounce, the industrial metals may be ready to rise too. CLF has been choppy, but we can watch for a break higher above the 50 sma.
–
CLF – CLF put in a drop & reversal above the 10 sma
,
X – Steel stocks are perking up, as seen with this base in US Steel .
,
NOG – Northern Oil & Gas (NOG) popped with volume above the 50 sma. I almost bought this, but decided to sit on my hands in this sector for a bit longer. It has been choppy.
SD –SD seems to be holding up forming a base too. There are a lot of stocks like this that look to be possibly becoming bullish. See NOG, HAL, WTI, MRO, DNR, LPI, etc. Today is the oil inventory report release.
,
.
Yesterday I pointed out some Biotech like PRTA here …
PRTA – Another biotech stock that is trying to get off the bottom. It has been choppy too, but that could be a small base that formed. It broke above the 50 sma & could run to the $10 area. It can be bought with a pretty tight stop.
.
PRTA – It was up 10%. This sector remains mixed , with some good and others choppy. ZIOP did a shake out, and looks like a possible buy too.
.
FIT – I know that more than a few followed me into FIT, and it was up another 5%. I can see it tagging that 200sma, but a measured move does project it to get through it. We’ll see if it has the volume to do so.
.
EDIT: 6:30 a.m. Eastern. GOLD IS AT THE APEX. The report was written around midnight, but Gold has popped since then, so let’s take a look. It actually still has about $14 to get to the 50 sma and the downtrend line, but it looks Bullish. It is still within these parameters, but it IS at the 10sma. $1505 is the 50sma. This does need to drop soon, since we are at day 31 , or it is threatening to break out.
ON DAY 31, it actually means 3 things:
– You can go long with a very tight stop, or
– You can go short with a very tight stop, or
– You can continue to wait for a break out one way or the other.
We are right at the APEX late in the daily cycle, it is a battle of Bull & Bears!
