Wednesday March 25th – Picking Flowers
SPX – We have been discussing cycle timing while watching for a swing low that breaks above the 10sma. SO FAR, The SPX Popped on either day 35 or day 1 of a daily cycle low. We are close or we are there, so …
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NASDAQ – It may help to notice that The NASDAQ did close above the 10 sma, so it seems like the Tech stocks are leading the way, but we still don’t know if the SPX & DJIA will follow. We may know on Wednesday, and that will be a buy for that sector.
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SOX – The semiconductors stocks ( AMD, CREE, TSEM, MU, etc) looked good Monday and now they had follow through Tuesday, therefore The SOX also closed above the 10 sma .
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SCROLL UP AND YOU’LL SEE THAT WHILE SPX DROPPED TO NEW LOWS DEEPLY ON MONDAY, THE NASDAQ BARELY DID, AND THE SOX DID NOT. THE SEMICONDUCTORS OFTEN LEAD THE WAY, SO IF THEY ARE, UPRO MAY BE THE NEXT LEVERAGE ETF THAT MOVES HIGHER WITH THE SPX ( IF A LOW IS IN PLACE). I ALREADY MENTIONED THAT TQQQ & SOXL CAN BE USED FOR A BOUNCE / RALLY OUT OF THE LOWS. UPRO CAN TOO.
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UPRO – After such a steep sell off, it would be easy for this ETF to double on a rally if an ICL is in place.
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REMINDER: THE OIL INVENTORY REPORT IS RELEASED ON WEDNESDAYS. Read the chart.
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XOP – The XOP is not above the 10sma, but it seems to be stabilizing, with a possible MACD cross & RSI rising.
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From Yesterdays Report: GOLD – This was a big day and it pushed Gold to close above that 10sma. THAT should be a dcl in place. We should be able to expect Miners to move higher now too.
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I ALSO MENTIONED: GOLD IS NOW MAKING $30- $50 MOVES AS PART OF NORMAL ACTION, and even $100 moves can take place in 24 hrs. Gold ran from $1482 to $1580 Sunday night to Monday night.
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GOLD – And GOLD certainly did rise in an uncommon manner. It blasted over the 50 sma and almost made New Highs with a $100+ move! When you see a move like this, you cannot expect anyone to explain it as though they totally understand it. I will say this:
1. We had a swing low
2. We saw GOld confirmed that low Monday above the 10sma.
3. We saw it explode higher Tuesday, and that looked more like an ICL. And.. .
4. Gold is still oversold
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SILVER – I posted this during the day Monday, as Silver broke out from an inverse H&S & Several Silver Miners moved up steadily. Silver stocks were making gains as big as JNUG used to make on its biggest days. This was important.
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SILVER CHART FROM MONDAY NIGHTs REPORT : – Silver could be on day 3, but it hasn’t made it to the 10sma yet. That is right under $14. The chart shows signs of strength. ( 2 signs of strength out of 3 appear, but it is a bullish set up) .
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SILVER POPPED – Tuesday Silver joined Gold and Popped over the 10sma. This is day 6 for Silver with a dcl in place, but if Gold has an ICL, Silver should too.
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SILVER has a confirmed dcl at the very least. Silver is oversold.
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GDX MARCH 17 – A week ago we had Rail Road Tracks that I was taught by Joe Granville are rare & often indicate that the Lows will not be broken. I have used this in the past successfully, but with these wild swings could I trust it? I couldn’t be 100% sure, so what was the best way to view it? If it dips, we could buy it with a stop, because it could recover. So…
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AG– I used this triangle after an hr of trading MONDAY for AG to show that Miners ( or GDX / GDXJ) could be a reversal forming or a continuation pattern, so we look for a break one way or the other. I said that WE COULD BUY WITH A STOP RIGHT UNDER THE TREND LINE AS IT TRIES TO BREAK THE TRIANGLE.
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GDX – Now we saw a pretty strong pop on day 6. GDX used to gain 5% on a great day, it was up 14% at the close. NOW it gets very hard to enter because of the 14% move on top of the Monday move. Lets take a look at GDX in detail…
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GDX gapped open and you can see that it actually tried to close that gap and move higher again, so we may or may not dip down to fill the gap completely. IF you wanted to add to current position on a pull back, …
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Your best chance would be if we see GDX drop to the 10sma as a back test ( and gap fill complete, see Red Arrows) and then reverse higher. Unfortunately, this could just run right to the 50sma now ( green arrow). It is still oversold and can return to the highs over time like Gold.
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I’m posting my next chart just in case Miners drop on Wednesday. It never fails that when Miners drop soon after confirming a dcl, I get emails or questions asking, “Are you concerned? Are I Selling? What is going on? Why are we dropping? Is this ok? ” So I want to answer those in advance here. The trade is to buy a DCL with a stop below the lows. Your personal choice is to do whatever helps you sleep at night with the moves in between, but the trade is to buy near a dcl and a stop at the lows should be fine. If it pulls back, you can sell if you want as it drops to lock in gains, but notice this next chart ..
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GDX – In October 2008, the push higher put GDX above the 10sma through day 8, and then it dropped well below it almost all the way back to the lows by days 14 & 19. Many probably sold positions, but then it took off higher. It was NOT a rocket ship ride straight up to the moon, but it was a bear market sell off low. That said, if GDX sells off tomorrow, you now know what I know. =)
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What an exciting day in the markets we had on Tuesday. MANY MANY beaten down stocks in various sectors were up around 15-20% or even more. Will it continue or is it a 1 day wonder? Well, it has already been more than 1 day in the Miners. I want to remind everyone of this: Once the selling off started in the General Markets, it picked up speed and just went lower & lower. If you weren’t SHORT, it was hard to get in. THE SAME THING can happen on a rally higher out of the lows. We just saw that with GOLD. We can get a rip roaring bear market rally of short covering in any sector that leaves people behind too. That said, I didn’t sell the ‘bounce’ at this point. Below I will add a few Miners, Energy stocks, and additional thoughts, and we’ll see what Wednesday has to bring. Enjoy your Wednesday trading!
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~ALEX
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NEM – I am showing you this as a confidence booster for Miners. People have told me that they wont buy this bounce, because they expect another leg lower. Look at NEM. That looks like a recovery to me. 🙂
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BARRICK GOLD – This also may be showing us that miners do not have much downside left too. 🙂
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YESTERDAY I SAID ABOUT FSM – So you can make a list of what may be ‘laggards’, ones that are still below the trend line & 10sma, and if we do get follow through in the entire sector, you can enter on a break out ( Magenta circle).
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FSM (& OTHERS) – TUESDAY WAS YOUR BUY. I mentioned in the live area that they were gap filling, so that was the buy. We had the breaking of that trend line and 10sma, plus gap fill. Please read the chart to understand that better…
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EXK dropped to fill the gap and broke a trend line, so I bought it. This is still a lagger, and can still be bought, because it was ‘only’ up 10% 🙂
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IAG gapped open big, dropped to close the gap and stayed there. I would say that this can still be bought as a lagger too.
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SVM 10:30 a.m. – SVM gapped open about 30%, and dropped to fill the gap, but ran back up higher too, all within the first hour of trading.
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FROM YESTERDAY – SOMETHING TO WATCH FOR: SVM possible V-Bottom when this run is all down, so I am not selling the volatility. And…
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SVM possible V-Bottom – We had another building block added to that possible V-Bottom. The lesson here? IF SVM does a V-Bottom and you didn’t buy it with me, OTHERS might do that too. grab a lagger.
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CRWD & WORK – I was looking back at the list of stronger stocks that I had for us in the tech area, and noticed that they bottomed first! I did mention CRWD popping last week, but WORK, UBER, and others did too. Now AMD, MU, TWTR, SQ, HUYA, and others are looking good too. Let me show you…
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Let me show you a few good looking set ups , even before the SPX confirms a dcl. THIS MAY INDICATE THAT A LOW IS IN PLACE, SO UPRO CAN BE BOUGHT WITH A STOP.
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MU , AMD, CREE, TSEM, ETC – These were popping out of the lows ahead of the rest of the pack.
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UBER Started running before the etfs bottomed too, so we see leaders and that may help us to have confidence that a low is in place for the General Markets.
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SQ – This is popping fresh out of the lows, along with HUYA, TWTR and a few others. It may be an indication that the lows are in place, and these can be bought since they look to be finding buyers ( or short cover).
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GHSI – I own this and it was down 7% Tuesday morning, and I mentioned that I almost sold it to swap it for a Miner, but I like the set up. Suddenly it reversed off of the 10sma & popped up 8% so I posted this.It became a pretty good buy candidate since it was above that 50, 34, 20, 10 sma support. It then actually closed up 19% at 53 cents and looks like it might make a good move here. If it pulls back Wednesday a bit, you could take a small position. ( Working on Coronavirus )
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NOG – SOME ENERGY STOCKS ARE RESISTING SELLING & LOOK READY TO POP. THESE TINY MOVES ARE REALLY BIG. This was UP 17% and can move a lot higher if Oil bounces.
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WLL – This was has a higher low and MACD cross.
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WTI – This tiny pop from a higher low on the 10sma was 17%. These stocks might really POP %-wise. They are still very oversold.
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