Tuesday April 21st – Timing The Trades
When we are trading while coming out of an ICL, you realize that you have a good amount of time ahead of you, so you can trade any of the set ups that present themselves and you really don’t have to worry too much about the dips. As time goes on, however, you do need to start being more aware of the timing. I get just a little more cautious, because we will be entering the ‘time’ for a dip into a dcl. Some may or may not want to trade around between the first and second daily cycle , but I do start becoming more mentally cautious after day 20, especially since the Daily cycles for the Precious metals can be shorter than what we see in the General Markets. I also usually raise my stops under the 10 sma in the General Markets, since Tuesday will be Day 20. Now let’s discuss our markets….
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We already discussed that the NASDAQ & SOX broke above the 50sa, but the SPX is still struggling there a little bit. It is also close to the 61.8% Fib number, so this is an area along the way that we will look for success or failure.
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SPX – On April 2 I pointed out the Fib Number that the ‘C’ could end at ( 2940) and we are in that area, so things could get choppy and even a but toppy.
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ALSO the SOX sold off Monday, but it does have multiple support below price, so this is an area that I am watching too. AMD looks strong, but MU actually broke down and does not look good. AMAT and TSEM are pushing on their 50 sma resistance, so this is what I am watching for clues or signs of weakness or strength going forward.
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AMAT & TSEM look like this, but MU broke down yesterday. I am keeping an eye on things, because weakness may start to develop.
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VIX – This says that the Dip may be here
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OIL FUTURES CRASHED -When something happens for the first time in history, it is hard to explain how that could happen, but I’ll try to make it understandable. The price of OIL for June is about $22, but in May? The May futures contract closes Tuesday at 2:30 , and there is a large surplus of Oil that has been taken out of the ground and stored. So much so that demand is not there. People aren’t driving with the Covid shut down, supplies are very high, etc. Traders do not want to pay a premium for Oil, contract holders cannot take delivery for Oil & store it, so they have to sell. At -$35, they’d have to pay to sell it. CRASH! No Buyers, all sellers? The price plunged …
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XOP – HOWEVER, then you looked at OIL stocks and all seemed fine for now, in fact I saw several Bullish Charts including the XOP and XLE. Oil is due to bottom cycle-wise, so the oil stocks actually do not look bad, they have higher lows and bottomed weeks ago.
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XOM – So Oil collapsed but Oil stocks were fine. This would actually be considered a buy with a stop under the 20 sma.
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GOLD – This is another area that can go higher, but you want to be a bit more cautious around day 25, right? It may NOT be time to start new positions, with a dcl coming due. THAT would be a buy opportunity, So let me put it this way to be clear…
1. This can climb higher to day 33 ( that’s 2 more weeks) and then drop fast for 3 days and put in a dcl on day 36, or…
2. This can chop & drop starting right now, and bottom on day 32? 34? We don’t know until it happens, so we are a bit more cautious.
3. GOLD CLOSED UNDER THE 10 SMA AND THAT CAN START A DECLINE
That is why…
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That is why I had this in the weekend report…
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GOLD DAILY #2 – This is the first daily cycle and it had strong days and choppiness, so it may end with choppiness. A back test of the 50 sma would be normal over time.
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GOLD DAILY #3 – I would say that Gold could Pop & Drop too, because we have ‘time’ left in this daily cycle. Just keep in mind that Monday was day 24 and this could have 5-10 more days left in it. That goes for the Miners too. THAT SAID…
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SILVER unfortunately got a little bit weak looking. It closed under the 10sma, and I see a wedge break down. That does NOT mean that it is about to crash down, since a dcl can form from a choppy drop. What I hate is that I see some really bullish looking set ups in Silver stocks, but this does make me a bit more cautious about encouraging my readers to buy them right now. I will discuss this more below at the end of the report.
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GDX – This actually looks like Bull Flag, ready to break higher. Gold is under the 10sma, but GDX is not. In the weekend report I also drew these scenarios…
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FROM THE WEEKEND REPORT:
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GDX DAILY #2-We could see a POP and Drop, because GDX will still be due for a DCL soon. So do we get a POP and DROP next week? If not…
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GDX DAILY #3– GDX could just get choppy and droppy. A drop like this to the 50sma ( Think $26ish) would be normal and even present an inverse H&S, a Bullish Pattern with good upside potential. Let’s go to the weekly chart…
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So as time moves forward, I am less inclined to start new positions in the miners, because we will be coming due for a dip. That doesn’t mean that you have to sell everything, because it may just be a sideways chop that we see develop in some Miners, followed by a slight dip to a low. We should then move higher as the 2nd daily cycle begins. ‘Traders’ often lighten up and try to buy back in lower, but most people just ride the wiggles knowing that Miners will be higher in May.
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Enjoy your Tuesday trading, and I will discuss a few things below.
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~ALEX
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AKG – This is just an example of a Miner that is just doing its own thing. Gold broke below the 10sma and AKG was up 10% with strong volume. This chart was captured an hout into trading, so the volume was much higher by the close.
NUPMF actually shot up 16% after dropping to a low and this reversal looks very Bullish. Will it break out of Gold starts topping? I don’t know, but this is a good looking set up to keep an eye on.
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Yesterday CDE broke out above the 50 sma, so this is Bullish and is encouraging to see , while Silver was under the 10sma. If it can get some follow through higher, it may just back test the 50sma at the dcl.
HL and a few other Silver stocks are still climbing along under their 50 sma. If they do not break out here, they will likely do so during the 2nd daily cycle.
GFI reversed at the 10sma and is above the 50 & 200sma, so this is a bullish set up.
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SSRM is pushing against the 50 & 200sma. This is bullish action, but Silver itself looks a bit weak, so even if it were to pull back during a dip to the dcl, it will likely break out now or after the dcl.
PAAS is another Silver stock that looks very good. Normally I would call this a buy, with a stop under the 200sma, but I’ll leave that up to you. Silver may get choppy, but this is really a bullish set up.
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CCJ is a Uranium stock that we have discussed in the past. After getting caught up in the sell off, the Uranium sector is recovering very quickly. With this bullish price action, it may be advantageous to start covering them again with a view toward “Buying The Dip” .
UUUU tagged the 200sma, so it could stall after such a strong run, it may become a buy if it dips to the 50sma and back tests it. If I owned it, however, I wouldn’t sell it to buy it back. Why not?…
This sector has had a strong recovery that a few of these are just slicing right through the 200 sma. We see that with UEC, so selling at the 200sma may not have been advantageous here. And…
NXE also had an increase in volume & pushed right through the 200sma, so these are strongly recovering with V-Bottoms after that sell off. If this is their first daily cycle out of an ICL, then buying the dip would be to ride the second daily cycle would be a good plan.
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I just grabbed this chart of an Energy Stock as OIL crashed yesterday midday. WTI is actually a Bullish higher low on the 20 sma and this Energy Stock is one that was recommended a while back near the lows with OKE, MRO, APA, LPI, etc. Some of these are up 100% off of their lows.
And again, with Oils crash in the may futures contract, XOM was holding up on the 20sma too. I still own APA.
BIOTECH WORKING ON CORONAVIRUS: I have mentioned and even traded a few of these. NVAX, COCP, INO, IBIO, CODX, VXRT, BNTX, etc . They may or may not follow the General Markets if & when it dips, so I am trading them.
INO was bought and pointed out in the Live area yesterday. It was up 2% when I bought it, but this is a bullish set up and volume was strong. I started pointing out the entire sector of biotech stocks that have potential to help with Coronavirus treatment.
INO ran up almost 20% and then dipped into the close only up 9.55%, but I still think that this can run higher. I added when it dipped down.
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BNTX is also on my list and this ran from $30 to $105. Wow! It may be breaking out here, but these can also just continue to consolidate sideways, so I didn’t buy this one, but you can keep an eye on it.
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Do you remember NVAX? We traded this first Pop in February $8 to $15ish, and thought that was a great run ( it was). Well now it is up near $25. THAT is how these are running. With that in mind…
VXRT -I also pointed this one out in the live area and bought it. It ran along the 50sma, and yesterday it shot up over 25% . The potential on these stocks is good, but I always admonish to keep position size small or reasonable, due to the biotech risk & volatility.
Also on my list is VIR. This ran from $15 to $75 in days when they released news about Covid plans. THIS IS A TOUGH RIDE! I rode it in March and went from Boom to Bust and sold with very small profits. It ran from $35 to $55 to $35 🙂 It might be ready to run again , and a stop right under price is reasonable.
With the OIL supplies so high, Shippers like TK, NAT, GLBS, FRO, etc popped too. This is another sector that can make very big gains, but at times is a very rough choppy ride, so use caution and keep position size reasonable if you trade this sector.
MJ stocks like CGC, TLRY, etc seem to be putting in a higher low too.
CGC they are holding above the 8 ema & 10sma, and look Bullish at this point. They can be bought with a stop, they may or may not follow the General Markets.
