POST -FED -THURSDAY : Tidal Changes?
We all know that the Cycles in the Markets can be like the Tide in the ocean at times, the Tide comes in and the Tide goes out. Markets rise up, and Markets pull back. If you’ve ever been near the ocean, you’ve probably also seen that when a storm starts to roll in, the waters can get stirred up and choppy rather rapidly. Well, the markets can react to turbulence too.
So far we have been seeing a steady rise in the General Markets, but the FED Meeting yesterday caused a little ‘reaction’. The waters have been stirred up, but I don’t think that this is quite time for a crash-like drop yet, but you never know. If you are going to weather the storms, you at least need to be prepared for them, so let’s take a look at the current set up and be prepared for whatever comes our way…
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SPX – The Feds speech sounded like they have concerns. At this point, we have a simple day 16 peak and a small dip has started. We see 1/4 & 1/2 cycle dips all of the time, so this alone is nothing to be concerned about. Read the chart & notice the deeper 1/4 cycle drop in April – we could possibly do that now.
NASDAQ – The NASDAQ was also running right up the 10sma, but we do see a short term topping candle. We could see a pull back. So with the General Markets, we could still be heading for a blow off top – or – we want to also watch for a ‘false break out’ to new all time highs. So…
MAY 28: A couple of weeks ago I discussed that The VIX might be setting up bullishly. It was approaching the 200 sma and that may support price, cause a eventual pop , and a market drop. Well…
The VIX has landed right on that 200 sma this week. This also looks like a Bullish descending wedge, so I can’t just ignore this. With our Fed Day Mtg, the Markets started to dip down and GOLD & SILVER perked up. We may be seeing a change here, so we must Stay Frosty if we are Long The General Markets.
VIX AGAIN: So If we eventually realize that we are Eating at the wrong table, we need to be ready to quickly change …
EDIT at 7:30 a.m. Eastern: I see DJIA Futures down near 700 pts. If we gap down & continue down, that would be a bearish Island top
SOMETIMES A VISUAL HELPS : At times, things aren’t always as they appear to be. We don’t want to continue to partake of the General Markets if we find that this big rally ( during a pandemic that has shut down businesses, etc), is just an illusion. That would definitely leave a bad taste in our mouths, so as I have always done, I will continue to cover the possibilities in the Weekend Big Picture reports. If the General Markets fall, The Precious Metals might be a nice place to visit. We may even ‘short’ the General Markets IF A BIGGER DROP IS COMING OVER TIME. We don’t quite know yet…
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WTIC – Oil has played out exactly as expected. We are now on day 35 of our first Daily Cycle and we have almost reached a resistance area. I think we’ll tag that 200sma, so this CAN move a little high before coming due for a drop into a DCL (Daily Cycle Low). A close below the 10sma could make things start to get choppey.
The XOP bottomed before Oil and also hit resistance before oil did too. It may bow chop around and eventually try to break out. THIS IS JUST A VISUAL POSSIBILITY– Do not try to short it, then flip long, then short, then long-based on this chart. It is a scenario that is likely, but not ‘actionable’, because…
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The XOP might chop might also just come in a tighter range too, so we’ll just let this play out.
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THE PRECIOUS METALS HAD A NICE REACTION ON FED WEDNESDAY. WILL IT CONTINUE?
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GOLD continued higher on day 3 of a new daily cycle, closing above the 50 & 10sma now. I would expect a nice move higher, because …
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GLD we have been trapped in this long box consolidation for 2 months! A break higher from here could lead to a Very Bullish run higher. For now, we can buy with a stop.
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SILVER pushed higher on Fed Wednesday too, closing above the 10sma.
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SLV shows Silvers break a bit clearer, over the 10sma too. Also , I bought USLV on the first 2 runs, so the SLV gives us the confidence to take that trade now if we want to. That was Good Volume and it has been above the 200sma for the entire consolidation.
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GDXJ -I posted this as a bullish set up after the Fed Mtg and before the Fed Speech. Before that I also mentioned that I had already entered CDE & EXK. I will discuss those below.
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FROM TUESDAYS REPORT: GDX –The miners did put in 2 days higher after reversing last Friday, but this is (so far) A pretty weak and unconvincing bounce. We need to see GDX get back above that 10sma, and that might happen on a Fed Wednesday, but if not ? What I drew yesterday is likely what we’ll see…
FROM MONDAYS REPORT: GDX has chopped sideways. I have what I drew as a first daily cycle 33 normal days in length. We would now be on day 25 of a 2nd daily cycle. This CAN be in the timing for a dcl here on day 24 (last Friday), but another bounce & drop into day 32 would also be possible and normal.
GDX CURRENTLY – Well GDX did get back above that 10sma, so this is promising, but it also got above that 10sma for 1 day on the last bounce. Is this a ‘confirmed’ DCL? Read the chart. If not, it is VERY CLOSE. There is a chance that this now drops quickly into a day 33 or so DCL, but I think the 200sma would be support and a rally would follow. If this just breaks higher I think we are in rally- mode.
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Some of us have been enjoying some Fast Trading of the markets while waiting for this next run in the Precious Metals Sector, but some have just been patiently waiting! Well, with what could be a confirmed daily cycle in place, it looks like it may be time to slow things down and enter a BUY & HOLD mode for the Miners ( or add if you are still holding yours from the last run). We need to see some follow through, but buying at the lows helps one to enter and be able to ride out any dips that may come along later. ‘Timing-wise’ we are within the timing for a dcl.
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Below I want to discuss a few of the trades that we have been doing, with a ‘Lesson’, and a few miners.
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~ALEX
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PATIENTLY WAITING FOR PRECIOUS METALS: The wait may be over, nice job. I just love the picture of this patient little airport security dog in training. He sets a good example of not going against our insticts. 🙂
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NEM – Our leaders out of the March lows chopped & dropped in May, but yesterday they bullishly broke higher after the FOMC MTG. This appears to be a day 3 break out.
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CDE has actually been bullishly crawling along the 200sma, rather than dropping in May & June, so I Bought ( added) on this reversal yesterday. I already owned CDE and it hasn’t sold off very much in this consolidation anyway. It is still a buy and a stop can be placed under $5
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EXK has also been chopping around the 200sma, instead of dropping in May & June. The Silver stocks seem to be holding up well, so I decided to add to my EXK too.
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WPM – A reader asked me about WPM a few days ago, so I drew this up and it looked like it possibly stopped on 38% Fib support. It needed to get back above that 50sma though, to remain healthy…
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And now WPM looks like NEM & Barrick- ready to move higher. It is above that 50sma and pushing on the 10 sma, so the drop from May to June may be ending.
Many Miners are on, under, or near support like the ones above and can be bought in my opinion. I will have more low risk entries in Fridays daily report if we remain bullish on Thursday . At this point I want to just discuss a few other things.
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GBTC – BITCOIN has been bullish, but this looks ready to go. THIS is a buy, and Many blockchain stocks that we’ve discussed continue to do very well. (MARA, RIOT, TEUM, FTFT, XNET, NETE, GROW, HVBTF, etc are some of those stocks).
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COCP was a trade idea in yesterdays report ( Corona-virus Pharma). It dropped to the 200sma & then rallied 12%. I think that it is ready to run.
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LESSON ON THE BASES:
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I have been asked about these large bases that are giving my stock picks 30% to 50% to 100 plus %-Gains, so I will just address that here. I do not expect this type of action to continue forever, but we have been in a special set of circumstances that has been leading to these set ups. Lets discuss…
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I used to trade CPE, OAS, and a few others at the $9 or $10 area when oil was higher. Oil crashed and these crashed, but then when the XOP & Eventually oil recovered, these lagged & based out. I look for a bullish sector with large bases like this, and I check them on several different time frames for signs of when they could POP…
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CPE and OAS were buys for us, and they certainly did POP. 50 cents to $2.50 was amazing.
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NAKD – I pointed out NAKD with this hug base. Why would it pop now? I checked the daily charts, the hourly, I looked at the internals using a few different indicators and could see it Popping with volume too. LOOK AT THAT VOLUME! We bought it…
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This does not look like much but NAKD popped over 300% this week, and then began to pull back. I bought under 70 cents and sold a good chunk around $2.15+ and more at around $2. It has dropped and may chop around, but I’m going to watch it and see if it sets up again for another run ( they often will over time if markets stay bullish).
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I put this in the report and said that I bought this , because this action in VISL looked very Bullish pushing on that 50 week ma, and…
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VISL was actually sitting ON the 10 & 30 week ma, pushing higher with Volume
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VISL then popped 300% . I sold this one & it can now chop around and try to do a little consolidation. It may set up for another Pop.
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GNC was posted too. It ws a smaller base, I should have expected a smaller pop.
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GNC certainly POPPED, and it went right to my first target at $1.40 after I drew this, but it dropped the next day.
I kind of played this one wrong, expecting that it might run even higher. I didn’t get out with the biggest Gains, I sold it on the way back down yesterday . Selling some on the initail POP is always a good plan.
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GNUS – This had a falt base, but I missed this run completely. I want to show you all something here about WHAT THEY COULD DO AFTER THE POP. This was 32 cents. Look at the $1.50 area. That would be a 400% GAIN…
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THIS IS THE LESSON: GNUS went WAY PAST $1.50. WOW! It ran to almost $8 ? Yes, but not on the first pop. This is why I said I’d watch NAKD, GNC, etc – after the first POP, they can chop and run again. Lets see how GNUS did that near that $1.50 area , eventually running up 1000’s % …
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GNUS popped to $1, but then dropped to $0.50 as a gap fill. Many may have sold everything, but then it chopped up the 10sma, because the markets and sector remained bullish. It actually gradually ran higher, since this chart only shows the run to $2.75. SO AFTER THE POP, THEY CAN STILL CHOP…
GNUS popped dropped , ran along the 10sma for days, popped again, ran along the 10sma for over a week, and then RAMPED UP BIG. If current market conditions persist, I will watch for this and put it in the reports.
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DYNT FROM YESTERDAYS REPORT– They had a strong push higher in March and have since formed a long tight base under the 50 & 200sma. It JUST pushed above the 50sma, also pushing the RSI above 50 % for the first time since March as a buy.
DYTN was down for most of the morning ( I own it so I was watching it intraday). Intrady it looked good and it then closed up 20%. It also broke that 200sma, so hopefully the Fed didn’t kill our bullishness and this can continue higher. IF NOT, it may drop & chop and set up again. I also had bought MYSZ, it looks ok too, but closed lower.
I like this base on INPX, but we may need the Markets to stay Bullish for it to POP.
INPX Daily shows the bullish volume surge-
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SXTC– I also entered this as a trade for the same reason. I may let it ride for a bit, even if the FED causes a short term drop in our General markets.
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SXTC– this is a close up pf the daily action. This sideways chop may continue if the FED causes a pull back, but this is a Pharma stock- so it MIGHT also ignore a market pull back . Time will tell.
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ONDK – Bullish sideways chop, but it IS still inside of the base. It broke a short term downtrend, but the base itself is still where price appears to be. It may need more time, but that was a Nice high volume POP off of the 10sma Monday. 
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It might be time to focus more on Miners now, if that FOMC MTG & SPEECH causes the tides to turn for a while, with a Market dip and a DCL with a push higher for Precious Metals.
