Thursday September 10th
SPX – We have been expecting a dcl, and this reversal / swing low is most likely going to be the dcl. So this is a ‘low risk’ area where you can buy at support and place a stop under the lows ( Some use TQQQ, SOXL, UPRO for a little leverage). As a reminder…
NASDAQ – As a reminder, we still do not know if this parabolic run will just continue ( Green line) or roll over as an a-b-c type drop that leads to an ICL drop. We will watch how things unfold ( weak or strong) and go from there. If this is going to drop, we could go short at ‘b’.
Look at TSLA, NFLX, AMZN, SQ, etc and you will see stocks that landed right on their 50sma & reversed ( They can be bought long too, for short term trades that may do well if a parabola continues). If you are thinking of possibly shorting later, take a look at LULU, WORK, and a few others, since they just broke down and may be signaling that we will finally see weakness. Time will tell.
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WTIC – Oil broke down & reversed, but I think that we are too early for a dcl, so this could bounce & drop.
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Important note: To be perfectly honest, it is very difficult to see exactly where the dcls may be. The dips were all shallow, so it is hard to be 100% sure where the count for Oil is. I thought that the last quick drop to the 50 sma was a dcl in July. If so, we are only at day 26 & more likely only at a 1/2 cycle low on a 50 day cycle. We’ll see, but the bounce may become short-able. .
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USD – The USD was stopped at the down trend line, and this helped Gold. IS THIS A SHORT TERM SITUATION? We shall see, but if that was a USD ICL, we should break the downtrend and Gold would drop.
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SO FAR GOLD IS A GIANT TRIANGLE, and this has caused Gold , Silver, and the Miners to be choppy.
NOTE: GOLD – I drew Gold as a break out and back test like this at one point, and that can still be valid, but the chart ABOVE also shows that we can just move this to a larger triangle now also.
GOLD day 19 or 20: Gold looks Bullish, there is no denying that. As it chops sideways, it reached the 50sma and we have seen past Bull Runs do 2 things when set up like this…
1. We have seen extended intermediate cycles that bullishly chopped & then ran gradually higher for a year, and
2. We have seen choppiness sideways that lasted for a while and then quickly dropped ( DCL / ICL) before taking off higher.
SILVER is choppy on day 20 also . Since we are coming due for an ICL ( we are 6 months from the last one) , I want to show you an example of a past strong looking set up while in the timing for an ICL too…
SILVER was due for a drop here after a strong run. So here it dropped and started to look Bullish after forming a dcl. Notice that it even broke out of a downtrend & regained the 34 sma, so it looked like maybe we should buy it. DOES IT NOW RALLY? ..
SILVER broke the downtrend and spent 22 days chopping higher out of that low (first arrow), and then crashed one more time to the real ICL. This is just a reminder of how quickly things can change when an ICL comes around. 22 days bullish and then a plunge. This drop was $18.50 to $16.50 & then it ran sharply higher.
GDX – So we move to GDX and this also looks bullish. If you want to buy just in case this runs higher, a stop can be placed under Tuesdays lows for safety.
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At this point, some Miners are acting bullishly on their own. Yesterday I mentioned how some are selling down, and others ( see NGD for example) are near the highs already, so we really have a mixed set up here of bullishness & consolidation. I pointed out yesterday that some may wish to buy for a ‘trade’ short term & hold on to it if it continues higher, but choppiness can be a bit frustrating at times. You will see that again below. After a couple of Buy Set ups mentioned below, I will discuss Miners a bit more below.
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Enjoy your Thursday trading!
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~ALEX
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WRN ( copper) was mentioned as a buy before & I bought it. I think that this can run well once it gets going. That said, it is still a low risk buy here. I didn’t check when earnings come out, you may want to do that on any ‘buy’ set up.
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CWH was a buy in yesterdays report. After dropping a little below the closing price, it closed up 6% again, so this is having follow through and can still be recommended as a buy .
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AXL – This automotive company ran from $2.50 to $9.50 and has since been consolidating those gains. When the markets just crashed down, I noticed that AXL did not, so this has been strong and remained that way. I think the lows are in and we are seeing higher lows, now above the 50 & 200sma. It is a buy, though it may chop a little here & there on the way higher ( I do not know when earnings are).
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Let’s talk about Miners again
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WLBMF AUGUST 31– This was pointed out recently as having dropped nicely from the highs, 95 cents to 65 censt is a good savings. It consolidated and look at that volume spike as it broke the down trend and pushed away from the lows…
WLBMF was then pointed out again on September 9 as it broke from a consolidation. This can now make a run back to recent highs ( so it could be bought for a trade & maybe even hold on for more). So now…
WLBMF– you can see that it continues back up to the highs this week. It ‘Peaked ‘ earlier than other miners, consolidated, and has finished that consolidation. THIS IS AN EXAMPLE of how some of these choppy miners can do their own thing.
We see that AUMN is still putting in higher lows , even though it has been chopping sideways for months. It lost & regained the 50sma, but I do like the MACD & RSI improvement lately, so the set up remains bullish. WITH BULLISHNESS CAUSING MANY MINERS TO REMAIN GOOD LOOKING, YET CHOPPINESS CONTINUING IN SOME OF THESE, I WANT TO DISCUSS THAT TOO.
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WITH BULLISHNESS CAUSING MANY MINERS TO REMAIN GOOD LOOKING, YET CHOPPINESS CONTINUING IN SOME OF THESE, I WANT TO DISCUSS THAT TOO.
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Notice that BTG dropped from $7.50 to $6, and now after chopping around consolidating gains, it may look ready to run higher, right? Yes, so it can be bought as a ‘trade’ & maybe even hold on for more. You may use a stop at the 50sma too, but let me show you something…
BTG may just continue to chop sideways as seen earlier this year too. So yes, you can buy it as a trade or buy & hold, but its good to realize that any of these Miners can remain choppy for weeks too.
ELYGF has been pointed out as choppy for weeks/ months. It dropped from $1.50 to $1.00 and I mentioned in past reports that this $1 level may be the lows. And this next point is important to me…
And this next point is important to me…
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ELYGF – If I own 5-10 of these Miners and just hold through times that I know are a ‘correction’ or ‘pull back’ at the end of an intermediate cycle, this is what would happen to my account. This stock alone would give back $5000 every time it dips to $1. If I own 5 of these Miners? I watch my account drop $25,000, so this is why I would rather sell when I feel an intermediate cycle is getting older & could drop, and I try to buy back lower. It frees up money to trade with too. ELYGF was $1 yesterday.
LET ME SHOW YOU SOMETHING ABOUT HMY, AUY, GFI, etc: I posted these as buy opportunities during the choppy pull back 2 weeks ago in August 26. I saw a Bull wedge and it is a low risk buy at the 50sma. SOME MINERS also now look like this, so lets see what happened….
On August 26 I also said that this could be bought low risk & it might…
1. Rally (green line)
2. Bounce & continue to chop,
3. Even possibly breaking lower as the dcl timing approaches
HMY chopped & dropped again since Aug 26 lows. I was looking at HMY, AUY, GFI, yesterday and thinking, “These are bullish, but they are still in the same place. It is also still a buy set up.” So if you bought 2 weeks ago when I mentioned it, you rode this. If we buy today? We may see a rally, more of the same chop, etc. We don’t really know.
HMY – We may even be seeing a choppy bullish consolidation like this if it lasts for a few more weeks similar to May through June.
SPAZF – I wanted to own SPAZF, TDRRF, and a few others too, but I wanted to see if it would pulled back 50% of this run. I see that often during an ICL drop. Well, SPAZF has dropped from almost 60 cents to 35 cents, but since some Miners are showing strength, this too may just chop sideways and bounce around for a while with the lows forming in or close to this place. That means that starting a position in this area may be prudent, even though it could go deeper too.
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So in conclusion: Miners do look to be set up bullishly again, similar to August 26. Many have remained in consolidations. I am not going ‘all in’ on Miners right now, the timing is not right for me to do that. I will buy a deeper dip or a break out Rally. I do see that the sector as a whole is holding up well, and it becomes apparent that we may get a milder ICL. On this older chart, you can see what 2 prior Milder ICLs look like where I wrote ‘The drop into an ICL’. Around May 2019 & November 2019 we saw choppy but mild ICLs. It is a choppy sideways drop, and some Miners can resist that a bit.
So we CAN drop further and we are only on day 20 of a possible 30+ day daily cycle. THAT means we could see 2-3 more weeks of chop, slop, and even pop & drop. THAT SAID, some of these miners may be in an area where I am willing to start smaller positions. For me, I sold my Miners in July/August and wanted to lock in good solid gains from the run out of March lows and try to re-enter lower later. I have been patient so far, hoping for a deeper ICL, but so far it is choppy. I also try to use additional funds to add to those Miners gains with other trades in RIOT, MARA, WKHS, SPAQ, LCA, GRAF, etc .
We saw in my August 27 report and again last week & this week that while some miners are acting bullishly in consolidation, others are resisting the selling and are near the highs again. It is a mix, we may get a milder ICL, and I wanted to mention that I may start a position or 2 since some Miners have pulled back and may just bottom in this area. I will still be trading other bullish set ups like WKHS, SPAQ, CWH, LCA, GRAF, AXL, etc.
