Friday October 23 – Reversals
Today is Friday, the last trading day of the week. After seeing a lot of choppy sideways movement in several areas, we had some pretty real looking reversals yesterday, so lets just get right to the charts…
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QQQ – I captured this chart 1 hour into the trading day & posted it in the live area ( under the daily reports). I have been saying that a drop to the 50sma is likely now, so a reversal there would be viewed as a low risk place to add to current positions or a buy.
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QQQ – 2 hours into trading I was pointing out this reversal at the support of the 50sma. So this is a low risk buy, with a stop under the 50sma. You could even add to the TQQQ position started at the dcl.
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SPY – By 1:52 p.m. Eastern the SPY reversed just above the 50sma and went green.
SPX – At the close the General Markets had dropped down & reversed fully to Green, so this is likely going to be the 1/2 cycle low that I have been discussing.
I DO WANT TO ADD THIS: These reversals may act as the lows for now, but will the markets rocket higher with a US Presidential Election less than 2 weeks away? The markets do hate indecision, so we may see indecision in the form of choppy price action as time moves toward the election results. I had to mention that because it just makes sense.
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OIL reversed again and again and has been quite choppy and so has the XOP, but let’s jump right to the Oil Stocks…
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This reversal for the XOP really looks good and several Oil Companies followed. Volume came in nicely and the MACD is strong. I didn’t buy anything, but some of my favorite trades ( APA, MRO, VLO, LPI, ERF, AROC, etc) are also reversing off of the lows with Bullish set ups. Let me show you one…
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APA ( and see also PUMP, VLO, LPI, MRO, VET etc) : These are right at the lows, so this makes them low risk if you buy with a tight stop. They all popped with volume and do look Bullish. It may Finally be time for an Oil / Energy run. It may only run to the 50sma, but that’s a start and a pretty good trade/ gain.
GUSH – That also would make GUSH reversal a Buy, and a stop should be used under the Thursday lows.
I will also discuss a couple of Oil / Energy stocks at the end of the report.
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The USD FROM YESTERDAYS REPORT: This was important. The USD dropped below what I had labeled as the daily cycle low at day 27. This made me wonder:
1. Are we seeing a failed 2nd daily cycle already that peaked on day 4 (quite bullish for Gold)?
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2. Is this a very long first daily cycle on day 35? US daily cycles tend to be shorter.
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USD – The USD reversed Thursday, but I had a dcl in place at day 27 and this looked like a failed daily cycle. Could this be day 35 dcl? I guess we need more time with all of this chop, but this USD chart still looks weak. That said: A strong $USD push higher from here would give us a weaker GOLD reaction. A USD dropping from here would make this look like it is trending lower again.
GOLD has basically been sideways / choppy and that makes it very difficult to read until it picks a direction. On this chart I wanted to simply point out a few thoughts.
1. The last daily cycle looked strong all the way up to day 24 and then dropped quickly into day 30 dcl.
2. We are on day 20, so we are also slowly running out of time for a rally higher.
3. Gold seems stuck below the 50sma. IF we got a rally from here, it would likely break above that 50sma and then drop back to back test the 50sma at the next dcl. THAT would be a strong buy.
4. Gold can also ‘react’ one way or the other when the elections arrive, an this sideways chop gives us no real clues as to which way that will be.
GDX looks similar to the last daily cycle too. In that last daily cycle, it broke a trendline, reversed higher & then sold off into a dcl. Yesterday GDX dropped & reversed too.
One noteworthy point : Yesterdays price was the same as the closing price of the reversal day where the dcl is, so basically we have had 4 weeks of sideways chop with the GDX.
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BARRICK, NEWMONT and a few of the other Big Miners are sideways and trapped under the 50 sma too. When these break out, I think that it’s safe to say that we’ll know we are entering the next leg up. So far it has been dead money.
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Today is Friday and it is the last trading day of the week. I usually ask myself: Do I want to enter new positions, or wait for next week? Do I want to trim positions before the weekend? Should I plan to trim some positions next week before the US Elections or just ride it out? I personally am still long several positions and I don’t mind staying long over the weekend, but next week I may look to trim some areas if I see uncertainty causing excessive chop and volatility.
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Below I will discuss just a few trade ideas since it is Friday, and I’ll also cover MARA & RIOT possibilities by request. Enjoy your Friday trading and upcoming weekend!
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~ALEX
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A FEW OIL / ENERGY SET UPS:
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APA (from above in the report) : Still right at the lows, this makes them low risk if you buy with a tight stop. Many Oil stocks popped with volume and look Bullish. A pop to the 50sma is still a pretty good trade/ gain.
MRO – I posted MRO 2 days ago when it reversed at about $4 using this chart.
MRO popped to $4.37 and a longer term downtrend has been broken, so that looks bullish. I do want to note that at a prior low in July, we had a similar set up and it went higher but remained very choppy too, so there is a chance that Oil & Oil stocks remain a little frustrating with smaller gains and more sideways chop.
Many of the Oil Stocks look like APA & MRO above, so you can check your watch list. Part of my watch list includes APA, LPI, ERF, VET, PUMP, HLX, CPE, etc.
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XONE – First take a look at 3-D Printer DDD. It has blasted higher recently. I see 3-D printer XONE as oversold, in an uptrend, and it just found support after a shake out at the 50sma. XONE seems to be building a bullish triangle after a rally from the July lows $8-$17 into September. That was a 100% run, and this is now a low risk buy.
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In September CREE was a semiconductor play as a buy along with TSEM, MU, JBL, AMD, etc .
And some of those stocks recently recommended here rallied and now had a minimal pull back to a support level.
CREE looks like it may break out soon to new highs and then continue that strong run. You could add to your position or start a new position with a tighter stop on this addition.
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So with some of these, like TSEM, you can add here or start a new position as a low risk entry. If you bought back when it was first recommended, this would be a low risk place to ‘add’ with a stop under the 50sma too.
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BY REQUEST: I already showed the weekly charts and the long term possibilities as very bullish for RIOT & MARA, but I was still asked about the short term wiggles. I’ll cover it again below, but just use a stop if you are uncomfortable with the dips or you could always cut to a smaller position size if the wiggles bother you.
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MARA – As pointed out yesterday, I do still feel that Bitcoin will continue higher and take MARA & RIOT along for the ride. There will be pull backs along the way, or possibly sideways chop & drop to the 10sma. I drew what that might look like here after yesterdays ‘stall’.
RIOT dropped & chopped to the 10sma in a bull flag just last week, so I drew that as possibly happening again. I did this just in case it gets choppy, you will know what I am looking for. A bigger drop to back test the 50sma is not out of the question, but if Bitcoin pushes higher I doubt that we would see that now.
UONE & UONEK – These popped & dropped Thursday, but I think they are ready to break out and run, so you may want to put them on your watchlist or start a smaller position and add if it acts correctly.
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And many of the the MJ Stocks (including The MJ ETF) dropped to red and recovered to Green yesterday too. The ETF will avoid any bad earnings reports or isolated bad news that may come from individual companies, but also may miss a good 15% Pop from some of these companies that make those kinds of gains on 1 day.
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The MJ ETF – I used this weekly chart to show that MJ ETF was pushing on the 30 week ma and ready to break higher. Buy now or then. On the daily i was pushing the 50sma.
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The MJ ETF – Broke that 50sma yesterday. A basic measured move gets it to the $13 area , but it can extend higher than that too.
