Thursday December 3rd – These Guys Are Everywhere
AS A REMINDER FROM YESTERDAYS REPORT:
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THE SPX ran to new highs and then pulled back into the close. Is it time for a dip? I think that it could be…
1. I have a Put / Call Ratio reading that is usually found at tops and
2. A cycle count of day 47 of a possible 50+, So I would say we are due to dip into a dcl.
SPX – And then the markets continued higher 🙂 . I do see a possible rising wedge that would eventually break lower, but right now you just have to respect the strength in the General Markets until that changes.
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I have mentioned stocks like AMD, MU, BOX, APPS, SPOT, UBER, TWTR, etc for the Bull in the General Markets, and the sector continues to trade bullishly. Take a look at Spotify…
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SPOT – After a sideways consolidation in June Spotify Popped and ran higher. It then consolidated from June to now! A 12% Pop gives it a break to all new high and it could run again. 2 reasons to cover Spotify.
1. A break out like this is obviously Bullish and may bull flag (or back test) and offer an entry before the run. In June it just ran away though.
2. We have Many Miners that look just like this, so I wanted to show you why buying Miners at the bottom of these consolidations (now) is important. They may get to the highs and break out.
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The OIL Inventory report Wednesday had the expected outcome. This was a Bull Flag and it shot up higher Wednesday. Oil stocks looked good too…
APA, for example, reversed at a normal support area of the 200sma. I also look at the longer term charts for these and…
APA – This looks like a massive bottoming process with a higher low and now it has broken above the 50 & 200sma. These Oil Companies do look like they are recovering from the March crash and this has been a swing trade or Buy & Hold kind of set up. This doesn’t look like much but APA ran from $7.50 to almost $15. Roughly 100%.
USD – The cycle count is very difficult to map out confidently because it has been so choppy, but the set up remains bearish longer term. The USD did break below the ICL ( lows) so this should be a failed Intermediate Cycle that leads to several weeks of more downside over time. Since it is very oversold and sentiment is extremely bearish (Contrarian) a bounce at anytime would not be surprising, but I wouldn’t expect the USD to regain the 50sma.
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GOLD has a trend line break and did close above the 10sma. That makes this day 2 and that is VERY early as we start the move higher out of what should be an ICL and not just another dcl. An ICL would see gains in this sector with over 3 months of upside and the USD really should drop lower after breaking down.
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SILVER My thinking on Silver is that it may be VERY STRONG on the next run. Why?
1. I remember when Silver would sell off in an extreme manner, acting much weaker than Gold. It hasn’t.
2. This is a solid consolidation that could cause a rapid upside rally on a break out. The September lows were never taken out.
3. Since I feel that Silver is acting very strongly, I may focus my portfolio much more on the Silver stocks.
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GDX is on day 5 since it resisted the sell off with Gold Friday and Monday. I have been asked about my concerns over the gap. That does NOT prevent me from buying, because if I hold back waiting for a gap fill that never fills? I’d get left behind. Let me show you 2 things pertaining to these Gaps…
#1 THE XOP GAPS – The XOP and most of the Oil Companies have left behind a big gap. That gap did not fill, did it? When I bought a few Oil Stocks in early November I mentioned that you basically have to trade what the market gives you. I said that for risk control, You could start small and add if the gap fills or add on the way higher. Oil stocks moved higher and never looked back.
#2 GDX 2008 – I was trading Miners during that 2008 ICL. It left behind gaps that never filled for years. If I waited for these to fill back then, I would have been left behind. As a side note …
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SIDENOTE: Take a look at that October 2008 ICL. Price ran higher and then dropped right back to the October lows in November. This was VERY hard to trade, since I would wonder if it was going to break down again. With this, I just wanted to point out that ICLs are not always a straight rocket ship move higher so I just wanted to mention that while we are here too.
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Due to Cycle timing, this really should be an ICL and not just another dcl. It has been 8 months since the March ICL. We buy the dcl as though it were an ICL and let it play out.
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The biggest problem that we seem to have now is that there are quite a few Bulls running though our streets lately. 🙂 I usually strictly focus on Miners at an ICL, but right now The General Markets have been bullish and Oil & Oil stocks are Bullish, Clean Energy and Solar has been very bullish, Miners are now set up Bullishly, some Biotech set ups are Bullish, etc. I almost wanted to make this report strictly stock picks and not cover the various sectors, just so I could do 5 Miners, 5 energy stocks, 5 MJ Stocks, and so on. Well it’s not a bad problem to have and it wont last forever, so let’s enjoy the trade set ups while they develop. Miners finally look to have The Lows ( ICL) in place and I pointed out what to look for yesterday. I’ll discuss some more ideas below.
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Enjoy your Thursday trading!
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~ALEX
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With Miners I always recommend buying a small basket ( or ETF) to reduce risk. If you own 3 Miners and 1 experiences a flood or an earthquake or does a public offering, it can really cut into your gains. If you own 5 or 8 or even 10 you can reduce the likelihood of that set back. Yesterday I mentioned a few Miners and let’s discuss a few more set ups.
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ELYGF – I pointed this out yesterday and now it is closer to a break of the downtrend & 50sma. I would expect this to run back to the former highs and more. That could be over 100% gains over time. I do own this here.
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HL – I can imagine a run higher to form a cup and handle, and then a solid ramp up from there. After an ICL the move can be straight up, but it ALSO can be choppy in the first daily cycle (remember 2008 lows?). This is still a very bullish set up if a cup & Handle forms.
CDE – Several Miners have gaps but as mentioned above, waiting for those to fill may cause us to miss out on a run to recent highs and then a break out rally. CDE crossed the 50sma. Yesterday I mentioned CDE and I also pointed out…
THE CDE WEEKLY CHART – I would say that CDE could easily rally over 100% from here once it breaks free. $7 to $14 is easily possible. $7 to $21 is not out of the question. I own it.
GORO was caught in a deep sell off and really crashed down in October. After putting in an early low, it resisted Golds sell off Friday and Monday by riding the 34 sma. Yesterday GORO popped with high volume and that is a buy in this set up. Did you miss this one? No.
It is only up 5% compared to the likelihood that it will run back to former highs & More. That is $3 to $5 and it can continue higher from there. Look at the RSI. Greater than 50% for the first time since August.
DRD – This ran from $3 to almost $18 after the last ICL! Here at $9 a return to the highs is a 100% move and it should run higher than that. It becomes a technical buy above the 50sma , but I think that it can be bought here. This and HMY are African Miners (Added risk?), but they run swiftly.
GPL – Even the smaller stocks like the Silver stock Great Panther can run vertically after a consolidation. The MACD & RSI are showing slight divergence in this double bottom low area.
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SPOTIFY: Again I am simply pointing out that many Miners have a long multi-month consolidation like Spotify and this can be very Bullish in a bullish sector, but the ride is not always easy or smooth.
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I have pointed out that some of our former Covid Testing/ Vaccine, treatment companies are looking bullish with the second surge developing. NVAX, MRNA, BNTX, PFE, etc are the bigger names. I wanted to also look at a couple of smaller ones. Any Biotech Company has risk- they may get bad news from the FDA or a failed test, etc, but we made great gains on these earlier in 2020 with a few small positions so I wanted to point out a few set ups. Examples are JAGX (Already popped) BIOC, IBIO, INO, RGLS, NVIV, NOVN, HTBX, etc.
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BIOC is a long base that seems to be starting to push higher, so I keep an eye on these base set ups. This tiny move was up 6%, but may have much more upside if it starts to climb out of this base.
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I bought NVIV yesterday simply for the volume in this set up. When I see a crash like this and a solid base with volume coming in, a quick trade may be developing. That gap may fill so I took position in the 66-68 cent area and hope to see a gap fill. If this trade doesn’t work out rather quickly, I will close it, it is not long term for me.
CNBX – Recently CNBX was one of those small MJ Companies that Popped from the base. I then pointed out the Bullish flat wedge or flag forming in CNBX. This often takes place as a continuation consolidation. This was yesterday morning and I posted this in the Live area as a buy. It was up 1%.
CNBX closed up 20%. You can see that these are really tacking on fast gains if you can catch the proper set up out of these bases. I have mentioned CNBX, MRMD, LBUY, SPRWF, and others as examples. You may also recall that…
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MRMD almost quadrupled after I mentioned it. It popped 15 cents to almost 60 cents in days.
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SPRWF was 10 or 11 cents when I first mentioned the base set up and now it is at 14 cents. That is 40% from just the last 3 days. Even just a run to May highs from right here is still a double and I like this set up.
NOTE: I would only buy these near the low (Base area) due to the risks that can come in this sector. For example if it gets up to 20 cents, I wouldn’t buy it there unless it forms a bull flag or other bull pattern, since a drop to 11 cents from there would be cut in half.
I pointed out that some of these companies like OGI are MJ Companies that have great upside potential under the current environment. OGI is forming a round base.
BY REQUEST: TLRY is very hard to trade because of the large swings that it puts in. If you catch it near support areas the gains can be very big. So this is hard to buy and hold, but…
TLRY BIG PICTURE – I feel that this sector has been awakened by the Biden win, since his administration favors the use of Medical Marijuana and even recreational sales. TLRY returning to prior highs would be ridiculous gains over time.
USEG – I saw this set up in the energy sector and I view it as Very Bullish if it plays out.
1. a Gap down and then a Gap up is a Bullish Island Bottom. That gap usually does Not fill.
2. Then I see an inverse Head & Shoulder pattern. If this breaks higher above the 50sma it can recover…
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The Bigger Picture for USEG shows us a long flat base, inverse H&S, Island bottom with a strong MACD rise. They did a reverse split earlier in 2020 to avoid delisting, but if this breaks higher, I do think that the gains could be quick. Watch the 50sma.
