Thursday August 31 – Bouncing Higher
On day 8 The SOXX made a little more progress. It is pushing on the 50sma and closed slightly above it, so that was good to see.
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THE SPX also made some progress, but it wasn’t strong follow through, so I wouldn’t be surprised if maybe it drops back and back tests the 50sma? Look at the 3 green arrows and that is what I am thinking might happen. I would only be expecting a quick dip if we do get one.
WTIC- Oil is slowly progressing after putting in a dcl.
The USD continued to drop into day 26, and that is good for the bullish set up in the various markets. I do want to also point out…
USD – I wanted to point out that the USD often puts in choppy tops with bounces (blue arrows), so we may see bounces along the way and those USD bounces may offer dips in other areas, where some can buy the dip or ‘add to current positions’ on the dips if necessary.
GOLD has been strong over the last 7 days. This is good to see, because we saw Silver taking off bullishly while Gold was lagging after a relentless sell off. It’s nice to see Gold trying to catch up, but now the Miners seem to be lagging a bit.
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SILVER is Bullish and that is obvious, but I just wanted to show 2 versions of Silver using ‘stockcharts’ and ‘Spot Silver’.
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You can see with Stockcharts that Silver popped over the downtrend and then stalled into a doji, so when I see this I would expect a small dip here and a possible back test. That is fine and remains bullish, however…
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When I use the chart of Spot Silver it shows that the price was rejected at the trendline, and this would also have me thinking that we may get a small pullback or crawl. So the view is a bit different on these 2 charts, but the short term set up is similar: We may see Silver dip a little bit before continuing higher.
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The Miners are trying to play catch up, but the GDX ETF was rejected at the 50 sma on day 7. This could now churn and build energy to break out above that 50sma. Yesterday I pointed out that GDXJ already broke above the 50sma though, so what happened with the GDXJ ETF?
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GDXJ actually popped up, tagged the 200sma, and dropped back. You can see that the 10sma held price and now I would think that the 50sma will hold price, so GDXJ MIGHT just chop and churn sideways for a couple of days until it can break higher.
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It is only Thursday, but I just wanted to mention that in the US, Monday is a holiday and the Stock Markets are closed. Why mention that now? I mention this because what I see above is possibly a short term ‘pause’ in various areas. GDX hit the 50sma and stalled, GDXJ hit the 200sma and stalled, so we may chop for a couple of days, right? Maybe. So if we do see choppiness for 2 days, that gives us lack luster trading into the weekend. Monday we are closed and Tuesday we may blast off again, when buyers return from summer vacation, so I didn’t want a little choppiness to concern anyone. This short-term analysis doesn’t affect the big picture at all, so I just wanted to mention that now. Many sectors turned bullish and so far I really like what we see. And remember, that choppiness that I have mentioned also may not happen, if Buyers just step in and buy the dips. Traders also always find trades, even if the markets chop in bullish ways, so…Enjoy your Thursday trading!
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~ALEX
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I had the MJ Sector watch list turned off, so I missed the POP in MJ Stocks. Thanks to Michel (thanks for catching that, Michel!) 🙂 , he pointed it out in our live commenting area and wow- some of the moves were big! This is the MJ ETF. So why did things pop with such strong volume? Well…
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So why did things pop with such strong volume? Well I found this news. I know that we have seen many ‘bottoms’ in this sector bounce and die, breaking down to new lows, so we wonder, is this news any kind of a game changer? Or is it just ‘news’ that caused a big pop? Well…
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Is this news any kind of a game changer? Or is it just ‘news’ that caused a big pop? I cannot know for sure, but when I read that I do see a ‘fix’ to 2 areas in this sector that cut into profits.
1. It mentioned in the last sentence that this new status would allow for tax advantages or tax breaks for the legal businesses. That could help profits. Also
2. I know that I used to hear of some MJ Businesses that had complained that with Federal red tape, they cannot get normal Banking benefits. It affects loans, credit rates, etc. It is possible that a new schedule 3 status will reduce Banking restrictions, lower credit costs, etc.
3. Is that enough to be a game changer? It’s hard to tell, but it may start the ball rolling in that direction, as more changes come into play after that decision too. Right now, that change is only News, it is not a reality, so We’ll see what happens going forward.
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I took a look at some Mj Stocks like TLRY, CRON, OGI, ACB, GRWG, and a few pink sheet stocks. They do look very interesting, so let’s just look at TLRY here.
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TLRY DAILY – That is a long Island Bottom riding the 30sma. After it popped higher, it then (with some pretty difficult wild swings), ran to the green 200sma and has been chopping against it. It landed on the 30sma last week and it held as support even before that news was released. So this does look bullish ( a bit wild though). The weekly chart though? I think that it is even more bullish!
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TLRY WEEKLY – The weekly chart though? I think that it is even more bullish! That RSI has not held above 50% in years, and it is there now. Price is right at a pinched 10 & 30 week MA, and that is very bullish on a weekly chart, so again, the massive weekly chart might be a bullish base formation. Lower lows again and again, but the weekly MACD is steadily rising. This might be very hard to buy and hold, but a small position might be a great way to track it.
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CGC used to be a popular MJ Company too, but as you can see, it has been beaten down in a big way. This looks like a very nice base, but I do have to warn everyone that these bottoms and bases in this sector have been known to eventually erode. It has been a tough sector, but CGC is trying to break above the 50sma and was up 13% yesterday on that news. Proceed with caution and know the risks if you entertain this sector for trading.
