Nothing Has Changed

You could basically read my last few reports and get the same results.  Even though the numbers have changed and the moves are taking place, my outlook hasnt changed.

Here is yesterdays wkly chart of SPX  – we expected a move higher, but a bounce or a buy the dip recovery?

I thought that the markets looked a little ‘different’ this time, so I mentioned that it could ‘fail’ .  Yesterday we did have a reversal

And CNBC  had a lot of people on saying, “You just have to Buy the Dips. Its been working for years now! ”  Is THAT what I mean when I say nothing has changed?…

AUDIO  [ I said it’d be short, you know better than that : )   about 17 minutes]   http://www.screencast.com/t/hb5DdGNdGg

No, I mean nothing has changed as far as this could be a weak and short-able bounce ,  not another strong recovery to new highs like in the past. I HESITATE to recommend shorting , because I also mentioned that possibly the front running stocks just cause the mkts to go sideways  for weeks while the Small Caps and Micro Caps move higher , and that possibility is still on the table.   We need to review charts …  THIS IS THE SIDEWAYS MOVE I mention could happen  (Hard to short)

QQQ JAN 5 – I said watch the bounce, it may fail at the 50sma or 10 sma

QQQ JAN 6 ,  Selling picked up / notice moving averages

QQQ yesterday /  tagged Bollinger Band and bounced. Weak volume so far.

ZOOM IN

SPX , COMPQ, and DJIA  looked a little better because it had slightly stronger volume, but I am still cautious about LONG POSITIONS. Looking at QQQ, DIA, SPY  I still see a weaker bounce at this low than other times.  Here is the SPY for example:  Notice the difference?

  Watch for stronger volume as we approach the resistance overhead or ( I.M.H.O.) we may stall or drop.

GOLD & SILVER… I like the set ups.  AGAIN  the Unbelievable strong Dollar marches higher,  Metals are NOT taking note. 

In other words…NOTHING HAS CHANGED

I was going to TWEET this out and I wrote “Ask me why I love this chart”.   MANY EYES are on this downtrend line. A break higher would likely cause a flood of buying ( And some may be shorting here, they will have to cover). Its a good set up.

Yesterday I wrote an entire article on Pullbacks and Dips,  dont really feel I left much out,  EXCEPT THIS…

I am an experienced trader and have seen many things, so I try to share that with you in the form of historical charts.    I know from conversations that I have MANY good traders here , and that helps me a lot knowing that you have your own trading plans and I am just sharing my observations and giving you a second ( at times Very Different ) set of eyes.   OTHERS may not understand a few things that I say,  so I want to mention 1 thing here.  It is called  “Buy the dips”.

   Yesterday got a couple questions :  ” I bought the dip today in GDXJ like you said to , am I safe”    Possibly I wasnt crystal clear on buy the dip. Short answer,  I think you’ll be fine, but you MAY need to withstand a bit more drawdown.  let me explain.

In an uptrend or move higher,  you can buy the dips and chances are you get higher prices later. We may not catch  THE EXACT LOWS,  so we use stops and give a little wiggle room, knowing that that could result in stopping out for a loss too.  Sometimes we dont want to stop out too quickly,  the dip may lead to a specific point.  THAT SAID,  let me show you what I mean when I say that pullbacks in Miners here could be “buy the Dips ” opportunities.  

When  I  buy the dips,  I look for a likely place that a pullback may lead to.  I do this with history.  How have these pulled back in similar situations?? If I have NO POSITION , I might add on a 1 day pullback, because sometimes thats all you get,  BUT CAN YOU GET MORE?   Could I buy even LOWER?  Lets look at history .

LESSON: (Click on charts)

GDX 2012 pulled back for days at a time, but found LIKELY SUPPORT at the moving averages.  I WOULD ADD THERE.

Individual stocks in the same time period may act stronger or weaker. 

See CDE in 2012 (Stronger,  10 sma only)

GG 2012 –  MANY RED CANDLES, still just a normal pullback mostly to the 10sma.  If you bought the first red day ,  you may need to be patient here

GDXJ Jan 7 …see the 10 Sma?  So We could drop more

Couldnt GDX drop to “Test” the 50sma  NOW instead of later & still be fine?  Yes. Does it have to now?  no.

SO did you buy a red candle yesterday? We may get a pullback to the 10sma or 50sma…or just a sideways move until the moving averages have a chance to catch up .

Seriously , I am NOT able to see into the future , and I know many of you realize that,  but I sometimes wonder if some still think I know what will happen each and every day.  Willi it drop another 2%?  Will it go up tomorrow?  These miner details I cannot know for sure,  we are dealing with probabilities.     s I try to guide us along, and  all I can do is show the possibilities and past history with it’s possible implications. It gives us a MUCH BETTER chance to make profitable trades.

I will not be 100% correct (NO ONE IS)  I will admit when I make mistakes, but thats also a large reason why I dont make emphatic statements as if to say  ” I KNOW THESE MARKETS BETTER THAN ANYONE ELSE!”  That is a fools game.  It leads to this  

I thank you for being a member here and allowing me to help you.  Not much has changed from yesterday .  The past several reports are playing out as expected so far…no big surprises, right?   I think GOLD/ SILVER are  building steam to break higher from those above chart patterns.    If nothing big happens today, I will likely just check in from time to time and answer questions, but may no need for  a Friday report.  We can watch for these things to continue to play out .    Today may be a continued bounce to resistance in SPX, NASDAQ and DOW,  Metals and miners may do much of the same and then we can look for  the same or sudden changes in Friday trading.  There isnt much more that I can say that hasnt been covered in the past few days .  I will then have a weekend report  That covers all things going forward.   BEST TO YOU ALL!

~ALEX