Many times when markets move , they are often setting up for the next trade. As things are setting up , Its not always possible to tell if the set up is Bullish or Bearish. I have mentioned here what I am seeing in the markets, but with the ECB meeting taking place and the results of that meeting not being released until (supposedly) 8:30 Eastern time, the goal is patience. Often traders & investors dont realize that over trading can cause one to slowly give back the gains recently made. So while we need to invest to make money, we also need to learn patience to be able to avoid knee jerk reactions and head fakes. While we wait….Quick review.
NOTHING has changed with the SPX,QQQ,DJIA, etc
Like yesterdays report ‘Groundhog Day” mentioned, as time goes on, not much has changed. One thing I did notice is…
(No audio today )
Though the set up is STILL overall leaning towards bearishness, I now see glimmers of bullishness. I didnt want to post that on the public part of this report. Bearish = The market is Unable to push above the 50sma and the 10sma. It is stuck in this sideways consolidation, however the longer that it pushes sideways and CAN build energy to break higher , possibly on ECB news. This is still bearish for now, but look at the MACD too. Improvement. THATS why patience has paid of. Taking a long or short position last week or the week before could have been dead money , or if leveraged or in options calls or puts….decay
QQQ – No major changes , but I now see slight bullish specs . Today may indicate if this Bearish looking set up finally breaks . DO NOT JUMP ON AN INITIAL SURGE HIGHER without watching the 50sma.
$GOLD & MINERS
I recommended lightening up. I expect a pullback in GDX/GDXJ . In the past we have pulled back to the 20sma and the 50sma at this point.
I posted this thought before the pullback started. We pulled back yesterday. I have NO WAY of knowing if the ECB announcement will cause further drop or reverse higher for another quick surge? I have drawn a chart showing that ( it will be toward the end of this report)
Dont you agree that it will take time to know if this is a regular bear mkt rally (Same as has happened since June 2013 , likely putting in a Bottoming Process). I am being asked , “Where will this pullback to?” It will take time to know, but if this is another Bear Mkt rally….here is what happens after the initial 2 month run up. We run up solid for 2 months or so, and the 3rd daily cycle can make a new high….suck everyone back in…and drop the bomb on them.
I am holding on to a few Miners, but look at this chart. See daily cycle 2 drops to its daily cycle low, then notice daily cycle 3. The daily cycle low of the 3rd daily cycle can be deep. Fast traders can trade this, investors may need to be patient.
What if this ISNT a bear market rally? What if this is NEW LOWS for Miners and the lows are in….will it rocket straight up?
I know many think that it just goes straight up, like 2008.
Well…. 2008 didnt either. Have a look.
After that 2 month run up , it dropped to the 50sma and then ran up & down and up & down = sideways. Good for trading, NOT GOOD for leverage or possibly even options. IF you bought calls at the 50sma in JAN 2009, in March 2009 you were almost back at those lows . Thats 2 months later. And then in April Again!
The above chart shows that it was still higher highs and higher lows as time went on, but the rocket to the moon was not straight up in 2008 either, so it might take study and patience going forward. A 3rd daily cycle may pop to new highs and drop to the 50sma and bounce around. Again, good for trading, not so good for BUY & HOLD unless one learns patience. And just buying 1 stock can be dangerous, a basket is best , asmentioned here in the past. EGO yesterday is proof of that.
Also I mentioned that while GDX/GDXJ pullback, some individual miners can still go higher. Look at NEM and ABX, AXU (And a few more yesterday while GDX/GDXJ pullback). So it may become a traders playground.
I pointed out resistance for ABX here , and thought that ABX would continue up though I expect GDX to pullback.
ABX yesterday
I still see Miners that just look like they want to go higher, much higher (ABX ABOVE)- but I need to be patient and wait and see how things unfold here. Take a look at NEM , breaking higher right through yesterday. Accumulation & short covering can be strong.
Let me show you another idea. WHAT IF….GDX responds to the ECB mtg by NOT dropping into a DCL now ( day 24 today), Is it possible that it could surge on news today ( day 25 ) only to reverse and drop next week? It could look like this.
I cant tell, but my call to lighten up / remove leverage , etc is based on experience in the past at this time in a daily cycle. Technical analysis says this could happen, because there is not a lot of resistance between here and $25 + . SO I also said it may be a good time to hold a core position if you bought lower. GOLD is only on day 12 , I believe…so it can still go to my $1320, $1330 target area. $1340 also mentioned yesterday with this…
$1300 is conservative target using the low of the right shoulder instead of the neckline , stronger target is $1340
$SILVER hit resistance and stopped. Some silver miners remained green yesterday ( EXK,SSRI, PAAS, AXU, etc) Watch that $18.50 area
SO as I mentioned, EBC announcement comes this morning. Watch the QQQ and SPY for breaks higher above 50sma, or lower , breaking down. Give the markets time…it takes the first hour to shake things around and establish true direction at times. Same for GDX/GDXJ/GOLD. I do not always need to be trading and making money ( or losing money!).. Sometimes the meat of the move is enough.
Patience will allow me to look at things & assess the situation going forward.
In the meantime you can
1. Hold the trades that you are comfortable with
2. Raise stops
3. Honor stops
4. I will be looking at things and watching for low risk set ups.
Best wishes
~ALEX
Groundhog Day 
Pass The Draghi Juice Please
Scroll to top
ECB: 60 billion per month
Thx Christel : )
Alex, thanks for your comments on EGO. Some what of a back handed comment but because of your suggestion sold out this morning when it was up 1.5% rather than down 2% now. In my books a smaller loss is also a success. Thanks for the great work!
Good Deshy,
Glad you got a tiny bounce to bail out on.
I believe it has room to drop further and I see more sellers than buyers at this point.
Alex,
I have trimmed all miner positions except ABX and RIC. Would love to hear your thoughts on how RIC chart is looking at this point.
Thank you as always for your excellent analysis!
Hi Alan,
Ric is fine, but it had run up over 200% from last summer, so we get a consolidation. You can see that it’s in the middle right now, so it can drop or pop & still be healthy. It has 3 support areas below and they should hold if this is a longer term hold. See the 50sma and the blue trendline? That should hold if it drops.
Thank you so much. I’ll keep a watch on that 50sma.
Goodmorning Alex.
Yesterday you show us a charts on NatGas. Are we still on the support line?
How does it now looks like?
Thanks for your very good help.
Gt.
Hi Geurt,
I’m going to teach you to fish. You look at the price of NATGAS , it dropped to $2.80 & bounced back to $2.83. Then look at that chart trend line.
So NATGAS is at $2.83 and hit $2.80 this a.m. , here is the trendline (Click on the chart)
Are we above or below the support line? : ) Looks like it tagged it so far . Best wishes.
Yeah, but hard to be happy with nat gas performance so far. That is an awfully steep line so you don’t want to ride it or keep checking back. Needs to make a move soon. Gas moves fastm if we get a good pop will probably look for a good exit vs trying to push it for more.
This is GOLD right now ( 11:20 A.M. eastern). Looks rather bullish to me.
Call me crazy but this is great action for the bulls. Many are waiting for that shoe to drop which we may already have experienced premarket with a drop from 1305 to1279. But, the shares hardly reacted as gold recovered before the open. I’d bet many went short. Maybe we just eat up the remaining time on this correction for the 10day to catch up and begin a new leg up. 27 on GDX would seem like a reasonable spot should gold get that push to 1320-1340. Alex- what is this-something like the 4th or 5th shakeout you showed us all of which recovered and went on to make new highs? You’re right: we are so conditioned for major drops…and they’ve all been bought.
You’re crazy
(Just kidding, you told me to call you crazy)
I am watching individual Miners and seeing some nice pullbacks to lower risk buy areas. We can still get a slam slam slam into a DCL. I have seen that enough, but for GDX…I think the 20sma or 50sma would be a possible target for a DCL.
Then a 3rd dcycle could top in 5 to 8 days and roll over…so one really needs to be alert. It can drop down to the 50sma if this is a low area forming…. or more if this was a bear mkt rally. . I want to keep from jumping back in too early, but as a trader, I can see some trades that may offer greater upside potential than downside risk (If stops are placed below Moving averages). It could get frustrating for some, and may be better avoided.
Look at ABX, NEM, or CDE – holding up well. Then look at HL. HL has me thinking that Maybe another quick leg up for some of these early in the 3rd dcycle , but it’s Never a strong buy. Its best to have patience unless you’re in front of the screen all day.
Hi ALEX…..
Just come back for a break from my clinic, and look @ CREE.
Sold it and make a profit from 666. EXCELLENT call Alex.
Bought 4 calls yesterday, and sold it today.
THANKS A LOT.
NICE GEURT! Glad to hear that!
the markets are losing that bearish look and CY and ONNN ( also semi) Look set up to break out too. I’m watching a few areas.
SUPERB call on CREE chartfreak … THANK YOU for bringing that ticker to my attention… luvd the chart..entered on pbk the other day, up 12% and climbing… you are on FIRE..;o) H – O – T -T
Awesome Heidi… I am really happy to hear that. Based on past conversations – You sound like e a good trader
You probably saw what I wrote below , but markets are looking a tad more bullish now. Great price spread on QQQ, so check out the other semi conductors ONNN and CY. I also am watching a few other areas. Interesting set ups forming
: )
will check them out.. THANKS!
Today SoS 1.5 Billion…..yesterday 900 million….makes me think this market doesn’t have that much further to go…your thoughts?
Thanks
Hi Harry ,
I actually think that the indices want to test the highs . I saw good price stretching out, and volume wasnt too shabby either.
I havent found B.O.W. or S.O.S. to be great timing tools, but I occasionally look at them as a reference point. Lately I have seen huge numbers piling up each time up too . Not quite sure what to make of it.
Alex, Can you show a quick chart of either ONNN or CY for learning purposes. I see the RSI>50, full stochastic turn, slowly turning MACD and both >50dma. Having said that I’m not seeing the similarity with CREE price action (before launch). Is there something else there that we should be looking at? Tight BB?
There is no similarity in set up, but it is a ‘bullish set up’ within the same sector.
CY is a giant bullish engulfing on a sideways consolidation.
ONNN- cup & handle , RSI over 50% ( Sorry- I cant do a chart right now, maybe tomorrows report if I remember).
Thx. The explanation is good enough. Just thought I was missing something “larger”.
Alex, good comment on patience. I had trouble last year with always having to be in an index somewhere. Looks bullish today now that ECB news is out. But I probably would have been stopped out multiple times and bled out slowly so avoiding until clear really probably was the best move for me.
thanks for showing future possibilities on miners. Really hoping we can get another push up early in 3rd cycle. But waiting for better entry right now. After today’s action seems more like a necessary consolidation than the beginning of a breakdown. Lets keep ot going!