QUITE A BATTLE GOING ON

We have been watching some great battles going on, and thankfully we have been able to make some nice trades despite the up & down action of the various markets.  Volatility can be a traders paradise, but an investors nightmare as price basically can remain the same in the up & down battle for direction.  Having  technical analysis, some cycle counts , and a  bit of experience  in our tool box , we gain an edge in certain areas.   This weekend report will highlight some interesting charts  ( 24 charts again to be exact!) …so to the charts!!!

 

Well look at this break out in OIL

It exploded at the end of Friday and shot up 8%. That is a lot for a commodity like OIL.  It closed above the 10 & 20 sma for the first time in a long time , as you can see.

 

I know that some will want to jump in and play this with an ETF or certain stocks.   That is fine, but also remember that  other steep sell offs usually have a rally of ‘short covering’ for maybe 2 weeks  & then drop back down to double bottom.  We saw that in GOLD & MINERS  Nov lows to DEC double bottom.

We have also already  seen the double bottoms form in some energy  stocks , so  the sudden drop Thursday may be a shake out,  we’ll see.   I pointed out that NEM and a few other miners did exactly the same thing  as seen in Energy Thursday  ( see chart of NEM below)   at the second bottom lows in Dec.  It dropped down below Moving Average support and then just ran away. Watch your energy stocks and see if something similar happens.  i will report on it as it unfolds.

 

Along with the OIL pop, look at the $CRB

 

So will NATGAS also move higher?  Sympathy run  … I think it should, but I am neutral here.

$NATGAS –  could be a shake out, but I am just keeping an eye on it.

 

 

Lets look at the Markets,  the $USD and GOLD / MINERS

 I have been thinking that the markets are showing weakness.  It is a real battle of the bulls & bears.  I have pointed out many weak stocks and a few strong.  recall  MSFT, RDWR, YHOO, BABA, TSLA, PCLN , etc    Then I see stronger ones like  CREE, TSEM,   (AMZN &  GOOG recovered Friday).  SO what do I think now??

 

The markets have been in a trading range for weeks, and I actually think the markets could finally fall apart this week.  This was the QQQ Thursday

 

NASDAQ WKLY –  It closed the week at the bottom of the range, pushing down with volume  AS GOOG, AMZN, AAPL recovered.  This will either bounce in that range for another week, or crash down.  I think it drops this week , even if it bounces Monday.

 

Remember when I said that the small & Micro caps held up well? I showed this IWC & IWM looked like Bull Flag consolidations in Dec / early Jan

 

Well as time has gone on,  they look a little weak too. Strong vol selling friday & H&S?

 

I’ve been watching  the $USD  VS the markets  ($SPX) .  Many are aware the the STRONG DOLLAR was good for the markets.  They were breathing together up & Down. Notice that the crash in OCT was in harmony with the dollar puling back.  The last surge higher by the $USD revealed new weakness in the SPX.  If the Dollar pulls back now,  the MKTS could crash to OCT lows in my opinion.

 

And this is the dollar, ready for a pullback as the QQQ sits on its lows in that consolidation . As the dollar pulls back, the Markets could crash and the CRB, OIL, and METALS & MINERS  May run higher.

 

 

So you know that I bought TZA.   I would likely get out if the NASDAQ breaks above the 50sma.   I mentioned picking some up if the QQQ  gives up at the 50sma, and I have traded that move in this consolidation.  It is a risky 3x ETF, so I cant recommend it for everyone.  IF we break down , however,  those here that trade 3xetfs and ultra etfs can look into shorting  the mkts using those. I see the OCT lows as the 1st target if the bottom drops out.   Here are some high risk vehicles  along with TZA-  SDS, DRV, SPXU, TECS, SOXS, and so on.

WEEKLY TECS  for ex:  ( much like TZA) .  Looks set up to run higher  which means tech stocks weakening.

 

SDS – as of Wednesday / wkly chart closed higher.

SOXS  3x bearish Semiconductor  ETF

 

SOXS? I thought SEMI’s looked pretty good?  They did, but may have topped too .

TSEM

 

SO it has been a battle of the BULLS and BEARS, leading to a long consolidation.  That can build power to break  Up or Down. This weeks reports have shown many weak tech stocks and even with the recent explosion in AMZN and GOOG…the NASDAQ closed at lows.  Not bullish to me.

 

GOLD / Miners  (SILVER) –  first, if the dollar does drop (chart above) These may rally.  Expecting a pullback into a daily cycle low , This JAN 28 chart showed  my first support target for GOLD

 

 

It hit there and reversed all in 2 day2 ?  WOW!   That doesnt mean it is done,  but it may be…I’ll explain. We are on Day 18  (or more) and that can be enough for a DCL. A break above Fridays close and above $1290ish would be convincing action…see both charts below

 

Using my JAN 29 chart , watch for a break above the magenta trend line Monday . Thats why I said roughly $1290 and the DCL is likely in.

 

Look at GOLD WEEKLY.  That was very cool, when you consider that the sell off $30 Thursday almost ruined this.  Fridays action saved it.

 

MINERS-  We may have seen a day 29 DCL in Miners. I drew this JAN 29 , posted it here, and stated that we may bull flag to the 50sma.  It then reversed Thursday as shown while GOLD was down $30 and closed higher Friday .  Bullish .  That may be it. We closed above Thursdays price  (clue #1)  and watch for a break above the blue dotted line.

 

GDX WKLY was also bullish in tech analysis .

 

Think about this…

SO we had a Gold drop of $30 Thursday, You would never know that if I show you these miners charts a yr from now.  Bullish.

 

AU – what sell of  ???  New recent highs.

 

CDE  –  If I show this chart a yr from now,  you’d say   ” We had a $30 sell off in Gold & $1 in Silver?

 

AG,  Technical analysis wise,  this remains strong, not weak, only pulling back 38.2% .

 

 In Late December I got emails saying that NEM & ABX  are going to doom GDX. Today they are sweet .

NEM WKLY –  6 weeks straight  of Green

 

I see that some in the comments section started buying , we do have traders here and they do know what to look for.   I think we may have seen the dcl  ( Cycle low ).  Things look pretty strong in many miners  (Shown above and mentioned before like  GFI, HMY, NG , etc).  Sometimes going into a cycle low is too scary to ride, but you can see that some of these Miners barely dropped.  How about the AU  !  

I am releasing this report now to give you all a chance to read it, and read it again tomorrow.   Also because of the Superbowl Sunday night ,  I’ll be with family & friends I wont be able to write it then –   I dont want to put it off till  Monday morning and leave anything out or not release it before the market opens. This is a lot to absorb.

 

1.  Metal & Miners –I have told you above what to look for in a daily cycle low for GDX  ( Magenta trend line overhead in one chart and we already have a higher high friday than Thursday).  Some of these Miners are already looking strong  ( AU, CDE, NG, AG, and more as shown) –  so traders can probably enter comfortably.  MY WARNING REMAINS….if this is just another Bear Mkt Rally in Gold & Miners…the 3rd daily cycle will roll over sooner than later.  Day 7?  day 9?      SOME MAY NOT WANT TO PARTICIPATE.    They may wish to wait for a really low risk set up at the ICL.     IF this isnt a bear mkt rally,  if we are entering a new bull run,  this daily cycle may surprise many and may do well too.

The best BUY will be the next  ICL,  likely late this spring,  but I think we can scalp some decent profits this week too.

 

2. OIL & ENERGY may begin to rally this week .

 

3.   The general  MKTS may drop and start to quickly move to OCT lows  (If I am correct in what I am seeing.  We still had some good earnings and charts  AAPL, AMZN, GOOG)  but overall the mkts look weaker than strong.  They closed at lows, to me that says …”GOOG & AMZN  WASNT ENOUGH” .    I am in TZA and added to that position nearing the 50sma.

 

I will try to answer questions when I am available…I try to leave the weekend time  for my family , but I do check in from time to time.  Thanks for being a Chartfreak reader,  I think looking down the road we are going to have some good trade set ups in Metals  (ESPECIALLY AT THE NEXT ICL)  and ENERGY may offer some nice moves. The Markets will have to reveal their long term intentions as time goes on.  Thanks and have a great weekend!!

 

~ALEX

 

P.S.  No audio…read this long report once,   then again,  maybe again and soak it in.