Putting It Together

Not a lot has changed from the weekend report, so lets review the charts.

Nasdaq March 2

Certainly has had the bullish follow thru that I expected, right to 5000.  Is it going to continue though?…

It can.  I posted this wedge in the weekend report.  It shows that we are at a point of interest, that makes it difficult to discern immediate future direction.  It is at the upper line, so it can drop from here, or continue to climb upward along the upper wedge.

When the NASDAQ broke out from 4800, some doubted my target of 5200 when I posted this measure move.  I think it is still possible, but there can be pullbacks along the way.

Zooming in on the NASDAQ , we see the short term possibilities of “Choppiness” .   In the past , we did something similar to now and while the set up is quite Bullish, it got choppy.   See the left side of the chart Aug 2014. Orange arrows picture where we may be now.

1. The run up

2. Drift to the 10sma ( orange arrows)

3. POP and chop

SPX – also quite bullish

 $GOLD – I expected a low, but warned that it could be weak. Maybe 10 days running up & possibly rolling over. Keep in mind that GOLD seldom runs straight up, so why expect it? Expect choppy runs.  The prior low,  choppy or straight up?  See below…

How about the JUNE 2013 low, straight up, or was there a choppy slam down day to panic everyone? Sideways & DROP.

GDX – yesterday after just 1 day down, I got an email ( Not a reader, an old friend) that GDX is obviously weak and  he was going short for 3 weeks. Bought DUST at the end of the day.   I understand the feeling, he might be correct, but waiting for follow-through is prudent.

One day down is not a market. Its still above the 50sma. We have seen a slam down after a low before (Blue arrows).  Its important not to get too emotional, let the mkts speak & simply HONOR STOPS.

I am expecting a great buying opportunity in Miners this spring,   and I think this is a bounce that may only last 10 days out of that low. It will suck in many long traders and we get a final drop to the real Buy,  the real meaningful lows.   Traders can play this any way you want, I am interested in watching how things unfold.

 $WTIC –  still pushing that 50sma.  I like the set up (As mentioned in prior reports)

NATGAS – still looks to have bottomed, but it is still bottoming. Double bottom?

SOLAR STOCKS put in NICE reversals yesterday.  YGE, JKS, TSL, JASO , SOL, etc etc   VERY INTERESTING SET UPS.

I want to add a LESSON here.  Read it later if you dont have time now.

I have been investing in some low priced stocks that are beaten down from much higher prices .  EXXI, REXX, GDP, etc were once $20 – $30 stocks. They can recover in time and it is a process. I often trade these types of set ups out of “Bases”, I get the quick %-Gains and then they often consolidate and base out again at resistance.  I want to show this to you here.

If you have been with me since last Summer, you may recall many LONG BASES that I wrote a lesson about. They are explosive at times AND I posted this about a company VIMC that I was trading. I Bought it near $3 & repeatedly bought it to $10. Lets review those charts. THIS is how I feel some energy stocks may recover…

VIMC LONG BASE / VOLUME

SEPT 2 –  our 2nd BUY AT $$3.60

SEPT 12 – hits $6.50

Sept 16 – hits over $9

These explosive moves were coming out of oversold , beaten down conditions.  You may recall that I traded APT, LAKE, etc in OCT and got the same rocket ship rides.

APT OCT 7  ($3.50)

APT OCT 15  ($10)

This is why I have stayed with some of these energy plays.  I dont think they will have THAT kind of recovery  YET, but they are in a recovery mode and gains have been 40% 60% almost 100% already.  They may be in that “Base Building” stage, so sideways action can occur too.  I have often made great %-Gains from recovery sessions and if OIL gets to $70 again? Some of these energy stocks will continue to recover.  Right now I go by the charts, the set ups are  still bullish  (So far).

  What happened next for VIMC?  It sold off and discouraged everyone ( But if you keep those on your watch lists & check them again and again, and they are really healthy again,  you can find this).

VIMC- after the run up & sell off all the way back to $5.50…it is a healthy bullish long term  set up

I just wanted to use this time to show you what I have seen in years of trading the markets.   WHY am I interested in a basket of energy stocks here? They were possibly overdone on the beat down.  New hysteria was reporting that OIL was going to $20 or into the teens, so everyone bailed on these companies as if they were going bankrupt.   Emotions and panic caused a fire sale.   IF oil recovers to some degree, some of these will too  (others may remain weak).   IN DEC I was buying up the beaten down MINERS and some went up 70-100+%.

SO most of the time  I am looking for Shorter term Quick  %-Gainers.   At other times I do look for value .  Recently CY, TSEM, ONN, TWTR were ready to buy & hold.  (CY still is a good set up right now) .    Some set ups appeared in Stocks like TWTR, FB, MU, MSFT, FNSR, AAPL, etc , but those are for longer term buy & hold under the right conditions, and I find that (most?) readers here dont want to wait for those to break out. They dont want to sit in a stock and wait, they want action.   IF YOU ARE looking for a longer term set up, email me and I’ll see what I can do, but they may chop ,  drop, then pop. They are a different set up.   ( again, CY looks ready now).

~ALEX