Look – A Pile Of Dots!

Sometimes people can look at the same thing and see something different than someone else. That is understandable , since we all have different experience in life and different ways of looking at things. When looking at charts , experience and training your eyes to look for certain things  can be helpful in seeing what others may not. So is the above picture  just a random pile of dots? Or is it a runner in action? The answer may depend on your focus or how closely you look at it. Lets look at some charts…

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SPX– the markets have been resisting the pullback. I posted this yesterday

Is there anything noteworthy in todays chart of the SPX?…

SPX MARCH 4 –  The target for the SPX is still a bit higher, but this is a 3rd daily cycle, which would lead us to expect it to sell off further. So Yesterday could have been a 1/2 cycle low, giving us  a bounce soon, and then possibly the sell off.

I’m just going to use the same chart as yesterday for the NASDAQ, because it basically dropped & was bought back a bit too.

The NASDAQ met it’s initial target, but being stronger, it may go higher with yesterdays drop being bought back too. I had a 5200 longer term target, but look at the left of the chart.  It has, in the past, run along the 10sma in a choppy fashion.

NATGAS has been bottoming , rejected at the 50sma.  This was March 2

It is showing signs of life recently,  but does have some work to do.  I still expect a run higher after this base forms.

OIL – I have been saying that   “I like what I see.  I like this set up”.  I am seeing things play out that I have witnessed in other markets and even in OIL itself in the past.  I have had us in Energy stocks since the very lows and many have done very well.    I have also tried to explain in every report what I am looking at and why.

OIL is breaking above the 50sma and has a positive MACD cross, as expected.  The set up is playing out properly.

If you are an alert & Experienced trader, you may be in calls or you may be trading UWTI, USO, UCO.     ( These are FAST, and not for the ones who worry when their positions drop .  Even on an average day ,  you can lose 10-15% in 1 day).   That said….OIL may take off upside or it could drop here.  Purple line can be support.  This chart shows a normal drop to roughly $51 is possible and I would likely enter a trade if it does.

GOLD & MINERS-  No change.  They havent showed any real signs of strength yet . GOLD rises overnight, and then  drops each morning.  Then it gets bought back and basically it is frustrating any who are trying to trade it. It may have a short run upside, but there is no edge to see how this will play out at this point.  I have no trade recommendation at this time. 

I posted these yesterday. Since then   Gold went sideways,  GDX dropped to new lows.

Since  GDX dropped to new lows,  it could be playing out like this chart I drew  to show how it may/may not be very trade able

 I drew this-

1.  The drop below the 50sma that becomes a Daily Cycle low

2.  The run up only tags the 50sma

3. Then the  drop toward a next DCL, maybe ICL?

I posted this chart of PEIX  along with SZYM  FEB 19.  I liked the tight base patterns , it had bullish implications.

BASES take time to play out , and PEIX has lingered in its tight base as seen below, but PEIX released earnings last night and is currently up over $1.00 at about $10.45.  It is now breaking out of this base,  I am hoping that it has the kind of follow through that it has had in the past. 

Would I buy the gap open if I am not in it? That is not low risk, but this stock has run fast in the past, I traded it last summer. I might take a small position and add if it pulls back . This is why…

PEIX  Last Summer  $10 to $23  ( gap too, didnt fill until now)

   So not much has changed since yesterdays report. I dont see low risk, profitable trades in GOLD/MINERS yet.  Those trading them are getting frustrated.  No recommendation there.    I encouraged buying the set ups I found right at the lows in many Energy stocks late January, because I liked the type of “Bottoming ” set ups that I saw then.  They have played out nicely.   I still am holding /  trading  Energy,    I see set ups there that I really like.   In a genuine ‘wondering why’ type question yesterday , I was asked-   Why are we in a basket of Energy stocks when OIL isnt even over the 50sma, I dont see strength in oil, etc ?     My answer is that I know these set ups and They are acting correctly.   The potential gains are great . Maybe I see some things that others dont see, but so far Dec-Jan Miners runs and now OIL / Energy runs have done very well, if one got in on the low risk buys.  Anyone uncomfortable because they see ” XXXXX”  that they like to see ?  I say just wait until you see what makes you comfortable.  You subscribe here to see how I am looking at things, but you dont have to agree or follow if you dont like what you see.  I do try to explain everything in detail , and even use other examples, but thats all I can do. If someone isnt comfortable, that is perfectly acceptable. Just trade what you like.

 Some of these stocks have moved 50-100% already and are now forming bases.  ( REXX, BAS, SFY, GDP ,KEG  etc )   These bases could produce another 40+% . These stocks were also $20-$30 stocks this summer, thrown away like trash with the OIL sell off.  If they recover half of that over time , it can be a move from $2 to $15  ( 600% ).  Its an opportunity that has risk & reward, but the reward is worth the risk here.

EXXI ran 100 + % already

Yesterday BAS and SFY continued their rise and I really like the bases forming here.

I am looking in other areas , and this weekend I am planning on trying to discuss a few possible long term type buy & hold plays.  Certainly it depends on market conditions going forward. A bull market since 2009 cant run forever and its starting to feel  “late”, so a steep pullback could occur too.  More on that later.  Have a great day, and thank you.

~Alex