Bulls-eye

SO far our ENERGY picks have been right on target.   What I was looking for in Natgas for the past few weeks has also taken place perfectly.  Gold & Miners? We’ll discuss that too, but first lets quickly review the Equity Markets.

SPX is really in a tight spot. It needs to break higher soon. Will we get a pullback and a surge in commodities?

Does the NASDAQ look any different? There certainly was no shortage of break outs in Tech yesterday…

NASDAQ– I’m still looking at the first consolidation compared to now.  They are very similar at the point just prior to a break out higher in Feb, but that wedge can still be drawn too. Time will tell, but there were some beautiful tech set ups breaking out this week too.

I have been calling for a “Shake out & Reversal” in NATGAS.   I mentioned that this would be the same as OIL a, same as the CRB.   Natgas is Quite oversold now, I expect a rally soon. I love this, because I was reading that some were calling for “Short” positions with the “break down”.  They got trapped and a short covering rally can now take place.  NATGAS stocks were telling the real story, werent they?

OIL-  Just what we wanted ?  YES!

 OIL, NATGAS, Coal Stocks are setting Up, STEEL stocks look good, etc etc etc .  Are we seeing a slow change of money flowing out of the equity markets and into commodities, causing them to bottom? I have mentioned that I think we might be.

I was asked about “Selling” yesterday.  My thinking is… what is your goal?    Are you a trader scalping positions? If so,  please scalp & lock in gains,  if your stock pops 10,15 or 20% in one day.  Lock in some gains.     DO I think this run is over?  NO.  WILL THERE BE DOWN DAYS? MIGHT YOUR STOCK DROP 8% TODAY?  Yes.   Right now, however, this is what I have been patiently waiting for.    These are the types of “Set ups” that I look for to make 60%, 80% , over 100% .   We did it in Miners Dec through Jan.  for ex:  remember CDE & Others ran 100% ?   We did it in these Energy stocks  JAN-FEB , when they were only starting to form a base.  Back then I know I had a lot of readers here didnt buy my recommendations at the lows.  Most bought later.    NOW these are breaking out of a solid 3-4 month bases .  I am not selling unless I trade out of one to get into another.  We could start to trend higher if OIL remains in recovery mode.

  If I have time, I can try to explain this more in the weekend report  ( and briefly now below).  For now, if you are in the money?  You can Raise your stops , but not too tight .  We will have down days .  You can scalp some good %-Gainers and look to re-enter.  I am mostly holding positions that I bought much lower.  lets review a few facts in this area.

Mini Lesson on Bollinger Bands

I was asked , “Why dont you use Bollinger Bands and sell when price hits the upper band.  Stocks usually drop from there.”   Good question, I know that many trade that way.  I have traded these set ups for a long time, and that method had me locking in gains WAY TOO early  more often than not.    I locked in 15% , but I missed 50% & 100 %  moves that way.   Yes, there may be a day or two down from there, but when would I buy back in?   Patience would get me the real %-Gains.    Lets review 2 charts for example.

ERF currently. If you sold the upper B.B. tag  ( $10.70) ,  it hasnt stopped yet.

GDP in February’s run, sell at the B.B. & miss 45% more.

I was also told that on the WEEKLY charts, a  B.B. Tag is a must sell.  I disagree.   That is not true if we are expecting higher prices and you are not a day trader.  YES.  We may get a pause or pullback, but you can miss serious gains day trading a possible up-trending move.  I expect OIL to be recovering , and OIL JUST broke out of its base, so I  (personally) want to sit on my hands until that changes.    I can ride some ups and downs .  ( However: You need to sell and lock in gains when you see fit.   What is your goal?  When you enter a trade , you should have a plan.   Selling POPS? There is nothing wrong with that).

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Lets just look at prior runs in Weekly charts of XLE & XES with B.B.   Did a sell of the Wkly B.B. lock in great gains? Maybe, but you’d miss so much more as it tagged & bounced higher along the B.B..

XES  –  2010 run up & Nov to March run up in 2013 also . Week after week higher.

ALSO-  ” Why didnt I sell my SZYM on the first pop?”   Certainly it is wise to take some money off the table in such a pop.   That was not my plan for my accumulated position, however.     SZYM  was a base that I had entered much lower at $2 and $250 as it bounced along the 50sma. My plan is a longer term hold, unless it stops acting correctly.  Yes, Sometimes these POPS like SZYM had can surge up & drop back, but coming out of longer bases?  Often  they  can run higher, bull flag, and run again.  I’ll just raise my stops & see.

As an example: Notice the recent POP in CMCM.  Possible Bull Flag to the 10sma and then higher? What if you sold that first POP?  No re-entry.

So have a plan and either stick to it , or be flexible as you watch things play out.

ENERGY looks like it may pullback today  ( it may also gap down and close higher,  we have seen that a lot recently).  Should I panic if my stock is down? No.

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BAS – look at that big down grade day. Hardly shows now. Down days can be expected.

Pauses after a big POP can be expected , as seen in KEG on Jan 24. Pop & sideways for a few days.

Did any miss the move ?   If I had cash & wanted to put to work?  Here are 3 Energy stocks that look to have more upside –  Nice set ups and they didnt get over extended yet.  All Energy stocks may pullback today with futures down too  (buying opportunity?)

PEIX

HK

Hero  did run up, but is flagging.

Energy stocks that look to have completed a measured Move,  like REN , can be watched for an entry if it pulls back.

   This tiny move was over 120%  in less than 2 wks!

GOLD / MINERS

Yesterdays chart of Gold needed improvement

Gold got a little better, gaining the 50sma.   We sit at $1205  pre-market.   (  I still look at what happened in DEC as concerning.  Gold doesnt look weak or strong right now.  GOLD looks lack luster for now.

NOTICE:   Last DEC we had a POP & a day 21 high, and then a drop to the DCL.    This time period now looks similar.  We’ll see – We are on day 21 today) .

On the other hand, I think that the Miners look Bullish .  Many individual Miners can be bought right here with a tightish stop. I think the SILVER miners do look good.

We may have already seen a DCL.  The timing was a little short, but it is possible, and the next leg higher could be starting.   Miners may just start off higher, so buying a miner or two may be a good trade.   Just to be aware of a possible DCL ahead of us in the near future like last Dec,  I drew this possibility yesterday if GDX breaks out & drops to a DCL, it would be a break & back-test in Tech Analysis.

Today is Thursday  and   the futures are down for the DJIA, SPX, and NASDAQ.    OIL is down , I’d like it to hold above $54.25 on a closing basis,  especially the weekly.  Gold is Green, so I want to watch Miners for clues as they move higher.    Friday will likely be the same as today , so  I wont have a report until the  weekend report,  when I can cover the weeks activities as a whole .  Things are really looking good and lining up in many ways.  I like what I have been seeing.    If I see anything important tomorrow , something I like or do not like in Energy or Metals, I will send out a notice.  Thanks for being here as always!

~ALEX