GREED & FEAR

We all have many choices to make when trading the markets day after day. They say that it is Greed and Fear that often rule the markets at critical turning points. Thats why it is important to know who you are as a trader,  and what your threshold of Risk is.  With that in mind, I am going to make a recommendation, but the choice is yours to make, with the information supplied.

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Think Out Loud

Quick update:

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WAITING

"The Train has left the station".   In trading, no one likes to hear those words. We want to be ready to get on board before the train leaves the station.  Today we will discuss the schedule of the GOLD TRAIN, and see  when it is due to leave the station.  First lets look at the markets...

In the weekend report, I mentioned a pullback was near based on Fridays charts of the SPX, NASDAQ and the Vix. SPX was at prior highs again. Nasdaq was gapping up outside of  the B.Bands.

SPX 7-17

Tuesday the SPX looked like this  as it dropped Tuesday & Wednesday...

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Be Prepared

There are times that the markets ebb and flow and then there are times when they go to extremes. By studying the charts, we can often be prepared for good trading opportunities that can come from many of these situations. Lets discuss what the charts are currently saying, especially in Precious Metals...

First : In the past I have pointed out what the Vix at 12 can often lead to.  Notice that when the VIX hits 12 &  rises  (top box) , the markets pull back  (middle box).

VIX 7-21

In my weekend report, I mentioned with this July 17 chart that I expected the markets to drop.  If the QQQ Gapped open, I said to sell it. 

QQQ 7-17

Now we see this...

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RISK

This weekends report talked about "Drops",  because many markets like the  Shanghai and even our own markets recently encountered them. I mentioned that after a drop, their often comes a great opportunity and now the equity markets were rallying.  Gold has entered its cycle timing to put in a low after it finishes its current drop too.  What does that mean?  It means we should discuss RISK, as we approach what I think is going to be an excellent  buying opportunity in the precious metals area.  First lets review the markets...

 

NASDAQ - We have rallied nicely out of the ICL as expected. We are outside the Bollinger Bands (not shown) and we could get a pause here sideways, or even a pullback. Notice that eventually all break outs get tested.

NAZ 7-20

Interesting thing about the chart of the SPX...

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Talking About Drops

Seems that lately we've been hearing a lot about "Drops" in the markets. Remember when CNBC was reporting that Shanghais drop  may never end until it hits the lows again? Its collapsing!  All drops end, and this one looked like it may just return to the break out.

SSEC

It did..

SSEC

And the stock market itself just had a drop, blaming the concerns of China,  Greece , etc as the problem. Lets discuss these drops since GOLD / MINERS starting dropping rather rapidly last week too. Will it end? Of course. Where and when ??  Lets discuss drops ...

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Melting Gold

Just a quick note for today ...

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A Matter Of Time

Lets talk about timing.

So far the markets are acting as expected for an equity market that has found its ICL.  The Excessive Bearish sentiment , Put / Call Ratio extremes , the Vix and Various set ups pointed out here in early July were all calling for a contrary reaction.  Not what the crowd would expect.  I expected a rally, but waiting for it each day seemed like time was being warped.    I still see the Precious Metals under similar circumstances, but as you wait for an inverse reaction , it seems like each day is a week.  Lets review this thinking.

Here is one of the many charts that I used to say that I expected a meaningful low in the equity Markets. This was July 6th.  Extremes comparable to OCT & Feb lows were in place, but when would we see a rally?

SPX T

SPX July 15 -   Notice that after July 6th, we dropped to new lows July 7,8,9. Three  days felt like forever, but now they are forgotten.  The rally continues to have follow through.

SPX July-15

Keep the above in mind, and we'll discus it further in the report.

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Below are just a few trade ideas.

We try to find low risk set ups and entries.  To ensure that the risk remains low,  we use reasonable stops and honor them if the trade goes against us. Being wrong is OK, it will happen from time to time.  Staying wrong can damage your account.

WIX - Just broke back above the 50sma again. Your stop would be under the 50sma.

WIX  

GPRO - re-gained the 50sma, but gapped open. You may want to wait for a break out above the blue dotted line

GPRO

Continue on...

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GOLD DROPS $113!

Hey, it did happen a few yrs ago, but now that I have your attention 🙂  I need to review something in the GOLD - SILVER -  MINERS section of this report.  First a quick review of the markets.

As expected , Follow through in the DJIA, SPX, NASDAQ, etc

NAZ 7-14 Read More