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On this Thursday of trading, let's review what the markets are doing so far, and we'll have just a couple more interesting trade set ups.
NASDAQ - The NASDAQ put in a low that was a buy on August 21, and that has not been violated. It almost made new all time highs on Monday. It is still early enough in the daily cycle to break the highs and Tuesday & Wednesday looked like a back-test of the recent break out from the downtrend line. I would raise my stop to that point.
SPX - That sharp drop on Tuesday also looks to have back tested a break out. Day 11 and this can break to new all time highs too. Recently, breaking to new all time highs has not turned into a strong rally higher, the markets just keep rolling over into the next dcl, but it is slowly putting in higher lows and higher highs, and that is a trend higher. A bit of a rough ride for the BUY & HOLD investor.
TQQQ - So here is the TQQQ that many here trade. Tuesday, Wednesday, or even today you could add to your current position, with a stop below the 50sma. If you bought in at the DCL, I would raise that stop now that we've had the first drop out of the way.
Read More So far, the trades that we have been really focusing on have been excellent. We'll do a quick review and then discuss those trades and set ups.
DJIA - Wow, that wasn't a very healthy looking drop on day 9, was it? The DOW landed right back on the 50sma, so at this point, support is support. If this were to roll over and continue down, that means that this could still drop into an ICL. ( I never did call an ICL, just a dcl, but we are overdue for one).
SPX - As a cautionary note going forward, I mentioned that we had a buyable DCL in place, but using this weekly long term chart, it's easy to see a rising wedge in SPX. It is important to look ahead when we take on a trdae. That is called being alert and prepared, not biased , rigid, and foolish.
That way if we do get a sudden drop, we aren't surprised or overly biased and married to positions.
Read MoreNOTE: GAS PRICES HAVE SKYROCKETED IN THE U.S. THIS WEEK. We'll keep that in mind as we discuss the Energy sector.
NASDAQ - We got the follow through to that daily cycle low that I was expecting, and now we also have a weekly swing low in place. Stay long and watch overhead resistance. I do see divergence, as shown on this chart.
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Actually, we were expecting higher prices in many of the Market sectors yesterday, so this Green Board that I captured Thursday afternoon was a welcome sight. Let's discuss these GREEN market Sectors and some Stocks.
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SPX- Yesterdays reversal filled a gap and strongly moved higher. It is right against the down trend line, and a push higher above the 50sma and the trend line is a buy if you ask me( I would have taken a chance and bought here). A break higher should indicate that we have a dcl and the markets are done consolidating for now.
Let's take a look at the NASDAQ
Read More We will talk about this and what it could mean for the Miners,
after a brief review...
Read MoreLet's review the weeks market movement and see what is likely to happen next week.
NASDAQ -We still haven't dropped into our ICL, but you can see that the NASDAQ has basically gone sideways all summer. Price is where it was in May. Is this reversal ready to move price higher out of this consolidation?
Well, we are within the timing for a DCL on the daily charts, but look at that lower indicator on the above NASDAQ chart. This sideways move has internal weakness, so the next daily cycle could roll over too, if you buy the reversal here, use a stop.
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SPX - So the SPX has a swing low in place, and the timing is right for a dcl, but at the same time, we are overdue for an ICL and this drop did not fit that definition. The SPX was rejected at the 50sma and it is good to note that a drop to 2400 now would give us a failed daily cycle and begin to fit the criteria for an ICL drop. A break above the trend line overhead would signal that we do have a dcl already in place and confirmed.
Read More Time for what? The clue is in the picture, and we'll discuss that after a brief review of the markets.
USD - We were due for an ICL and not just a dcl in August, but so far this low is acting just like the other dcls, and they rolled over after going sideways for a while. If this drops and rolls over, I feel that Gold will POP and RUN higher.
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