What? Huh, Oil? Who said something about Oil?

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(Below is a sample of Alex’s works from the past week.) 

These past few weeks have been extremely frustrating for a lot of traders out there.  So many are getting chopped up and setups that look promising one day, fail the next.

There is something that many traders don’t want to hear, especially ones just starting out.  Sit on cash.  It isn’t sexy, it isn’t going to make you any gains but it is often the BEST advice.  Trading isn’t always about making money, but it is always about preserving your capital.  As great as it feels to make money, it is 100 times worse to lose your money.

One of the old cliches in trading is “don’t try to catch a falling knife.”  When a stock is falling, there is a temptation among some to try to guess the bottom.  Oftentimes, this leads to buying at a price only to continue to see it fall. There are some tactics you can use to nibble around the edges, but that is for another time.  Right now, we should focus on confirmation.

That leads to oil.

(From 11/14/18)

OIL ENTERED ‘FREE-FALL”, and a low should be close.

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WTIC – I expected that small support area to give Oil a bounce as support, because we were on day 60, but it sliced right through it.  We are over 60 days deep and this was the 12th straight day of selling.   The next solid support should be $54ish.  We are just about there.

 

WTIC – This chart shows how oversold it is approaching that support ( but they can extend, we need a reversal).

 

**  I thought that we could see an Oil reversal at the oil inventory report.  I was informed in the comments section  ( thanks ‘LittleTimeLeft’) that due to the Monday Holiday in the U.S. –   The Oil inventory report has moved to Thursday.   I looked it up, and that is correct.  So will we reverse before that report?   It is hard to say, so below are 2 ideas of what we could see as Oil seeks out a low around that report over the next 2 days…

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WTIC – We could ‘bounce’ Wednesday,  and then do a final slam ‘shake out’  Thursday at the inventory report,  and then rally higher.

 

WTIC – We could gap down Wednesday (  and even Wednesday & Thursday) and then take off higher. Oil is stretched though, so when a reversal low forms, I think it will eventually V-Bottom.

 

So we are looking at what I expected to be an ICL, and this has been a raging sell off, so it fits the description, but  I looked back and saw something that was pretty interesting.  This caught my eye…

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WTIC – After this monster sell off in 2015, the sharp V-Bottom rally was immediate,but then it slowly stalled, went sideways , and eventually rolled over into  another sell off,  bringing price much lower ( Bear market).  THIS WOULD BE DEFLATIONARY. Not good for Commodities,  so is Oil going higher after this ICL or will it stall?  If it stalls, I’d like to remember this chart.

I bought DWT (Short Oil) in October around $5 & sold if for a $1 gain.  It has since doubled.   I sold that way too early, so If we get another drop like 2015, I will recommend DWT buy & hold for a month.

 

(As a brief reminder, I have been noting that Oil was likely for a big sell off.  It was stronger than I had anticipated, but nonetheless, we wait for the bottom to form and could see a reversal in prices. Once price has confirmed the bottom, you can enter a position and set your stops at the lowest point.  Then move them to breakeven quickly.)

WTIC OCT 26 –  Due for an ICL, This chart showed Oils was expected to drop near $60 in the Big Picture.

UWT, USO, UCO are ‘long Oil’ plays.

 

(From Friday 11/16/18)

WTIC – Past reports discussed the Cycle count.  I looked back at OIL, and often it puts in small days at the lows, so  I added to my Long position, thinking that this time it will not be a bear flag.  See the chart. If we get to the 8 ema, I will sell a portion.

 

 

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Friday November 16th

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Just a reminder : Today is the last trading day of the week, and next week will be a holiday shortened trading week in the U.S., so let's see where the markets stand and enjoy our Friday of trading!

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Note:  we'll see how 'earnings' affect the markets going forward, but NVDA released earnings after the bell, and got crushed, down over  $33 or 16%.   We will discuss that with the NASDAQ too.

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SPX -  Wednesday we had a gap fill and a bounce into the close.  We need a bigger sign of strength than that, so we'd see if Thursdays trading could show some strength...

SPX - Markets sold off to a new low on Thursday morning,  and then put in a nice reversal.  It overtook more than 1/2 of the prior days candle, so you could add to positions on a day like that, with a tight stop at the lows.   Our inverse H&S remains in tact, let's see if this can power higher.

Read More

November 14th – Saving Grace?

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Let's take a look at the Markets, and I will discuss the Theme Picture later in the report. Consider the last part of this report as  important, and please read it carefully.

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DJIA - We have a gap fill.  Now let's see if these markets can get moving to the upside. I have discussed my thoughts on the General Markets in recent reports.

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Wednesday – Oil Did What?

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It certainly looks as though Oil has entered the capitulation phase of a sell off into an ICL, and a low is very near.  I want to discuss that as a future buy opportunity in this report, but first we'll do a market review.   Just to reiterate:  In just about every sector, Trading remains very choppy.  That can be a bit  frustrating or even a bit damaging if position size isn't kept small, stops aren't honored, etc.  The sidelines are not a bad place to be until the dust settles a bit.

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SPX - Rejected at the 50 sma on a bounce, so far this peaked on day 7.  We now have a possible inverse H&S, but the open gap below could draw price in for a gap fill.

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11-13-18 / Choppy Trading – You Can Also Sit On The Sidelines

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The Stock Market involves real money, so it's by no means considered just a 'game', but similar to many  games, we have a few choices when we take a position(s).  If, over time, we find that things are getting a little rough ( the markets may get choppy for example,  or players may get banged up), we still have choices.

    3 basic choices are:

1. We can exit the playing field (sell) and head for the sidelines to avoid all  of the choppiness.

2. We can stay in the play until we get 'stopped out' or are rewarded with a move higher

3.  Just wait on the sidelines and see how the game plays out for a bit as a spectator, and look for a better time to enter

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Nov 10 – Weekend Review

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It was a bit of an exhausting week with the constant volatility and choppiness in various sectors of the markets.  let's review this weeks  market activity....

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IWM DAILY  - I drew this on Nov 8 saying that short term, I would expect the markets to pull back due to this light volume rising bear  wedge, however...

 

IWM DAILY  - That doesn't mean a big pull back, it may simply be this tag of the 10sma...

IWM DAILY  - And so far that is what we have.  IWM dropped and bounced off of the 10sma.

   

Now let's look at the Bigger picture...

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November 8th – Friday

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It is the Last day of the week and the Elections have passed, the somewhat non-event of the FOMC Meeting has passed, so now let's just take a look at what we have going on...

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SPX - We had a slight pause on day 8, so I have just drawn in a possible dip to an inverse H&S at the 10 sma as support.  This is just hypothetical.

 

However here is another reason that I think we may see a drop in the General Markets....

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November 8th – Propping Up The Markets

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As mentioned yesterday, Markets do not like uncertainty, but with elections out of the way, we could get a Post Election Pop.  As you can see, we got that Pop.  Today is an FOMC Meeting, and there were a few other areas of interest that continued to set up for higher price too.  Let's take a look...

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SPX - On day 7, we can expect markets to hold up above the swing low from here, but I'm still wondering if they can recover fully,  or will things remain a bit choppy again going forward?

 

This is what I am looking at...

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November 7th – Elections, an FOMC Meeting, and More Chop

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It has been difficult trading or investing for the Buy & Hold group.  October was a drop into our ICL , and it was a deep one.  Since then, we have seen a lot of choppiness heading into the U.S. Elections.  Markets do hate uncertainty.  Now that that will be behind us, we still have an FOMC Mtg scheduled for Wednesday & Thursday of this week, so unless we get a strong reaction higher when the results of the elections are released, maybe we should just expect a bit more choppiness .   Let's review our market sectors...

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SPX  - After an A-B-C type sell off , this looks like an ICL is in place and we are on day 6.  Resistance is right above, so the elections results could push price through.  Markets do not do well in uncertain times, so the post election results could help the markets.

  Read More

The MJ Stocks, Round 2?

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(below is a sample of Alex’s work from the week.  The marijuana stocks were highly volatile in recent months and after the news of legalization in Canada, they saw a sharp sell off [‘sell the news.’] A reversal appears in order.  There are dozens of companies to cover in the MJ sector, including the MJ ETF but these are just a few.)

MJ STOCKS –

Note: I have repeatedly warned about the great risk / Reward of this sector.  It simply moves very fast and any bad surprise can take price down quickly.  That said, they do also move higher 10-50% per day.  please use caution & control risk with position size. 

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CVSI – I mentioned that even with the “Sell off’ in this sector,  CVSI held up around that 50sma, so I bought it.  This is a bullish chart pattern.

CVSI – It continues higher

 

 

TGODF – I also said that I bought this as it was rising, because it was a bullish engulfing at the lows with good potential.

TGODF – It was up 35% Monday.Several have been moving off the lows, and just ran staright to the 50sma and even broke out.

 

 

PLNHF– Tammie mentioned this stock, and I actually loved this chart pattern.

1. Steady on the 50smaI

2, A long sideways consolidation, not a sell off t was already up 10% when I bought it,  but you can see that it ran higher and sold off.

3.  Big Volume

but why would I buy it if it already ran from $1.6 to $2.30 in 3 days?   I bought it as it sold off to $2.30 knowing that it can be bought back by the days end.  This set up was very bullish, and …

 

 

PLNHF – And it closed up 24%.  I is at new all time highs, and that is bullish.  As a measured move  (and with that volume), it does have a target of $4.20 or more, so even though it was already up-  This One was buy-able.

 

NOTE:   THAT PLNHF  CHART ABOVE WAS SPECIFICALLY BULLISH OVERALL.  I WOULD NOT JUST BUY ANY STOCK UP THAT MUCH, YOU CAN GET CAUGHT IN A DOWNDRAFT.

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GTBIF – This is an example of what I see many MJ stocks doing now. At first glance, I would expect a ‘Bounce to the 50sma”, but as you see, many of these are breaking out again.   Can you see how this slowly ran higher in August to the 50sma,  and then ramped up?  I’m wondering if We may see the same  ( read the chart).  This tiny move is already $10 to $14!

 

 

KSHB –  KSHB crashed below the 50sma in the recent sell off, but suddenly, the sector got heated up again,   and it ran from $4.50 to $6.40 in 5 days.  That’s not all…

 

KSHB – I always like to look at the big picture of these, and you can see that KSHB is a bullish triangle, heading for all time new highs.   Let’s just say that you held “Buy & Hold’ from last Oct lows, that was $2 to $8.50, but what a bumpy/choppy ride these can be!   It is now at $6.25 and could break to all new highs soon though.

 

 

 

 

OGRMF – Another long term bullish chart,  but VERY difficult to ‘buy & hold’.  It has now bounced off of the 50 week moving average after a steep 2 week crash.

 

OGRMF – This was the crash on a daily chart and it is just now starting to move higher, up 9% yesterday. Please read the chart, it is difficult to tell if this will meander higher or surge higher.

 

CGC –  Read this chart:   This is a tough call, and I mentioned it last week.  I can’t tell if it is ready for a massive run again, like in August?  Maybe it is.  Or will it meander, and if so, why?  I say this because there may be a lot of  Buyers in September that may now be stuck after that sell off, so they become sellers stuck in this stock just ready to bail out on a rise higher.  It is a buy near this support level though.

So I posted this and wrote this chart about CGC last week, thinking that maybe sellers could be caught in this stock ready to bail out.  I could also be wrong,  they may just add to position and ride it higher.

I have a list of maybe 60-80 MJ Stocks, and that is too many to mention here, So check your list of MJ STOCKS and see if they may be rising from a support level with increasing volume.  You may have a nice trade developing if you do.

 

Chart Freak Membership

Alex has been successfully writing a daily newsletter service for nearly four years now and is considered one of the best traders of precious metals miners, energy/uranium stocks, and biotechs.   This is your opportunity to join his service as a member and follow along as we enter the next bullish gold Cycle higher.

If you would like to find out more about the service or sign up, please click the buy option for more details.