rsotc commented on the post, Outlook for Gold, the Mining Sector & Global Equity Markets (video) 2 days, 1 hour ago
CQQQ (China Tech ETF) looks poised for a move down to at least the 39 & possibly the 38 area or below pending a break below this bearish rising wedge pattern.
rsotc44- While anything is possible, I just don’t see much in the charts that would indicate that gold will be anywhere near 1500 by or before the end of the year. I’ll continue to monitor the charts & let you know what I see but just remember that it is common to get such big calls on gold or any stock, sector, commodity, etc..after such a bullish run like gold had throughout the first half of the year. As of now, I’m standing aside & waiting patiently for the next clear setup, whether that is long or short, trying to remain as objective & unbiased as possible.
Gaucho- Those divergences could very well continue to develop, become “confirmed” & play out for a fairly decent counter-trend rally, possibly more. They may also fail to become confirmed. CDE is likely to trade largely inline with the rest of the miners, particularly the silver miners & with SIL coming up on my second support zone, the R/R just isn’t very favorable to remain short at this time although I can certainly see some more downside.
Trailing tight stops at this point are one option that could allow for additional gains but the risk of an opening gap that jumps well above your stop is always a possibility. For now, I just want to book profits on most of my mining shorts & wait for the next objective entry or setup.
SPY printed a high of 217.12 so far vs. that mid-point line on my SPY 60-minute chart above at 217.12 & looks like we’ll close right around the 217 level. Objective time to add some short exposure for those willing to roll the dice as the markets are likely to either gap down or above that level on Monday & as this is a decent resistance level, odds favor a reversal (gap down).
Gaucho- Yes & no. Yes, I do think that CARA has a good shot of taking out that downtrend line on the daily chart but only after a pullback & consolidation. I think the stock has longer-term potential but I strongly expected a pullback off the T2 level & even posted before & as the target was hit ( http://rightsideofthechart.com/members/rsotc/activity/16831/ ) that I planned to book full profits there & may look to recycle back in as a swing or trend trade later. I’d like to see how the stock trades for a bit (days or even weeks) before determining if & when to re-position as a swing trade (I might day trade it until then).
As of right now, CARA has pulled back to dual support levels (horizontal + trendline) on this 60-minute chart, which is likely to provide at least a bounce trade (i.e.- quick day trade) although maybe this proves to be the end of the pullback with the stock going on to take out the T2 level & primary downtrend line in the coming weeks. However, I just can’t make a strong enough case to add it back as a swing trade as other than a pullback to support, I don’t see much else on the chart that would confirm another swing trade entry just yet.
CARA is now at 8.30, up just over 5% from where posted as a day trade opp earlier. As day trade positions are larger than swing trade positions (as there isn’t any overnight/gap risk), I just closed the bulk to the trade but will take home a small fractional (and beta-adjusted) swing position. While I still plan to watch how the stock trades over the next few sessions after hitting T2, the charts still seem constructive & CARA might want to punch up to that downtrend line on the daily chart before a more lasting consolidation/pullback.
For anyone that might be trading CARA, I just sold the most recent swing trade in CARA that was posted taken on this pullback this dual support level which provide another 21% gain following the recent quick 33% gain on the unofficial swing trade also posted in the trading room.
I was thinking about holding out for a move up to the downtrend line before booking profits on this second trade but just as my gut told me that it is time to start taking some profits on the marijuana stocks (with quite a few down sharply today, it is telling me to start reeling in long exposure across the board & even add some more short exposure. CARA will likely be revisited for another long trading opp in the future but going flat for now (other than a very small position in a long-term account/IRA).
Taking starter short positions in MKTX & CSCO here. May be posted as official trade ideas but just wanted to share if not.
Just shorted AMD as well & jumped the gun on that ATVI short setup earlier (partial position).
GIR- For the most part I agree. I have GLD at decent support while at rarely seen oversold readings on the daily RSI so a long here is certainly objective & could prove to be a very timely entry. Now to play devil’s advocate, consider this:
In my videos, I often talk about how oversold readings on the daily & weekly time frames during a bull market in just about any stock, index, sector, commodity, etc.. usually prove to be a great buying opp just as overbought readings on those time frames in a bear market often prove to be very fleeting & act as great opportunities to position short following a counter-trend bounce. Those are blanket statements & I always glance the chart of the security I’m trading to see how it has acted following overbought & oversold readings in the past.
With that being said, during a primary or secular bear market, it is more than common, in fact typical, to see an oversold reading become “more oversold”, sometimes for weeks or even months. Ditto for overbought readings in a bull market.
Therefore, just be aware that IF the recent bull run in gold off the Dec ’15 lows to the July highs was simply a counter-trend rally in a new secular bear market in gold that kicked off with the blow-off top in 2011, which is certainly a possibility if you glance any long-term (20+ yr) chart, then it is certainly possible that gold could continue lower for some time.
On a related note, if you glance a weekly chart of gold, you’ll see how throughout the powerful bull market that was launched around the turn of the millennia, extended overbought (70+) readings on the weekly RSI were quite common yet gold has failed to cross above the RSI 70 level on every attempt since the the 2011 peak.
I’m not of the opinion that gold is in a new secular bear market but I’m certainly open to the possibility. Here’s a link to a long-term chart of $GOLD highlighting the action around the overbought & oversold levels on the RSI. Also note how gold is still well below the primary bull market uptrend line that was taken out in 2014 & backtested in 2015. Bottom-line, stops are a must & will mitigate losses if gold & the miners are headed much lower. Best of luck on your trade!
astoria26 posted an update 2 days, 2 hours ago
Hey Randy, can you please put up an oil chart today? Thank you!
astoria26- I don’t have a solid read on the near-term direction in crude although USO did just manage to take out the Aug 19th reaction high. However, crude is quite stretched (overbought) on the short-term time frames & although I can’t make a case to short it, I wouldn’t chase it here either.
Longer-term nothing has changed for a while now. I continue to monitor that potential large Inverse Head & Shoulders bottom pattern that I pointed out before, with Right Shoulder still forming. Here’s a link to that chart:
Thanks for the chart! I’m not chasing it here, I’m wondering if I should sell what I have. If oil breaks out above this inverse H&S that you’re monitoring, would that be your signal to buy?
Depending on how the charts & the breakout looks at the time, quite likely yes, that would be a good time to go long for a swing or trend trade in crude.
Regarding your current position, sometimes when I’m in a trade that is going my way, especially a consistent uptrend line crude has been in for the last week or so, I will place a relatively tight trailing stop. That will let your profits run while automatically ratcheting up your stops to help protect you from giving back much of those gains (barring an unusually large opening gap down beyond your stop level).
With outstanding margin balances recent near historical high levels and knowing that the gold/GDX trade was one of the most crowded, over-loved trades in recent years AND coupled with the fact that gold & GDX rose along with the stock market since the first of the year (indicating that a lot of traders/investors were either loaded up long gold/miners or long equities OR long both) then it would be interesting to see if this recent plunge in gold & the miners has a domino effect of triggering margin calls (force selling) led by the drop in account balances from the gold/GDX drop that spills over into forced selling (margin calls) of equities.
Just a thought but certainly a possibility.
Gaucho posted an update 2 days, 6 hours ago
Hi Randy @rsotc, is going up today.
Do you think is going to have a pull back if it reachs 1.94 or 2?
Gaucho- You forgot to type the symbol. What stock are your referring to, ACBFF?
Sorry, ACBFF you are right
I figured that was the one you were referring to. Yes, assuming that it even makes it up to the 1.94-2.00 area before a healthy, over-due pullback, the odds for a correction if it gets there before any meaningful pullback or consolidation would be quite high IMO.
I’m seeing profit taking in several of the cannabis stocks that have been highlighted recently & as much as I like the longer-term prospects for ACBFF, I would be surprised not to see a decent bout of profit taking any day now, possibly starting today following the sharp gains this morning.
With the official Long-Term trade up as much as 231% today, it would only be prudent to book partial profits and/or raise stops at this point. In fact, I was planning to post an update on the front page to that effect, which I’ll do soon.
Ruben- My opinion on AAPL isn’t very strong as I see a mixed bag of technicals: Possible bullish pennant formation but negative divergences was put in place on the MACD & RSI at the recent highs. The direction this pennant breaks could determine the next near-term trend in AAPL although I have to say I favor the bearish case as AAPL is almost certainly to drop if the broad market sells off.
Hi Randy @rsotc, you metioned:
“to start taking some profits on the marijuana stocks (with quite a few down sharply today, it is telling me to start reeling in long exposure across the board & even add some more short exposure”
Is the ACBFF a long run stock or is it also apply the same concept of “reducing exposure”?
Gaucho- I’ve been posting that I have been reducing exposure to the cannabis stocks in trading room recently, including this post made yesterday: http://rightsideofthechart.com/members/rsotc/activity/17196/
I just wrapped up a video discussing my thoughts on the cannabis stocks, both near-term (more profit taking is very possible) as well as long-term (bullish but will wait for the next objective entry).
As far a shorting the cannabis stocks or any low-priced/penny stocks I would be extremely careful. While I love to reverse trades from long to short after booking profits if I think a pullback is likely, I wouldn’t short any of the cannabis stocks as the risk is too high & despite today’s pullbacks in several of them, the momentum has been extremely strong/bullish lately.
Regarding ACBFF, I did book partial profits but mainly because the position size was growing too large for my confort level, despite the fact that ABCFF is my favorite & largest position, as well as a long-term hold (investment) in the cannabis sector. Never fall in love with a stock & never let a position size get too large. To answer your question, yes, ACBFF is still intended as a long-term hold/investment & at this time I don’t have any intentions of closing out the entire position any time soon.
dpatel- I will do but I mentioned earlier today that gold does not have any bullish divergence, even potential divergence, on the 60 minute or daily time frames. As such, it might be prudent to wait for more a more solid technical case before going long the miners for a swing trade. I’ll make sure to keep everyone updated on what I see (btw- did you see the 5-minute bullish falling wedge that I posted for a short-term trade on GDX earlier today in the trading room?)
Breakout triggered on that GDX 5-minute bullish falling wedge although volume is lacking so far. Still a good shot at the 23.40 level though, possibly more if we start to see some volume come in.
j1persi posted an update 3 days, 3 hours ago
Is nvda back on the table to short yet?
NVDA very much looks ripe to short again here but until & unless QQQ rolls over & breaks support, shorting anything tech is likely to continue to prove frustrating. Again, the chart really looks ripe for a short & I still very much think the broad market is on the verge of a major drop so if you are willing to give it a little room, I’d have to say a short entry here is likely to pay off handsomely over the next several months.
pangblood posted an update 4 days ago
ACBFF to move to TSX tomorrow, should be a boost to the shares
Awesome. That will give the stock more visibility & credibility. BTW- ACBFF is moving the the TSX Venture exchange, not the regular TSX. Still a plus for the stock but the Venture exchange is venture capital/emerging companies although I hope to still be long this one when they make it to the TSX & COMPQ one day! Thanks for sharing.
CGC.TO: another TSX canabis stock on a rip:
thx again russ. looks like CGC.TO also has OTC shares that trade in the U.S. under the ticker TWMJF for those US traders that might be interested. I’m going to add that one to my watchlist. Looks to have recently broken above a bullish pennant on the daily chart & the measured target would be around 4.40 (closed at 3.4612 today) but right now, I’m still in the process of gradually booking profits & reducing exposure vs. adding anything but the most compelling breakouts in the cannabis sector. This huge run in the sector could just be getting started or it could turn on a dime, erasing a lot of the recent gains in very short order.
I’ll keep a small scattering of various cannabis stocks with decent charts in my long-term accounts but might be flat the sector in the trading account here very soon, looking to re-position on the next big pullback.
Thanks again for passing along CGC.TO/TWMJF.
(note: That bullish pennant played with with TWMJF rising nearly 30% from there to print a high of 4.42, just 2 cents above the 4.40 measured target, less than 2 full trading sessions later)
@pangblood Here’s my chart of the $CDNX (TSX Venture Exchange). I believe you live in Canada. There is (or was) an ETF that trades on the Canadian exchange (TSX, I believe) that tracks the Venture Exchange. It just ran into resistance (green lines) with a relatively small negative divergences in place & then broke down below the dashed uptrend line. One to watch as it approaches that 700ish support level for a possible long entry as the divergent low earlier this year was very powerful & could mark the beginning of a new primary uptrend.
VAPE, one of the cannabis stocks highlighted in yesterday’s video) broke out today. ACBFF took out the previous reaction high, trading at new all-time highs today (bullish).
EDXC, also covered in yesterday’s video, just hit the 2nd target.
MJNA (also covered yesterday) just hit the 0.0747 target today as well, gaining about 70% since the breakout a week or two ago.
CGRW, GRNH, CANN & many of the others covered also up big today.
Shambo posted an update 5 days, 1 hour ago
randy, take a look at HOG for a short. besides the chart, its slow season coming up, plus my son-in-law sells bikes and it has been a VERY slow spring and summer in the Northeast. Despite great weather.
Looks like earnings will be announced on 10/18
If anyone else from another region in the country could confirm that Harley sales have slowed considerably, you could go short it as a bet on an earning miss or disappointing forward guidance. Thx for pointing out the earnings date morrienelson.
One thing to note: If you glance a long-term chart going back to 2005 or so, you’ll see that HOG peaked in late 2006, about a year before the stock market. Also note the similar the decline from that point, down to the first low in mid-2008, followed by that counter-trend rally into late Sept ’08 before the stock fell off a cliff (obviously, largely a result of the meltdown)
That initial leg down & counter-trend rally is very similar to the leg down & this current counter-trend rally off the May 2014 highs.
Shambo- I see quite a bit worth mentioning on the chart of HOG (see below). While prices are starting to break below that uptrend line today, keep in mind that this market has been plagued with wtih whipsaw signals (false breakouts & breakdowns) due to the sideways trading range.
Also note that while I’d much rather short HOG here than go long, there is quite a bit of support below, including the first support about 3% below current levels at 49.51 (next support target 47.09) so it could be a slow ride down on this one, at least until/unless the broad market rolls over soon. G-luck if you take it.
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