Market Updates - A Bunch of Retests and Key Spots

We have had a nice market correction the last 2 weeks.  Here is an update on ideas I wrote about at year end or where I have positions outstanding:

URA

Retest of trendline breakout of my favorite idea going into 2018.

CCJ (big URA component)

Another Retest.  Very pretty 9 week potential double bottom base (within a larger base)

REMX

I used Friday's woosh down to buy back the 1/3 of the position I sold in late 2017.  High conviction idea. The ideal add or new entry is somewhere between Friday's low (gap fill, near low of last base) and 200 day of ~24.  The strongest stocks sometimes don't undercut where you think they will.  We'll see about this one.  I view this correction as a buyable correction.   For you Elliot wave folks....I feel like we had 2 "1-2's" in 2016 and 2017.  We then had a big 3rd wave up with now a first 4th wave correction.  When this first 4th wave ends, we should get one more big 3rd wave.  For you trend followers, that 200 is a major spot for a very strongly trending security. 

GDX

Another retest.  On some measures, GDX is the weakest of the big commodity complexes.  That monthly is still super super tight.  Maybe this is a double "double bottom"....one of my favorites that I used for VRNT in the earlier part of this decade.  If it is and it wants to be proper, we need a true rinse of the 2017 lows.  I think we will get it.  

That's it.  Good luck on your trading.  Keep focusing on your very best ideas and set ups.  And keep learning.  

Things to Learn From My 2017 Year End Review + 2018 Preview

This year was a "B" year for me.  Up 27% (vs 19% for S&P and 13% for Russell).  This probably should have been a 40-50% year given the amount of risk I take.  There is a lot to learn from.

Mistakes to Learn From

When you have an A position, size it like an A!

REMX was the strongest, tightest commodity stock in 1H and I sized it like a B idea.  The biggest leaders have the most relative strength, the tightest formations, and move first.  Like AMZN 03/09.  REMX was this in commodity land in 2017.

When you have a B position, size it like a B (or not do it at all :).

GDX wasn't as tight, didn't show the same relative strength like REMX, yet I sized it like an A!  Big opportunity cost, plus......

Let your stock stop you out.

The one thing I did do OK with GDX was buy it at the 50 days limiting the damage.  It didn't stop me out once despite being early.  But I put myself in position to be shaken out emotionally.  I lived with this too big of a position all year.  And capitulated on 1/2 in December.  Right when equity and bitcoin sentiment was at a fever pitch.  To quote Fight Club, "I am Capitulation."

2018 Preview

Commodities look like a huge theme to me.  We now have multiple A setups.

REMX broke out from a second stage Oneil box/flat base.

see above.  For me REMX is still sized like a B.  Terrible sizing to date!

URA looks like it completed a more proper year long double bottom.

Has basically consolidated for +18 months (if you look at the prior base which failed).  Had major capacity shuts.  Like REMX and TAN (Which I missed), URA is another way out of our long term resource, energy crisis.  Nice tight week last week!

My one mistake I had this year with URA was entering it prematurely (as a B position).  The dailies and weeklies were not lined up.  Had lagging RS.  This setup is way better.  Same amount of time on the bottom of the base as the left hand side of the base. We didn't have that in June!

I sized URA like an A after the recent capacity shut and pocket pivots.  It might be forming a shorter base with a base.  Any capitulation in this new handle, near the 50 day, would be a great add.

GDX might have completed a triangle with 3 major consolidations.

Look at this tight monthly!!!!  That is insane!

GDX around the 50 day is probably a great add.

Happy New Year.  Have a Great 2018!

Commodities perking up!!!!

I could post 30 charts on secondary ideas like DBA, ABX, etc.  But I am going to keep it simple and just show you 3 major commodity ETFs to summarize the strong recent commodity action.  I think we are a 2-4 weeks into a major move in the commodities.  Laid out my thesis a few weeks ago.  These should be multi month runs after their bottoms a month ago.

REMX (Favorite Recent Idea)

This weekly chart was as pretty as it gets.  It was perfect.  We are now 4 weeks into a move.  8 week rule in effect.

Given the strength of the move and the fact this was a high quality base on base (a second 1-2), this has huge potential in this third wave.  I will not sell this until I see an obvious sell signal.  And I will be holding pieces of my position until they violate the 20, 50, and 200 days.  We are nowhere close to any of these on REMX only 4 weeks into its move.  That's how I handle my positions with big stock potential.   Fundamentally, I think REMX was the strongest pick too because it had more "new" in it. Has exposure to electric car, wind turbines, alternative energy, etc.

URA

Another powerful base on base.  Already had pocket pivots thru 50 and 200 days.  Forming a nice handle just above and still riding the 10 day.  Look how it rode the 20 day in its last power move.

GDX

The granddaddy of em all.  And the most hated.  Up through the 50 and 200 this week.  Shook off bad news in ABX.  The above 2 ETFs are unknown or "off the run".  The GDX is known but hated.  That's what makes big stocks if you are right - off the run or hated sentiment.  And a big catalyst/theme - like a new president with protectionist policies and a bottom in long term interest rates.  GDX about to take out its trend line.

Keep it simple.  Find your best ideas, focus on them, buy and sell them properly.  If you get stopped out, you get stopped out.

Midyear 2017 update

We are at an interesting cross roads for the market.  Leaders like AMZN that have been on +8 year runs have had hit big round numbers.  Put/Calls have been low.  The underperformance of commodity stocks have had a parabolic move which I retweeted recently.  The QQQs have started to weaken.  While interest rates have probably put in an all time low.

My best guess is the next bull market will be glad by commodities and inflationary trades.  Usually you need the market to get hammered and the next leaders to show relative strength. first

So here is a recap of some long term ideas have been tracking so you can pounce.

REMX (rare earths) -  Look at all of those tight weekly closes!!!!!!!  If this base works, the upside of this is a enormous.  The second base would be interpreted as a second 1-2.  Has had pivot points recently for possible entries.  Not sure if this base needs one more shakeout.  I have half a position.  A big one.  But not mach 2 with my hair on fire big.

URA - nice candle on the monthly.  Hasn't made a lower low.  Just had a pivot point through 50 day.  Might need one more low.  Same position size as REMX.

CCJ is a leader in URA.  Looks like it needs a final shakeout in its first base it has had in years.  I have a tiny position.

XLE - up through 50 day.  probably needs one more shakeout despite recent strength.   The monthly shown here had same setup as IWM last year.  Nice doji to end the month.  Small position.

SEA - might need one more low but just ripped the faces off of the shorts. pivots already through 50 and 200 day.

GDX and ABX.  Original pivot points have hit some stops.  Still like the long term ideas.  the monthlies look like they need a final shakeout.  But look at all those tight closes on GDX.  If they rinse these in next 2-3 weeks, they look like buys on shakeout plus 8% setups.  I'm confident those 2015 lows are the lows for a long long time.

CS just had pivot points too.  Beautiful cup in a larger cup and handle.  Wow!!!!  Still have a medium sized position which i was never stopped out on.

May 17 Update

Here are the 3 charts that have most interested me in the past few weeks:

ABX - looks like a clear 5-3-5 down that has completed.  Look at that doji or morningstar at the bottom!

REMX - Look all those tight weekly closes, that is as pretty as it gets.

URA - looks like it put in a double 3 down.  With the final 3, a 3-3-5 down.

All of these are just below the 200 day.  If you got stopped out previously, or you are looking at these for the first time, up through the 200 day is a proper entry.

Update 4/23

I am going to keep this really simple.

I like to focus only my very best ideas.

REMX is the first base I've seen since GDX/ABX where the bottom of the current base might have put in.

Look at that weekly bar!  High volume, tight close, close in the higher end of the range. Many tight closes in the base.  Beautiful rinse of an upward sloping 200 day.  I started to make it a real position on this rinse.  I previously bought this small at the right time in the last base.  If this goes lower one more time I'm going to be there.  If I like the way it takes out the 200 day and 50 day on the upside, I'll add there too.  I love the looks of this.

I liked the look of RBS overseas, so I bought more of that before it started to rip this week.  I like owning good Europe names going into a known event everyone is worried about.

I have waiting for URA down by the 200 day.  At there I will make this a real position.  Have a smaller position so far.

I still own my max position size in the gold miner complex thru GDX/ABX.  I have not been stopped out and am profitable on the positions so far.  I haven't had a real sell signal.  Keeping it simple.  No reason to sell.

Update - March 2017

I don't overpost to get clicks or traffic.  I only post when I have big ideas currently or when I am "stalking" them.

Last year my big idea was the IWM.  I posted then.  And then I've been posting in late Dec, Jan and Feb when I've been exiting.  I exiting my final piece of that and the SPYs in the last 2 weeks.  I didn't like the exhaustion gap on the SPY after the POTUS state of the union.  I didn't like the sentiment levels.  The SPYs I sold 3 days after the speech.

Meanwhile the IWM put in a short term double top.  The remaining IWM I sold on the double top break and break of 50 days.  I've been 100% out since those sells.

So I now have one full sized position.  The gold miners thru - GDX and ABX.   35% position combined.  3% risk to equity.  ABX is one of the more beautiful longer term bottoms I've seen with now a solid cup and handle first stage base that is thru its 50 and 200 days with pocket pivots

And I'm staking 2 other big ideas.

Uranium - Thru URA and CCJ.  I have a 13% position basically off earlier break of 200 and 50 days. I'm waiting for completion of second base to build and then go to make bigger.  URA could be done going down or this C will keep going. I added a little late last week.  I would love! this at 200 day.  The first base it broke out from in December is as beautiful as it gets.  I don't think 7 weeks is it for a move which should be a year in duration.

And SEA.  have 13% position on breakout of a weak handle.  Waiting for longer, more real handle to complete to make bigger.  A lot of tight closes

I have a smaller position in REMX ,similar position I haven't been stopped out on, that's it.  Hope that helps.  Those are big ideas currently and my biggest updates.  Keeping it simple.

Update - 2/11/17

Here are updates on my recent trade ideas

CCJ - Came into 200 day and had nice bounce!  I added down around the 200 day.  Like how name shrugged off mediocre EPS.  It regained 50 day.  I'd like to see the action tighten up now and generally start to ride that 50 day up.

SEA - Could be forming first proper handle and had a "continuation" pocket pivot on Friday.  I added on the day it came into 50 day.  Handle might need more work.

ABX/GDX - GDX took out 200 day this week.  A good sign.  ABX, shown here, is the strongest name in the group.  If they form handles properly, I will add.  Have nice sized core positions from weeks past.  Most of the places where I see strength are inflationary!  I am noticing a theme.

VIAV - Short term blow off top?  Sold half.

CS - working on that last shakeout.  No adds yet.

TBT - I would LOVE this down by the 200 day.

Z - never broke out.  broken for now.  That's why I had small cheater position on and nothing too aggressive.  I sold the day of EPS when it gapped below 50 and 200 days.  Wait for proper entry if it sets up again.

Update - 2/5/17

The indices are still in no man's land in the short term.  Long term they still look solid.  I sold another 1/4 of my SPY exposure from 2016...basically to finance single stock positions, some highlighted below.

I'm going to give you quick observations on my potential top ideas.

CS - Still waiting for final flush in second part of a leading diagonal.  So far it looks perfect to me.  Before this diagonal CS had 3 corrections down.  There are never 4.  That's why it has top idea potential if it sets up again.  Love at 13 on a bad earnings reaction or europe headline.

GDX - has already taken out trendline of a double 3 correction.  Took out 50 day.  About to take out 200 day that will be another confirm of another new uptrend.  I own this and component leader ABX.

SEA - Coming into 50 day.  Already has 50/200 day cross.  After a second 5-3-5 down much like IWM in 2015/early 2016.  Had a 9 month correction, now trying to uptrend.

CCJ - Uranium stocks had big run last 2 months and now consolidating big run.  CCJ is the leader.  About to complete a first ABC down.  At 50 day.  200 day not far away.  Those are good spot trade spots.  Have a starter position in CCJ the last 2 days and early took a starter position in rare earths REMX.  Looking at ETF URA.

Update - 1/29/17

I have started several new commodity related positions the last 1-2 weeks.  New positions are 5-10% positions, nothing crazy, have 8% stops on these.  My exposure has ramped modestly.  I'm not full on aggressive but have some exposure on.  Here is the quick recap of my positions.

IWM - still have 1/4 of my position on (from 2016).  held the 50 day nicely.  still not out of the woods.

SPY - had a smaller position last year vs IWM, still have 1/2 my position on. With regard to the market, in short term I am concerned about the bullish Barron's cover this weekend and the lack of a true flush - low volatility.  But long term trend still intact for both IWM and SPY, need to keep some on.

VIAV - wave 3 can't be the shortest.  with breakout from flat base this week, this is going on a long run.  love the 50/200 days up.

CS - still hasn't had the flush I'm looking for yet for a second major setup.  still have my 10% position on from set/oct/nov.

Z - Still trading tight in the handle.  This one could go either way.  5% position.

REMX - rare earths!  broke out from a cup and handle, 200 day flatting/curling up, 50 day up.  after a long, long downtrend.  5% position.

SEA - similar to REMX.

GDX - had a second long bear market undercutting lows from a decade ago similar to our equity indices in 08/09.  Looks like it started an uptrend and then completed its first correction.  Just had a pocket pivot thru 50 day.