One of the perks of being a subscriber of The Entry Points premium content is that Trader Scott sends our members comments every morning about market directions, movements and stocks we are watching for set ups. We release these comments in an edited form afterwards from time to time to allow our visitors a little peak into our premarket information:
5/22: As mentioned several times, PMs should still be in rally mode thru May, and gold has its sights set for 1295+ again, and then we’ll see about a bigger pullback. But currently it’s 1245-1265 trading range..
(Crude oil) – My original belief was a bounce in early May, with commodities in general. The $ selloff has helped the commodity rally. So here’s the crude chart I’ve been running this year, with the accumulation support area, and then the “break of support” with the excellent volume. I was anticipating a low in that area, but the volume surprised me. Something else is going on with this thing. That’s why I was saying the “legitimate bounce in crude”, instead of my original expectation of a “bounce”. And on a 60 minute, the daily can be a little weird on commodities, with the nice action below support. Over the next week should be a topping area, and if they wanted to do a bull trap, they’d want a quick selloff to set a good resistance, and then spike it thru on the way back up. Basically the reverse of the bear trap (spring) recently. Two other things/observations – the energy shares are lagging badly, and junk bond strength is supportive. But that is going to be the huge problem going forward, as I’ve written about this several times, the “fracking miracle” is nothing more than the “miracle” of zero/low interest rates. Fracking/drilling is very capital intensive, and when the rates start the next push up, likely in the second half, that is going to seriously wound the “fracking miracle”. It won’t kill it, and I’m slowly compiling a list of frackers to watch for over time. but we need the rate rise first. I have continued to hold off with the frackers until the rates kick in. Which of course, then what about the effects on crude. Almost everyone is extrapolating fracking supply to infinity.
5/25: We can sit and talk about this and that with gold, but in the meantime it’s just stuck in a range. The backup yesterday was helpful, a break below the bottom would have set up a good opportunity. GDX did break below the 22.40 mentioned in yesterday’s premarket. So that was the “trigger” for me, and then used JNUG and sold 1/2 into the rally. These areas pointed out are the likely sell stop run areas, and they are good for at least a bounce. The miners here at these entry point to me are just for trading – a smaller range within a bigger range. If you’re super bullish, then the small ranges are actually re-accumulation areas within an uptrend. My approach to markets is to see the bigger selling waves to set up something more substantial otherwise just trade, as there’s not enough “breathing room”. The stock market, after the “FBI scare”, did go to another new high in the big indexes – not the Dow yet. And as we go to the new highs, the market is continuing to weaken, but as pointed out several times, this action can go on for a long time. And it’s the “no news” big selling wave and volume which is the most important. The other stuff is just emotional entertainment, let someone else get off focus with the other crap, and just deal with the “facts”. So we’re in a favorable period, but we’re at resistance in the big indices, so in the meantime there are individual stocks out there.
5/30: Basically the same comments about gold as per last week, at the top of the range, and a lousy entry point. Gold is backing off from the resistance, bigger picture which is a better situation than just blasting right to 1295 in this time frame. Anybody wanting to trade gold (buy) in here has to understand the parameters. Last Wednesday’s premarket we had the bottom of the range lower risk entry potential. Now we’re near the top of the range. There is the “employment” number on Friday. And the the Fed meeting in a couple weeks. I’m already mapping out a position trade potential (buy) for..Crude oil is below the “psychological”/(meaningless) $50..Bigger picture is down the road..
6/6: Today the correlations are firmly in place – gold up, Yen up, bonds up, stocks down. The stocks down part will fade in and out more, but at this point, some stock market selling should benefit the others somewhat. I expect those to change later in the second half, with the bonds falling off first. But those correlations don’t usually end with a whimper. It will probably be at a time when all of them are falling together, and then one starts lagging a lot on the next rally. In the meantime, here’s the same gold chart, and it’s nearing the big $1295 resistance discussed several times. And an emotional blast thru there is not what I want to see. So far it’s been relatively unemotional. Let’s see how much of a catch up the miners can do.
6/6 – 4 PM: Gold made it up to the $1295 target talked about in the premarkets a few weeks ago, and it has interestingly not gotten emotional (yet), and it still has a good shot of blasting thru $1300 temporarily. As you know, I always sell too early, but I cleared out of the JNUG trade. The miners did do a big catch up move today, but they’re still lagging badly. They still have a shot to continue pushing up, but they are at resistance, it’s been a good trade, not an investment, and I’m taking my profits.
6/7: In yesterday’s afternoon comments, I gave my reasons for selling out of the rest of my JNUG position. My expectation is for another tradeable low….But I always sell too early, and an emotional spike higher is possible. The emotional spikes, after a rally higher, are weak handed buyers, so they are quickly reversed and then some. Gold has been leading the complex since the December lows, which is my preference, as gold pulls the rest along with it. The others can pull at times, but it’s temporary. Gold and the Yen continue to be attached, as the Euro is much more on its own. A banking crisis in Europe will very much help gold, along with gold, the USD, the Yen, and Treasuries. But the Treasury rally from the December lows….