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.
There is a video here discussing the trading opportunities we were looking at in last week’s premarket comments. Again, these comments are what we ourselves are doing.
As we talked about a couple of weeks ago, the sentiment on gold in the big trading range was […]. We were long on a trading basis, and the sentiment was beneficial. Then we had the breakout, and the rally continued, of course here came the weak handed believers piling in – truly amazing to watch this happen over and over. As I stated then, it was time to[…]. We didn’t get as much of a spike to make selling “easy”, but again into resistance areas plus very bullish sentiment – not a good combo. And last week, “Yesterday talked about below 1325 first, and then a short-term potential there. Intermediate-term still thinking a selloff back into the old trading range will freak out a lot of people, and set something up – no hurry for gold right now. Bonds are in distribution, and I’m holding some December puts.” And any of these opportunities now are short-term bounces, that is the point of a bounce, in and out. There’s a video about my NUGT long-side trade last week once gold “broke below 1325”. And understand what you’re looking at – on a bounce, if you’re right, then sell into the rally, and move stops up to breakeven. That was my approach, so at least some profits were taken and maybe get some more out of it, the continued rally didn’t happen, so breakeven on the rest. That is a winning approach to bounce setups in miners. Gold shorter-term trying to set something up, but for me bigger-picture, where’s the high probability set up? This is not remotely a situation like my last gold purchase on July 7th.
Quickly on cryptos, a huge selling climax in Bitcoin, with the big support area now set – this technology is here to stay, and these things trade very well. And MGTI which topped with Ethereum, (likes the rally) and also DIGAF (trading-basis only) also likes the rally. The stock market permabears are continuing to grasp at more new reasons (excuses) why stocks will crash. Truly remarkable. Big liquid markets don’t crash right from the highs, they have the first wave with the huge increase in volume, then the big rally, and it’s the next wave which can be the big problem. It’s remarkable how many people believe in the “crash” thesis.
We’re watching –[…] received fast track designation from the FDA. NBRV – with a huge rally on drug news. The chart is pretty ugly, but to be unbiased we’ll watch. It looks like a potential short to me actually. Watching BITA for a reaction to buy into. It is another Chinese stock, and we talked about this one awhile ago as an emerging strong stock.
Fed day is tomorrow, a known news event. This business becomes “easier” when markets begin to set up (ending action/accumulation for example) before the event. And a trading range, and break below it on the knee-jerk reaction to the consensus view of the news, can then set up a buy. I’ve chronicled, and bought into some of them, several of these setups in gold this year. Some recent ones are shown with the curves. The early July one was a classic weak-handed screw up with the July Jobs Day news. That one was also a time frame turning point. The others were time frame continuation areas. The next real good time frame turning point is in about 3 weeks. A shorter-term one should be this week. So gold needs to begin setting this one up. The Yen pair is starting to get EA showing up into the rally. I continue to be very bearish on bonds, and long December puts, but it’s overdone to the downside.
As to energy – same view of […] -the reactions in energy going forward are buying opportunities.
We’ve given several excellent bounce trade potential situations recently, and have shown some approaches how to trade them. Yesterday I traded HMNY, that video is on the home page, along with other setups. Again, what we talk about in premarket are the things we ourselves are looking at. MRTX still had the momentum going for it which was part of the reason used to buy it yesterday into the reaction. That is also explained in the video. ADMS has an analyst upgrade. It has not been a great performer for me since buying it, and the rally may be a place to take some profits out. Patiently watching if CAPR can break above resistance and hold, for something later. Watching STAF.
Today is Fed day and these at times can be opportunities to get into or out of trades based upon the reaction to the “news”. It’s not news, and means “nothing”, as the Fed is believed to be leaders. False. Most everyone in markets has a different view than I, but – the Fed is a follower, not a leader, just watch the market, there is the “leader”. It’s not that what the Fed does is unimportant, it’s that how is it helpful to maintaining consistent profitability, well-above average returns, and small drawdowns. If you know the answer, then let me know. There is an industry called “Fed Watchers”. They are supposedly experts at deciphering Fedspeak. What a colossal waste of time. When a market is ready to move on a big-picture basis, there is nothing which will stop it. And a weak-handed reaction to the news makes that market (or stock) even stronger and more powerful. Reread my December 2015 post about finally being time to buy gold. It was written 6 days before the first Fed rate increase in 9.5 years. Yet I said it was (recap) “finally time to buy gold, and especially the miners” and “yes the Fed would be raising rates”. Why was my belief so contrarian? Because the market was ready to move (there are tons of videos and posts describing the technical setup then), and a knee-jerk move below support would (should) set up a very powerful spring. I also said “only buy into weakness” – as the weak hands would absolutely sell into weakness after the Fed announcement on 12/15/15, so be aware to not look at news and just “close your eyes” (ignore the analysis) and buy.
Gold currently is in a totally different situation technically, and sentiment-wise. In 12/15, it was the secular low area (I believed then, not remotely easy tho) and very importantly to understand, the low spring in the huge accumulation zone (again, not remotely easy) – and very, very, very tough to have faith and believe in my work then, and publicly say it’s time to buy. It was an emotional market, no believers in gold, and the whole time frame then actually.
Today, in hindsight, gold is in a bull market. And very bullishly big-picture, the internet and TV is filled with clueless people still flailing around about “where is gold going”. The selloffs are the buying opportunities – I’ve said that exact thing now for 18 months. Very, very few have also been on board with that view, and still aren’t. It still is the timing part which we try to nail down – not easy. Shorter-term now gold is building a not that impressive yet trading-range support area. Look at and compare the previous areas highlighted in yesterday’s gold chart. The sentiment is getting more constructive, but not impressive yet. It’s always about probabilities to me, and that is when to step in, and if I miss a move, big deal. Gold is not there yet to me. Short-term, a break below $1304 support and into $1300, could be the setup for a rally. All of these breaks right now are re-building it. So there is very short-term trading vs. more longer-term focused.
DMPI has new technology with a patent, but look at the ugly long-term chart. We always attempt to be unbiased. There could be a daytrade-only buy in there. WAC looks like a pump-and-dump setup (also).
HTGM – we constantly remind that for most of us, the way to view gap ups, unless you are totally committed to in and out, is to put these stocks we talk about on a watch list, and it’s several days down the road where the great setup is – into the reaction. Three pushes down is one type of setup. This stock is up 25% pre-market on news. We talked about this stock on September 5 saying: HTGM – This stock is starting to look interesting as it started coming off a 100 day low of 1.59 on Thursday. It showed a sign of strength on Friday and was up 16% on heavy volume. This company tends to release news about every 5-6 months which makes this stock spike. The last time was on March 24 which caused this stock to move from 2.05 to 13.25. Fridays move has certainly captured our attention so keep an eye on this one.
Let’s see if BBBY can have a selling climax today – it was downgraded by analysts. I’m still long ALDX at 7.30 on the bounce potential yesterday. It didn’t bounce. Please look at the trading video about HMNY from yesterday. I’m doing another video for you guys about how a stock gets very “top-heavy” at the highs. HMNY was a monster bounce stock from Monday, and then the huge volume into the distribution and now huge resistance. And bounce potential, daytrade, again today.
Below is the 2 year US Treasury. We talked about the Fed only following, that chart is an example. Several years ago I wrote posts about short-term Treasuries already being in a massive bear market (prices), and longer-term (rates) will be later on. That bottom in long-term rates was on 7/6/2016. Bonds are in a massive bear market. I’m still long December TLT puts, and will use rallies to buy more puts, using 2018 puts next time.
On 9/12 – Intermediate-term still thinking a selloff back into the old trading range will freak out a lot of people, and set something up – no hurry for gold right now. The last few days we discussed how gold is “just no there yet”, and I’m in no rush to buy. Now we are back into the old trading range, and this is what I like to see. Again about sentiment, the following is from 9/12: From Friday’s premarket – “Sentiment is a wonderful tool, and it was quite amazing back in early July, right when I was buying gold into the bottom of the range, to hear even a GATA member almost giving up on gold.” And this – “Sentiment-wise the non-believers are, of course, becoming believers – not a plus.” So now after the big sustained rally in PMs, here is some brilliance from the ones who are always buying after a huge rally, or giving excuses why gold is falling, right into the big lows – “Steve St. Angelo Reveals the Start of “CRAZY MOVES in Gold & Silver” or “GOLDEN CROSS!!! – Precious Metals BULL MARKET CONFIRMED!!!” I have zero interest in anybody else’s view of any markets except for using it to judge sentiment., and you can see how the sentiment has really shifted. It took them a while, but their emotional approach to markets is back again. So now we’re going to need to start watching the sentiment in the other direction, and manipulation theories are coming back. Good sign. We still need the time frame intermediate-term, and still believing 2+ weeks. Plus the technical setup. Yesterday the setup for a short after a Fed knee-jerk rally did not happen. I scratched a miners long-side trade, and will look again today. The $ or stock market isn’t the problem for PMs, it’s the Yen.
TEUM and BCRX – Both of these stocks are up pre-market on good news. These 2 have shown up several times in our pre-market comments. We’ll see them gap up on open, but remember that buying the gap is not a good idea. These gaps and moves are indicators that you should be watching them for stronger moves which means they need to be on your watch list. Watch them for the pushes down over following days – that is the really good setup. And even then using the next gap to sell into. HMNY will continue to be volatile.
I’m still long […] in this reaction area, but there will be volatility over the next few days. We’ll see if it’s another DVAX for me. I had to sit on that one for a bit before it really kicked in. It’s good to wait for the refinancing news to come out about these strong stocks before getting too aggressive.
Yesterday we talked about the pump-and-dump potential in DMPI and WAC, and before in NBRV. Please understand how to also NOT do things in markets.
ALNY was a bounce stock recently. This is an example of using news-related selling to buy a […].
Yes, sentiment is powerful, actually the most powerful tool to me. And please realize that the best tool to to get at the sentiment is actually the technical action itself. Meaning, especially, ending action. And there are all of the other tools also discussed. There are videos galore about this stuff – ending action is simply weak hand/strong hand change in “ownership”.
The Yen pair is continuing to weigh on gold. There has been some short-term EA in gold, but a powerful setup will see numerous EAs. Again refer to the July 7th time period – a classic. That time period had so much going for it setup-wise. And understand, a big rally can occur without a great setup. It’s just that this business is all about probabilities and having them heavily on our side. There was a pretty powerful SOW in gold, which is bothering me for now.
I updated some trades in the afternoon comments yesterday. And other of my positions can have potential into the reactions only, like ITCI, MRNS, SQNS or HALO. We talked about BITA several times for you, no position in it, but watching the reactions. We love strong stocks.
We talked about CAPR several times, and again for most of us, let others have the gaps up. We sometimes daytrade those, and very occasionally buy-and-hold but it’s the reactions over the next several days which are the great setups.
SPI – This is a solar energy stock that is on our watchlist and would be a good idea to put on yours. Trader Scott watched BLDP, PLUG and FSLR for a long time before he did anything with them, and they have performed very well. We have loved the renewable energy sector a long time, so keep an eye on SPI.