In looking at the chart below, notice that $NUGT was consolidating for the entirety of 2017, until clearing a descending trend line in early August. While the trend line break did not lead to immediate gains, it did provide a nice trading opportunity when it cleared the small flag it formed near 33. After a more than 30% gain, $NUGT has been pulling back towards the breakout level. There are converging levels of support that may signify a reversal attempt in the near future. First, you have the horizontal support formed by the breakout level. Second, you have a rising trend line formed by recent pullbacks, and third, you have a rising 50 day SMA near that trend line. One last thing to notice is that volume has been drying up as well.

When you combine the confluence of support near $33-$34 on this chart, along with Gold pulling back to a clear support level, I believe that there will be a decent opportunity for a trade here. It’s not quite ready yet, so the key is to watch for that reversal attempt near the support levels.

Good Trading,

Joey

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The post Gold Miners near a buy zone appeared first on Downtown Trader.

While it was a bit overshadowed in my opinion by the moves in some of the indices today, Gold may have had an important change in character today. The metal as tracked by the SPDR Gold Trust (ETF) (NYSEARCA:GLD) $GLD gapped sharply higher today negating a recent breakdown under a key level. This occurred in tandem with the US Dollar dropping sharply. Many had been watching $GLD break under an important level near $123.70 a few days ago, but it actually held up pretty well near $122. I saw some calling it a head and shoulders, but I didn’t interpret it that way. I saw $GLD trading down in a falling wedge, after breaking down from a rising wedge in August.

Regardless of how you label it, $GLD failed to follow through on the downside and instead gapped back up over the falling wedge and its declining 20-day moving average. While $GLD remains under its 200 and 50-day moving averages, it is starting to show some signs of life. It may be in the process of setting a higher low (needs to be confirmed with a higher high above $137.55) and the false breakdown may catch some market participants off guard.

I’ll be watching $GLD closely in the coming days as a trend change could lead to a strong move in the miners. While $GDX is one possible play, $NUGT and $DUST are also great vehicles to use for short term swings.

Good Trading,

Joey

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The post From false moves… appeared first on Downtown Trader.

However, I did manage to find more than a few charts that escaped today relatively unscathed.

$CRI for instance traded in a narrow range candle and formed an inside day. While the candle shows sellers were in control for the day, the overall pattern of consolidating above the prior base remains intact. Maybe $CRI pulls back to test the base again, but overall it still looks pretty healthy to me.

$CME is another one that still looks pretty good too. It cleared a prior trendline and is now flagging in a tight consolidation. I’d be interested in this stock on any strength that clears this area.

$ORLY actually closed near its highs today, although it was slightly lower from the prior close. In essence, its just another consolidation day as it continues to form a base. $ORLY is probably pretty close to either attempting a breakout, or pulling back towards $121 again.

Another I will be watching pretty closely is $KFY. Flags have been working in this market and $KFY has shown very little weakness over the past month. Strength over $22 could lead to a nice breakout.

There is enough in this market to make me very cautious. I am seeing some stocks fail on their breakouts and some leaders like $AMZN and $TSLA have been looking a little tired. Of course we have the Government shut down hanging over things as well, but seeing healthy charts keeps me optimistic that this can still be a stock pickers market.

Good Trading,

Joey

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The post Still some decent charts out there appeared first on Downtown Trader.

$FOSL had a strong gap on earnings in August that has resulted in a lengthy consolidation. It really had no follow through and traders that bought that gap are likely frustrated with the stock. However, $FOSL had already run up into earnings before the breakout and investors that were holding prior to the earnings gap are still comfortably in the money. The reason I mention this is that the price action in $FOSL is typical of a healthy consolidation. Sure the failure to continue running after earnings may be seen as a sign of weakness, but the stock never really reversed, and $FOSL has quietly been finding support on dips.

Traders have been willing to pay higher prices on recent trips to the 50-day moving average and $FOSL is now on the cusp of breaking over several week highs. So the short answer is I like this chart because it MAY be near the end of a consolidation, and its recent highs should act as a magnet if it can clear the mid 119’s. Overall its a bullish stock in a good sector. Whether it gets there or not, there are enough signals in the chart to have made it attractive to me.

That being said, I don’t own this stock as I already had enough risk on with my current portfolio, but hopefully breaking it down this way may be of value to some of you.

Good Trading,

Joey

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The post Breaking down the chart in Fossil Group, Inc appeared first on Downtown Trader.

That being said, it seems $AAPL is finally falling out of favor with many traders as well. I’ve noticed much more bearish comments on the Stocktwits stream recently on anything related to the stock, and this was considered blasphemy just a year ago. Despite correcting from over $700 per share to the low $400’s, the stock remains heavily shorted (in comparison to prior short interest). Short interest is down over the past two months, but still much higher than last year at this time. Retail traders are often most bearish too late and short interest spiked in November 2012 and then again in April 2013 (both pivot lows).  Interestingly enough, $AAPL was up most of today despite the market being quite weak. This comes one day after most investors were disappointed with Apple’s WWDC announcements. I pay attention when a stock doesn’t go down on perceived negative news and then shows strength on a poor day.

While its hard to feel confident in a stock that is still in a downtrend and well under its 200-day moving average, $AAPL is starting to show some signs of a possible bottom on the daily chart as well. In looking at the chart below, you can see that $AAPL cleared the downtrend line that has held prior rally attempts over the past 7 months. While this is not an all clear, it shows that downward momentum is slowing.

$AAPL is also working on an inverse (reverse) head and shoulders base, which is a common bottoming pattern. While the pattern has not come to fruition yet, it is fairly well developed. $AAPL has also been holding above its 50-day moving average as it builds the right side of its base and it is forming a clear level of near term support. If it can clear the right shoulder, $AAPL would present a great opportunity to catch bears off guard and squeeze higher.

Often, great trading opportunities come from catching one group of traders off guard, and this is a case where that can happen. Traders should not get too confident, as $AAPL is still bearish overall, and the odds are just as good that it continues to head lower. However, there is an opportunity here for a great long trade if the markets cooperate.

Good Trading,

Joey

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The post Are traders too negative on AAPL? appeared first on Downtown Trader.

While volume is certainly an important indicator to watch, there are other clues confirming that momentum has been declining under the markets hood. The percentage of stocks trading above their 40 day moving averages has actually been dropping steadily since peaking in January. This is certainly worth noting as it reveals a market being led by fewer and fewer stocks.

The McClellan Oscillator, a shorter term indicator, is also revealing a similar pattern. In fact, one could argue that it is almost oversold already, which is not typical with a market one day off fresh highs. There is definitely some distribution occurring, the question is whether it is signalling a pause or a top.

It is much too early to make any such conclusions. I would actually be surprised if the market experienced more than a drop of a few days right now as many participants have missed out on a large chunk of this move. However, I will paying close attention to what individual stocks continue to do. For a market to continue pressing higher, it needs expanding breadth, not contracting number of stocks making highs. If this behavior continues, I would expect we enter at least a mild correction that could take us to $SPY 146 in the next month or two, and possibly into the gap just under that.

Good Trading,

Joey

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The post Declining Breadth Needs To Be Watched appeared first on Downtown Trader.

The markets have been correcting over the past few weeks, but the intermediate term uptrend ($SPY) remains intact, with a higher high in September (vs April), and as of yet, no new lower low (vs  June). With the market oversold on many indicators and everyone expecting a flush, the market could easily surprise with a strong bounce.

Gold and Silver look like they are starting to resume an uptrend after a very lengthy consolidation. Below is a $GLD/$SPY ratio chart showing that Gold is starting to outperform the general stock market. Notice the ratio is starting to make higher highs and higher lows. This mirrors the action on $GLD and $SLV daily charts. However, it is key that the metals clear their September highs (ratio chart already has) in order to confirm the move.

The giddiness in Biotechs appears to have run its course, but as with all sectors, there are some that still have potential. In the diet pill wars, $ARNA has held up much better than $VVUS and is worth watching. $SRPT is another one worth watching as it consolidates in a very tight range. Watch to see if it attempts to clear the tight range that has formed over the past week.

As we head into the holiday season, $MA and $V are in pretty good shape technically. They have not given up too much ground on recent market weakness and remain near all time highs. Below is a chart of $MA showing it holding above its September breakout as it consolidates. Any strength above $477 could lead to a breakout.

While I am expecting a strong environment to close out the year, I could easily be wrong. That is what trading is all about though, and I think the odds favor a few long shots soon.

Good Trading,

Joey

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The post Themes I’m Wacthing appeared first on Downtown Trader.

While it may be frustrating to miss a strong day or two in the market, it is important not to chase market performance and try force a trade. Many traders fall prey to overconfidence after a strong move and get ultra leveraged well into the move. The market is still healthy, but it could stand for a few days of consolidation or pulling back in order to let equities take a breather. I find myself only holding a couple partial positions after being on margin several weeks in a row, and who knows, maybe I miss a move. However, most setups are too extended for my taste and I’m more than happy to sit and wait for my pitch.

Good Trading,

Joey

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The post Waiting for my pitch appeared first on Downtown Trader.

Here are a few stocks I am adding to my watchlist for this week.

I thought $AFFY was ready last week, but it stalled out with the markets weakness. However, it did not suffer through any real weakness and has traded in two very tight low volume candles. Any move above these could signal a breakout attempt. A drop below them would mean it needs more time, or a failure.

$LIFE is another one that made it on to my radar for the week. It has spent most of the year consolidating a breakout and only recently started to turn higher. It is starting to form higher lows and is currently forming a bull flag after clearing some resistance. I believe that if it clears the flag, it will make a run at this years highs.

$HII is also worth watching as it trades in a very tight range. Recent IPO’s are always intriguing as there is no long term resistance holding them back. $HII has stalled out near $41.50-$42.00 on a few occasions and as recently as a few weeks ago. However, the pullback from these highs has been orderly, and $HII remains above an upward sloping 50-day moving average. If $HII can clear $40.50ish, it may challenge for new all time highs soon thereafter.

As with all trading ideas, please perform you own due diligence, check earnings, and make sure if fits your trading plan.

Good Trading,

Joey

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The post Long to the Hilt appeared first on Downtown Trader.

Short term of course, the metals and the miners are extended. Looking at the chart below, its clear to see that $GLD is pulling into some resistance and may encounter some selling soon. However, in the grand scheme of things, it remains in a larger trading range and has plenty of room before hitting the top of the range near $175. This coincides with this years highs and a resistance level from last year. $GLD looks like it is headed for at least a test of this area and maybe more. The ETF has respected the $150 level as support on a few occasions and the recent emergence from the past three months narrow range could be cementing a bottom.

With $GLD clearing its 200-day moving average after being extended, it is likely do some backing and filling. However, it appears there has been a change in character for the metals and buying the dip may be the way to go moving forward.

Good Trading,

Joey

follow me on stocktwits and twitter for more analysis on stocks and cool photos

The post Gold Clears 200-Day MA appeared first on Downtown Trader.