Intriguing Precious Metals & Miners

I have been waiting patiently for the metals and miners to offer a high probability entry. The key is to try and get them on strength, but before they run too far away from you

_________

_________

_________

_________

_________

It is always a constructive exercise to look at an issue in multiple timeframes. With regard to the Dow Jones Transportation Average, the past few months have been a quagmire, complete with head fakes and false breakdowns. However, looking at the weekly chart is a good reminder that we are still in a clear bull run, and that the buyers have done an excellent job of defending the 20 period weekly moving average.

Below, compare the daily and weekly charts of the trannies, paying attention to my annotated weekly especially. In essence, the broader timeframe often amounts to looking at the issue “with the lights on,” where you usually get a moment of clarity about the trannies you are checking out.

____________

____________

___________

The presumption that this most recent rising wedge on the S&P 500 would resolve in the same bearish manner as the one in mid-February has turned out to be a costly extrapolation for bears to have made. Now that everyone seems to be on the same page that we are clearly in a bull market, the underlying bid appears to be stronger than ever. We are seeing impressive action in a multitude of individual stocks, with price breaking out of sound technical bases. I am still overweight solar names, and TSL is leading the charge higher today.

As the day progresses, I have my eye on that 1330-1332 area on the S&P, which marked tough resistance during late February and early March. Should the bulls prove too tough for that level to turn them away, a test and breach of 52-week highs up at 1344 appears inevitable. Of course, sticking to the very best setups is key. Despite impressive action overall today, a biotech like KV-A is getting slaughtered, while even AAPL is in the red.

One of the nuanced aspects about trading is spotting an “easy” setup, but never actually following through and buying or selling the security. What you are looking to see is a clearly defined line in the sand (or on the chart) where you see a discernible edge for a trade. At the time same time, if price falls below a specific level, then you take a pass and move on.

Many novice traders, and in fact even some experienced but overly aggressive ones, mistakenly think that an “easy” trading setup is one where you simply buy immediately and are virtually guaranteed to profit immensely. In reality, the easy setup comes from knowing what you want to get out of the market, and only deploying capital  if and when you actually get it.

I have been discussing the enticing setups in many of the coal names for the past few days. The daily chart of Alpha Natural Resources, below, offers a pretty good example of the kind of easy setup to which I am referring. The stock could easily be working through a bull flag here before moving higher. However, a break and hold below $58, and I will take a pass, since the presumption that the prior level of resistance has now turned into support will be undermined. Sure, the chart would be far from crippled with a move below $58, but that does not mean it represents a high probability long trade either. Thus, the essence of disciplined swing trading is a more complex version of identifying and monitoring “easy” setups.

_____________

Direct Link Click Here

____________

In addition to the numerous posts that I have written about solar stocks of late, the steel and coal names look to be setting up as well. The KOL, ETF for coals, is flirting with a major breakout above $50, while the SLX impressively smashed through the $74 level today.

Some names of interest: ACI JRCC PCX STLD

____________

____________