If the market were going to pivot upward, this was the perfect time technically given price was testing support and the short-term rising trend. This managed to swing the momentum to upside for ETF "Diamonds in the Rough". I was particularly surprised at some of the choices today.
First, none of these ETFs came up in my scans so I had to "eyeball" it. One theme today was Bonds. I'm not in favor of Bonds as the PFIX (I own it) chart as well as the yield charts look too bullish. However, I thought it prudent to report. I didn't include any Bond ETFs.
The other surprise was Miners; Silver and Gold Miners in particular. If you recall, on Friday I took back my inverse Gold Miner ETF (DUST) off the table. Silver (SLV) looks bullish as does Gold (IAU), but I'm going with Miners as they benefit when the broad markets are rallying.
In all cases, we have to be very short-term investors. The landscape changes very quickly. I will likely shed my inverse ETF tomorrow if we continue to see rally. I tightened up the stop. The inverse charts still look pretty good, but given this rebound off support, I expect to see a continuation.. at least for a few days. After that, time to buckle in for more decline.
Good Luck & Good Trading!
Today's "Diamonds in the Rough": AIV, AMH and NUE.
"Runners-up": AGIT, ABBV, RDWR, AVB, UDR and EQR.
RECORDING LINK (9/2/2022):
Topic: DecisionPoint Diamond Mine (9/2/2022) LIVE Trading Room
Start Time: Sept 2, 2022 09:00 AM
Meeting Recording Link
REGISTRATION For Friday 9/9 Diamond Mine:
When: Sep 9, 2022 09:00 AM Pacific Time (US and Canada)
Topic: DecisionPoint Diamond Mine (9/9/2022) LIVE Trading Room
Register in advance for this webinar HERE
Save the registration confirmation email with login instructions in case Zoom doesn't notify you in time.
There was no trading room as Monday was a holiday so here is the last recording.
Welcome to DecisionPoint Diamonds, wherein I highlight ten "Diamonds in the Rough" per week. These are selected from the results of my DecisionPoint Scans, which search for stocks that could benefit from the trend and condition of the market. Remember, these are not recommendations to buy or sell, but are the most interesting of the stocks that surfaced in my scans. My objective is to save you the work of the initial, tedious culling process, but you need to apply your own analysis to see if these stocks pique your interest as well. There are no guaranteed winners here!
"Predefined Scans Triggered" are taken from StockCharts.com using the "Symbol Summary" option instead of a "SharpChart" on the workbench.
PureFunds ISE Junior Silver ETF (SILJ)
SILJ tracks a modified market-cap-weighted index of small-cap silver mining and exploration companies.
Predefined Scans Triggered: Elder Bar Turned Green.
SILJ is down -0.33% in after hours trading. Price has formed a bullish falling wedge which suggests and upside breakout. Price bounced off strong support. Price also formed a bullish engulfing candlestick today. The RSI is negative, but is rising. The PMO has turned up. Stochastics are rising out of oversold territory. The ETF isn't outperforming against the SPY, but that is improving in the very short term. I've set the stop just below support at the July low around 8.3% or $8.37.
The weekly chart also features a bullish falling wedge with no breakout yet. The weekly PMO is turning back up, but the weekly RSI is flat and negative. The SCTR is in the tank. Basically this looks bullish, but be prepared for it to fail quickly if it is going to fail.
iShares MSCI Turkey ETF (TUR)
TUR tracks the performance of a market-cap-weighted index of Turkish stocks. For more information, click HERE.
Predefined Scans Triggered: New 52-week Highs and P&F Double Top Breakout.
TUR is down -3.00% in after hours trading so it is taking back all of today's gains and then some. The good news is that a 3% decline would still keep price above the April top. However, it also tells me that this could turn into a bearish reverse island. These resolve with a gap down, leaving the prior price cluster as an "island". The chart was hard to pass up given the PMO bottom above the signal line. Volume is also coming in. The RSI is very overbought. The last time that happened in August, it only resulted in sideways chop. However, in April it was a bit of a warning sign. Stochastics are rising strongly above 80 and not surprisingly, it is outperforming the SPY by a long shot. The stop can be set conservatively at 5.9% around $22.88.
I really like this week's upside gap up on the weekly chart. This rally has pushed price above strong resistance at $22.50 and gap resistance from early 2021. The weekly PMO is rising on a crossover BUY signal. The weekly RSI is rising, although starting to look overbought. The SCTR is about as good as you can get at 99.8%, meaning it is in the top 1% of ETFs based on relative strength calculations.
Global X Uranium ETF (URA)
URA tracks a market-cap-weighted index of companies involved in uranium mining and the production of nuclear components. Click HERE for more information.
Predefined Scans Triggered: P&F Ascending Triple Top Breakout and P&F Double Top Breakout.
URA is up +0.13% in after hours trading. I covered URA on August 31st 2021. The position is still open and up about 15.5%. It was up over 47% at its top. The chart has really perked up after price bounced off support at the early August tops. I didn't annotate it, but I think it is clear there is a reverse head and shoulders with May low as left shoulder, lows in June/July as the head and the August low as the right shoulder. The RSI is positive and the PMO is rising unlike so many other ETFs/Stocks. Stochastics have turned up in positive territory. Relative strength hasn't been great since the end of August, but since the August low it is definitely seeing a rising trend in relative strength. The stop is set below the 200-day EMA at 6.4% or about $21.48.
The large double-top formation using 2021/2022 highs, did not execute and instead price hit the confirmation line at the early 2022 low and bounced. Best parts, the weekly RSI is positive and rising and the weekly PMO is triggering a crossover BUY signal. The SCTR is a strong 94.7%. The upside target is the 2021 high which is about 29% away.
Don't forget, on Thursdays I look at reader-requested symbols, click HERE to send me an email. I read every email I receive and try to answer them all!
Current Market Outlook:
Market Environment: It is important to consider the odds for success by assessing the market tides. The following chart uses different methodologies for objectively showing the depth and trend of participation for intermediate- and long-term time frames.
- The Silver Cross Index (SCI) shows the percentage of SPX stocks on IT Trend Model BUY signals (20-EMA > 50-EMA)
- The Golden Cross Index (GCI) shows the percentage of SPX stocks on LT Trend Model BUY signals (50-EMA > 200-EMA)
Don't forget that as a "Diamonds" member, you have access to our GCI/SCI curated ChartList on DecisionPoint.com. You'll find it under "Members Only" links on the left side on the Blogs and Links Page.
Here is the current chart:
Full Disclosure: I am 15% exposed, half of which is hedge. I am eyeing URA.
I'm required to disclose if I currently own a stock I mention and/or may buy/short it within the next 72 hours.
"Technical Analysis is a windsock, not a crystal ball." - Carl Swenlin
(c) Copyright 2022 DecisionPoint.com
Watch the latest episode of the DecisionPoint Trading Room with Carl & Erin Swenlin on Mondays 3:00p EST or on the DecisionPoint playlist on the StockCharts TV YouTube channel here! OR join us live at Noon EST by registering HERE.
NOTE: The stocks reported herein are from mechanical trading model scans that are based upon moving average relationships, momentum and volume. DecisionPoint analysis is then applied to get five selections from the scans. The selections given should prompt readers to do a chart review using their own analysis process. This letter is not a call for a specific action to buy, sell or short any of the stocks provided. There are NO sure things or guaranteed returns on the daily selection of "Diamonds in the Rough."
Regarding BUY/SELL Signals: The signal status reported herein is based upon mechanical trading model signals and crossovers. They define the implied bias of the price index/stock based upon moving average relationships and momentum, but they do not necessarily call for a specific action. They are information flags that should prompt chart review. Further, they do not call for continuous buying or selling during the life of the signal. For example, a BUY signal will probably (but not necessarily) return the best results if action is taken soon after the signal is generated. Additional opportunities for buying may be found as price zigzags higher, but the trader must look for optimum entry points. Conversely, exit points to preserve gains (or minimize losses) may be evident before the model mechanically closes the signal.
Helpful DecisionPoint Links:
DecisionPoint Shared ChartList and DecisionPoint Chart Gallery
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
For more links, go to DecisionPoint.com