If you missed it, we provided an introductory video that summarizes the Trader Membership and its strategy.
We have two new setups this week.
New Setups
- VanEck Gold Miners ETF (GDX)
- Natural Gas Future (NG1)
Asset Classes
Equities
- Merck & Co. Inc. (MRK): Pending → Active (turned active 8/11)
- Walt Disney Co. (DIS): Pending→ Active (turned active 8/10)
- Walmart Inc. (WMT): Pending
Equity ETFs
- VanEck Gold Miners ETF (GDX): New Setup
- Health Sector Select SPDR ETF (XLV): Pending
Commodities and Cryptocurrencies
- Natural Gas Future: New Setup
- Bitcoin: Pending
Equities
Short: Walmart Inc (WMT)
-Bearish divergence as price made higher high in August and RSI lower high compared to mid-June levels.
-WMT has moved higher of late, but the bearish divergence has been extending, so this setup remains pending.
-A close below the upward trendline from the end of May and the 20-DMA would prompt the short trade.
-Targets align with key horizontal support levels, with target 1 near the 50-DMA and longer-term upward support line. Target 3 would need to see a sustained reversal lower in prices in order for it to be met.
-Since March, WMT price action has been positive, but a break of trendline could change the recent bullish structure.
-Potential stop loss slightly above YTD highs, to allow for some leeway for retest before closing position.
Equity ETFs
New Setup: VanEck Gold Miners ETF (GDX)
-Bullish divergence setup with lower low made in August and RSI higher low compared to June levels.
-A break above the short-term trendline extending from mid-July would provide the buy signal.
-Target 1 aligns with key horizontal resistance, and would see GDX break back above the 50 and 200-MAs. Target 2 also is consistent with horizontal resistance, while target 3 would see price hit the YTD high.
-Macro Catalyst: A reversal lower in Treasury yields or the US Dollar could prompt miner equities to reverse higher from here.
-Potential stop loss is placed at the top of the unfilled gap from March.
Short: Health Sector Select SPDR ETF (XLV)
-Bearish divergence setup as price made higher high and RSI lower high in July compared to April levels.
-A break below the trendline extending from the end of May would provide the sell signal.
-The move below that trendline would also see the sector fall beneath the 50 and 200-DMAs.
-Targets align with key horizontal resistance levels, with target 3 needing price to sustain a continued reversal lower in order for it to be met.
-Macro Catalyst: XLV recently bounced off its 50-DMA, but a continued rotation into cyclicals (Financials, Energy, Materials) could come at the expense of Health Care if economic data were to outperform.
-Stop loss is placed at the unfilled gap from December of 2022.
Commodities
New Setup: Short: Natural Gas Future
-Bearish divergence setup with price making higher high in August and RSI higher low compared to June levels.
-The setup would be triggered with the upward trendline from April, which has had multiple touches over the past few months.
-Targets align with key horizontal levels, with target 3 needing a sustained reversal in prices to retest the lows.
-Macro Catalyst: Natural prices have surged due to supply concerns related to strikes in Australia. A resolution to the strikes would see prices revert lower.
-Potential stop loss is placed slightly above the YTD high.
Cryptocurrencies
Short: Bitcoin
-Bitcoin hit higher high in middle of July while RSI made lower high compared to end of June levels, causing a bearish divergence.
-Price fell below 30,000, and is now below the 50-DMA. A break below the trendline that exists from January in addition to horizontal support around ~28,000 will provide an objective sell signal.
-Targets 1 and 2 are tight given the bearish divergence is short at three weeks old, allowing for higher probability of targets being hit. Target 3 would need to see price re-enter a bear market.
-Despite all the bullish rhetoric surrounding potential ETF approvals, bitcoin has been unable to break decisively above 32,000, which is strong resistance.
-Macro Catalyst: A countertrend rally in the DXY could pressure Bitcoin given its negative correlation to the dollar, in addition to an overall risk-off environment if economic data were to come in weaker-than-expected.
-Potential stop loss is placed at horizontal resistance at the high from May 2022.
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