Thinking Out Loud

SUNDAY MAY 4 7 Charts Update on Metals/Miners

I’m still short term Bullish, long term ‘Cautious’. We have to be. The charts are shaping up nicely, but I’m always open to further lows into the Summer months. This caused me to want to look at Mostly weekly charts for this update. I want to keep commentary fairly brief and let you allow the charts to do the talking.

GDX WEEKLY- Notice how it Lost the 30WMA in the fall of 2012. It has regained and remained above it. It is something to watch. Will it hold Or will a perfect Inverse H&S form into the summer??

The same thing happened with GOLD. It lost the 30WMA and REGAINED it recently. It has NOT closed below it on a weekly basis

So what? Why do I care about that 30 Weekly Moving Average? Well…Look at the Lows of 2008 after that major sell off in GOLD.

WHEN – THE – LOWS – WERE – IN….It never closed below the 30 Weekly MA again…so it is something that I want to watch going forward

THE SILVER WEEKLY -looks like its at a critical area too. POP – OR – DROP? If the lows come in the summer, as almost everyone I talk to & read thinks is normal expectation….this could play out (However-what usually happens when the majority expect the same thing…lows in the summer??)

The $USD sits on support and in the past has rallied from here. I’ve written enough on this chart ..(click to enlarge )

My Final chart is only going to be understood if you Know cycles analysis applied to Gold. I know that Many of my readers are avid followers of POLY or Likesmoney and should be able to follow this observation. Poly is known as The Cycles expert at the Financial Tap , not me- so this chart that I am pointing out is not his current thinking. It did however, play out in a VERY BULLISH manner like this Coming out of lows that caused Metals / Miners to be very much hated & untrustworthy – much like today.

What happened then?

From my viewpoint- I stared at this chart all weekend. How can one ‘brush it aside as unimportant’, or ‘grasping at the straws of a 1 time anomaly’…when we are above the 30WMA now too? It should at the very least be noted. To me, it is a relevant occurrence to be included in the possibilities of T/A.

Almost everyone that I know is expecting SUMMER lows & a perfect Inverse H&S pattern. Definitely sounds normal to me….but at times, when everyone is expecting the same thing- It doesnt happen. -Just sayin” Download your free smiley

Thx for reading , Best Wishes ~Alex

( Also- Please scroll down further for Friday Mornings observances of Miners/metals if you missed it.)

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Friday MAY 2

I was hoping to post 2 or 3 charts before the jobs report, but it got too involved. I was looking at The GOLD/ SILVER/ MINERS markets, and also the SPX IWM, QQQ charts… So lets start with a chart of the equity Markets and a few thoughts about what we see-Then we’ll switch over to the METALS MKTS

QQQ or NASDAQ – We are just under the 50sma now . I have been Tweeting this as a critical area for over a week. THIS is where you’d buy TZA if you think it cant break above. Stop right above. This one stands out (and so does the IWM )

A look at IWM shows a similar lagging action compared to $SPX & $DJIA… which were near ALL TIME HIGHS

IWM is also lagging as SPX DOW near all time highs.

On a weekly chart, you want to Hold or Regain the 10sma…or you get a larger correction /Consolidation . IWM & QQQ weekly are the same

In recent times when the NASDAQ lost its 10WMA (Weekly Moving Avg) , you could look at the 50WMA for support . So maybe we drop or go sideways to that area?

Just as a reference point – Some believe that the markets are getting over heated, yet also could end in a “Blow Off Top” type move, so I wanted to show the path into the NASDAQ Bubble of the 1990’s. Yes, it did lag and pullback & drop below the 10 WMA a few times (About once a year) and RIGHT BEFORE the blow off top, it crashed…so its always good to see how things played out in the past / and compare to todays movement.

So Bull Markets can correct anytime, and still be healthy as seen in ’96 ’97 & ’98. One can take it step – by – step and look for signs that indicated in the past whether it was ready to really Drop , or just a pause along the way.

As I looked at SLV , it was DO OR DIE TIME (Again- bumping on recent lows) . It keeps bumping along a nice solid base and really looks good from a Tech Analysis view point. ( IF it breaks down, however , SILVER could end up in the Lower teens!!) The daily could have been bought here with a loose stop right below May 1 lows. If that failed, we’d have to watch the June 2013 lows if a quick slam down were to occur. A BUY could also come when one waits for a break upside out of the latest descending wedge

You can see that the SLV WEEKLY has divergence at the lows – that us usually quite bullish, at least for a bounce /temporary reversal.

GOLD & GLD broke out. The MACD is Bullish. They Could rally , but also a drift down that trendline could happen, since it did last summer. This morning, GLD is surging with volume & broke above the 10 sma…it is a BUY.

This all still looks like a “BOTTOMING PROCESS” as long as it holds up

Lastly GDX (or GDXJ) has been tricky because they kept getting rejected at the overhead moving averages. THAT can lead to a consolidation that builds ENERGY to push above through them under the right conditions. The MACD kept rising though prices were lower = Bullish. THIS MORNING, they are rising up to the challenge so far, regaining the 10 & 20sma. Below you’ll see the positive divergence that I pointed out on Yesterdays chart , then I will post a current one.