Lets Look At GOLD For A Minute

June 10 2014     Questions – Questions – Questions! There are many when it comes to the illusive Precious Metals Market!  Will it Bottom this summer? Has it bottomed yet? Is the Bear Sell off done or are we going to $1000.00?  Honestly, I dont think anyone can know the answers to those questions for certain , so instead of emphatically insisting that “Its this…”  or  “Its that…”,  Lets just look at some charts and discuss a few things that we can look for (And maybe we should look out for) going forward.

First – Most know from prior reports (See the Learning Patience article) that I had been expecting a low here, and we are there now. I am uncertain, however, as to whether its THE MEANINGFUL LOW that I expect with a great rally to follow, or just a bounce & one more drop to that ICL (The meaningful Low) .   For starters we are still in this down trend, so even if if we bounce as far as $1290 , $Gold could still drop further.

If we start to drop here & now, even spike down, do you want to go short? You may want to consider this first…

For starters, GOLD is even more oversold than it was in Dec lows

The question was…If we start a sell off now, should I go short?   Usually I would think it could be rewarding, but here and now You may want to just wait for THE LOWS and go long. This will be a meaningful low and a strong rally should follow. A sell off here COULD BE A SHAKE OUT. Notice why I say that. This is GDXJ. I drew in the “Slam Down arrow”.  Go Short?

Look back at DEC lows, because often THE LOWS have a small bounce to draw “Longs” in, then you see a quick “Stop Run” to shake them out, and it reverses and takes off.  Below is that process at the Dec lows.

See the 5 day ‘bounce’ at the end of Dec- then came a SLAM!!

Now you see the following day broke BELOW prior price to “STOP OUT” the longs and it revered QUICKLY.

THE LOWS were actually in and a rally began the next day.  Those who had flipped short that close to the lows were forced to cover & chase. Emotionally, that can cause indecision & over trading.  Look below, THE LOWS were in!

 SO where are we??  I have mentioned That I expect  THE LOWS soon if not here.  In cycles, one more Daily cycles that can last from say 20 -30 trading days long could fit in still ahead of us here. Yes…if these are not THE LOWS (And if they are, they should take off upside fairly soon if they are, maybe in the same fashion as Dec lows with a SLAM & RUN), then we could get one more roll over and find THE LOWS in a couple of weeks, likely in July. This should produce a strong rally that you do not want to miss as a trader.

Like I said at the start of this article , so many questions as to where Gold is RIGHT NOW.  What to do?  SO &  SO says $Gold $1000 soon, The other guy says Gold $2700!!   Well I take it step by step and I look for clues. One clue is that at these type of the approaching Meaningful Lows, Usually you will see Miners start to form bases and they often bottom first  (Smart Money Accumulating) .  If you have followed my work in other blogs / Forums in the past, then you remember me pointing out ‘Bases’ and Miners that had ‘Good set ups’, often  a week or two before the lows . Last June & last Dec 2013 we got in early  as I pointed out the strong bases in PAAS, SSRI, RBY at the PUKE OUT lows before that big %- run,  etc. That was  before Gold bottomed  ( it isnt easy buying then by any means , Bottoms are a process and can be quite jittery, but clues were there) and we made some incredible gains just trading or even with buy & hold then.  So Are we there yet??  Its still too early to know on GOLD, but lets look for clues. Are there any Miners setting up bases or showing accumulation / strength?  Yes.

At this point I’ve talked enough, lets just look at charts of Miners. They can tell their story.  I DO see some good things in these charts so far. There are MANY others, I will likely provide a list as time goes on. I’m not showing  BUY or SELL here, just showing signs of strength.  Roll the charts…

I Tweeted this the other day …

Look at that recovery of the recent selling

Ok, thats enough for now. If you know how to read charts, you can see that something is VERY DIFFERENT here, and what is that??   We have been conditioned to “Fear” the Miners if Gold even twitches  (But I see strength) .

When GOLD droops , Miners SWOOP (down).  In recent selling phases of Gold/Silver …When Gold even starts to shutter, what do Miners do?? They sell off 10 % in a day. THESE Miners are now showing you some strength has stealthily occurred. Seems like some are being gathered and held as a core, being accumulated. Sometimes the stops are run & they recover quickly.  Right now, I see GDXJ leading Gold. We are ‘at’ or ‘approaching’ a Meaningful Low.     Is it THE FINAL MEANINGFUL LOW that I have been waiting for in Gold/Silver ? Its too early to tell for their actions, but some of these Miners are shaping up & basing out and whispering to us that “We Are Close”   In my humble opinion .

Thanks for reading!!   ~Alex