July 22, 2013 I didnt want to scare anyone, so I decided to just show a playful little bear to make my next point, instead of a Full Blown Bear. If you’ve been following my thinking, you know that I expected another Leg higher. Using cycles for timing, it should’ve popped higher or at least should POP really soon. If not – this second leg up may just fail. So why the little bearishness? Well, as time goes on and the consolidation continues, we are losing the “strength” that was adding confidence. Notice the following charts…
GOLD is weakening & looks actually tired
I want to see GOLD get above those 2 moving averages overhead & not struggle so much.
What about the Miners?
GDX is holding above the 20sma and is still Ok, but I see signs of weakness appearing and the hairs on the back of my neck stand up. Why? Because we should be in the Beginning of the 2nd daily cycle & its too early for weakness. MACD & RSI are weaker. It should be refreshed from the consolidation, not tired. We can still POP higher, but I remain “Alert” for now, based on what I’ve written on this chart.
Now if I switch to a weekly GDX chart, its absolutely fine. It looks bullish with a base. We broke out & looks like we may “Test” it (or already did last week).
I Dont, however, like that “EVERYBODY” is talking about the’ break out’ & ‘inverse H&S’. It is so obvious I almost feel that it has to fail. The markets just usually arent THAT obvious, but occasionally they do play out exactly as they are set up to.
This was just meant to be a short write up – a little heads up to say that on a daily... I think this Lift off is taking longer than I expected, some indicators are getting a little more bearish, so we want to stay alert.
As a side-note
-Have you seen Steel stocks? Look at a weekly of AKS, X, STLD, etc They have had great patterns & have been doing well.
-What about Aluminum? Look at a chart of CENX, AA, $DJUSAL – pull up a 1.5 yr weekly with just a 10 WMA. In my GDX weekly chart above I wrote in green that you want to see the 10 WMA hold price in an uptrend.
Aluminum is BEAUTIFUL example
I like the set ups on many of the Fuel cells. They are forming bases on the daily charts after explosive moves up. The weekly charts are fantastic. Some have stealth-fully been climbing & then dropping, making higher lows. They may play out very well in the long run. I Tweeted FCEL daily chart today. Some of the fuel cells have been making great %-Gains daily & pulled back into the close today, but I still think they are likely playable. This was my FCEL chart . After I posted it, it Popped higher & sold off into the close almost back to the price when I posted this.
Let me show you why I say they may be “Playable” moving forward. Its all about looking at a chart for clues.
I look on a weekly for a “Common” turning points or BUY points. BLDP has held its 50% RSI weekly line & the 27 WMA.
SO if price dips there, buy the reversal.
PLUG on a wkly . It reversed today, but I am thinking it still may go higher by the end of the week. It has good volume buying in the past 2 days and things are lining up. IF it did keep dropping, I would be watching how it approaches the 32WMA & watch the weekly RSI at the 50% line. It may offer a low risk entry….low risk because you cut yu position if it fails from there.
Anyways….I really just wanted to alert readers to the recent weakness in the GOLD daily chart and keep us alert to how this is unfolding. There are many other trading ideas out there, with Coal & Uranium stocks looking like a bottoming process, Energy , Steel, Aluminum (Aluminum now overbought) stocks in uptrends , Tech stocks selling off and possibly re-setting up for another run, and so on – I just havent started posting those trading thoughts here daily yet.
I have mostly been focused on writing about the Gold / Miners set ups , expecting that 2nd leg up again . I do this for a living, so I also often just lock myself in a cave & just watch / trade my own personal accts when the markets are open. Its tough to write about ‘everything’, so I just tried to stay focused on what I thought would be a good run up for readers to ride (Miners) . That is still a possibility…but I do not LOVE any one idea or cling to a ‘bias’…if I see a little bear appear, I may see fit to feed him too. Time will tell.
Thanks for reading , as always!!