JULY 10 I have been discussing & waiting for the next leg up in Metals & MIners. Most who follow me on Twitter know that, just like in late MAY when I was expecting the “Meaningfiul Lows” to be followed by a Great Rally, I have been looking for ‘Low Risk Entries’ or ‘BUY POINTS’ during the recent consolidation – to get positioned for the next leg up. Yes, It is starting now. If you didnt take your position during the long consolidation (Well, it felt like a year, but I think it only lasted about 12 trading days) and wish that you had, I am going to show some charts for “shopping”. To start though, lets review where we are….
I TWEETED this on JULY 7, the well know BULLISH CUP & HANDLE
These usually break out if conditions are right. Conditions definitely looked right. In Fact , Bullish conditions have been pointed out here since the End of MAY. By looking at some successful bullish charts, we can also get some clues as to which Miners might be “set up” properly right now…
When looking for reliable set ups in some Miners, you can look for what we have already seen as Bullish Follow thru. We saw & pointed out on June 9 that GDXJ was breaking out from a downward sloping channel-
Was that BULLISH? Well then we saw this “Follow Thru” the next day on June 10
You want to take notice of the “Consolidation Phase” Posted in the first chart of this article, that followed GDXJ’s Run up. It was a cup & Handle formation & seen here- I Tweeted out this possible target on JULY 7. ( THUS: If you see a stock that has a similar look as this, it is likely going to start its second leg up too).
Lets also look at GOLD JUNE 16… And then see the follow thru. WHY??? Because GOLD was pushing on resistance ( so if you see a Miner doing this, you cab buy the break out with confidence )
It Too Broke Upward. It has also now consolidated in a “RUNNING CORRECTION” and is Due to Break out higher. If you trade METALS FUTURES – You should have bought this too.
I also have been TWEETING this week BUY areas on smaller time frames to get in on LOW RISK ENTRIES . When GDX & GDXJ formed an upward sloping channel, you could BUY THE DIPS & keep a mental stop somewhat below those Buy points. As a review lesson…I Used an HRLY chart or even 15 minute charts and look for pullbacks to buy in your favorite stocks. Maybe you saw these charts?? I posted MANY each week showing entries and you can look at your stocks this way too, if you have time… Here You’d BUY JNUG at $19 & $21 (Click to enlarge)
JNUG BUY recommendation JUNE 30 at $24 & $24.50 (Click to enlarge)
JULY 7 – You’d have added more JNUG at $26 ( 2 days later it hit $33)
So you can see that certain patterns of “BUYING” & “SELLING” & indications of the Human psychology that go along with why these patterns form can help you find Low Risk Entries . LESSON: The value of a Low Risk Entry is that it shouldnt drop much from your buy point. IF IT DOES- YOU CUT IT LOOSE. Its prudent to look at your stock after you buy it and say to yourself….”When I bought this, I expected it to do X-Y-Z. Is it?? Is there follow thru?” If not, ask yourself, “Since It is NOT doing that now, why am I holding it – am I just Hoping” that it will?”
IF THE SET UP that you invested in failed – If it is currently going something totally different – Cut it loose, clear your head, and re-enter if it sets up properly again in time or better yet, move on. There is always another trade coming.
Please read my prior Gold/ Metals articles if you havent, they contained some stocks that may still be worth looking at. I am going to quickly throw some charts together here. I think SILVER stocks are extremely bullish & had some great set ups, look at all the cup & Handles that formed . See GPL, EXK, FSM, MVG, AG etc. If they had a Great run up in the first leg up, they’ll likely gain similar buying activity . (AG is ready now, for example- see how it bounced off of the 20sma?)
First recommended June 17 Buy $9.50+ area
CURRENT TARGET near $13
For the sake of time, I am just posting a few charts from here on. I want to post this before the MKT opens, so hopefully the charts speak for themselves, like “Buy the Bullflag” – Is it above the 20sma & consolidating??? then “Buy the Break out if it has good volume” etc .
AAU 3 charts First Base / Second Base & Breaking out with LARGE VOLUME yesterday
ANV – 2 charts – First Recommended buying WEDGE break out – Now a BUY as Flag breaking out ( consolidation )
AXU – Dont quote me on this, it has lagged a little, but it usually runs strongly when SILVER breaks out. I think it could run up over 50%.
SSRI PAAS EXK had running corrections breaking or climbing upward now.
AUY pulled back to the 20sma & is sitting there now. One could BUY with a stop below that. ETC ETC ETC
I hope this has been helpful. Basically what I am trying to show you is this-
1. We expected a Meaningful low in Late MAY – we had an amazing run up , some stocks going 20-50% & more-
2. We expected a “Pause” a sideways consolidation & just went through it looking for Low Risk Set Ups-
3. We expected it to break out & move higher. Another leg higher…It seems to have begun
(I dont like to get tooooo excited …. Markets are funny & its best to enjoy the ride & remain cautious as things unfold.
So We are not emphatic & I dont E-V-E-R cry out like an idiot “YOU MUST GO LONG!! “ ” THIS WILL NEVER FAIL” – or “SHORT THIS RALLY! THIS IS A FAKE MOVE!!” & “You’re foolish to be long!!” etc etc. I read that garbage in some blogs & Forums and just shake my head at those posters . Are those types REALLY trying to help anyone?? Those types also usually learn lessons the hard way. What we do here is try to listen to what the market is telling us it will “LIKELY” “POSSIBLY” “MAYBE” do next . We have to start somewhere…we have to find Low Risk Entries…then if the trade goes against us? We got it wrong, cut our losses and search for more clues. If we got it right? We take our loved ones to dinner!!
Some will win , some will lose (Some are born to sing the blues) Best wishes to all, thanks for reading & please Tweet this article to anyone U think may enjoy it – Thx in advance!