Friday Sept 25 ( Note: As I write, GOLD just got sold off $1228 to $1218 )
In the above picture, are these horizontal lines parallel or do they slope? Its an illusion.
When a magician lifts something up with his right hand and holds it right in front of your face (While his left hand is grasping something taped to his left pant leg) and claps his hand and everything changes in a puff of smoke…Its an Illusion
And Thursday, when I looked back at what has happened to $GOLD & $SILVER lately , and then examined a few other things, I thought…. IS THIS REAL OR IS THIS AN ILLUSION??
Notice $SILVER– Breaking down to new 4 year lows! Everywhere I read, ” It’s going off a cliff, $10 to $13 Silver soon!”
Nobody is yelling, “Its on sale! Lowest Prices in years!” People used to buy it all the way down, but now there is an element of Fear. THATS GOOD!
And lets look at $GOLD…
$GOLD has had a steep sell off, and it has had 1 or 2 day reversals recently all the way down, but anyone who buys gets burned. The story gets uglier and uglier on CNBC.
I believe its called a “Useless Relic” by many interviewed there, and the DEATH CROSS has sealed its fate. THATS GOOD!
WELL….You and I know the story VERY WELL! When GOLD & SILVER drop even a little, the Miners get thrown out with Both hands. When the GOLD and SILVER prices start to drop, people start loathing Miners…”Miners lose money with lower Metal Prices!..SELL!” And then comes the panic flush, right? Have you seen that too? Ok, then answer this…
If the Magician Market Movers are showing me WEAK GOLD, and SILVER is at new 4 year lows being pushed down easily with their right hand , who is secretly strengthening some of the Miners with their Left Hands? To The Chart!!…….
GDXJ – Silver broke down, new 4 yr lows! Gold cant catch a bid and Miners? Is this an illusion? If the Volume is THAT HUGE, shouldn’t prices be MUCH lower and at new lows? What is holding price up with that massive “Selling” volume? Buying? Distribution? Magic?
And of course, the tiny Juniors must be bleeding like Mike Tyson went 3 rounds with them in his early days, so lets take a look at the blood bath.
EXK – is a silver Miner. It must be shredded with new 4 yr lows in Silver, right? And with $Silvers “Continuation Triangle break down” screaming $10 Silver….
Wait…EXK has higher lows and higher highs for 1.5 yrs? Is this an illusion?
GPL – a baby tiny Junior Silver miner. Dead and bankrupt, right?
RIC – Does a chart often get any better looking than this? Do you know what the “Magic line” is? If you read William O’Neil or Jesse Stine you do, and I have pointed it out in past reports often too. This is one sweet weekly chart. This weekly reversal trying to re-gain the 10WMA is WHILE METALS are still smoldering.
GORO – Another SWEET wkly chart. The 30WMA held it captive since 2012. Reversed off of it this week while CNBC reported that GOLD is not done selling off.
Also, when GORO sold off in the March to May selling, it almost got cut in half. In the recent sell off from August to now, it only lost a little over $1 and is reversing back up!
RBY – Normal 61.8% re-trace, lands and bounces of the 200sma twice. The MACD looks good here.
Heres an Illusion...Gold cant catch a bid this month, is this stock ready to crash or has it been bought up?
LSG WKLY – this baby ran up 500% from June 2013 lows. It is orderly and rising in bullish stages (Break out, Back Test- Break out, Back test) Hint : Buy the back test.
LSG daily – close up of recent Back Test. Has this sold off for the last 2 weeks too?
OK, Miners didn’t all do GREAT, but I see MANY that are holding up very well under the circumstances. Silver stocks like FSM , MVG, EXK on a 1 yr chart are NOT selling off as SILVER threatens a panic crash. Others have held up on a 1 yr chart like RGLD, GG, NEM, while may others are in a trading range , testing lows ( or some have broken to new lows too).
The point that I am making is that there seems to be an illusion here at this sell off too. Since when do Metals get trashed and Miners hold up so well for so long? After all , Miners need to sell that very metal to make money (Hedging not included) . Its up to you to decide what is real and what is not. Is it more likely to you that…
1. While Metals are being sold off as valueless relics, barley catching a bid , and threatening GOLD to $1000 and $SILVER $13 or lower- Miners are seen as valuable ( even though they are selling that metal dropping in price)? Is THAT desirable to big Money?
2. Perhaps Miners are being accumulated by smart money , while Metals & Miners are still in the process of putting in a bottom. And maybe that ‘conspiracy’ illusion that Metals are being sold off harder to scare people out of their positions, while allowing big money to accumulate positions…is real? It is true that the Big Boys must BUY when others are selling to fill the larger orders without driving prices up.
I haven’t mentioned Miners here for weeks, they werent acting correctly to my eyes. Yesterday I posted intraday mentioning that I bought . I didn’t see any other newsletters buying, most articles on 321Gold and so on where telling me “Why Gold is selling off” and “Why the strong Dollar is hurting Gold.” Just like at the end of MAY 2014- I got a few of my buy signals this week and took some new positions. You may recall that I was posting here during the month of MAY about a “Meaningful low” called an ICL, meaningful because its a special low that only comes about 2x a yr (Roughly). I caught the June 28 2013 lows, The Dec 2013 Lows, and End of May 2014 lows as reported here. I may be expecting a bounce, but it unfolds much stronger. In MAY , most waited for a pullback in June that never really came. The short covering rally quickly took Miners straight up. Is THIS one of those ICL lows? It could be, but I cant say for sure yet. If it isn’t this will be a short trade, because it can roll over for a couple more weeks, likely into that ICL (meaningful low) on the next drop . I DO , however, Think that this could be the ICL (or Very close to an ICL), since I got those BUY signals that are also fairly rare.
In MAY it seems that everyone was ‘looking at’ Gold breaking down from that small triangle . I was too. I kept hearing : “We will be ready to Buy “SUMMER SEASONALS” for Gold in July!”in all the reports that I read. They were saying get ready to short a bounce & Go long in JULY. I was contrarian, pointing to healthy looking MINERS ( Just like now) during that May sell off in Metals. I started buying at the end of May…( yes we could have bounced and dropped further then too , but I also said that it could be the ICL that leaves most behind). It was the ICL. See my article May 30 as a reminder here http://www.chartfreak.com/2014/05/31/learning-to-be-patient/
In summary, it doesnt make sense to me that as GOLD is HATED and cant make a reversal stick , Miners are getting some kind of love. Heavy volume and not dropping? HMMM? I’m not telling you to buy, I am letting you know that I bought and expect a bounce very soon. Some of my signals indicate that we could be at the ICL (meaningful lows) or we should bounce and 1 final drop could get us there. One thing not lined up is the current C.O.T. levels. That doesnt bother me. As usual, Time will tell if what I am seeing here is a good trade, but in this business you go by experience and probabilities. I think Miners are telling me something and again, I got a couple of my meaningful BUY signals this week.
Follow up on one stock – I was discussing OTIV with one of the readers earlier this week. I mentioned a possible entry near $2.75. There were reasons that it could drop there and reasons that it “Might” be supported there. Thursday it hit $2.80 & reversed higher. I had drawn this chart that afternoon as it approached $2.75 , then it reversed, and was about to TWEET it out. I got interrupted and never got to. I still think its valid to share.
Again, it can still drop here (or break down or up ) , but on a day when the markets sold off, this dropped on light volume and reversed, closing green. Interesting.
Thats it for now. Again, as I write this GOLD & SILVER have sold off $10 from when I started. I am going to be brave, hold my breath and post this anyways. I think the metals ship may be turning a corner soon, especially if that STRONG DOLLAR decides to give it a rest for a bit. . I got a couple of my Buy Signals for Miners this week , and I took the buy Thursday, as JNUG reversed above $13. Next I will be looking for follow thru.
I like the set ups on MANY other stocks mentioned in prior reports . like JRJC, HPJ, HGSH, etc etc etc Thanks for reading and best wishes!
You may want to read yesterdays brief report if you didnt yesterday.