They Look Really Bullish

Nov 15, 2014 Weekend Report

I was driving to a formal event today when suddenly I saw what appeared to be a ‘sign’ on the side of the road, so I pulled over and there we were…3 of us looking pretty bullish ! For my 2 new friends it came naturally, but for me it has been building for over a week.  If you recall my article written pre-mkt last Friday (Nov 7), I felt that I had seen a legitimate “SHAKE OUT” in the overnight action and said that I was buying in the pre-market . I also mentioned that confirmation would likely come this week and I outlined briefly what I would be looking for.   (If you’re new here, you may want to read the articles outlining my expectations. A short one last Friday is here  Scary yet Beautiful    Or   the weekend report Bears get tired too)…

 We will now review whether  conditions have been met to increase the likely-hood of a Bottom being put in place Friday Nov 7 for GOLD, Wednesday for Miners.  ALSO I NEED TO BE CLEAR…A Bottom here would not necessarily mean THE BOTTOM at this point, but certainly weeks of gains.  To the Charts!

AUDIO version  here  click here then click ‘download’ & ‘OPEN’ to play

-Then come back & follow the charts

Last Weeks chart – Broke 1.5 yrs support and MOST called for a cascade sell off . To me, likely a SHAKE OUT.

 

BEARS had MANY reports of a “Break down in Gold & Imminent crash targets” (I know because 5 of my readers emailed me those reports! ) Some were fearful and others concern for my well being…I thank you for that.  HOWEVER-

 

 

As a review:  I would’ve stopped myself out if we had a break down of Fridays Nov 7’s shake out lows. That Friday NOV 7 …I pointed this out in my 7a.m. report. (Click to enlarge any chart).

 

And a Price target had been reached overnight on a Weekly chart …I actually showed this from Tuesday NOV 4 –

 

 

What I was seeing remained BULLISH above support and so I tried to walk you through my daily GOLD observations in last weeks reports.   “Are the Bears Toast”    “Bears get tired too”   “Not all bottoms look the same”   “Nervous? Here’s a new perspective”  –   THURSDAYS report pointed out that a break to new lows could again happen and Miners were weaker Thursday-  but the Miners were still above the 10sma & I mentioned that was bullish….This all leads up to The next chart on Friday morning –

Golds SHAKE -DOWN & BREAK OUT –  Became a SUCCESSFUL  test of support again This Friday

 

 

 

This reversal off of Support came after another Mini shake out Friday morning  (Are you seeing a pattern too? I will explain in a minute)

  If you’ve ever read any of Richard Wyckoff s writings – He describes how BIG MONEY can’t go “ALL IN” , so they move the markets to new lows and shake out the weak hands, only to scoff up their shares and the sell off recovers.  Wash / Rinse / Repeat.   A “SHAKE OUT”.   It is done a few times to allow them to enter larger positions at sale prices…when everyone is afraid and easily willing to sell to them.

  Think about this for a moment and draw your own conclusion:

   Most newsletters are screaming   “Break of support, go short!”…

  Reading message boards , I constantly hear,   “I WONT HOLD METALS OVER THE WEEKEND, NO WAY, I’ll sell by the close Friday!”   SO –  If I was a big boy and needed to get into a large position, when is the BEST time to break price down and shake out the nervous holders? How about FRIDAY when they’re ready to bail out anyways?   Pre Market we get them scared and sell it down…they’ll sell at the open because they  dont want to “Hold” Over the weekend anyways, and now they wont want to wait until the end of the day and sell with even steeper losses either. ” I need to get out while I still can”   is the thought on Friday morning when GOLD is down, so Friday morning (2nd Friday in a row now ) GOLD sells off, and then rallies all day and closes near highs?   I say , THAT IS BULLISH!

 

Leads me to this … BIG BOYS BUY TWICE NOW ON FRIDAYS SHAKE OUTS? (Enlarge)

 

  So will we have another week of weakness? My guess is “NO” its time to leave everyone behind!!   (Unless Big Boys  are reading this, then they’ll sell it off to NEW lows, breaking both shake outs,  hit lower lows like last December  & recover )      I honestly think that THAT was it though.   Let me ask…after Fridays shake out and rally all morning straight up , did anyone you know BUY & HOLD?  Few  if any.  Did anyone you know “Sell” . Many are ‘out’.     Did people say , “I’m not chasing only to see it down next week. I’ll buy the next pullback”.  If so, This would be a good time for Big boys to buy all morning Friday and let the short covering push their prices higher- and then More short covering & NEW BUYERS can step in and add to those gains too.  running prices up Sunday night would cause a “GAP OPEN” and still more will say  “I dont want to chase, I’m waiting for a pullback.”  And away it goes. They will buy eventually and push it even higher.   I’m guessing at this point,  We’ll see.   Last Monday was a sell off..if we get another will you buy then?

 

  Lets examine some other charts and see why I think this may be the Final lows.

$USD- Short term bearish looking

 

 

GOLD is a Bullish set up  ( with plenty of Fear to boot!)

 

We also have this chart, credit goes to seasonalcharts.com.  The lows point to Mid November. Interesting .

 

 While  Daily charts are more for the short term, Wkly charts are longer term and  I am thinking that we are at an ICL  ( those meaningful lows that I’ve pointed out in May 2014, Dec 2013 and June 2013). In that case, you get a nice rally for a couple of weeks.  How are the weekly charts looking ??   In my weekend report last week, I was discussing the possible “SHAKE OUT” in weekly terms and the First chart in this report was highlighting that.  Lets see where Gold is now in terms of a weekly shake out.

 

GOLD WEEKLY –  (SHAKE OUT & RECOVER)

 

 

  A week ago I pointed out  in this chart that MINERS did a Bullish “TEST” of 2008 lows on LIGHT volume & reversed = Bullish. (Click to enlarge)

 Note: On this chart I wrote  “A close above 190″ is a shake out” –  that’s a mistake.  On a monthly basis A rejection of the 2008 , such as we already have, is a shake out if it remains above by months end.  A close above 190 recovers the recent sell off.

 

 

So how did Miners hold up this week? The Miners I pointed out  in last weeks letter got BETTER, and others are catching up now. Time to just blow thru some BULLISH charts of Miners.

 

 

Progression of GG to build confidence – (GDX largest holdings)

OCT 31 – reversal, look for candle test soon

 

 

GG  Nov 5 (Gold was down $35, GG looks good, tests candle & reverses)

 

GG today – ready to break out

 

 

GG weekly  (Shake out & recovery)

 

More charts to build confidence

 

SVM –  daily then weekly

 

AUQ – I pointed out that it was already strong on this chart MONDAY!

 

AUQ Wkly    Now-  shake out  SWEET!

 

FNV  – uptrend. Good for the buy & hold type

 

RIC   -remained strong too, another  BUY & HOLD type , its almost back to recent highs!

 

IAG    -is up 50% from my Friday report!

 

IAG WEEKLY = promising

 

  I actually have many more charts , but I think you get the picture. This is a HUGE report of charts.  All last week you were likely reading in many newsletters that a BREAK of recent support in Gold & Miners will immediately cause a panic cascade drop to $600, $800, $1000 .   I know this  because as I said..Some of you have sent me the articles this week.   The articles are saying to go short & ride this crash down.  I see accumulation, what do you see now?   If you’ve been reading here long enough then you know that I am not a  PERMA-GOLD BULL. I just look at things from a few different angles , add my  experience,  and then try to allow the markets to tell me what they are doing.  After reading all of the above and looking at the above charts—What do You see?

  Summing it up:  “Yes, GOLD could drop to $1000.”   Here and now?  Its not likely.  Right now  I’ve been looking for that  Meaningful low that will catch “Shorts” on the wrong side again.  My friends the Cycle guys are alert to that idea too.   Current Sentiment is one of “Fear”.   Does anyone love miners?  Ask yourself:  “Who bought and is holding through this weekend?”    We just went through a strong period of selling off ,  a break down of long term support that has called the ‘crowd’ to jump on short positions,  and then a few shake outs that seem to have gone undetected (by most  : )   I see buying / accumulation taking place and a sharp short covering rally may be just ahead,  along with some more buying . As I laid out in other reports…I like to buy at the shake out lows to avoid getting stopped  out by wiggles, but its ‘safer’ to wait until Price moves above the 20sma and closes there. Did you notice that many of the miners I highlighted are there already?  Even GDX closed above the 20sma .  Next week could be exciting.

 

 

 

  One last thought:    I cant recall a True Shake Out that  ‘Leaves the weak hands behind’…and then go back and pick them up.   It doesnt “leave them behind” only to give them a second  chance.  It leaves them wondering if that was a low.  Since I think we just witnessed a true shake out on a weekly charts, I dont expect the train to back up & offer another chance at The lows.  I may be wrong, a FINAL shake out may come, but the weekly charts look complete and the Miners look ahead of the curve… I do think that the Train MIGHT be leaving the crowd  behind.

~ALEX

 

  Ooops!  I left out some silver charts, but they are very bullish if you ask me.

–PAAS wkly is very nice.

–EXK wkly is on the launch pad right now. A low Risk Entry NOW -I.M.H.O  (A close above $3 on a wkly is a shake out)

 -HL  wkly is bullish, it regained the 10WMA w/ strong volume

-SVM  (shown above in this report) is great. 

-SLW was a strong buy, still is. We are at lows still, thats why its scary.