Reminder: Not All Bottoms Look The Same
Nov 10, 2014
Mondays action was what … Scary? Yes, scary if you had a long position. If you didnt have a position, maybe it was time to take one! Was this another chance to buy in the Area near the lows ? …or…Was today a chance to go short for the coming plunge? I ask that because I know many (not here necessarily) viewed today as “Weakness”. ‘The Bulls have no strength , no follow through, No buyers and the Bears are still alive and well.‘ And while I have to admit that that COULD be the case, I doubt it. Bottoming is often called a “Bottoming Process” because the battle of the bulls & bears doesnt allow a sell off or a rally – At First. If you examine previous “bottoms”, you’ll see that many act just like this before they take off upside. If it’s a Real Bottom, that battle often drops off the New buyers, and leaves them behind.
AUDIO LINK CLICK HERE AUDIO LINK
Look at prior lows for Example: The reversal candle made the lows, then the next week sold at least 1/2 way down that candle
So what we see happening also happened at June 2013 , Dec 2013 lows, May 2014 lows …Now
In Sunday nights report I felt that I should mention to you all that I expect GOLD to sell off. There was reason to believe that it would, and I wanted to prepare you for that in case it did. I drew this & posted here… a test of the NFP candle ($1155 area) and I hoped it would do it now & get it out of the way. (Click to enlarge)
As we sold off, I Tweeted a possible inverse H&S forming, but as price stretched down toward that $1150 area, it was invalidated . I was watching this intraday at that point.
Would it hold?? (Click to enlarge) The “TEST” was on extremely light selling
It held perfectly so far, and reversed higher. This was later at night 8 p.m. Eastern tme
Now I see a bullish wedge break out . I have to consider a 5 wave drop here, so I noticed this possibility. Yes, GOLD could go even lower (And still be ok) Click
Many lost their confidence today when the selling started after that reversal candle Friday. To again boost confidence in the set up at hand, take a look at the next charts . GDXJ
This looks exactly like our GDXJ Friday reversal . The lows were in Wednesday, Friday had a huge reversal as shown, so Monday (today) would be lower
So this would be Mondays lower drop after the Friday pop / rejected at the 10sma like today
Doesnt Todays chart below looks just like that chart above? Look at the chart above, then this one, then above , then this one.
If it plays out the same, This would be the future…
Again…JUNE 2013 lows were NOT straight up. HUGE POP, then down for days..weak hands exited though lows werent violated (Green box).
May lows were not straight up right away, notice the “Shake out” bottom here. It spent 2 weeks down there below support!
If the lows are violated, then we have to re-asses, but at this point the selling could be an opportunity to buy low and have a tight stop. OR- Look at the MAY lows in the chart above again. Once it broke above the 10sma, it was a safer place to enter too. You could wait and let it prove itself if you dont want to have to worry everytime Gold is down in the overnight. I am just writing this follow up report because I know from some emails that some are worried. Gold / GDX GDXJ Popped big time Friday only to sell off today. Is it weak? Is it time to short? Or Get a position while prices are on sale? You have to decide that for yourself, but I just wanted to again show you that prior bottoms were just like this. Not all Bottoms are the same, but this one isnt very different either . 
Its funny- you hear it EVERY TIME, “I am going to buy the next low with All that I have!”. Its NOT that easy, huh? Everywhere you read you hear that Gold is going to $800 to $1000. The King Dollar is Not going to pause, The EURO and Yen will fail, and so on. Doubt is natural in these devious markets too. Many will buy it, but not many will hold it overnight. FEAR is at Bottoms, Bravado is at TOPS! Maybe for some its best to wait until it proves itself (or fails). Again, I just wanted to show you all how “Not all bottoms look exactly the same”, but this one isnt really any different than the other ones I’ve seen.
Best to you !
~ALEX
P.S. This is where we are in GDX after today
This is how GDX / GDXJ ended their day (Click to enlarge)
Thanks for the reminder, Alex!
Hey Rob, yes, the selling gets nerve wracking for many, so looking at past lows can help.
Hope all is well in the great White North : )
Thanks for the reminder, Alex!
Hey Rob, yes, the selling gets nerve wracking for many, so looking at past lows can help.
Hope all is well in the great White North : )
Safari still can’t load audio on iPad Alex. Just so you are aware.
Yes, Thanks for that, and unfortunately I cant change that. I want to use video screen capture in the future…hopefully that works for you. For now – When I have an important report, I try to write everything I can as well, but it takes 4+ hours to do a report like the last few. Finding & Drawing charts, organize them, write it all out & audio, and that is just too much.
The website is currently being redesigned for easier use, and I’ll try to switch to video when that is ready.
Thx Ken
Safari still can’t load audio on iPad Alex. Just so you are aware.
Yes, Thanks for that, and unfortunately I cant change that. I want to use video screen capture in the future…hopefully that works for you. For now – When I have an important report, I try to write everything I can as well, but it takes 4+ hours to do a report like the last few. Finding & Drawing charts, organize them, write it all out & audio, and that is just too much.
The website is currently being redesigned for easier use, and I’ll try to switch to video when that is ready.
Thx Ken
Hey Alex, nice work, audio worked great. I had a trailing stop Yesterday on URRE got stopped out late in the day nice ride. Thank you. I never would have seen that sector if it wasn’t for you. It pulled back a little Yesterday. What do you think about getting back in here? We are at the 78.6% retrace from September, so I’m thinking it needs to pull back further.
Glad you were able to get something out of it! Its hard to say after such a strong run up, because if its short covering, they can just keep running with buying & short cover, but sometimes they spin around and drop 20% in a day. I just have to wait & see , until they form a more familiar move (they broke their 50sma, so maybe watch for a test / Drop to 50sma again)
Tough call when they move like this
Hey Alex, nice work, audio worked great. I had a trailing stop Yesterday on URRE got stopped out late in the day nice ride. Thank you. I never would have seen that sector if it wasn’t for you. It pulled back a little Yesterday. What do you think about getting back in here? We are at the 78.6% retrace from September, so I’m thinking it needs to pull back further.
Glad you were able to get something out of it! Its hard to say after such a strong run up, because if its short covering, they can just keep running with buying & short cover, but sometimes they spin around and drop 20% in a day. I just have to wait & see , until they form a more familiar move (they broke their 50sma, so maybe watch for a test / Drop to 50sma again)
Tough call when they move like this
I’m ready for today, but need to eventually see multiple positive days together. This provided great perspective and reminder to be patient. I know I flipped around getting stopped tons back last Dec. Now I have a much more solid plan. Thanks!
Hey Cason…I got flipped last Dec too. That was 20 grueling days of Bulls vs Bears and Not fun : )
Sometimes it is best to just be trading something else like Uranium’s or Energy until ( as you said) a string of green days and a break above the 10 & 20sma.. Each one knows their own risk/reward and also ability ( are they in front of a p.c. all day or not? , etc) , I just do both – lol Best to you!
I’m ready for today, but need to eventually see multiple positive days together. This provided great perspective and reminder to be patient. I know I flipped around getting stopped tons back last Dec. Now I have a much more solid plan. Thanks!
Hey Cason…I got flipped last Dec too. That was 20 grueling days of Bulls vs Bears and Not fun : )
Sometimes it is best to just be trading something else like Uranium’s or Energy until ( as you said) a string of green days and a break above the 10 & 20sma.. Each one knows their own risk/reward and also ability ( are they in front of a p.c. all day or not? , etc) , I just do both – lol Best to you!
Very interesting and concise analysis.
You are definitely spotting important patterns others have not taken notice of.
We can’t know with all certainty how it will play out, but you’ve presented an excellent case a possible outcome and a valuable TA lesson as well.
Appreciate your insight!
Best,
Jim
Thank You Jim- All that you said is true, we dont (and really Cant) know exactly how this will turn out, but I try to look at everything -with out Bias, just comparison- and draw a conclusion until things change ( follow thru Up or down). Thanks for the feedback, I’m glad you viewed it as valuable.
Very interesting and concise analysis.
You are definitely spotting important patterns others have not taken notice of.
We can’t know with all certainty how it will play out, but you’ve presented an excellent case a possible outcome and a valuable TA lesson as well.
Appreciate your insight!
Best,
Jim
Thank You Jim- All that you said is true, we dont (and really Cant) know exactly how this will turn out, but I try to look at everything -with out Bias, just comparison- and draw a conclusion until things change ( follow thru Up or down). Thanks for the feedback, I’m glad you viewed it as valuable.
Alex, a small point to consider. I find it is sometimes confusing to immediately know what chart you’re referring to, e.g., the one above/below your comment. This could be eliminated by associating your comments more closely with the particular chart you’re talking about. For instance, now you place your comments equally spaced between two charts, if you were to space your comments directly under or over the chart you’re talking about (using unequal spacing) it would be instantly cleared up. This could also be done with centering several asterisks or hyphens (- – – – – ) on a line to separate a chart or comment from another. Other than that, great work!
Yes, I was in a hurry writing this . it was midnight when I wrote this report., because I wanted to post my thoughts before Gold moved. I have written an entire report at night for the morning, and when I wake up…Gold already did the move, so I think to myself “why post about it now?” Then I’ve wasted hours, so I was rushing along last night, spaces in between were bigger. Usually you will see that I am writing about the chart that is below what I write. I share the idea and then you take a look.
The best thing to do would be to number the charts – and I have in the past, but not consistently.
thx
Alex, a small point to consider. I find it is sometimes confusing to immediately know what chart you’re referring to, e.g., the one above/below your comment. This could be eliminated by associating your comments more closely with the particular chart you’re talking about. For instance, now you place your comments equally spaced between two charts, if you were to space your comments directly under or over the chart you’re talking about (using unequal spacing) it would be instantly cleared up. This could also be done with centering several asterisks or hyphens (- – – – – ) on a line to separate a chart or comment from another. Other than that, great work!
Yes, I was in a hurry writing this . it was midnight when I wrote this report., because I wanted to post my thoughts before Gold moved. I have written an entire report at night for the morning, and when I wake up…Gold already did the move, so I think to myself “why post about it now?” Then I’ve wasted hours, so I was rushing along last night, spaces in between were bigger. Usually you will see that I am writing about the chart that is below what I write. I share the idea and then you take a look.
The best thing to do would be to number the charts – and I have in the past, but not consistently.
thx
Alex, I really enjoy your work, great explanations, thank you so much. Mike
Thank You Mike, appreciate it!
Alex, I really enjoy your work, great explanations, thank you so much. Mike
Thank You Mike, appreciate it!