I TOLD YOU FED MINUTES ARE FUN!
Nov 20,2014 (also known as The Day After )
Well, Never a dull moment of a Fed Day, huh? Some have written and asked if “Lock out” is out of the way now. I would say no. It may be even more of a Lock Out I cannot imagine that this “SHAKEOUT” was bought by many either. We had a shake out below that critical $1179 area and it again recovered. Did any buy? I know 2 of my readers wrote that he / she bought (knowing in advance that a shake out could happen). THAT was brave! I imagine that MORE people grabbed DUST, went short , or bailed out. Some wrote and told me that they were advised to add to DUST by other letter writers. Let me show you how I walk through this roller-coaster ride. Overnight…how did GOLD react? Charts below.
AUDIO LINK click here, click download/ click “OPEN” – return to follow charts
GOLD FOR PERSPECTIVE- The whole story so far
Amazing how “Orderly” that chart looks in Hindsight, isnt it? so…
BIGGER PICTURE – GOLDS MONTHLY CHART is a valid shake out as of now (Click any chart to enlarge)
So it was scary in real time for MINERS yesterday , first in the morning, and then into the end of the day (Post Fed). Lets examone GDX / GDXJ and see if things are still ok, or is anything Broken?
GDX ( End of day ) – I drew these up last night, but with futures currently up, downside possible targets/ limits (I had $18) may not apply now.
Intraday after the fed minutes, GDX at 2:30 p.m. – was holding up looked like a simple gap fill and I emailed a friend this chart ( just an idea or guess – thinking we may just tag the 10sma and turn higher)…This one actually may be more accurate with futures up.
GDXJ Actually broke BACK INSIDE the trendline with HUGE volume…. I didnt like that. With futures up, we may jump back outside of the channel . I had $25 ish as a target for those looking to buy, or 10 sma was at $26 . THIS is why we might have a lock out. The shake outs are too hard to buy, then they reverse higher sooner than expected.
SO I got lots of comments and emails yesterday. Many were concerned about the action and some actually bought DUST going into the close. What can I say when I get those emails? I just dig deeper and try to see if things are “Broken” or normal.
Digging internally , GDX has GG and ABX as its heaviest weighting, so I go there first . I ask myself...”Are they O.K., or damaged?”
GG – (It had not “Broken out’ yet, but looks great really).
ABX – same story. Look for a break out on these two stocks for further confirmation of Good things to come.
I also wanted to see SLW, which I like a lot as a silver play , and did mention it here in a prior report as a buy. Is it still ok?
Look at that volume. Looks great!
(Further pullback actually looked necessary)
As I continue writing, GOLD is selling off again, but these charts actually show me that further pullback may be normal. If they BREAK DOWN to the downside, then something else is happening and one would have to step aside and let things play out.
So now you know the drill…I run through RGLD, GOLD, AEM, FNV and some of the other big boys, all looks fine so far. You can see why I like to get in early though, it is difficult to hold positions in the volatility of Metals / Miners. I also do not like HIGH VOLUME SELLING…so with the volume on GDX / GDXJ at the end of the day , and closing at the lows, I remembered that I had seen that recently in another stock. I will show you that stock here….
Notice all looked good and then a sudden slam down on high volume and close at the lows took place below moving averages. Looked ugly
Well, I owned it and had stopped myself out so…how did it resolve? Shook me off, recovered and ripped higher. I had to stop out and grab the move back above the 10sma, but thats how it goes in volatile bottoming areas.
To sum it up: I have felt that this was a bottom for a couple of weeks now, and the volatility is no reason to think otherwise, it is , in fact ,expected. Nothing has changed – nothing is broken.
It looks to definitely be a shake out at Nov 7 lows , whether it is a Lock Out and just runs higher while others grabbed short positions…time will tell. I can picture many scenarios…let me leave you with one of them . IF this doesnt turn out to be a runaway move higher…Maybe a flag pattern here…to pause and build steam to blow through the 50sma overhead?? Its just an idea. This report is just reporting that as you can see from the charts…. Its still very much looking like a bottoming process to say the least. The end of the week says a lot on the weekly charts , and some of them are currently beautiful. SLW is one to take note of, with silver lagging.
I like what I see, cant wait to see the weekly charts Friday at the close. Best wishes to all and I hope this report rebuilds some possible lost confidence in the bottoming process , despite the Fed Minutes Volatility. Thanks for being here !
~ALEX
I keek an eye on a further breakdown in the 11145-1170 area and then the up-move in the 1240 area.
Well, I never say never (Why the 1145 area ?) , so it could drop there 1 more time. The 9sma held Gold up yesterday & it was looking like a shake out below that $1179 & recovered. Often once thats in place, it stays above…but like I said, I never say never. Best 2U Gerry
hope i am wrong! right now it is not clear if Shorts are loading up the truck or the Longs do. EURUSD same candle right now. 1145 because of fork support.
Ahhh, the ole Fork. Nice.
I feel like the dollar is not just consolidating sideways here, I feel that it is a bit more of a struggle. The MACD is crossing down and RSI is weaker…but I admit that it COULD be a sideways consolidation. Last time this happened , $USD stuck below the 10sma – it dropped to tag the 34 sma area. THAT would give GOLD a little more lift I.M.O.
Here’s a GSR fork. Hope meats leave fork onto fan. After V, the 66.78 gap is a magnet.
I’m with Gerry on you can’t tell which said is loading the truck. But one of them is going to be wrong…
Definitely agree on USD – it looks toppy, not like a consolidation to me.
Thanks Alex… if this is the start of a true big move in metals then there will be many opportunities to jump aboard the train at the stops along the way….if not, then the reverse will also be true…
Agree Ron- in CYCLE work, this would be the first daily cycle. They last roughly 20 – 30 days (a month), but its not straight up…they often dip down or go sideways 1/2 way thru – and then after that, the last week or two they dip again for the “Daily Cycle Low’ , and another buy opportunity will present itself. I will cover that then.
originally I said a safer buy could be a stock above the 20sma. Another is above the 50sma, and so on. Thx 4 writing
Thanks Alex. Really appreciate your perspectives. I held my core miner position through yesterday, it was not pleasant but that’s why it’s a core and not ‘all in’ position. Thanks for everything you do to help us understand the markets.
Thanks for reading along CS, and the kind words. Appreciate that feedback.
Alex, are we between point 13-14 or after 14?
Love that chart, might be daily, weekly, monthly. or yearly. I printed it, as it matches my sentiment exactly.
Wow. That is ACCURATE, too!
Alex, point 14; I told you so.
Love that chart, might be daily, weekly, monthly. or yearly. I printed it, as it matches my sentiment exactly.
Wow. That is ACCURATE, too!
Alex, so now that we know Thurs was higher without any more post-Fed shakeouts, do you have targets going forward (or is that tomorrow topic already!)? Based on what you stated on cycles, should have about 1-2 more positive weeks. If we get a few more really solid days, those that got in early may want to lock some profits as we know the volatility in this sector can be WILD! Looking for 1240-1250 on gold for now in this short-term upswing. Closing over 1200 for the weekly candle tomorrow would be a bullish sign going into a short week next week!
Alex, so now that we know Thurs was higher without any more post-Fed shakeouts, do you have targets going forward (or is that tomorrow topic already!)? Based on what you stated on cycles, should have about 1-2 more positive weeks. If we get a few more really solid days, those that got in early may want to lock some profits as we know the volatility in this sector can be WILD! Looking for 1240-1250 on gold for now in this short-term upswing. Closing over 1200 for the weekly candle tomorrow would be a bullish sign going into a short week next week!
Alex, about DMA, can you go ‘back to the future’ for a glimpse when would be the next golden/dead cross? DMA 50 ahead
Alex, about DMA, can you go ‘back to the future’ for a glimpse when would be the next golden/dead cross? DMA 50 ahead