More Of The Same
Writing this report is tough, because its going to sound a little like yesterdays.
The picture has been leaning Bullish to me for over a month in Metals, but it just gets more and more Bullish as it plays out. The question now is Are we still in the first daily cycle, and therefore a dip into a daily cycle low is still ahead? Or are we in the 2nd daily cycle, which being fueled by short covering could just take off higher? It is not easy to tell at this point, but it almost doesnt matter. Both are very Bullish with recent developments, and many in public blogs are still afraid to buy & hold this. THAT is good. They tend to jump in later and add more fuel to the move higher. So lets just look at some charts an draw some conclusions.
GOLD WEEKLY – This would be Huge In my opinion, because more bulls will want in
Close up of Gold this morning (Above resistance)
GOLD is bullish with either scenario. Its becoming BUY THE DIPS, or RIDE “EM if you own them,
I’ll explain that- EVEN if we are in the 1st daily cycle & about to dip into a DCL, its a buy opportunity. This cycle peaked so late, that If cycles are avg of 28 days, picture 5 days sideways or dip and then we go higher. I THINK we go higher now however.
If its a first daily cycle & Day 22, you could expect a dip for a few days.
THEN we look at SILVER. It also “Could” dip to tag that trend-line so dont be alarmed if we see that, but I think maybe we just take off higher and continue to leave people behind. It makes more sense to lock people out and trap shorts.
I hear from some that they didnt buy yet and dont want to chase. THIS is the problem with that at this point, and why last week I said you should at least have a starter position.
In SILVER 2008, just like now I heard “BEAR FLAG- GO SHORT” . Some of you wrote to me 2 weeks ago saying your letter writes were calling for GOLD crash to $800-$1000, Go short. In 2008 , Silver looked the same as it does now ….and when it broke a trend line and popped above the 50sma…it just took off. Look again at the ABOVE chart…we just did that. 50sma is $16.63!
GDX chart shows that Miners havent really “TAKEN OFF” like the rocket ship that they can be. Maybe we do pull back a bit into a daily cycle low?
I dont see these as weak, it is consolidating and building steam to break higher in my opinion.
SO Some of the charts that I posted yesterday (PAAS, SSRI, IAG, HL etc were bullflags and began breaking out after my post. They look good to me. Look for Miners that are breaking above their 50sma as a safer trade in my opinion, but also I think some of the silver Miners are going to move very nicely once we get the 2nd daily cycle moving upside . IF we get a pullback, I will be showing stocks setting up for a buy entry. I have said before that I dont often TRADE IN & OUT in the first 2 daily cycles off of those meaningful lows. They can dip intraday and when you sell, they reverse and run away. I’ll ride them and likely it’ll be for the next few weeks (I’ll keep us posted).
CRUDE IS at $61.97!!! People are asking me to watch for a low to buy. I’d rather not at this point. We have awesome st ups in Metals and miners, why get hurt catching that falling knife. I guarantee that if you have followed me for the past 6 yrs on public blogs, You have never heard me express my political opinions. I am unbiased in all things, but let me state this observation as to why I dont want to trade OIL/Energy right now.
1. Yes, it keeps looking like a capitulation low and due for a bounce
2. Yes, A short cover rally could move quickly higher
3. I believe you always get that reversion to the means
4. HERE IS THE POINT, ever since Russia moved into the Ukraine and the coalition of Nations that frowned upon that warned of SANCTIONS that would hurt the Russian economy (You cant afford a war if your economy takes a dive)…OIL has relentlessly been cut in price. It would have been a great short, but that’s hindsight now. Low OIL prices are hurting the Russian economy and is that the intent? Are there powers behind the scenes able to show surplus in Oil, able to claim they are becoming energy efficient and do not need to buy foreign oil. Able to hold prices low ? COULD oil go to $40, even if there was a strong $10 bounce? Might OIL just go sideways and bear flag , and then drop there? Too many uncertainties in my opinion.
I’ll watch it, but I have less interest at this time until it starts acting differently.
Thats it for now – I apologize that I ran out of time to address a question in the comments section about 8 year cycle lows. I have drawn my chart and will address that in tomorrows report. ( Since its an 8 year cycle, we have a little more time, but I do apologize for running out of time here ). We are dipping in GOLD currently as I close this and its still tough to say where we are in cycles. Technical analysis is getting more & more bullish and so… I THINK WE ADD ON DIPS if we have no position.
~ALEX
P.S. 3 charts below For the EXPE position (Applies to MON too) . I thought we’d test the break out over time. Yesterday it slammed down & reversed. TEST MAY BE DONE
Thought it could pull back
EXPE Done pullback already? This really looks good for a longer term hold
Thanks for excellent posts over the last week.
Thank You Beek, It was a little hard to write today because not much is changing Big picture. I like the set up and pullbacks are to be expected in between. Still looks Bullish
Alex, nice call on the EXPE, bought it. Looks like re-test not quite finishe, but looking to hold above yesterday’s lows.
Seems to be some interest in possible reversal in FCX. Would you think it worthwhile throwing up a chart with your commentary?
Yes, EXPE looks like it definitely wants to hold support at that Inverse H&S…sometimes they just linger out of the gate if the markets themselves are choppy. MKts are down for 2nd day here, soseems like EXPE is holding around support.
I looked at FCX yesterday & saw a strong looking reversal, but look at FCX is in November. That looked like a real reversal and collapsed. I think at least a bounce to $27 is coming, but I cant say we are at The lows right now. I will throw a chart in tomorrows report if you’d like? Just reply here , I’ll check back latr. Thx
Thanks for comment, probably best to just wait, be patient and see if this is an enduring breakout.
No worries on the analysis of the eight year bottoms in gold. In time. But along those lines I noticed something else you may have already mentioned and I missed: in determining whether/when an authentic bottom is in place does it matter that silver peaked a full five months ahead of gold (April 2011 vs September 2011)? If so, maybe silver bottoms way ahead of gold. Also of note, on the charts on the day of the Swiss vote a huge spike down in silver with lower lows down to almost 14 and reversal. Gold although spiked lower did not make a lower low. The former looks like a wash out while the latter…not sure Significant? Answer when you do the charts on the eight year pattern. Save you some time here:) Best!
Hey Mark,
I have thought about the Silver top in May and Gold Sept, I am not sure if bottoming has to be in the same order. It seems that Silver just caught fire & got parabolic really fast , maybe because it was cheaper and easier to buy up in an extreme way? Gold got overbought, but it didnt look nearly as straight up .
I also Notice that Gold bottomed first in spring of 2001, silver bottomed in the fall…but both topped together in March 2008 & both bottomed in OCT 2008. Then Silver peaked first in 2012 . so inter-related?? its a tough call.
Alex, seeing as today is a just a more-of-same day, could you plz enlighten me about a new inverse ETF i read about.
I know that the leveraged x2 and x3 should not be held in anything other than a favourably trending market due to daily rebalance slippage/erosion,… but there is a new x1 unleveraged ETF announced by Proshares, which will inversely track GDXJ (as i understand it).
This will also be subject to daily rebalance, but is that any problem when held in a sideways market, seeing as it won’t suffer the same as the leveraged x2 and x3 types?
As far as my sums have it (to give an extreme example), start with $100 day one, up to $125 (25% gain) … back to $100 on day two (20% loss) … and repeated, will soon lose all funds in x2/x3 ETFs, but will not lose value (ignoring fees, etc) in the x1 inverse ETF.
Is that correct?
Sorry SonOfGud,
I havent heard of it and would not be able to answer uninformed. I think if you call your broker, they could help you.
No problem.
It was more the principle of an unleveraged x1 inverse ETF, rather than any specifics i was wondering about.
BTW, this was what i read…
http://finance.yahoo.com/news/proshares-proposes-two-junior-gold-191157234.html
I’d love to hear your thoughts on the stock market, I sold most of my UPRO about 2 weeks ago. I’m looking to add on a pullback. What technical indicators would you look at, to tell you the market is ready to move higher.
Thanks
Hi Harry, sure,
In my opinion, it has more to go. I can see it doing maybe a bounce in between at a half way point (like an A-B-C) but honestly I need to watch it unfold and get an accurate idea as it does so.
Yesterdays end of day reversal sucked in anxious buyers, The regular Buy The Dip crew . now they are trapped. I will cover it tomorrow, but I dont think its done to the downside
Alex- today’s action in miners def looks like it wants to drop to a dcl now no? Always makes me nervous when yen up big and usd down and metals don’t follow through. I for one am confused here.
It is possible , I dont believe I can tell from just one day . Is this just a gap fill from yesterday & we reverse higher again? Or dip to the DCL? Cant tell.
When I wrote my mid-day update 2 days ago, I did so because a few people jumped out of position and thought DUST looked like it was breaking out. They bought DUST. As I was writing my update to cover possibilities…GDX/GDXJ reversed and closed green, so its tricky. We could dip & do a gap fill & reverse back up tomorrow..or yes, drop down into a DCL.
GOLD is Right translated , so if we drop to a DCL now… I still expect to beat the current highs on the next run up.
I drew this for you (And anyone else concerned)
We have seen what happens after candles like today’s all to often the last 2 years. I am holding longs but very concerned that miners relative to gold seem weak the last week or so.
Rm, I share your concerns also. Been hard to jump in even with the confidence Alex’s posts provide b/c I’ve just been burned so many times in this sector. So, I am with you. I would say that today really could have just been the baby getting thrown out with the bath water – everything was down pretty hard late afternoon. Possible that GDXJ was punished just for being a stock and being on the exchange. Or folks that are over committed elsewhere took profits here to pay for margin calls elsewhere. Nervous with you but hard to draw conclusion on such an ugly day. Yes, miners/gold ratio continues to widen. If it closes (ever) could be lucrative – need it to hurry up!!
Alex, just my 2 cents. I think you’re great and I’m looking forward to seeing how this service develops. My interest is not in individual stock picking but in keeping abreast of a number of markets in order to make larger and longer plays via ETFs. I look after 5 family accounts (4 IRAs & 1 trading) and just don’t have the time to be trading like a maniac. So, I would like to see more of an emphasis on a variety of markets even if they’re not turning around, but may be consolidating, or whatever. You, of course, need to do what you want; I just thought I’d let you know how folks with needs similar to mine would profit the most from your skill and service. Thanks.
Thx, so you are a longer term investor in ETF’s without trading in & out of them often? Which ETF’s do you use as investment vehicles? Thanks
there are a number of other sites out there, SMT, TRI,TFT, for general market as well as commodities as well as bonbs with and without “fundamental” slants.
Alex, hard to tell if today was really miners down or if they were just dragged down in weak market action. Looked good at the open with gold flat, then still without much gold action they got clobbered late – pretty large swing from high to close at the low. But they are still stocks and sometimes everything gets dragged down together, so not sure how much we can really concluded from today’s action (other than my account balance got wrecked!). I thought GDX might be solid after claiming 50-day yesterday. But after today will await more confirmation on DCL before waiting to take any new positions or adds.
Looks like they were dragged down in sync with the 1.5% loss in GM’s. So across the board. A bit ominous,on one hand, with the relative strength in pog, but made the GDX more explainable.