Just as I mentioned in the Wednesday morning report, The Fed Wednesday Storm was enough to more than Rock The Boat. If you watched the action from 2 P.M. to market close , the name of the game was Volatility. Remember though, sometimes the storms wash the landscape clean and we see the light of a new day, and today lets discuss the beauty of what might be…
MY AUDIO IS 20 MINUTES- I apologize for that, I had a lot of wind in my sails : )
I want to start by reminding you all that we have been discussing how THE MARKETS , $ USD , $WTIC , and GOLD & MINERS are all lined up in the timing for a daily cycle low. THAT was bound to lead to crazy volatility, with everything dropping to lows at once. And I have been focused on Metals / Miners for a while , so I’m going to go into detail there at the end of this report, I have a LOT to point out there.
I will start by saying that the $USD is still performing very strongly, it pulled back (Not to 85 as I anticipated) but took its time, and cycle wise was due for a new low. We got that low likely yesterday & with some FED FUEL, reversed higher right on time. I DO have reasons to think this move higher will roll over after a bit , and I will get my test of the 85 area eventually.
Let me also add this, the Dollar spikes over 1000 ticks and GOLD/ SILVER didnt get absolutely slammed down? Thats bullish I.M.O.
With the Markets , I pointed this chart out Dec 10 to show areas to take note of when we started our correction . 10WMA or lower trend line
This was the reversal today, right at that trend-line. It was also as we were expecting a Daily cycle low timing wise. This reversal is likely the start of a new run higher.
Leveraged ETFS are SSO, TQQQ, UPRO, etc – but this late in a bull market , I have a hard time recommending those even though we should make a run for the highs here ( maybe short term trades where you can watch them).
This is SSO ( I do note that in AUG we stalled at lows with Up/Down/Up/Down days then the run up. I just keep that in mind in case we get shaky, BUT The Cycle lows are due right now. This reversal is likely the low.
The IWM, IWC, RUT were big reversal moves – they all look very similar & I suspect these could break out above their prior highs as inverse H&S
I will keep my eyes peeled for small cap / Micro cap stock set ups, but I looked today and mostly saw HUGE moves in energy stocks as mentioned yesterday. SFY (36%!) , EXXI, REI, WRES, WG, GDP, BAS, etc etc ( and some junior miners had nice gains too). Yes, the beaten down out of the lows were good gainers.
That leads me here, The moment many are waiting to hear about …WHAT was happening in Metals and Miners!!? If you watched MINERS live from 2P.M. to the close, it was CRAZY. It was a gradual climb all day, then 2 p.m. Fed release & it was a blast off rocket! Then the rocket crashed when Yellin started to speak. Then it started to recover, but who could buy that? After the first blast off / then crash- too risky? All the while GOLD was just selling and bouncing and selling and looked weak . ( Perfect) Let me show you what I saw, through my eyes, it was exactly what I was hoping to see.
By now you should know that I have been waiting for a daily cycle low. The run from ICL (meaningful lows) to the next low. Thats 1 daily cycle usually 22 – 28 days long. Can be 30 days, but often around 28, you get a low and a move higher, in this case the 2nd daily cycle.
After 3 P.M. – I noticed that GOLD appeared to be doing another stop run.
I have mentioned that GOLD has acted very well, strongly in this first daily cycle. Still near highs toward the end of the daily cycle. The weekly chart looks normal , similar to dec 2013 and its only Wednesday. A reversal into the week end would be great (watch for it)
I got a few emails saying that someone is saying that since GDXJ broke to new lows, it means that the gold cycle is failed. This is not true at this point. I showed on here in 2 separate reports that in 2008, GDXJ didnt exist, but GDX did. GDX did not break lows, but I showed some JUNIORS that did…and recovered. CDE, NEM, etc etc
& This was CDE in 2008 – broke to new lows & recovered.
Well, this is GDXJ today ( With the $USD rocketing up over $1 , and GOLD red…we got this) This is not a failure in Technical analysis . You buy it with a stop below the lows.
If we don’t drop in GDXJ Thursday & Friday, and especially if we go higher, this is a weekly shake out / recovery.
What about the gentle move up in Miners today-
1. Then the ROCKET at FED Release
2. Then the CRASH BACK DOWN
3. And then higher again. THAT cant be normal., can it??
It was BEAUTIFUL if you love Technical analysis. Check this out, break out and back test 2x during FED Speech
GDX (click to open)
GDXJ HRLY – the same beautiful move. Seriously…this is sweet!
SO I thought things were playing out perfectly. (Someone must have been buying those trend-line tests).
I also have been reporting that with Gold/Silver selling off 2 days ago (SILVER was down $0.60 cents the other day…some gold & silver miners were actually green and looking good). Signs of bottoming ? Leaders? Let me show you just a few of those from 2 days ago & yesterday …
NG DEC 15
HL today held the 50sma
IAG DEC 8
IAG (today price is higher- good volume reversal ) Buy above the trend-line or 10 sma
SO what I am saying is …
1. The ICL in GOLD was definitely in when I wrote about that shake out Nov 7 . GOLD has acted nicely.
2. Because ‘all bottoms look different ‘- I thought we might get a V-Shape bottom or shallow pullback like in MAY 2014 and didnt sell much as it peaked.My Bad : (
3. yes, the pullback in GDXJ was much deeper than I thought it would be…however- for GOLD and GDX , HUI, XAU it has gone as expected . So Nothing has changed (…and GDXJ at this point looks like a possible SHAKE OUT weekly & Daily now).
4. We should be looking for a daily cycle low around day 24-28 (Maybe a little more or less).
TA-DAH! With the $USD surging up $1+… A possible DCL
WHOA WHOA WHOA…WAIT A MINUTE! YOU’RE GETTING AHEAD OF YOURSELF!! GOLD HASN’T BOTTOMED. GOLD DIDN’T HAVE A REVERSAL LOW TODAY.
Please notice this , it has happened MANY TIMES in the past. I have noticed the types of “SIGNS” that I mentioned in recent reports. I look for some Miners not selling off when everything else is. I look for Miners resisting the $USD up days or $GOLD / $SILVER sell offs. When I see that around day 22, 24, 26? I take note- it may be signs that miners are bottoming first. It happens frequently.
GOLD – BOTTOMED ON NOV 7th
GDX – BOTTOMED on Nov 5 , Much higher by the 7th.
MINERS bottomed 2 days before GOLD in Nov 5th & 7th area. It probably didnt make sense to many that by NOV 7th miners were 2 days off the lows & green while Gold was still selling.
Right now – This late in the timing for a daily cycle low, we had a strong reversal while the dollar surged up $1, GDX & GDXJ intra-day broke out from a down channel and went back & back tested it 2X as Janet Yellin spoke, A shake out / Recovery in GDXJ is now showing on a daily basis and weekly chart . HMMM, You might have just seen that on FED WED again.
I cannot recommend that you run out and buy here, unless you are an experienced trader, because if GOLD does get that 1 or 2 day slam, I know many will be very nervous if that down channel that I showed in GDX/GDXJ gets tested 1 more time. I DID BUY. I do try to answer all my emails, but recently I got quite a few saying that things were failing and so on…and I answered all of them. At this point, I would recommend to those followers to wait for a move above the 10sma or for a GOLD reversal. I Bought that trend-line test, and am expecting a pretty good run up in the beginning of the 2nd daily cycle. I DO recommend that if you were planning on buying when the DCL is in…you get ready to do so. Some miners are already holding their 50sma, recovering nicely and I will get a list together soon.
GOLD I can see a cycle low above yesterdays candle
SO we have a lot to watch ,but things are lined up nicely here in many ways. I think many Miners are a buy here already . I Use technical analysis & cycles for timing and I am writing with confidence that what I watched yesterday ( And the past couple days where some Miners stayed above thier 50sma and stayed strong in a silver sell off, etc ) was the unfolding of a Buy opportunity in Miners. A Daily Cycle low appears to be in close if not here Miners & Technical analysis helped me to enter at a double test of the down channel, as shown above. Some are going to be gun shy, Understandable. You may want to wait until GOLD itself puts in a reversal and trades above $1208. This would be back above its 10sma & also puts a swing low in, since Wednesdays candle was a small trading range, and its highs were $1203.10 . Many Miners are set up nicely and I can list some that I like, but you can just buy them as they breaks above their moving averages short term. I think the ones that ran best in NOV , or held up the best recently should give you decent %-Gains. We may have lows forming across the board, so there can be many trading opportunities . Use ETF’s if that is your comfort level. I will release this early tomorrow (Thursday) .
~ALEX
P.S. I wrote this report last night. This is GOLD as of 6 a.m.
FED MTG TODAY 
SWINGS!
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Hi Alex, I was thinking about GDP and glad you addressed it. I bought some other energy stocks yesterday but I’ve been watching GDP as well. Thanks for your comments today.
Hi CS – The Energy stocks really had some nice gains off of the lows. The short covering may definitely be helping them and its good to see many of them recover their 10sma. GDP is still quite oversold, yet the MACD is about to cross positive. It would be nice to see these break above their 20sma and head for the 50sma overhead. Thats a HUGE move %-Wise, but one step at a time. There will be up days and down likely. : )
Good morning ALEX…… a question, you said: “I Bought that trend-line test, and am expecting a pretty good run up in the beginning of the 2nd daily cycle. I DO recommend that if you were planning on buying when the DCL is in…you get ready to do so”. Are you in the PM back? Did you buy yesterday that trend line?
Yes, that is what I meant.
For others, they may want to see GOLD prove itself first by re-gaining the 50sma & holding above?
They may want certain miners above the 50sma or 10 sma , as I have shown above with IAG, HL , etc because they can put a stop under the 50sma.
Right now both GDX & GDXJ are pinned against their 10sma and if they can break above, may close thier gaps below ( We usually get that noon time dip) , some may want to watch that and see if the gap fills on a slow pullback & reverses higher again.
You have been so good in keeping the emotions aside and just analyzing gold’s structure as it speaks to you. This has caught both the bears and bulls of guard.
Thanks Mark, Its not easy, because emotions are normal human reaction & behavior .
When GDXJ broke to new lows , it definitely caught me off guard, since I expected a shallow pullback. I had to stop out, so I just checked past lows & saw that 2008 wouldve been similar with juniors. SO sometimes it feels emotional (I was a little frustrated stopping out ) but if the research of the 2008 lows did help me to be less emotional & more calculating ( but a little frustrated after all that work was in the mix : ) Lets see how THIS NEXT DAILY CYCLE plays out, if these are in fact the lows
Now there’s a gap in GDX. Looking for more back and fill in this area to fill and then some on that gap before we move higher. Still feel it won’t be until at least next week or maybe the week thereafter for a sincere move higher as more shorts pile in with the perceived weakness. That would give us almost an entire two months of consolidation before we move higher. This move could be surprisingly strong as we are so conditioned for failure or weakness. Are you looking for a bull flag to begin developing here Alex to potentially test 17 again?
Its possible, theres no real way for me to tell at this point, but if you look back at Nov lows, it played out that way. Many individual miners back then either surged through their 10sma, or struggled around that area, so we may see that at this point too.
GDX & GDXJ did just do a gap fill and went back up to their 10sma…where they struggle a bit. like I mentioned in the report – Miners bottomed 2 days before Gold in Nov…so maybe they burst through the overhead resistance when GOLD finally pops higher. That may not be for a day or two.
Short question ALEX…. how looks RIC-T?
Shall I buy or wait? I don’t hang you up on your thoughts?
THANKS A LOT.
RIC.To – dropped down to its 50sma and turned higher, so that was a low risk entry. It is curently up against the 10 & 20sma together and MAY or MAY NOT break right through upside. So It can just keep breaking higher like it did at the Nov lows (it was strong)- or it also could drop back to the 50sma & test it again if GOLD/SILVER sells off 1 more time.
So the question is , “Could you handle buying here and it drops there?”
If it were me, I might take partial position now and add if it drops back to the 50sma, Or even add if it breaks above the 10 & 20 sma
Is there specific recommendations you will provide or just have to try and find it ourselves?
Well, I want to help , so you can tell me what you want… A few individual picks? I can do that. I also didnt know if some would want to buy now? Wait for GOLD to move up too? Buy GLD? SLV after Metals confirm the move?
So with such a variety of readers, I do like to teach people to recognize low risk entries / when a good time to buy might be / when to wait and what to look for ….mostly because people have different risk appetite. Even Different times of confirmation- some want GOLD & MINERS to be running together. Some want GOLD over the 50sma, others want GDX over the 50sma, etc etc
SO with that in mind, I said in the report that I bought some Miners positions yesterday & why.
I showed some in the report above (See HL & IAG) & said they could be bought here , because they havent taken off, but have held up nicely. Some are currently above the 50sma, but not too far above – they could be bought with a stop below the 50 , etc The problem here is that I have some that want ETFS, others want Miners ETFs, others want juniors, etc GOLD/ SILVER ETFS will be different from GDX/GDXJ since I feel that Miners bottom first here. GDX/ SIL / GDXJ might be ready to be bought now. Other readers want to wait until they go above the 10sma, etc
Wow, long winded me! : ) So how can I help?
Thanks for the response. I guess it would be nice and helpful that when you take a position if you shared your thoughts with us. Also if you think a good time to take a position in jnug(gdxj) nught(gdx). thanks!!
OK Knight – thx- I see what Ur asking for.
As you could see…I BOUGHT near the end of the day after the trendline test & reversal & wouldnt have had time to alert that I bought AND INCLUDE reasons why – before the mkt closed.
IF knowing that ” I bought Miners” is all one needs, without info why…. I hope/ imagine they bought the gap fill on GDX/GDXJ today after my report came out. THAT entry on the gap fill was close enough to where I bought too. I actually spent almost 5 hrs on that report last night to convince readers who were ready to buy to see why I did. Whew!
(And I may never outwardly recommend JNUG / NUGT out loud because I have seen others recommend it and it moved against them 20% one day & 20% the other. THATS 40%! I cant recommend something that moves like that to everyone, in case I cant do a quick alert & get them out. Some are less experienced & may just hang on to big losses….so what I will tell you – I assume that you are more experienced from past conversations- is that when I say GDXJ ( you can choose JNUG/JDST leverage if it suits you) if I say GDX , you can choose leverage.
Setting a stop for 5% below GDX can really hurt in NUGT- so you might want to only choose the leverage if I think upside potential is much better than the risk downside?
And SOME of these JUNIORS will move like 3x because they are shorted here when GDXJ broke down below NOV lows. Many called it a failure again (Shake out I. M. O.) Some may rocket. I will have a report early : ) thx!
thanks Alex. As always a true professional
Alex, wow, lots of reasons to be bullish here – 1) GLD still above 1188 point, 2) held up with $index rocketing higher yesterday (that was a big move for currency) 3) held up with HUGE DOW move over two days – we’ve seen miners got ROCKED in the past when market tears up – they want their money somewhere else.
So, questions – NUGT 20-25% in 2 days, GDXJ up almost 15% (unleveraged) in 2 days. That’s huge. Sorry, I went into the doubting camp but emotions are powerful when you have that severe a drawdown. Your DCL seems to be that you were right all along (that’s why I joined the service, man!). So, do we chase here or wait for a pullback (would the lockout be in play this DCL?)? One other thing to touch on in the coming days, too, please. When to get out. As I learned last DCL, day 28 is not the high! It was between 10-12. So, do you have a timeframe for when we should look for a high and how we may want to exit and preserve capital? When these guys do fall out of a rally it can get ugly quick (late March anyone)? This will help me devise a better strategy this time!
Also, keep up the good work on market updates. I chased into SPY yesterday – made enough on long calls in 1 1/2 days to cover my GDXJ missteps already!
Yes , Cason…It is looking like it is all still in place. GDXJ threw some off, thats why I tried to point out Juniors did a stop run in 2008. Congrats on your trade!! WHat a move in the markets today ! And I appreciated your emails and comments here. I learned from them, so please dont apologize for any ( as you said above) doubting camp or emotional feelings. It WAS very frustrating seeing a more than shallow pullback . Lets just make some $$ on the next leg up. I will mention a few sell guidelines – Sell SOMETHING in 8 days to be safe , but I’ll try to cover more in the report
I do decent analysis but don’t have the technical kung-fu skills you do! I utilized this comment to develop my most recent strategy – thanks!
Hi Alex.
My one concern is how much affect the far reaching GM euphoria has had on the miners etf. do we need a higher weekly close in POG to confirm?
I have not see that as a correlation.
I had a weekly GDXJ chart in this report, I’d like to see what I mentioned with that chart.
Alex,
one question about RBY, i doubled down in the 80’s a couple of days ago and really wanted to sell at 93 about breakeven, but I managed to stay away from the computer and now have a nice gain. I remember you said about a year ago there where some funds buying the stock, how can you get the same info about this company? (i.e. funds invested in the stock)
Hi Marinho
I need to look into that (I had it bookmarked & lost it in a p.c. crash). I will try to locate that aagin…thanks for the reminder
Also any opinion on SA? I still remember you said lots of buying in it by funds last year.