I feel like I’m living in that movie Groundhog Day, where you wake up and though some things continue to change, its just a repeat of yesterdays events. The equity markets moved a bit , but its the same old movement, and leaves me with the same conclusion. As for GOLD & Miners, NATGAS, and Oil? I am expecting changed that I will discuss here.
First lets look at the SPX as of yesterdays close
You can see that we are getting the same movement as expected and …
As mentioned each report prior to this, the markets are struggling below the moving averages and exhibit lack of real buying efforts. I am thinking that the ECB report Thursday may clarify direction in the equity markets , and I have mentioned that I was thinking it could be a short opportunity. ( We are now approaching oversold, but markets can remain oversold and this will not stop a sell off if that is where we are headed.
NATGAS – I had reported that the POP in NATGAS recently could indicate a trade able bottom. I wanted us to drop and maybe fill that gap / test the moving averages. This chart was drawn to show a possible entry ( low risk , since a break to new lows would be your stop). The trade vehicle could be UNG or 3xEtf UGAZ, use at your own risk, 3xETF’s are FAST
OIL has been looking like a ‘bottoming process’, but we have seen this before . Each time – OIL meanders over to the 10sma and then dropped further. So this is your highest risk trade, but it may be that OIL is looking for a bounce, short cover rally, or something similar. This was my OIL chart JAN 15- to show its current character- trapped under the 10sma
LET ME BE CLEAR ON THIS ONE- as a trader I may take a quick trade set up in OIL if I expect an oversold bounce ….. That doesnt mean a low is in.
I keep getting emails from ( Just a couple) people who want an OIL LONG TRADE. You need to be patient and let the market tell you when it is ready, not when you are tired of waiting. And not when “So & SO went long with his subs, why cant we?” I give up when I hear , “Why dont you give us a long oil trade?” The real Answer is : I’m not a magician, and I dont see a GODOD LOW RISK TRADE, except for the fact that you can be stopped out for a minimal loss.
SO again, This is an extremely high risk trade because each time in the past that Oil paused and went sideways to the 10sma and the MACD improved, it gave it up. Yes, we MIGHT be forming a bottom. I think we can still see $40 Oil also however.
OIL NOW – Your stop is below the lows – You can use DIG, UWTI (widow maker 3xETF), UCO or an OIL stock that you like which actually may be bottoming.
GOLD/MINERS
Personally I think we are nearing the end of the move up. Individual Miners may act separately and some just coming off of their lows may remain strong, while some that are getting extended may begin to pullback. These moves are hard to put a “Target” on, so I have advised possibly lightening up as we approach the ECB meeting , in case we get a knee jerk reaction. We could still get a quick pop to GOLD $1320 in a day or 2 ( my original target), but Miners appear to be late in their daily cycle (day 22) and could pullback and then make another run at new highs again. Here is what I see…
Target is really now also $1340 on the inverse H&S. ( If you measure from the bottom of the shoulder it is the more conservative you get $1300 , BUt it does look like it wants to complete the move to $1320 to me.
GDX- this is just an idea of how a normal DCL would play out. We are on day 22, a pullback to say day 28? Tests the recent break out and tags the 50. IT CAN go sideways for a week or so, but this is likely .
SO tomorrow is the ECB and I know everyone wants me to tell them exactly what will happen and exactly how to trade this. I cant. What I will say is that if you dont mind missing a little more upside vs giving some gains back, take some off of the table and no leverage ( I am repeating myself). Tomorrow COULD be ECB in the morning and Gold hits $1320 overnight and by the open is at $1270. You just have to prepare yourself mentally for that. Or GOLD could pop to $1340 (See chart above) and what if you’re not fully invested ?
Investing is not a game of I CAUGHT THE EXACT BOTTOM and I SOLD THE EXACT TOP, but boy should we have made a chunk of change in this middle ground. If we pullback from here I still expect that this was a right translated daily cycle and it indicates that we should stretch out to make new highs. You have a decison. Sell it all and buy the dips? Sell half in case it goes higher , and add when things get clearer? etc Its a trading startegy that you must develop to know what you can live with. I will cut my positions in 1/2 at least today .
Some miners just started breaking out with excellent volume (ABX for ex ) I dont think I’d sell that, it may just go sideways or keep going higher.
ABX JAN 20 – May hit resistance near $13.25. Sell & Buy a pullback or hang on and just add on the dips.
Others just breaking out . I mentioned that some have been running ( IAG has doubled) , other may play catch up. Just a couple examples here.
LSG
AXU – Obviously lagger , may fundamentally be less wonderful, but POPPED with volume, looks to have good upside.
And NEM WEEKLY – I forgot to post this in the wkend report, adds to GDX strength
Expect a possible pullback if your following cycles. Some individual miners may just march to the beat of their own drummer, so holding a “CORE” of unextended ones may work out best. We’ll have to see how the ECB decision tomorrow affects our equity markets and more.
As usual, 2 of My favorite sayings with the markets are “Time Will Tell” and “Stay Frosty!” And of course, Thank You for being here!!
~ALEX
SILVER AND GOLD 
In My Opinion, Its Back To Learning Patience
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I just want to add…this is a pretty bullish set up in CREE . and there are others out there, so if we break higher, I will look for long candidates in tomorrow report ( Click able chart)
Alex-I’m liking the fact that the remaining vocal bears have remained so. Skepticism is the fuel we need to keep that wall of worry alive and well. If this move goes too much higher it may encourage the bears to give up too quickly. A strong correction may then occur.A move down sooner rather than later I would think would encourage the bears to take more shorts adding more fuel to a move higher once that correction runs its course. Your suggestion that maybe we could pull back to 20 on GDX would create a beautiful reverse double head and shoulder pattern. Thank you for the report!
The latest sentiment readings on gold are only at 36% bulls. Silver is a little more concerning at 60%, but still plenty of room to run before having to worry about sentiment turning the move back down.
I agree. The current sentiment isnt even where it has been in the past at IC tops. I will be buying the dips
Yes sir ree : )
And those pesky gaps would then be filled on the 15 min:)
Mark, good comment. At previous bear market tops there was wildly bullish chatter that ended in agony. Here, I continue to see sell each pop vs buy the dips.
Thank you Cason. I’m watching four to six notable bears from various sites monitoring their thoughts as we move up. There are ay least one or two (that I’m aware of) who feel the top is in. This is where it can can very interesting. Should the technicals continue to create a favorable chart patten on gold and the shares, I just have this feeling that we will run up to 1550 rather quickly. Alex points out, rather astutely I think, that we are following the June-September 2012 pattern. But, the technicals like the MACD are better positioned now vs 2012. And sentiment, on a contrary basis is much better (far more bearish now) than in 2012. Back then it was only a “correction”. Now we know better. Lastly, look at NG and RIC: I’ve stared at them for months wondering what are they telling us? Maybe we now know.
Thanks for sharing. Checked both and they look great, though hard not to think potentially overbought at least in the short term. Certainly looks like much more than bear rally on those two. Also on index monthlies, pretty sweet MACD cross recently.
Alex,
thank you for your observations, i trimmed on tuesday, yesterday, but kept some individual stocks and will look at today for ulterior trim. I want some exposure to the pm since the rally has been of somewhat different character then other bear rallies.
Yes, I’m trimming some areas just to hold profits , and hoping to buy a pullback. Some are getting extended ( My SSRI is great but maybe a tad extended for ex – a pullback to $6 its the 10sma, would be great). I wont sell everything though. Finally looks like a place that a core (if bought much lower) can withstand a pullback.
I just checked out gold weekly anticipating a buying opportunity shortly. Because of the rather sharp downdraft in 2013 should we clear 1375-1400 o the next move there really isn’t much resistance until we reach 1550-1600. By virtue of that lack of resistance I’m wondering whether that 3rd cycle may be a bit stronger than history would suggest?
Very good, timely report Alex. I own a very small position in UGAZ, it’s response today to natural gas and oil being up are not exactly encouraging. Any thoughts on this?
Hi CS – I just got back home. had a miner emergency this a.m.
Currently I see UNG up 1.4% and UGAZ up 3.6%. Seems normal . Basically Your just looking for follow through or it may just chop around the lows.
Really think gas needs to get up over 3.0 and hold. Certainly, not another beat down. Reminder, storage report tomorrow at 1030 AM Eastern.
Alex,
Just want to compliment you on your service, having watched you move from from great contributor on the BBT to a rapidly “professionalizing” conduct of a new service, providing incredibly frequent updates, interpretations and mini-lessons as market moves progress. You let the market reveal what it’s doing, teach us valuable technical ways to evaluate those moves short-intermediate term on an almost real-time basis (incredible dedication to subscriber following), and provide a mode of data processing and interpretation that can provide a basis for sharpened decision-making, and that along the way, for the wise, offers a powerful counter to ever-present personal biases. Just want to thank you for your super conscientious efforts in behalf of your subscriber base, including and especially those efforts to teach us to fish.
In that regard, although I know your time is stretched, it would be great to sometime have a gallery of ‘Alex’s Lessons’, eg. that recent one on “When to Sell”, so valuable to developing one’s own trading skills. Right now I have made a folder for such titled the same. Have made money well-beyond the sub fee and just want to thank you for your conscientious and prodigious efforts as you have energetically undertaken your new service.
Alex, I second this suggestion. I would find it very helpful toward understanding trading strategy.
Rube,
Great post! You have captured what most of us here appreciate about Alex. Thank you!
Rube,
Thats a very Kind post and thank you very much! That was really well written. ( and I remember you from BBT as well as Tiger 5 below and a few others : )
Honestly, the goal of this service is definitely to help the readers to be able to make money and better yet, teach them to fish as you stated. It sounds funny, but I do care a lot about the readers here, you’ve all given me an opportunity to share my experience and offer some help in your trading. I really want to be able to do that. The lessons along the way have been with you all in mind for sure. Things that I’ve learned along the way that I have found helpful (Nothing is fool-proof, but there are increased probabilities in certain areas).
The difficult part is that this web design is a purchased pre-figured lay-out and I’m not sure how much it can be altered. I have an opportunity to use the tab “Freak Charts” to move chart set ups there ( still need to do that). The lessons that I have tucked away inside various reports might be helpful if I had them listed somewhere, but not sure if I can arrange that. I will need to talk to “Support” and see what I can do. For now, if you see a lesson, write down the title of that report and Month that it was written ( and why you liked the lesson) – you can always go back under the “archives” area that is listed on this page and revisit it. That is a good idea though, and thanks for the input.
And again thanks for the kind write up!
Took about a half off the table yesterday and this,morning. 10 DMA is only about a point lower on GDX then support around 20 below that. Hopefully that will contain any pullback. One of the services I subscribe to is calling for an intermediate top here but it feels to me that we’ll have one more surge before a larger reaction takes place. We’ll see how it goes.
I personally cant say that its an intermediate top. They may be better than me, I take it a step at a time. .
Since I dont know who you are referring to , and they are calling for a “Top”. I would ask myself….Did they call the Bottom and guide you through it. If so…you may want to listen. If they’ve missed a lot, or guessed a lot along the way and were wrong, they may still just be guessing .
What did that service do for you during this entire move? ( rhetorical question)
It’s Hadik. He’s generally been pretty good with cycles. I don’t trade based on his stuff but do keep his info in mind. Calling for a top between now and the 26th on Gold then a correction but a higher low. He’s not as specific on the stocks. There certainly have been occasions where the metals have corrected and the stocks haven’t.
I also subscribe to another service that is supposed to be an expert on oil and gold, but COMPLETELY missed this move entirely. In fact today’s report continued with the “gold and precious metal miners in a downtrend”. Sure, long term I get that, he’s trying to protect folks. But it isn’t going to 1550 overnight, and it doesn’t mean you can’t make a buck in the mean term. Anyway, point is that guy is about to get fired for CF instead!
I have never heard of Hadik. , I dont get out much : )
Alex, looking at the weekly on SSRI and what it did last year it looks like it hit the BBand then 1/5 week pullback then same measured move up from 7-12. Does this look like a similar set up to you Alex?…
It looks like a similar set up ( but it may or may not be). I see what you are looking at …pull it up with a 20sma and a 34 sma and you will see a difference between that 1st run up & now however
Great. Really appreciate this site and you
I meant to say 1.5 week pullback.
Alex, how is Oil looking? Still holding that UWTI position? if so, through the ECB meeting tomorrow?
thx
I think it still might pop higher, but because its a 3x ETF- I got rid of it. It didnt do what I expected when I expected it and with a 3xETF I need immediate results or risk a strong gap down the next day , and so I had to just say , “It may pop higher later, but it’ll have to do it without me.”
Alex, Any thoughts on Eldorado? Clearly the big loser today and wondering if chart wise it looks damaged? Sadly, had a limit order in from a while ago that actually got filled?!? Not the best price but then I didn’t get in at the top either.
I dont like the chart now, it does look damaged and needs to prove itself. Volume was extreme and it sliced through and is under the moving averages.
I would not own this , unless it proves itself ( which I believe would take time )
Alex, feel pretty solid on your feeling that 2nd daily cycle should be dropping into a low soon. Can you continue to talk to what you feel might be ahead after that? I know, no crystal ball. But I want to have a plan to be looking for support at 10, 13, 50 sma, etc. and have a plan for next round of investment. Or if, as in the last couple of years, 2 months of fun is all you get and then 6 more months of bear attacks (boo!). Inferred from comments below that buy the dips likely still the way to move forward; just want to make sure I understand everything.
Also, this 2nd leg – think this was the lock-out we were looking for last Nov/Dec. It hit the 10 day and then sat there for about 2 hours and then it never looked back until today. Gold moved $75-80. I was under invested for that leg (but at least caught part of it). So, I’d really love another chance. I did follow advice and I’ve backed out of my options prior to ECB. Thanks, Cason.