ROSE COLORED GLASSES

If you’ve been reading here at Chartfreak for any period of time, you know that I really do try to listen to what the charts are telling me and leave any ‘bias’ out of the equation. We dont fall in love with certain ideas or stocks, we dont look at all things through rose colored glasses,  and this helps us to  remain flexible.  With that in mind, I wrote a mid-day  update yesterday alerting my readers to some changes I was seeing. Lets examine what changed and what else we may see changing soon.  I posted this chart of GOLD –

GOLD broke out of a downtrend that I had been watching . I said that I became a buyer of Miners…

This doesnt indicate a long term trade is guaranteed, so let me point out a couple of reasons why it may or may not be…

This is GOLD as I write , you can see the next target. Knowing that we may just be in a weaker Daily Cycle,  it could stall or fail there.

I mentioned in the morning that GOLD & SILVER  looked ready to break out. I posted these…

REMINDER to those taking this trade –  This chart shows the sell off & Green Arch  “BOUNCE” 1 month prior to the last ICL.  It was a convincing 10 days in OCT, and then you get the slam down into the ICL. We could be at the green arch bounce.

At this point, I just want to show you a crazy Fib Chart that I drew  January 21 and have been watching for the past month.

  I was expecting $1220 – $1230 as my upside target, and this was 1 reason why.  IF NOT, It could drop back to other support levels ( and it did).  Notice that as of FEB 23 , we hit the blue line just under $1200.  IF THAT BROKE, I was going to announce a short position into an ICL below 1100.  We just reversed on that line. (Whew).

Note: The above chart also shows that  an overhead downward sloping blue fib line now will be at $1230’s in March. That was just a side point for those that find charts interesting. I am always amazed at the things that I see taking place.

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I have repeatedly mentioned the short term nature of this trade .  Is this a doomed 3rd daily cycle? Is it a 4th Daily cycle?   Buy & sell within 7 or so days?   Was that rather prolonged selling period leading us right into an ICL?   These questions need time to allow the charts to answer them.   I will be watching as it unfolds to see if it appears stronger than normal  or not,  but  certain miners have looked pretty strong so far .

Lets examine something interesting.  This is GOLD in an ICL BOX.  That means lately an average of 6 months from DEEP LOW to DEEP LOW that produces those strong longer term  rallies.   The green arrows point out similar time frames and this looks the same as last spring.  This projects an ICL in GOLD likely in April. Notice the 10WMA is $1230 area and stopped the bounce last April. AGAIN the gold target of $1230 to watch.

MINERS, however,  look very different than last time to me.  They look stronger and the pullback was much less %-Wise, with the  prices still above the 10WMA.    I am watching how miners react out of these lows.  Certain miners seem stronger.

SO GDX looked became a buy yesterday. I said to BUY (If you were taking this trade) above the 10sma.  I also posted intra-day charts in the mid day report..

GDX FEB 25- Allow me to throw an idea out there.  Did we just have our first daily cycle (Pink Box), our second daily cycle  29 days ( yellow box) ,and 3rd daily cycle? ( blue box).  THIS CHART shows that if we did…the 3rd daily cycle topped on day 5 and was very weak.  OUR MACD is already trying to curl up?  The MINERS didnt even sell off 50% in 3 daily cycles?

MINERS seem quite strong to me.  If we just had 3 daily cycles, look at these charts  (Weak or strong?).

And look at the difference in NEM WKLY this time vs the last ICL dip last spring.

SO I want to see how this plays out.  Are we in a BEAR MKT RALLY again and on the 4th daily cycle? Or have MINERS bottomed and is this the start of a Bull Rally? Time will have to tell, for now we have a possible 5- 10 day trade.

OIL & NATGAS have not changed, I still like the set ups on Energy.  Use these numbers as a guide on a closing basis.  No change,  just watch out for earnings.

OIL hit $48.43 & reversed, closing above the 50sma. This is a consolidation, and I still expect a break higher .

NASDAQ ( And other equity mkts)

When the NAZ broke out I said that after such a long consolidation, it could hit $5200.  I currently  see that the 1st target has been reached and 5000 could be that nice round number where a pullback occurs. I would at least be cautious if I used leverage or call options here.

I want to release this before the market opens, so that is it for now.  I still think the ENERGY stocks look like nice set ups.  They are bases and breaking higher.   Normal consolidation, pullbacks and bounces.

NADL & GDP have earnings tonight.  NADL reversed after selling yesterday and GDP looks great.  Earnings could cause a break out or pullback (possible buy opportunity).

GDP – a drop after earnings to the 50smaa could be an opportunity. A break out could run swiftly.

Not much has changed from yesterday.  I expected a break in GOLD/SILVER and posted wedges. We broke higher.    The markets continue to melt upward, I expect a pullback sometime soon though.  NAZ 5000?   OIL & NATGAS are bottoming and I expect a move higher.    So  tomorrow I may or may not need to post a report, since GOLD is early in the move and all other areas are still acting correctly.  I will post weekend report to update all things . Thanks for being here and best wishes trading!

~ALEX