What happens if I am conditioned to see an egg sink in water, and then I see one float? I think that I would want to try to understand what the difference is. What has caused this change. Sometimes in the markets we also get accustomed to seeing something occur, but when the opposite happens, I like to try to understand what has changed. We’ll discuss this later in this report, for now…
The SPX has broken to new highs! If this pattern plays out, it has room to run.
Look at this next chart below , and compare it with the SPX. I posted this April 29 and you saw what happened
BAA was coming out of a tight base, so it exploded higher. SPX has been going sideways for a while, so it can break out & move higher now too.
NASDAQ– There have been little false breaks to new highs in the NASDAQ, but the pattern is tightening and can run ( trend ) a bit. A wedge pattern remains in sight.
To save time, OIL & NATGAS charts haven’t changed much from the Weekend report to Tuesday morning. Nat-gas keeps moving higher and OIL has been in a sideways move.
The $USD- This is where I was referring to the egg doesn’t float in water. It does if you add salt. GOLD doesn’t usually hold up if the dollar rises, and Monday the dollar reversed from recent selling and was up $1.09. Gold remained up $2 and $Silver was up over 1% with the dollar up 1%.
The chart of the Dollar looks like a double top, but now a bullish descending Wedge is breaking out. The USD is up almost another dollar in Pre-Market. Just a bounce? Will a bounce crush Metals? Will we get a mild pullback in Metals and will the $USD roll over after an oversold bounce? This is what I want to watch moving forward. I’ll explain why.
As mentioned, GOLD & SILVER remained Green with the $USD up over $1.00 yesterday. Now with the USD up almost another $1 pre-market, GOLD & SILVER dropped, but not excessively (So far). With the dollar going from 93 to 95, I would expect GOLD down $20. So Is there something different going on? Only Time will tell, but lets look at GOLD & SILVER briefly with that in mind.
GOLD – Gold has made higher highs than the first daily cycle. It has my 1st target right above where price is now, but it has gone up 5 days in a row. A dip to the 10sma is not out of the question ($1200 area) , but must be monitored with the dollar rising.
SILVER– Broke out and has been up for 5 days in a row. It too can pause or drop without damage, but we’ll monitor things as they unfold.
GDX – I wanted to discuss the bigger picture here for a minute. In a 5 month base, GDX is making higher lows in November, December, and March. Since March it has been slowly climbing higher without much fan fair. No one cares, most hate buying or holding miners at this point. With Gold going sideways and Silver near lows, GDX was rising.
NEM, ABX, and GG are the main components of GDX.
NEM has done very well, as pointed out in the weekend report. Lets look at some Miners…
ABX is in a huge Base. You may recall that many Energy stocks took this formation. It looks to be pushing resistance and trying to break out higher. IF IF IF this can break higher, there doesn’t look to be a lot of resistance until $18.
GG – from the weekend report. This has been one of the weaker points in the GDX ETF, but this isnt bearish. It is above the 50sma, but it needs a little love soon.
SO I wanted to look at a few more Miners and just see how they are acting in this environment.
BVN- Break out of a consolidation that should act as support.
Many Juniors are popping.
I like the SILVER miners
In January I was hearing how all these junior Miners would go bankrupt. Remember EGI & GSS and BAA were earnings release surprises. Are we saying that earnings no longer kills the miners? (Link below)
So here is what I am thinking. We are seeing Miners taking the lead, being accumulated, building constructive bases, etc. Can they break down? Of course, but so far they are breaking out upside. They are acting like BASES since last November . Gold and Silver have been up 5 straight days in a row, let them rest and we’ll see how they act as they pullback. You know that MANY will panic and the “Hear we go again, Gold is Crashing!” cry will be released from emotional traders. I say , “Lets not get too excited yet either way. Lets just see how this plays out”. Yes, it has been a 3-4 year Bear mkt in metals, but signs of a bottom are surfacing. We’ll stay alert.
To make an EGG float in water, just add salt . Eggs float in brine. The question for me is… What is making these miners ( Due to go bankrupt) hold up? Some are even breaking out higher, with the dollar nearing highs again? Is it Accumulation? Are there Buyers? Time will tell. There is only 1 way to buy lower though, and that is for a pullback. We’ll just have to see if we get the right kind.
Best Wishes!
~ALEX
I’m going to release this and then go back and proof read & correct any typos for the sake of time, so please excuse any that you found 🙂
I pointed this base readying for break out yesterday… it had follow through , watch it today . No resistance to the left.
Running With The Bulls? 
More Shaking?
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What a perfect name for a stock, MOMO. 🙂 Edit: A Chinese stock, no less!
Yeah, Its quite a MOMO stock. It was up 90 cents when I started writing & I just saw it up $3! Wow. and….
I do not own it 🙁
“I do not own it :(”
Yeah, there are quite a few out there like that for me too. 🙂
Look at CMCM on a 2 yr wkly chart.
I do not own it, but definitely should have instead of trading it
Another big move higher by NATGAS this morn. Not a whole lot of resistance until about 3.55
Nat Gas now down. Not a pretty day for commodities across the board.
Yeah, quite the reversal. I guess there was some resistance at 3.10!
Nice real-time update this morning Alex.
Thx Rube,
I was fighting the clock on this one. I usually gather my charts at night , and write the report 6-8 A.M., but last night I couldnt so I did the whole report this a.m. and time was flying by, but it gave me a chance to see what was active pre-mkt too 🙂
I dont know if it will hold or not, but pull up a daily chart of BVN and use only the 10sma.
This a.m. it dropped down there and just went green. That also took it down to test that support area drawn on my chart in the report. Wow.
Backtest of the 11.75 pivot too
Oops, duh, that’s what you said.
lol
Nice chart break out on SWKS
anyone buying the dip in oil today?
Oil is really late in it’s daily cycle. You might want to wait a bit and see if it can move down and test the breakout at $54.
And the $54 level is where the 50sma is and it is likely to test it too.
perfect … hmm – maybe i am getting the hang of this??? lol i have this for crude.. https://www.tradingview.com/x/gcQxJsAn/
That’s a nice chart!
thx carl…
Such vision we have. 🙂
Spot on imo.
good one maria..we are pretty close..
well obviously the retrace is just a ‘guess’ …. approximate
No, not yet. But I do have EXXI, BAS, SD, SFY and USO on my watch list. Also hoping to add to my REXX holdings at the proper time. There will be some great opportunities once this correction in oil runs its course. I see things similar to Gary, think we may be headed to the 50 SMA area in the near term. Good luck everyone.
I did but wouldn’t recommend it. 🙁 I was already in and up (@ first) on Fri AM reversal. Will stop out tomorrow short term of lower. Also accumulating Jun USO calls so giving it a month to play out. Defined risk in options so even if ended worthless can only lose very defined amount.
It would be nice to see a bankruptcy phase in the miners as a sign the bear is finally over.
I’d rather see a take over , buy out phase – Like PZG has with CDE or deals like GSS just got from RGLD
thanks gary.
There was a chance that Oil was in a A B C wave 4 correction triangle but broke down this morning……stopped out of PKD, ARP, RES and TGA with small loss. Holding SZYM…….most likely now heading to the 38% Fib level, which is near Alex’s breakout at $54.
Nice scary drop by gold here right to the area expected, though it may not be done yet, of course.
COFFEE surged yesterday and is pulling back today to retest the 50 DMA and the B/O level. Great entry pt here. It’s shame that JO has such lousy volume.
EWZ is pulling back below the little consolidation range of recent days. Not optimum but I still like it down to a bit above 34 where the 50 DMA is going, and where the neckline to a kind of IHS is as well. http://schrts.co/jb8kex
looking 4 feedback.. anyone have something like this for the dollar? FWIW: this is just an approximate and total conjecture on my part — not a call by any means. ;o) https://www.tradingview.com/x/Fb2ZMeEq/
i suppose i should also post the converse — gold mnthly [pure conjecture-not a call] 4 feedback only .. https://www.tradingview.com/x/Fb2ZMeEq/
Same chart, both posts
https://www.tradingview.com/x/iKc03480/ oops try this .. sorry :-/ [bad bad maria] LOL
Nice Chart Maria !
I will say this imo we could easily test this breakout in Gold as the $USD increases in its daily cycle.
If that Support fails ……….
I certainly can Not beat your EW chart 🙂 but I bght. UUP calls last Friday with tight tight stop, still holding. I think we may have a possible ICL, a definite DCL last Friday.
IMHO…..this $USD strength will Pressure all commodities.
FYI……Avg. DCL cycle for the $USD is 23 days +-2 days,
i always start w/ the monthly 4 the big picture. Here it is on wkly: https://www.tradingview.com/x/qku2dEKv/
I added the note that B & C could be MANY MANY different combos- this is just ‘simple’ zig-zag – could go quick like the green zig-zag i added.
Alex, we’re bound to get a decent trading opportunity in the coal sector once the dollar finishes its short-term run. I emphasize ‘trading’ because only those who should be prohibited from having access to sharp objects buy and hold coal sector stocks for the long-term in this environment.
Possible ending candle on TLT (what do you call that?)
THANKS JDWM.
What is an ending candle?
At end of a trend. Started heavily down today and is now flat. Possibly bullish engulfing building. It is building on the weeky; but of course only Tuesday at the mo.
THANKS.
Hi Alex and subs.
Who can answer the question?
As the bond market rallies, will the stock market rally as well?
Thanks for help.
Usual rules / aka correlations no longer apply given C Bank involvements. Watch each asset individually
Stopped out of most Today. Still hanging on to RIG, PEIX, and PLUG.
I’m still in energy, playing for the long haul, but gave back most of my profits, still above water, but not by much.
Whats a MOMO?
Not certain what you’re asking, but “momo” has become short hand for a momentum stock; a hot, high flying, relentlessly soaring stock. Not that MOMO actually fills that definition on anything higher than an hourly chart, so not really the best example.
Alex, any thoughts on KITE? It just regained the 200 SMA. Potential trend change or dead cat bounce?
Possible, nice reversal but 1 day doesn’t tell much
Alex, if we finish here that’s one fugly bearish engulfing on natgas. Would a trip down to the 50dma seem likely? still would be around 10wma? Thought maybe you could ask your crystal ball 🙂
Yes, agree
Harvesting profits on WEAT.
Picked up some CENX just now….looks like a pretty low risk here entry above $13
Unfortunately, my account looked like the egg on the left. 🙁 JUNO my only positive today (cashed out).
Alex, maybe you can address this tomorrow. Stops and discipline in commodity pullback. I am trying to stay in for the long haul due to bases; I’m in energy and some recommend silver miners. Smaller positions, still above water right now. Thinking just below 50 day but for some (REXX) that’s a 12.5% haircut. So, want to give base room but if we break down, not interested in watching it burn.
At least learning some here, I went into positions very deliberately with plan to stay strong through base (instead of emotional chase and knee jerk sell like in the past).