Just The Facts – 31 Charts Of Evidence

For the past few weeks I have daily been pointing out various ‘clues’ in the Precious Metals Markets indicating that a drop could lead to a nice summer rally in Gold & Miners. Is there any ‘evidence’ saying that such a rally is still ahead?  Some have sent me articles  ( like the one shown  below) saying that Gold is just a pet rock, Gold is Doomed, Gold has no value, and will continue to drop until it gets to $600-$800.  Well of course anything can happen, but in the weekend report we will look at all of the ‘evidence’ and draw our conclusions from the charts

First, a review of the various markets…

I’m going to point out the big picture view of the markets.  I have many concerns that I have pointed out over time as the markets have been surging up & down. Those concerns remain and give the market an appearance of topping or being in need of a good pullback.  Lets examine the evidence.

 

SPX – I have been showing this view for months now.

The NASDAQ surged higher to new highs. All bullish?Look at that MACD HIST.

The Semi’s usually lead the markets up or down , and so far they haven’t lead the markets higher.  Its a break down.  From here we need to see a recovery or they are leading markets lower.

And then we have the DOW THEORY.  I pointed out how badly the TRAN had broken down.  Has it recovered at all with the recent market rally?  This should be in the back of everyone’s mind as we go forward. The blue line is the important 10WMA, and it continues to reject price.

USD –  Reminder:  I mentioned weeks ago that  my target was 98 for the dollar  ( this was important, because it may allow Gold to rally if the dollar would drop). This was July 13

$USD–  July 24 wkly.  The dollar reversed at 98.  If we could get this drop, it could allow Gold to rally.  Notice the peak  in March was Golds last ICL. The Dollar low in May for the Dollar was the peak in Gold.  This looks like Gold could bottom here, more on that later.

 

WTIC – Oil was being held back by the 10sma. A break out higher could have run up to the 50sma, but July 21 I pointed out we’d need to break this trend-line first. 

WTIC– rejected at the 10sma again, but it does look set to bounce again, maybe to that 50sma? But what else can I say about that?

 

I want to point out that the 2008-9 lows 1. Ran upward  2. Bull flagged  3. Then continued higher.  We are doing nothing like that here.  The dollar dipping here may cause OIL to bounce and tag the 50sma, but testing the 2009 lows  could be ahead.  It might be a good short  (DWTI) if we bounce to the 50sma and price is rejected.

I have followed the bullish set up in NATGAS daily charts all along, but now we see the Big picture has NATGAS  near resistance, and it turned down. It sits on the 10 WMA.  Watch for a break out or break down from here.

 

                                                                                                     Whats next?  

 

GOLD SILVER & MINERS

Intro:  My thinking is that an ICL is in place.  I will show the evidence in this report, but I have pointed out all week long what to look for and it has played out pretty much exactly as mentioned.  That should build confidence for all of us.    

*There is an alternative scenario, I looked into it, will mention it BRIEFLY at the end.  I think it’s unlikely,  we will stay alert as we move forward.  SO lets just get to the charts…

 

GOLD 7-21 – I said it would be better to have an undercut of recent price as in prior lows to shake out buyers.

 

GOLD – LATE in cycle timing an undercut of the extreme volume lows, and a strong reversal amidst a lot of fear.  Many of my indicators are Beyond ICL levels.  Extreme bearish sentiment everywhere. I believe we saw an ICL  ( Deep trade able low).

 

GOLD WKLY-  looks like an ICL

 

One of the readers at Chartfreak mentioned looking at a Gold :Euro  chart.   ( THX) 🙂  It fell to support & reversed.  Interesting. I drew what it might look like if we run higher and then drop to Gold $1000 area in the future in US dollars. 

 

GOLD C.O.T. – All charts are clickable to enlarge .   As of last Tuesday , Smart Money / Commercials less short than any time since 2013.  Much less than prior ICL’s and even likely with additional selling.

 

SILVER – a break & close above the 10sma on a daily would be bullish, breaking the downtrend line.

 

 

SILVER COT also below prior  ICL  lows

$BPGDM –  This is amazing too as an extreme.  It read  ZERO as of Thursday. Not an exact timing tool, but it is extremely rare and happens at bottoms. Do you remember the June 2013 bottom and the surge higher? 

 Lets look at Miners

 

GDX WKLY –  Enough Volume for a capitulation low?  Record volume. Everyone bailed out and not many dared to buy this drop. It is a buy in my opinion, I’ll show you why shortly.

 I had pointed out that when “support’ breaks, the bear news letters come out and call for Miners to all go to single digits. It happened in OCT 2014 when support broke.  Everyone had downside targets in the single digits and called for their followers to go short, with weeks of downside.   I mentioned that it is often a stop run designed  to lose the longs and trap the shorts. I posted this chart to watch –

Updated chart with a reversal candle

 

GDX DAILY –   Extremely oversold, I was looking for a slight undercut , similar to Nov lows and we got it.  I sent out a Friday afternoon update before the close.  I said that I was buying, but the problem was ‘buying on Friday’ before the weekend.  It could be risky if Gold slams down Sunday night like the last Sunday , but the lows do look to be in. 

 

I posted this chart just to show readers that rarely does this move out of these lows go straight up  (It can and has in the past like May 2014 shown, but less often). Often it pops and drops again , so there will be opportunity to buy, often near the 10sma.

GDX ICL NOV- not straight up. Stalled at the 10sma.

  In Technical Analysis – a  Buy signal for me is a Bullish Engulfing after a steep sell off.  It can be shorts closing their positions and buying it back, it can be Buyers stepping in for discount sale prices.  Either way, a bullish engulfing is low risk.  Buy that low and a stop goes under that low, it should not be taken out.

  I saw Bullish Engulfing candles everywhere in Mines at the close Friday.   If there were 1 or 2 I’d feel more cautious, but SO MANY?  Lets take a look .  I posted a couple Mid-day ( I will post here) and show a few others.  This also gives confidence of a low. 

 

 

 

 

There are many more. 

Some have strong reversal candles like AU.This was at 3:30 p.m. Friday.

The list goes on & on.  Look at some of these on a Daily & weekly charts.  Do these look like Gold was selling off all week and no buyers were in sight?  Or do these look like strong reversals and the ICL ( deep meaningful lows) that we are expecting are likely in?  

.

See  Daily charts of  NG – very strong looking ,  TGD,  SAND, GG, SSRI, PZG, CDE, BTG, PAAS    ( SA -looks like it could double on a bounce  🙂  )    Bullish engulfing :  BAA, EXK, HMY, FNV, AEM, MVG, etc.

  I think the lows are in  and I recommend taking positions.  The bigger risk is to not being invested.  Use stops.   Buy your favorite Miners, or enter ones that I have listed as reversals or bullish engulfing above.  We have reversals right across the board.  If we get a down day Monday,  good for you on a little lower entry.  Even if we dont,  we are basically still at lows anyway and I expect a nice summer rally at this point.   Starting a position here is warranted,  the evidence is in our favor and makes a strong case that what we have been waiting for has arrived. 

 

~ALEX

You probably remember that I said at the start of the Gold section :

*There is an alternative scenario, I looked into it, will mention it BRIEFLY at the end.

   Simply put, there was a time in SEPT / OCT 2014 that we looked like we had an ICL in many ways and we actually bounced for 2 or 3 weeks and rolled over into a final ICL  (1st Magenta arrow to the 2nd).   Many indicators showed an ICL was possible then too, but not as extreme as now.      COULD WE DO THAT HERE to get to $1000 when no one expects it?    I only say maybe because we didnt tag 2008 areas of $1033 pointed out on my chart last week.  Would a 2 or 3 week rally get the bulls over excited and then drop it down like Oct to Nov 2014?  It looked like this.

 

  I find this less likely.  

Lets enjoy our 2 or 3 week rally, and I will be able to see if we need caution then,  but right now we have STRONG reason to believe we are at extremes worse than most other ICL’s.  We are likely to have 2 daily cycles higher and then we might look into a possible turn down.    I’m taking it 1 step at a time.