DIFFERENT

For quite some time I have been pointing out things to take note of that are a little different than many others saw things. I think others are starting to see what we were pointing out here months ago. I was mentioning  a bearish rising wedge pattern in the spring, and in June I looked at the SPX this way.

JULY 24, the SPX had not broken out from that toppy looking curve.

Would the BULL MARKET break higher soon?

No improvement at this point in August

The Daily SPX reversed at the 200sma, but will it break out to new bull market highs this time?  Watch the overhead down trend line .

I have also pointed out these ‘negatives’ to the markets in prior reports,  for us to keep an eye on as time goes on.

AUG 5th I was warning of the VIX flipping like it did.  A Higher VIX is a drop in the markets and thats what we’ve been seeing.

The SOX chart for 8/3/2015.  I was showing how the semiconductors broke down and remained down.

The TRANNIES look bad in a downtrend for months now.  They started to look like they may recover last week, but have fallen below the 200sma again.

TRAN Aug 7th

 DJIA AUG 7 – Below the 50 & 200sma, the 50 is trying to cross below the 200 now

 So for the general markets,  I am reminding that we are seeing weakness continue to pop up.  I shared charts of AAPL, GMCR, TSLA, VIA, TWC, PHH and others .  It is possible that we have a topping process occurring in the general markets and a bottoming process in some commodities.  Lets keep that in mind going forward.

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$USD- I also have mentioned that even the though I keep hearing about the strong dollar,  it has really been consolidating for weeks and this lst rise up to resistance has weakness internally  (So far).  We;ll see if it gets rejected here  ( Likely good for commodities) or breaks out. I am leaning towards it being rejected.

USD- 

$WTIC –  I have mentioned that OIL should bounce out of this squeeze

Oil may just bounce to the 50sma and then we’ll have to see how it looks if it gets there.

XLE – shows some divergence, but we need a close above the 10sma .  We’ve seen a couple of “false starts” , so why dont we change that to a close above the 13 sma to get going.  Some energy stocks started improving last week  ( See REXX, LCGY, BAS, even  WRES looks bottom like.  Still risky at this point.

NATGAS – Still within this triangle, it’s pretty much neutral at this point.

GOLD &  MINERS

The COT remains very bullish . Sentiment and fear are still very bullish.  The Bullish set up remains the same , and you can re-read my past reports to see all the details.

( Look at the top of this page for these titles of older reports. Click on them to read the reports) .

Gold – We have had 3 Fridays of ‘reversals’ in Gold.  Notice that each time, the follow through has not been there.   Each Monday closed down.  Lets see what happens on Monday Aug 10

Technically,  GOLD did close above the 10sma and we have a MACD cross. We just need some follow through and maybe we can get some short covering rallies in some of our Miners 🙂   Watch the $1090 area for the 10sma.

People get very impatient at lows. When GOLD is ‘bottoming’ there is always a chance for it to drop lower.  Looking at past lows in Gold on a weekly chart, notice please that it is not very different from what we see now.  A slam down, a lingering at lows, now we just need to go higher.  Yes, we remain ‘cautious’,  because we could get a drop lower, but so far the bottoms look similar.

WKLY GDX –  I’m  trying to show the same thing here.  Lows can be a “process’ .  V-Bottoms are rare in Precious metals. We made a new low in GDX last week and it bothered some.  Notice that we did the same in Dec 2013,  and rallied shortly after making the new lows.

GDX WKLY –  I like to see VERY BIG volume and price hardly going anywhere.  That means that its not all selling ,  we may be seeing accumulation.

I developed a few indicators that I use during sideways moves at lows.  You wouldn’t enter a position until the lower 2 indicators cross upward.  They dont cross well after the rally starts, but they often cross when the price closes over the 10sma. Most bottoms were a success, but last Nov price looped back down and double bottomed, so it got you in at $18 GDX and then you may have been whip sawed out before the real run up in Dec.    They haven’t crossed at this point yet.

I want to close by showing you one other factor that I think bodes well for the Precious Metals sector rallying soon.

The MACD on the weekly Dollar is weak.  I dont see the dollar making a strong push higher at this point.

So the anticipated trade is that GOLD , SILVER, and MINERS will rally higher and do so for a few weeks.  Right now they are lingering at the lows and trying peoples patience.  I have mentioned that IT is possible that we could get a quick slam lower before a meaningful rally occurs, so we should remain ‘cautious’.   You dont want to keep jumping in with leverage only to get stopped out again and again,  for some that is depressing.  As I mentioned, when the upside gains traction , I still feel that we could get the best trade in a LONG position as this sector does break out.   WHEN it steadily moves higher,  I will be pointing out set ups in Miners.

  We have seen the past Friday reversals higher in GOLD turn down on Monday, closing in the RED.   Hopefully , this Monday will be a little Different, and we can finally get some of the follow through upside that we have been anticipating.    I would love to see the Miners start to take the lead.  Some were actually starting to shape up last week, and I pointed out some “POPS” in PPP, GORO,   I higher low in  NG,  etc .    Patience should  pay off nicely  when we get that upside follow through.  🙂

~ALEX