Crazy action in the markets today. Some of it was expected, but some of it doesn’t seem to fit. Lets take a look.
IBB – Really taking it on the chin lately. This is a weekly chart and todays volume was massive.
SPX – down 50 points. We will get the test of the lows that I was expecting, but then you have to watch for a possible ‘stop run’ and reversal , or an A-B-C down .
Further Chop & a Stop run was shown in the weekend report.
THE VIX from the weekend report indicated a possible sell off coming in the markets. Note that the Vix has a lot more upside potential. If I was short the markets, I’d use a trailing stop in case they just keep falling.
USD – The dollar still looks like it wants to drop a bit more, but the MACD doesnt look weak. Here is the part that doesnt seem to fit. The dollar dropped and so did OIL, GOLD, SILVER, and Miners. 🙁
OIL – dropped but no real change. Timing wise Oil is running out of time to stage a nice rally and it is starting to look weak.
GOLD SILVER & MINERS
This is part of the puzzle that doesn’t fit. The cycle timing ( 2nd daily cycle) should have helped Gold & Miners to rally with the dollar dropping. We saw weak Silver & Miners. We need to be very cautious if holding positions. Some Miners look ok, others are breaking down. The good ones may follow (SA, AU, AEM, etc are still above their 50sma).
GOLD – This chart isnt ugly, but with Silver and Miners dropping down today, I’ll lose confidence in Gold. We should start to anticipate that Gold may break down.
In the comments section, it was pointed out that the 111EMA is holding Gold back. It has often, but in 2nd daily cycles, Gold has blown through that moving average with ease. We need to do that here, or Gold is weak. Notice that the spring daily cycle went sideways for weeks before dropping into a daily cycle low. THAT hurts traders. We may do that again.
SILVER– Not a pretty chart when the dollar was dropping.
This is the puzzling and unfortunate part too. Look how good this chart looked just days ago. This was a solid buy recommendation. Acting correctly, strong volume break above the 50sma.
GDX Today- Dropped back under the 50sma and the ICHI cloud after closing above it. I never see that in a 2nd daily cycle until the cycle turns down for its final drop.
GDX March ICL– Look at the this sideways chop on the left of the chart. This scares buyers out over & over again. We may be seeing that here unfortunately. How does one navigate that?
This is a close up of last March. Day after day, hard to hold and not much profit.
So it has only been 1 ugly day in the markets since the weekend report and already much has changed. We just need to be aware that the follow through on Gold, Silver, & Miners was not there. The Golds chart is ok, but Miners are weak and could go sideways or even start break down. More time is needed, so either get out and wait and see what happens, or be ready to honor stops. I am stopped out of many positions now. Quite frustrating and uncommon at this point, but these markets are volatile.
~ALEX
P.S. Never think that the red resistance lines will hold the bears back. Be ready for whatever.
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Thanks Alex. Great update.
Major Puts action on some Energy plays.
VLO (over $1M worth of puts were purchased today) in sweep (smart money).
Careful with energy.
VLO & TSO look similar when it comes to recent performance, which was pretty good up until now. They do both look like they could break down chart wise here. Thx
HYG puts open interest (DEC, JAN) is incredible. A lots of money are anticipating the High yield bonds crash….
Nothing easy about any of these markets right now, that’s for sure! 🙁 Sometimes it can be best just to step aside and preserve capital until trends become clearer. There will ALWAYS be other opportunites…but only if you have some capital left to participate!! As you say Alex, LOTS of things are not behaving as anticipated or as it looks like they should, which makes it nigh on impossible to call at this time.
I hate the fact that I personally think that the gold chart looks fine, normal pull backs and runs higher. Then I look at Miners that usually lead the way and they are bogged down in the 2nd daily cycle.
I had the same thought about ‘trends’ when I looked back at GDX in March…no real ‘trend’ higher, it was a choppy ride higher and very difficult to hold on with confidence and make money. Thats why I put it in the report.
The reports are great Alex and all very well rounded. They frequently help me focus my thoughts and help me form/confirm plans that suit my style and time frame, which tends to be intermediate/longer term. So not inclined to try and bottom pick or go for shorter term trades generally. I do it sometimes but definitely happier taking a somewhat longer term view and thus more of a ‘trend follower’ in that regard. But it’s taken me a very long time to find and feel comfortable with my personal trading style and am constantly tweaking it. A long and sometimes VERY bumpy road as we all know I suspect!
I prefer a buy & hold too, but boy these markets are choppy all over lately.
Just a little!! I find myself sitting on my hands a lot at the moment. Hard to do sometimes but my nerves can only handle so much excitement or pain at any one time!! Lol. I could be wrong but I think we are in huge transitioning stages at the moment…equity bull to equity bear, gold/silver bear to gold/silver bull before major new trends unfold. So it makes for incredibly choppy environments until the major new trends get more established which certainly sums up a good chunk of this year so far!! It’s like turning a super tanker as opposed to a high speed boat!! It takes time..and a lot of chop!!
I think similarly
Good to hear. 🙂
I don’t see how you can look at the charts and see a change in Gold and miners? Still looks downtrend to me.
I dont just look at the chart of Miners to see it. Look at the Yen, USD, etc
I totally agree from a pure trend point of view Bill but my opinion…and that’s all I was expressing…is based on a whole host of other criteria as well such as long term cycles, typical length of bear markets, gold/Dow ratio, debasement of fiat currencies etc, etc. Also on my long term weekly charts of gold I am seeing ongoing bullish divergence in momentum indicators, which is indicative of pending long term trend chnges, just as I have been seeing ongoing bearish divergence on long term charts of major equity indices. So putting it all together I have formed an opinion that we are in the transitioning stages I mentioned above but new trends have yet to be established. Ultimately price action has yet to confirm what is still just my opinion or current thinking. This is my very ‘big picture’ back drop and something I bear in mind, which I will take into account and influence shorter term trading positions but not necessarily dictate them. Does that make sense!?
Chris, I get it, I haven’t checked it out yet. You said you were more of a buy and hold investor. I think we would all like to do that, just can’t see how right now. What are you investing in?
Not a lot!! I have what I consider a longer term investment portfolio, which is hugely liquid at present. Unlike many people I consider cash as an investment position and although it currently earns little or no interest, if we are starting a major equity bear market as I believe we are then the future purchasing power of that cash with regard to equities should increase markedly if general equities drop say 40% to 50% again. I also have an element I use for what I consider to be shorter term/intermediate trades. I have been in and out of inverse index ETF’s over the last couple of months and so far so good in those! We are also allowed to use ‘spread betting’ accounts in the UK, which I believe you are not permitted to in the US. These make it very easy to go short/long of stocks, commodities, indices, currencies etc both in and out of market hours and I have been dabbling in all of those from time to time. Definitely trades though rather than long term investments. The only thing I have been truly investing in of late is physical gold and silver, which I have been gradually accumulating over the last month or so. That is based on my views and I am prepared to hold that for the long term more as a protection of some of my cash rather than anything else. But we are in an incredibly tough period and no easy answers. at least none that i have found!!
Yeah, I also share much of the same sentiment, but COME ON, let’s get on with it! 🙂 I keep trying and it’s not working. I think I just need to sit in cash and really wait for a great setup. Of course, we actually had a great setup in gold/mining sectors and we see where that got all of us.
Remind me NEVER again to buy an asset below a FALLING 200DMA. Ever. Ever. Ever. That would be never. It’s not investing. It’s gambling and I really ought to know better.
Thats almost everything now, including the SPX, NAZ, IBB, WTIC, AAPL, etc
You can buy GOOG 🙂
That in itself is maybe sending a very loud message!! I’ve been using inverse index ETF’s on and off for weeks now. One of the few things that is really working for me. Having said that I am anticipating an important general market low forming during October but which will potentially involve a VERY volatile bottoming process, so won’t be holding those for too much longer! Then step aside for a bit and if a new uptrend emerges, look to play that for a while. At least that’s the plan right now!!
I quit miners last night as I posted. The bottom feeding is cutting me to pieces. I think some large movements might be at foot, but I’m just going to let it get going first then re-analyze.
I have to admit, things look bleak. I have one observation to consider. I have been following the candles of GDX from the last ICL in November. I overlaid them in gold where we are now. I don’t know how it fits cycle wise, but so far we have followed it pretty well. If it holds true we should be do for a pop up and a run higher? Who knows. See attached, let me know what you think.
Well at least it shows that being at the lows this long didn’t adversely affect it in the long run, but I have to wonder about the stop run in GDX this time around. I wonder if breaking to new lows adversely affects thing, but I wouldn’t think so because GDXJ broke lows in Nov-Dec and did participate in the run higher too.
I’d say that it at least shows a possibility.
Bill, only thing I see is same think you likely do – that yesterday’s downdraft was a bit too strong – I see it holds trendline but well outside of the harmonica. I’m pretty much down to ‘hope’ at this point, which honestly, isn’t the best strategy…
Cason, agreed I don’t like to see that downdraft. But look at the gold candles, Yesterday was a down day last time then started up. Fingers crossed. I have stops but I hope they don’t hit, very loose, almost not worth having.
Cason, its beginning to look like the pattern will continue lower.
Stopped. 🙁 🙁 🙁
Bill, we just have to try harder. Will the harmonica to work! Make it work! 😛
Who knows if the harmonica will work? It may need to be tuned? I think the gold candles gives me the most confidence. You can see from the previous ICL we moved in a similar pattern and still made it higher. hoping it works out the same
Always great reports, Alex – Thanks!
Do you have an opinion on whether gold could be making a triangle?
Here’s a 2-hour chart: http://tos.mx/5NoCPQ
It could be considered one. If you look on a 3 yr chart, it has done that repeatedly when an ICL forms
Thanks, you’re way ahead of me!
Just looked and see that they don’t always break the same direction, so the observation isn’t helpful at all
Gotta keep watching with a quick trigger finger in case the bullish case is wrong
GDX in premarket is rising with strong RSI, even while gold is down – good sign.
Also, if US$ is kissing the underside of a bearish rising wedge, that should bode well for gold?
Here’s a 1-hour chart of US$: http://tos.mx/nJrtvu
nice job CF.. thx for looking out for us..
ps. I like EGI…looks like 2 is complete & it’s in beginning of 3….
silver also looks to be in 1 (of 5 wave)
I like EGI too. I dont own it, but it is acting correctly. ( I have it down 20% today though)
Hold up : I was noticing that it was above the 50 & 200sma, but today is no longer above either.
EGI fell out of bed this morning. Hopefully it was someone that just needed to get out of their position.
and mux, ssri …
ps. where’s my thank u maria…hmmm?
You contribute for thank yous? Gezzz
lol.. that was for CF.. (me giving him props for his report)
just joshin .. of course…;o)
Oh, Thank You Maria…for the…..uummm…for …aaahhh….starting up the company MUX?
Thanks 🙂
In UR head, I get the feeling many things are MUCH funnier 🙂
clearly…. :-/
(u get that it was because i praised u & ur report, right?)
ps. I luv that bear pic… totally get the ‘ah ha’ on that one.. scary business this is… dang
I got what U were saying with the “no THX? , but I went away and by the time I got back, you had already addressed it with Bill .
I just added my Thx for Mux later
Also above JDWM’s 200sma.
Slightly rising 200 is better than a flat one and much better than a falling one
That’s a 3 down?
up … https://www.tradingview.com/x/bcIkzBHH/
Hope you are right. I could use some good news.
I’ll give you a little hope Carl. You can hope that this was just a back test. (refresh).
Note: It can still go a bit deeper and slide down the blue trend line to the magenta one – stochastic not oversold.
Thanks for that Alex!
Any thoughts…does this move in the miners this morning look impulsive or corrective from yesterday’s move…Is it convincing?
thx
I’m not convinced. GDX 4 million at 10 A.m. eastern is not impressive at this time.
thx…was wondering if I should de-leverage into the strength this morning….or tighten up my stop..
Curtis, I’m in the same place – if this is a slow grind up (bear flag) before the next drop, I am certainly not interested in holding any longer. So, do I just eject or move stops up and see if we can’t get the elusive two days in a row. Either way, I am moving stop up. If we go negative for today, I’m out and will take the loss and not look back.
If we end higher, I might trail the stop. We have Jobs Report Friday and as shaky as markets and miners have been, not sure I want to play ‘chicken’ with the Fed and gov’t data right now!
It could just be my bias so I’m not sure, but GDX (and GDXJ though not the best example) could be forming a diamond bottom. Just Google it and you can find good explanations. What do you think guys?
In which case a breakout over the downtrend line from the Aug top would be the bullish confirmation. That fits with other TA too, of course.
I can see it, but I always find those and they break down or morph into something else. In other words, I haven’t successfully found any until after they break out & complete, so I ‘m the wrong guy to ask..
But I see it, so it is until it isnt ( or confirms). Something to keep an eye on, thanks.
Yep, something to watch.
It’s look to me like the intra day twists and turns with GDX/J seem to be loosely correlated with SPY/QQQ which I find interesting but not implausible given the fairly Blah! move in GLD. Though that is almost the opposite of many of the theories we had considered – i.e. gold/miner 2nd daily cycle (should have been up) timed nicely with the 2nd half of the current corrective pattern in general markets.
fwiw, I have S&P in C of A-B-C corrective Major 4th wave of Primary 5. A was the Aug swoon to 1820; B was the ‘gee, just didn’t quite get up to the 200day so Cason missed his short’ bounce, C underway to test (or minor overshoot) Aug lows. Then nominal new highs which would complete the 7-year bull market for the time being.
…mannn i do believe DQ’s about to bust a move…
https://www.tradingview.com/x/prpc0kAD/
You betting?
I can see DQ in a similar bullish pattern.
cool ..i luv it when ur harmonica is pointing in the same direction as my indicators…
Doesn’t matter. I won’t touch anything energy here.
No impressive buying volume in GDX as of 1/2 day.
#cautious
GDXJ looking very much like the two 3-day-drops earlier this month
Yeah, this sideways chop is always frustrating & boring. And its pretty much market wide
… i don’t much like this stochasticRSI either, as far as the “what happened next?” is concerned
Oil is so frustrating ..just moving within the same boring range:( decide alreadyyyy..Grrrrr !!!
Ditto – Boring day
Well, unless you were holding PNX or RJET recently
no i trade only 3x 🙂 even more good reason to get frustrated 😀
Ahhh, A Scotch drinker I presume 🙂
ha ha ha women in (from) India dont drink scotch (alcohol) 😀 But trading these products will make one get drunk before going to bed at night 🙂
I’m almost speechless (That rarely happens) . My apologies – I had a different picture in mind of who I was talking to. So you are female and from India?
Thanks for straightening me out on that. : )
May I recommend some Chamomile tea for a restful night
..most of the Indian girls i knew at uni used to get legless just like the rest of us 🙂
in fact some could easily drink me under the table
So how about that OIL? Like ASH said, pretty directionless. (refresh)
Boy is that a pinched flag formation and crawling right under the 50sma. The cycle in oil can really stretch, so this can go either way, but when it goes, it may run in that direction for quite a bit.
.
a rerun of last Feb?
indicators are near identical
broke lower then, but thats no guarantee of course
yeah.. that’s one lonnnng snout…
legless?
l o l
haha.. dont you damyankees use that expression?
No!
i wont even tell you what i was thinking … L O L
no.. please do!
hahah.. ok remind me on a thirsty thursday nite ..when i have my trusty glass of wine charting
Maria-Son meant he get drunk in a way that he dont even see women got legs:)
i still dont get it.. ha ha ha
it means you get so drunk, you lose the function of your legs, to stand up straight
ahhh … yeah.. i got it.. now that u speakn my language.. oops i mean English
… and you shoulda seen the state they were in..
Definitely an english espression! Lol Basically it means you’ve had so much alcohol to drink your legs (amongst other parts!) are no longer functioning properly or indeed at all!! Of course, I am sure you have never been in such a condition Maria!! 😉 😉
like sea legs? wobbly??
me.. never… ;o)
In extreme cases..worse than wobbly!! Lol And I thought not in your case Maria!! Against the ‘Cheerleader’ code of conduct I’m sure!! 😉
exactly!!! ;o) i was too busy being a scholar/athlete in HighSchool/College. Gymnast, Volleyball, Soccer, FastPitch Softball were my passion…
— i was never a cheerleader (well – on a field anyway) giggle ;o)
Wow..quite the athlete! 🙂 Clearly no time left for cheerleading…well not the offical sort anyway!! Lol 😉
annnnd .. I lived on a Ranch/Riding Academy and we had 35 horses to care for every single morning and evening… busy FUN life…
I assume your sisters helped!!? That is one lot of horse to ‘muck out’!! Lol Or is that another expression you don’t use in the US!? 🙂
yes… 2 sisters did… sometimes we could sweet talk the neighbor boys into helping out… giggle…then we’d all go to the tack room after and play spin the bottle.. LOL
Hahahaha. I bet they couldn’t finish the ‘mucking out’ fast enough!! Lol 😉
tee hee….
i have a pic of me riding/jumping a horse …(equestrian) i will look for…
Would love to see it. 🙂 And would that be wearing a ‘cheerleader’ outfit, jeans or jodhpurs!!? Lol And just out of interest is there anything you don’t do!!!? Sports wise I’m talking about!!! lol It does seem you have most of the bases covered! Lol
exactly!… i have a full tub of wigs & …. oops.. nevermind.. HA!!
Hahahha. I can only imagine!!! 😉
what is the bottom in GDX so I can go all in? thanks
I think it’s zero 😉
he he he you guys are funny..i love chamomile tea & some yoga :)) Yes i am from India living in the US of A 🙂 sonofgwaadd has a good understanding about indian women:)
So safe to get rid of the oil position now? (small $$$)
lol
might i ask.. at what point are any of you ppl considering to abandon ship on the GDX/J front?
i halved my exposure yesterday
Last night I mentioned in the report that I got stopped out of some miners. I was going to mention in tonight s report that I didn’t like today weak bounce, it wasn’t with conviction. GDXJ tagged the 50sma and started back down, so I am very under-invested and I will re-enter if this proves itself ( Maybe back above the 50sma).
Goid down, but Silver is looking good this morning… ready for a spike??
I was stopped this afternoon – was talking about how/where with Curtis early. I still have a little bit of GLD as that has held up better than miners. But if we can get one rise out of it, I’ll dump it as soon as I can.
hmm… https://www.tradingview.com/x/fdeiYhwN/
orrr this one? the alternate .. as it can go both ways…
https://www.tradingview.com/x/N8HqYk4W/
Both scenarios big moves!
I’d buy that one, not the first one. GDX headed lower.
Stopped out of JNUG, ejected RIC. I don’t see any scenario where I would take a long position, regardless of sector, until we get the August lows test complete. It can go up without me if it wants, but I am completely done with trips down, regardless of sector. And I certainly won’t touch anything commodity related until the most recent commodity death-spiral is complete. The risk/reward just isn’t there; risk is entirely too high right now. Cash seems to be king.
I’ll see if I can’t post a chart when I go home from work hours and hours from now – but look at the last few days of RIC, one of the stronger miners recently – clearly it has already peaked in the 2nd daily cycle, which makes it left translated. Why after a right-translated 1st cycle? Don’t know. Maybe I’ll think about it over whiskey. But I sure wouldn’t invest here. Caution is too light a word.
It’s certainly been an especially frustrating period Cason, no doubt about that. Without doubt ‘sitting on your hands’ sometimes can be a very wise move until things get a lot clearer again. Give it time and other opportunities will present themselves as sure as night follows day. Just might need a little pateince unyil then.
Cason, ditto. out of most everything today myself. What a bad run. Whiskey for everyone except ASH.
Not a fan of whiskey…can mine be a Yeungling. I’ve always enjoyed those on my few visits to the States…well Florida at least. 🙂
Chris, there are so many good IPA’s now. Your really should try to raise the bar. Yeungling is now being sold most everywhere, seems so much like Bud and Coors to me.
IPA’s sound good. It’s been a year since I was last in Florida so I’ll definitely look out for IPA’s the next time I’m over…whenever that might be. We did get to try a few beers made by micro-breweries which seem to be springing up everywhere now and some fo those were really nice drinking. 🙂
Best IPA in Florida, is Jai Alai. Check it out, if you make it back.
Thanks Bill. I’ve made a note of that. I’ve got freinds out there at the moment and they enjoy a nice beer so I’ll let them know as well 🙂
Bill, what do you think is going on? I guess rate increase fears? That is how the financial media is explaining it. Really hard to put my frustration into words. We waited months for the perfect setup and into 2nd DCL and it didn’t work. I know it happens, but I was really primed for this!
Cason, I have no idea of whats going on. There was always talk about the government trying to get some of your IRA money? Maybe this is how they are doing it. I trade in my IRA and 401K and its down considerably. I may have to work until im 70.