Running The Bases
We’ve been looking at bullish bases in the Energy and Precious Metals sector lately. Very quickly they have been making some strong moves. Explosive gains actually.
For example, this was SGY when I pointed it out. It ran from $4 to $7 in August/September and then pulled back after hitting resistance at the 50sma, forming an inverse H&S. When it broke above the 50sma , it was a buy around $6.
SGY – 3 days later and it is nearing $10. Thats $4 to $10 in about 1 month.
EXXI is up 150% in 7 days!
These are obviously getting extended and may be due for a pull back. That means that it is best to look at other bases that are currently set up, but not extended…
WTIC – Oil broke from the bull flag, but may pause soon below the 200sma. I still think it has room to run into the lower $50s, so other Energy stocks still have time to break out too.
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I wanted to put together a small list of a few energy stocks for you to watch or enter with tight stops. I was looking for stocks that have bullish looking bases.
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SFY – This already Popped and yes, it might still be able to run a lot higher. I personally wouldn’t buy it unless it drops to the 50sma. I am just putting it here to show how similar it is to the GDP chart/ Base (below). I expect GDP to break higher.
GDP Midday today – GDP dropped to the 9 Ema and recovered the 50 sma. It then went on to close higher than shown here. The above chart was at the close ( $0.81). I like this base so far.
GST – The set up is bullish
AREX – I still own it, and it’s still in its base. I posted this chart in Wednesdays report. It dropped 2 cents on 1/2 the volume of yesterday.
I pointed out AKS Wednesday. It improved a bit more today, above the 50sma and breaking from its base.
CENX – Same story as AKS. Regained the 50sma today.
BAS, REN, PACD, KEG –
I see in previous thread, discussions on big picture PM Bear Market.
Well take a lookee here $GOLD1980-2015, and see what happens with daily PPO (50,100) moving averages at secular(?) turning points.
Always a fake break below the +ve divergence… no doubt corresponding to the final 5th EWave, and then reverse.
(1982 did drop further, mind)
Currently we are in the middle of such a reversal.
Very interesting to see. Thanks SOG. 🙂
Thats an interesting catch, nice post SOG. I wish it did the same for 2008, but I do see the relationship that you are pointing out.
I have some strong feelings about where we are too, and we are AT or so close to final lows in the Metals market. When THAT happens, we will have beautiful trade set ups for years!
Really looking forward to that part. I’ve been waiting years for that Alex…literally!! Lol
Ditto – The Miners were trading like clockwork in the bull market. Very easy to trade and as for long term losses? What were those…stocks just ran higher unless bad earnings or suddenly doing a public offering.
Happy days!! 🙂 And hopefully not too far off once again! 🙂
maybe with 2008 being a real rapid spiker, there was no time to register the effect on daily 50,100 MAs..
Alex, couldn’t stay away..I knew it! Thx for the great report. GDX approaching the $16 that many have charted here…maybe time to lighten up and wait for a bit of a breather? Do still think the cycles are valid (i.e. time for a pullback) or is this more likely to keep running?
I know Deshy-
I was looking at some energy stocks and Miners and I just see some HUGE gains from some breaks from these bases, and then I see some bases that price hasn’t broken out of yet , but if they do it could be a great short term trade.
Then I thought of you guys/gals & just wanted to share. 🙂
GOLD also looks bullish here
Hi Alex. Just in case this might be of interest to CF’s in general but even more so to those looking at the bigger picture/longer term I updated my very long term chart for oil with my attempt at EW labelling. As always this comes with a major health warning and although the wave counts look reasonable there is absolutely NO guarantee I have them correctly labeled!! But in conjunction with the very long term GDX one I posted yesterday, which also shows promise for a major bear market low being in place, there is a possible intruiging situation potentially starting to build where we are just possibly seeing major bear market lows starting to form in the general hard assets/commodities arena!
As you point out though and which I would very much agree with, we may be approaching a pause point. We are not only closing in on the major down trend line on the multi year chart but I’m also seeing a possible 5 waves up on my 1 hour chart. Looking back at the late August bull leg the 3rd wave did extend and it’s just possible that might happen again here. However under EW rules the price of WTI could not drop back below 49.55 if the 3rd wave is extending. I’ve added my 1 hour chart here as well so hopefully it will make the short term scenario a little clearer as well. Hope all this helps both shorter term traders as well as us longer term investors! 🙂
I have been feeling and mentioning for a few months now that I agree- in my studies – I see strong signs of bear mkt bottoms in CRB, GOLD/SILVER , maybe OIL too. Commodities bottom and possibly market topping ( That remains to be seen, because I believe that they both can run higher together). The YEN is another area that I did some studies on and found some great clues there.
It does feel like lots of pieces of the jigsaw are now slotting into place. We still don’t have the initial strong confirmations IMHO but it’s all looking VERY promising that we may well do in the near future. One possibility I see is general equity bear market (for which I already have preliminary signals in place…confirmation will come with the backtest you have been highlighting in recent weeks) but a general commodity bull market in either some kind of reflation/inflationary trade OR a major currency crisis where faith/confidence is lost in ‘paper money’ and there is a rush into ‘hard assets’ and commodities in general. But time will tell and one thing I have learnt the HARD way is always to keep an open mind and be willing to change expectations if the facts change. Not always easy to do!!
When I look at this chart, I keep an open mind about 1 thing. Look to the left side and see the 1-2-3-4-5 of wave 1 in August. Wave 3 was very long and had a bump in the middle.
Now look at the 1-2-3-4-5 now. Back in Aug, the 1-2-3 looks like what we might be doing now , but not yet finished until we hit the 200sma on a daily. Not sure if that makes sense, and its just a guess…see chart (refresh)
EDIT: That should say this was not the wave 3 TOP yet.
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I totally agree Alex. Sorry I perhaps didnlt make that totally clear either in my comments or in my chart notes. But I did mean to say that jsut as you have pointed out that what I have labeled as wave 3 may in fact just be i of 3, that is the first subwave of an extended 3rd wave just as it did last August as you pointed out. BUT if I remember correctly price will have to stay above 49.55 because a wave 4, in this case it would be wave iv of 3, if extending, is not permitted to enter the teritory of wave 1 or in this case i of 3. Have I explained that OK? But very much on the same song sheet as you Alex. 🙂
You’ve made it clear many times that E.W. labeling can advance as time goes on, and you explain very well : ) You put 3 or 1of 3
I just wanted to point out (And seriously, my thought / view could be wrong).
that looking at the run in August & the daily chart — the OIL 200sma as a possible 3 top. You have the same idea.
As you have mentioned many times…doing this in real time rather than with hindsight is the real challenge. If you want to mix it up in an even more bullish way…there could actually be a 5 wave pattern completing pretty much now but this in itself might just be the first subwave of an even larger 5 wave pattern. Under that scenario, we would see a larger wave 2 correction and then an even more powerful 3rd wave to the upside!! So many possibilities!! This is why I steered away from EW and leaned more towards simpler support/resistance techniques and more of a trend following style using ma’s. But at the end of the day it’s whatever you can make work for you and feel comfortable with. That for me is the real challenge!!
Very tough real time. It always looks probable , until later when I do E.W. – lol
That scenario you just mentioned would probably show up on a weekly chart later 🙂
Good report Alex. A few days ago I bought KMI and PBA as I like some dividends to go along with potential price appreciation. So far so good. My RIG has done well and thanks for your thoughts on GDP, I’m definitely interested in that one.
Very nice, I like those 2 charts ( KMI & PBA) . I didnt mention PVA – but that looks spectacular potential if it was in recovery mode.
and look at ticker ‘ZINC’ potential . Whew!
Nice trades CS
Thanks! I’ll take a look.
Cycle-wise, GDX over $16.16 would be very pleasing. It would break the highs of the first daily cycle in august, and that is what we expected really.
CENX making a nice move here , out of the base shown in the chart in the report. After reclaiming the 50sma – up 12% currently.
CENX now up over 16% – I missed this one : (
Odd day here. Yesterday looked like reversal candles in GDX ,DUST, NUGT etc
Gold is up $20 and broke out from the down trend line that I had in this chart ( refresh) Now possibly closing there on a wkly basis since today is Friday, and no one cares. Then you look at AUY, SGBL, AGI, NGD, etc breaking from bases the way that Energy did.
SA & IAG look like a cup/handle w Bull flag. Pretty interesting stuff here on a Friday.
What does that tell you when no one notices or cares? Often a Bullish sideways move may be happening..
And remember what I pointed out in a report last week about 2012 triangles and cycles. The count gets messed up.
Just talking out loud here.
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IAG anb SA look just like GDXJ. I think we are topping here, need a short break. This time the train left the station with no places to get back on.
side note:
Look at a 1 yr daily of SA. with only a 50sma.
Looks like a large Inverse H&S . I like it. Small bull flag possibly forming in the area that it is in now. It did not drop back to lows in August when GDXJ did, so I see it as stronger.
I bought some JNUG. It looks like a bull flag breakout. BUT, the volume isn’t terrific, and divergence on the MACD and RSI hourly chart. MACD crossing over though.
Sold JNUG and CDE
Think you could be right Bill, as far as GDs are concerned.
This rally is near identical with the halfway position pullback of the August 2012 rally.
Just get your chart up & compare all the MAs/MACDs, RSI, stochs etc.
I could be wrong about the very short term Alex but on my 4 hour charts I’m still seeing potential for just a little more backing and filling on silver, maybe a back test of the broken trend line on gold and just possibly a wave 4 on GDX. However I would then be looking for that to ‘fire up’ a 5th wave higher in GDX and for gold and silver to push higher to various chart targets I have in mind over the next couple of weeks, which would certainly tally with those bullish looking set ups in some of the stcks you are seeing. 🙂 I also just think we may also see the rally in the general equity market run out of steam next week and see at least a pull back if nothing more. Tha might also get some added bullish attention on the PM area.
What I am alluding to here , is the start of confirmation of a major change in everything.
will discuss it all in the weekend report.
Something to look forward to. 🙂
Could be CF.
A question over energy is oil is leading shares. I’d be more comfortable other way around.
oh wow.. looks like 5 was an ending diagonal in GDX… nowww it will come down to my box….
Why can’t you post charts? Don’t tell me you’re working!
https://uploads.disquscdn.com/images/860c8b21cc49dbf30054982677d9f709cdcfc8031671d2ccc50af1a2b173114d.gif
Oh grow up! LOL
agreed M.. absolutely not a place to be buying.
lets see that box do its thang
with hindsight, that was an interesting wave 4 over past 3days..
quite possibly, a ‘rare’ running flat?
Hey what a coincidence. I was flicking through one of my EW reference books and was thinking exactly the same thing. It just suggested they were VERY rare so wasn’t convinced. But funny how you saw the same thing. 🙂
yeah C.. the overshoot on the Bwave and the truncated undershoot on the Cwave
And with bearish divergence on MACD and RSI on the 1 hour charts. Hopefully that is just wave 5 of larger 3 and not five of C. Then that will mean ‘your box’ will be the next ‘sweet spot’ to start wave 5 up to complete this first intermediate upleg. 🙂
there.. i cleaned up my box.. now it surely ‘should’ get tagged
…. https://www.tradingview.com/x/1pYlo2Ln/
ps. ending diagonals show up when a move has gone too far too fast.. target is back to the start of the wave and ‘then some’ … also.. price should not fall below my box …… that would invalidate the count
why invalidated below box? … wave2 would not necessarily be broached
What about the gap at 14.50? How does that tie in with EW if we assume that it will be closed at the next DCL?
thats where im looking too Conrad.
The way I currently have things on my chart, I have the a potential wave 1 up from 11 Sep IC lows ending at 14.70. If wave 3 is ending now as we suspect then under EW rules (I believe) wave 4 is not permitted to enter the territory of wave 1. So 14.50 would breach that rule and if it does head back down there it would possibly make this and ABC corection rather than a developing impulse and that would not be such good news in the short term. 🙁
ok.. lets not get too pessimistic.
lets for now see it as a chance to load up the truck
For lots of reasons SOG I personally am favouring that it will develop into a full 5 wave impulse and NOT an ABC. This would be the first larger wave 1 up. If it does I would expect it to complete this month. Then we would look for a larger wave 2 to correct some but NOT all of that wave 1 before starting an even more powerful wave 3 up. It would be around the lows of wave 2 where you would want to load up the truck. My guess is that wil be sometime in November. 🙂
Thanks Chris
I did put an updated chart below in a reply to SonOfGud in case you havent seen it. It might help make things a little clearer. Sometimes pictures say more than words can! Have agreat weekend Conrad.
Yes. Saw that Chris. Thanks again
sorry conrad.. i just saw your question… chris answered it correctly..
No problem…. thanks Maria. GDX always fills the gaps. Will be interesting to see if it does that at DCL (EW says no) or at ICL
Your box is looking just about perfect I would say. 😉 As things currently stand 15.0 would be an almost exact Fib 38.2% retracement of this latest 5 wave move. It will be very intresting to see how things pan out from here. 😉
do you know if there is any significant fib at 14.50?
50% retracement SOG but read my note I just posted above in reply to Conrad!!
thx C, but it was 50% yesterday, i thought you’d said.. does todays higher high not change that?
I think it would have been 50% yesterday before the new highs today. But I think I might have forgotten that important point about wave 4 not being allowed to enter the territory of wave 1. Apologies as I’m no EW wxpert and haven’t looked at this ascpect for years. The 50% retracement now is at 14.72, which is just above the potential wave 1 peak now. Obviously if that wave v (five) is not complete yet it will rise yet further. I just checked a reference book and it does appear a slight breach of that rule is allowed in futures and leveraged markets. GDX is netiher but it is volatile and therefore an intra-day overlap might be permissible? Just a thought but someone else who knows EW better than me may be able to confirm or not. I’ve added a update chart which will hopefully make things clearer. Waves 4 and 5 on my chart are TOTAL speculation at this point!!
k thx C.
i take it as read that none of us are actually ‘experts’ on EW here, but all contributions are welcomed, coz they might just reveal a pattern that had otherwise escaped notice.
in other words.. every little helps
I just Keep it Simple….Use the 9 ema in a strong uptrend, unless we are topping & dropping to the dcl : )
sound advice Alex!
Well, its a start – LOL. Look at the first daily cycle it held on that pullback. The January run higher got a little whippy .
are you talking about daily closing price holding above the 9eMA?
looks like a 2nd line of defence (12eMA?) to contain the intraday low is required when choppy, unless you are ultra cautious with stopouts
Agree…9 ema often holds in the wave 3, but when that is done?
GDX may/ may not hold the 9ema in Wave 4 dip, and then after wave 5 – the drop is at times 50% of the whole move up ( a-b-c style) , but that’s also more of what happens in bull mkt advances, rather than bear mkt rally. Those bear mkt rallys are a tad reckless, right 🙂
Now that is an ‘expert’ who speaks from experience. You CANNOT beat keeping it simple. 🙂 Just as well you are here to keep us all in check Alex and to keep us grounded! Much appreciated. 🙂
On my one hour chart above my 50 period ema very closely equates with your 9 ema on the daily. As you can see on my chart I just posted it does work very well for giving support (or resistance) when GDX is trending. As you say…keep it simple. Just of interest the 50 period ema (9ema daily) is right around that 38% retracment level at the moment just above 15.0 Obviously rising with each pasing day though.
You’re um box, is at the gap fill on GDX! I’m writting a book, so can you tell me where you came up with that position?
Dear Bill
if u would like to discuss the specifications of my box .. you will at the very least .. need to buy me dinner .. and a bottle of scotch.
actual LoL..
you 2 should form a double act.. straight man & funny gal
giggle
I doubt it will take a whole bottle of scotch.
ZAZA – shake out up 54%
It looks like it hardly moved, up 78% from the bottom! Still oversold
I know…looks like it has a lot of room to go higher, after a 95% move, Crazy.
CENX now 21% : (
new brainstorm… this pattern just emerged .. https://www.tradingview.com/x/Z4XvSwYY/
You see, there you go, you showed the Fib numbers. Less questions to ask. Time for me to go get some scotch. What kind do you want?
TeeHee
im easy…. as long as its wet & quenches my thirst….cheers!
Any hints in EW speak what that wave formation is!! Possibly an “I’ve already started on the scotch” larger wave 1!!? Lol 🙂 Personally I’ve started on the red wine…but it is 9.15 pm in this part of the world!! 😉
ugly right? which makes me wonder if it’s all not just part of a larger correction…
I’m thumbing through one of my reference books. It doesn’t look very conventional!! Lol But I am on my second glass of wine!! 😉
yeah.. nevermind chris.. L O L …i had a fleeting visualization… but i lost it.. HA!! oooopsie…
im gonna delete that before I confuse anyone.. ha ha ha
I think I’ve found it ….it’s vERY rare…but it’s know as an ” iggly, wiggly, ziggly zag” leading wave 1!! 🙂
ha ha ha ha
As you can probably tell…it’s been a long week and the red wine is slipping down all too easily this evening!! Lol 😉
And once again you have raised a smile!! Lol Now I must start “boneing” up on some of those new wave patterns. So much to learn and so little time!! 🙂
If I may kindly chime in…youre #2 is at the absolute lows on the daily chart. Sept 11 was the lowest point for GDX, so I dont think it can be a #2, right?
I like ARDBEG for scotch ( on ice ) , but its very strong and peatty. Not for the feint of heart. 🙂
Your a tough task master Alex…but I would have to agree with you. Lol It’s unlike any wave formation I have ever seen but you have to give Maria 10 out of 10 for effort…let alone sheer entertainment value. She certainly always manages to make me smile…one way or another!! For the record I HATE scotch…a VERY, VERY bad experience with it in my younger days! But I do LOVE red wine. Just for future reference for our future international overseas convention!! Lol I hope you both have a great weekend. 🙂
If I may kindly chime in also…
an ending high* such as that can only be a 5wave or an overshooting (expanded) Bwave, can it not?
*edit
I think Maria may have dumped that particular wave count now SOG! Have a great weekend and see you back here next week. 🙂
cheers C.. same for thee
:-/ sorry .. lol
which chart? the one i deleted? lol
i will have to study more …. ill have to grab my laptop & go sit all alone in my gazebo with beautiful crisp smell of leaves all around me … darn darn darn…
I hope you appreciate there is a LOT of ‘leg pulling’ (does that mean joking in the US as well!?) going on here. We all love and appreciate your hard work and contirbutions really. So be very pleased and proud of what you have already learnt and for the record none of us here will EVER stop learning. 🙂
this chart.. the one i had in an open browser window..
you cant escape your past.. lol
Lol lol
but here is one thing i did read for sure though ..– particularly FOREX and Commodities dont “obey” the Strict “RULES” of EW.. so to answer your ? .. yes .. 2 can go lower than 1…
Now….are you sure the exception applies to that particualr rule!! 😉 And is that in an ‘impulse’ or only other forms of ‘motive’ waves!!? Or am I mkaing a ‘boner’ here!!? Lol 😉
yes.. im 100% certain I read – somewhere.. lol .. in the pretcher book Im pretty sure… ll find it if you want… i believe it was part of the ‘personality of waves” section … also in forex & commodities the 5th wave extends more-so than the 3rd ..blah blah blah
I’ll dig my copy out. That will be my homework for the weekend!! Lol I definitely remember the part about the 5th wave normally being the longest in forex and commodities. I actually mentioned that yesterday i think in one of my posts about the possible major %th wave to come in both GDX and Oil!! The other one I don’t recall but I haven’t looked at EW in years so am incredibly rusty and only had a basic understanding even when I did. So you keep going…we are clearly all loving your posts and comments and every single one of us is learning here..and always will be. 🙂
Mine has started well. But red wine can do that for you!! Lol 🙂 Have a great one too Maria. same time, same place next week! 🙂
but in other news… i wonder if i will ever NOT be amazed when i see fibs play out like this…. CRAZY
NGD.. is getting it done.. ringdingaling … https://www.tradingview.com/x/G4rXBB3C/
End of a week with higher highs in $gold, $silver, GDX and SIL …. Happy days are round the corner!!
Time to get started Alex 🙂
You’ve been tick on, and what a wonderful supporting crowd.
NM