Keep It Simple Stupid ( K.I.S.S.)

There was a lot of action in the markets today, maybe that was due to the Beige Book and Fed Yellen Speech .  Reminder: DRAGHI speaks Thursday morning and we have a jobs report Friday morning.

 I wanted to just keep It Simple today,  and let the charts do the talking. Lets see what they have to say…

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SPX –  Dec 1 – I was pointing out that the chart looked bullish, but as it moved higher the MACD was ‘concerning’.

SPX – Now both Price and the MACD are concerning. That could be a bearish engulfing, even though the futures are pointing higher as I write.

Read on for more…

IWM –  Can this break out? This 200sma  was a resistance area pointed out in earlier reports.  It has not been overtaken. The volume on the SPX and the NASDAQ was kind of high, and it is also getting late in the 3rd daily cycle.  What does that indicate?  This bearish reversal could be the start of a dip here. I’m watching the 10sma and the trendline for support, but I think both could be taken out soon.

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Reminder: DRAGHI speaks Thursday morning. It could affect the dollar.

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USD – I’ve been talking about this possible bearish rising wedge. There is a bit more room to go higher, but this looks like a topping candle and that MACD crossed under as the dollar hit new highs. That is not bullish.

$WTIC – After pointing out that OIL failed and cycle-wise could drop for a couple of weeks, Wednesday shouldn’t be much of a surprise. This was the idea going forward- 

Nov 13 – called for a down trend starting.  lower highs and lower lows. 

Or maybe just a base forms and we get a double bottom, due to XLE holding up? Either way, lower prices.

But also this longer term chart showed a wedge with room to drop into the $30’s

WTIC –  Dec 2 –  drop on heavy volume almost into the $30’s.  This has more downside.  NATGAS fell too.

Reminder: DRAGHI speaks Thursday morning,  it could affect Gold.

GOLD –  Gold fell to NEW LOWS WEDNESDAY, and even fell further in after hours into the $1040’s.   I would actually LOVE to tag that $1033 area and get it over with in case it is necessary.   Volume is lightening up.  Notice that the MACD is rising while price is dropping –  that is interesting, huh?  ( Amazingly , Miners did NOT follow). 

SILVER – Ditto, silver fell to new lows in after hrs,  but the MACD is about to cross positive?

GDX – With GOLD & SILVER selling off, we all know that the Miners get absolutely crushed.  Well they aren’t.  I accidentally put the 20sma on here, but both the 10& 20sma apply here.

   SO I had mentioned GOLDS $1033 area several times.  I really wish we would hit it in pre-market for a test of the 2008 highs, since Miners look to be holding their own.  If Gold would tag that area,  it may turn higher and finally begin to rally. Price was only $12 dollars above it in after hrs.  Testing the 2008 area could be the final lows for Gold, but we’ll take it one step at a time for now.

GDX –  With Gold breaking new lows daily,  GDX is not selling off and the MACD continues to rise.  The MACD is much higher than when GDX was at the AUG lows.   IF GOLD crashes, my stop would be somewhere below prior lows,  but I think this is really acting bullishly right now. I would buy a stop run as soon as it recovered.

This is an interesting fact  that matches current conditions, and remember that C.O.T. for Gold. It is more bullish than it has been in 14 years!

  I expect a good rally to come about.  What will trigger it?  With yesterdays Fed Speech we saw  GDX  hold up well with Gold selling off.  Will Draghi’s speech finish the job?  What about the Jobs report Friday?  I do not know,  but Gold keeps selling into a very stretched situation and Miners are not following. I have a stop in case GDX breaks the lows, but they are holding up very well despite selling in the precious metals. I’m not saying to  go 100% leveraged here,  but I would buy the dips and accumulate a few Miners that are acting correctly.  Some are even above their 50sma or 10sma  as Gold makes new bear mkt lows  ( SA is a sweet chart if you ask me,  Check out the chart of NG with Gold at lows. ).  You can add later too, when you see evidence of a rally unfolding.  I do believe it is coming soon.

~ALEX

Reminder:   C.O.T. –  Smart Money is more bullish than any other time in the past 14 yrs… since the yr 2001!!  I imagine that this would  improve with every day down in Gold.  Smart Money is likely buying these dips.