1-29 Wkend Report: It’s Adding Up

We are getting the follow through that we expected in many different areas of the Market.  The small pieces of the big picture continue to add up.   Will it continue?  Lets check the charts! 🙂

SPX Jan 27 – I pointed out that the drop mid week was normal, the same thing  happened coming out of the August lows. I still  expected a run higher.

SPX Jan 29 – Friday we got our follow through. 

Moves higher out of the lows  can be convincing, but will it lead to a break to new highs in a bull market,  or a bounce?

IWM DECEMBER 24  –  It never recovered out of the AUG lows  and I noted the resistance here at the moving averages, so…

IWM – I’ll be keeping an eye on the resistance areas  going forward too. 

Because I expect a believable bounce to get everyone “long” and then another drop. The last 6 week rally did that.

USD – Well Well Well.  I called for a drop immediately in the $USD, and then the Bank of Japan threw us a curve ball.  Did you notice that this POP  did NOT hurt the precious metals?  Interesting. 

USD WKLY –  We still could get the double top that I have been calling for, but I need more time to see how this plays out. 

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REMINDER:  And also for those that were not here during my December reports.  

In one of my Dec weekend reports, you may recall that I did a study on interest rates and their affect in the past on both Gold and the Dollar.  People worried that Gold would crash in an interest rate hike environment.  Actually in 2004 – Gold continually rose in that environment,  the dollar dropped. 

  In 2004,  the $USD  dropped and rallied on the first rate hike, then rolled over as the year went on.  ( Note: Ever since the Dec 2015 rate hike , everyone expected the Dollar to break out and run to 120.  So far it has been lack luster.) 

  This was GOLD in 2004, with the first 4 interest rate hikes in years.  It was NOT bad for gold to be in an interest rate hike environment.  

WTIC – Strong out of the lows  and huge volume , but it could still just be a final daily cycle  that would roll over like last spring. ( Next chart) 

 This move could look like this red arc and roll over to $26 if this is not an ICL in Oil.   The Green arrow is if Oil put in an ICL.   Yet to be determined, but energy stocks are very trade-able right now for short term traders. More on that later.

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NATGAS  Jan 20 chart –  This was a rocket on the first leg higher, then pulled back in a normal manner. 

It lingered at these lows for days and I was worried about a possible bear flag, but it broke out above the 50sma on Thursday as shown .  Now I expect a 2nd leg higher.

NATGAS WKLY

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GOLD , SILVER, and MINERS

The C.O.T. has increased, but I point out other Gold highs here and you can see that we are well below those level.

Gold Jan 29 –  Gold closed higher when the USD spiked over 1.14.  Gold bounced off of the 8 ema too. 

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GOLD WKLY –  Follow the stochastics.  

SILVER WKLY –  This could be ready to POP this week. Stochastics is STILL oversold.

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  I checked social media this weekend and while some are bullish, I also see quite a few people saying ” The strong dollar is back, I am shorting miners.”   or  “I’m Buying Dust.”  That is good.  We want people to think that this move is not real and we want shorts to pile in  ( And cover as it continues higher). 

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GDX can pull back and still be fine, but also I thought that it was interesting  ( and bullish)  that …

GDX –  Made higher highs Friday with the $USD rocketing higher.

My chart from GDX Jan 28.  Please note the gap open at $13 & $13.50 .  We could drop there,  but it just seems that we would have dropped there Friday with the dollar up over 1.00 .

GDX WKLY –  Shake out and we are pressing against a down trend line. so early in the ICL my middle indicator is already at the zero line. Bullish in my opinion.  Also oversold on the weekly stochastics. I would NOT Be shorting this, unless it was just a quick trade. 

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GDX WKLY #2 –  So early in the ICL for miners, we look set to break out here.   We could get a break out  by the end of next week. The weekly stochastics remains oversold,  with good divergence at these lows.

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  So –  I want to release this report Saturday night.  Even though I think that this report has enough in it to express my views on the various sectors, I do have more charts to share.    I will try to release another report before the  open on Monday morning.  I will include more views on the big picture in miners and I also will try to post some trade set ups, because there are many short term trade set ups that look pretty good.  The hard part is OIL / Energy sector.  Many set ups look very bullish,  but if Oil does roll over,  they will drop too.  They need to be monitored closely. 

SO enjoy your weekend and I hope that this gives you a good idea of how I see things lining up.  My next report will add reasons that I feel Miners are bottoming and running higher,  rather than setting up to drop.   Like I said, I saw many people on Twitter, etc.  wanting to short the recent rally.   Yes,  we could pull back a bit here,  but I think that we are heading higher sooner than later. I’ll have more on Monday morning. Thanks for being here!  

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~ALEX