They Did What?

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Yes,  Gold has a bullish looking set up, and miners not only sold off, but they broke to new lows.   We will discuss that, but first lets take a look at the rest of the markets.

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NASDAQ –  The futures are up over 100 to 200 points each morning,  but the rally fades.  What to do?

NAZ 1-19

Here is the SPX …

 

I do expect a bounce soon, but it may just roll over after a tag of the 50sma .  We’ll look at it closer when it comes our way.  Notice the selling of the past few days, up , down, up, down.   Is this really unexpected? Is it completely different than anything we’ve ever seen?  No, not at all….

SPX 1-19

SPX  summer 2008 –  Look familiar?  Then the multi week ( Weak) rally kicked in, but it was rather lame really.  The rally went from Mid July and lasted 2 months.  Then what?

SPX 2008 summer

The SPX recovered the 50sma a few times , sucking in the bulls, and then crashed. Normal distribution at tops. 

SPX 2008 fall

The dollar hasn’t changed from the weekend report.  I expect it to roll over soon.

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WTIC –  We MIGHT be starting to see capitulation selling. So far we bounce to the 20sma, go sideways, and start another leg down. If we capitulate ,  we may see final lows.

WTIC 1-19

NATGAS –  Natty tried to reverse on Monday.  I am still watching the fib #’s.  

NATGAS 1-19

Re-Gaining the 50sma would be bullish. I didn’t have it on the last chart,  so it is shown here.

NATTY

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GOLD, SILVER, MINERS  

 

Ok, in the weekend report I emphasized how Bullish the Gold charts looked, and how the Silver chart looked normal too.  That would imply that Miners would follow Gold higher. Gold remains bullish, but Miners broke down Monday   I will try to make sense of that, but how?  Theory.

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GOLD – Still healthy and a bullish set up.

GOLD 1-19

Silver  – It looks like it wants to break higher.  These 2 charts give NO REASON that Miners should break down.  The equity markets were not breaking down either,  so there was NO REASON for Miners to break down…

SILVER 1-19

 

GDX –  Yet they did Break down.

GDX 1-19

 

I cannot rationally explain it as a matter of fact.  I don’t feel like I have seen this big of a difference between Metals and miners before, so what can I say?

    ” Manipulation” does not satisfy my mind.     So I am going to try to reason this out with 2 possible theories and a warning first.  The warning is,  “THIS IS NOT ACTING LIKE IT NORMALLY DOES AT LOWS,  DO NOT TRY TO GUESS THIS BOTTOM UNTIL IT PROVES ITSELF”

 

Theory #1.

Gold just bottomed last Summer on JULY 27,  Miners bottomed  ‘roughly’   1.5 months later on SEPT 11.

Gold broke to new lows and Just Bottomed on DEC 3,  Miners bottom roughly 1.5 Months later ( Soon/Now)

 

THEORY #2

The break down we saw on Monday to new lows is the lows for Miners? They do not need to continue much lower if it is a shake out ( WARNING, LET IT PROVE ITSELF).

QUESTION: Have I ever seen a break down like we saw in GDX recover? Notice that GDX closed at the lows with increased  volume.

GDX break

BREAK DOWN

Yes – It’ s  not the most likely scenario, but it is how inverse H&S are formed.

RECOVER

  SO it will take more time to see how things play out,  but when I look at those charts it just doesn’t make sense.  Gold looks Bullish, the markets held up, and miners broke down fast.  Why?     SO at this point it is best to wait for further clues as to what the markets want to do here.   Cash is a good position for now.

 

  As a side note,  I am going to be using this twitter account at the link below to alert when I have a new premium post.

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https://twitter.com/ChartFreakAlert

     Please follow me there if you want an alert via twitter for These Premium Reports.   The other twitter account that I currently use will be used to just post content for the public.

 

~ALEX

68 replies
  1. Irwin
    Irwin says:

    Good report, Alex.
    I’d like to see a quick $60 gold shakeout with miners holding steady; but then, I’m an optimist.
    USD Index down 0.31 as I type. Best course of action – wait and watch.

    • pankef
      pankef says:

      “cheap” is a relative term. The same argument could have been made many times over the past few years only for prices to continue lower.

      • Gary Savage
        Gary Savage says:

        But then again the juniors are down 90% from the highs. That is in line with the most destructive bear markets in history. I think we can safely call them “cheap” at this point. But yes they can go lower still.

    • Bill
      Bill says:

      The RSI5 and the %R are getting very oversold. Has room to go a little lower, I was thinking around $11.80 on GDX. I expect a solid bounce from there, but I don’t have a crystal ball. I’m with Theory #2, I think we drift down for another week then move higher.

  4. SonOfGud
    SonOfGud says:

    check out this channel.. $GDM (proxy for GDX).
    rarely leaves the confines of this channel, except in latter stages of a cascade or a rally.
    would appear that is not currently the case, and so we should expect it to bounce back from here (famous last words)

  5. knight
    knight says:

    If miners can’t rally on days like today I don’t know whats going to happen when gold corrects. This is just plain silly. This trade really hurting. It’s hard enough being right in this industry but to be right and still lose money that’s just a shame….

    • Bill
      Bill says:

      I’ve mentioned that before, doesn’t have to happen, but I’ve seen it enough to know it can. Gold up miners down. Sucks

      • Dallas K
        Dallas K says:

        Here’s a chart of ratio of Gold vs GDX. Looks like Gold has performed better than GDX for a while now. I might stay with GLD or UGLD for a little while.

    • Cason
      Cason says:

      No kidding! I sold my hedges on the fakeout reversal last Thurs which fell apart. I wish I had held that and short oil so I could go swimming in money. Drat!

  9. Bill
    Bill says:

    Something has to give soon. On the 8th Gold was at 1108 and NUGT was at $30. Today Gold is at $1108 and NUGT got to $19.20? Divergence………..

  11. chartfreak1
    chartfreak1 says:

    BIOTECH turned around ( ZIOP, IDRA, TROV, CALA , MACK, OMER, etc) ,

    Stocks off of their lows. Everything shorted and oversold….feels like a reversal.

    GDX / GDXJ may be reversal now too, but safer buy is above the overhead trend line.

  13. chartfreak1
    chartfreak1 says:

    Some energy stocks down 20 – 25% / Others reversed and popped up that much.

    REXX is up 25% and LGCY has a nice double bottom reversal.

    AAV – ??? Boom!

    • Cason
      Cason says:

      We’ll have to see how tomorrow closes. Last two reversals have failed. Can it get above 9 EMA? That should be a really good spot to watch. If we gap up and sell off again, that would be terribly bearish (yet unlikely!). Not sure that we can get back to the 50-day though. It would have to fall pretty fast for that to happen.

  17. Cason
    Cason says:

    Some of the oversold indicators that I watch. The chart for $CPCE – put/call ratio dropped huge on today’s intra-day reversal. $BCMM (http://www.barchart.com/charts/stocks/$BCMM) went from ridiculously oversold this morning to neutral at close. NAZ, % of stocks below 50-day – now below Aug lows. (REFRESH).

    Never seen so much excitement about the DOW closing down 250 points. 😛 I’ll be watching the 9EMA like Alex suggests above; we’ve had a couple of fakeouts so far; not falling for any more.

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