I’m Starting To Sell, Not Chase

What a rocket ship ride Miners have been on.  Buying the lows has brought about some huge gains for some, and I had encouraged not selling too early with this type of set up.  Now it is time to start thinking about locking in gains, and not chasing these moves.  A pull back will come and that may lead to a buying opportunity.

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GDX – And we have a shooting star/reversal candle in  GDX and many of the Miners. A pull back usually follows.

NEM – I was looking at that large base and encouraging those holding a Miner like this that it may not be time to sell yet,  just because the 200sma usually acts as resistance. This could keep running.

NEM – But now one has to start seeing this straight up move as a time to at least start locking in partial profits, and using a trailing stop on the rest.

Yes, the African Miners are rocket ships, but a 50% pullback could happen, and that would be quite a hit.

 So unless you are holding a core position and you think the lows may be in, it looks like it may be time to lock in some gains.  Look at HMY ‘s big picture.   A break out would be great, but look at prior runs in this channel.  They were  Autumn to Spring and then gave it up all up. 

We’ll discuss this sector a bit more later in the report, lets review other sectors first.

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 I am not trading the general markets  right now.  The sell off  looked ugly in many ways Monday, but the signals get a little mixed with reversals into the close yesterday. Some indexes broke to new lows, others did not.

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SPX , Dow Jones Industrial Average, NYA, etc  –  These  sold off but held the lows ( so far) and reversed into the close.This is still similar to the August lows, but that dip was oversold.  This dip is from an overbought stochastics.

The NASDAQ broke down and reversed into the close. A gap back above the blue line is an abandoned baby ( bullish short term).

RUT, SOX, IWM, etc  barely  broke down to new lows with divergence in the MACD, and then closed back inside  –

That said,   it’s a mixed picture, not that clear.  These look like failed cycles,  but  The Put Call Ratio is in the range for temporary lows to be found.  When I see unclear short term conditions like this,  I need to be patient.

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The USD still looks weak to me.  So far my original thinking Feb 4th shown here is playing out.A weak bounce / bear flag.

It is oversold, so we could get a bounce  ( or just a bear flag).  This could give Gold a pull back.  I expect the dollar to continue downward again after that.

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WTIC –   Oil now looks like it is setting up for lower price again.   After a brief bottom, the trend line and 20sma are still capping price. Until Oil closes over the 20sma and moves higher above it, I have to view Oil as remaining weak. We may be at lows, but we need a burst higher soon, or the  trend is still down. 

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NATGAS – I had drawn a possible 1-2-3-4-5, and an a-b-c down to follow.  This had a small a-b-c as shown. Then NATGAS lingered in this area.

This A-B-C is a bit larger than I like now , if I drew one in here .   The pullback to 61.8% is fine, the volume pop today was good.  It is now oversold, I still favor the upside, but I’d like to see a break out above the down trend line drawn from the last 2 highs to todays. Traders could Buy above $2.30 with a tight stop, but it does get frustrating with all of the volatility.

So really,  many areas of the markets are not crystal clear.  Time will help clear things up. I want to be patient in these areas.

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GOLD, SILVER, and MINERS

As mentioned above, quite a few  Miners put in a topping type candle.  Mostly the majors like ABX, NEM, etc.  ( Some juniors actually still look like they want  to continue higher. ).   After such a strong run out of the lows, we should expect a pull back.  A buying opportunity could present itself,  and I will be watching this area for low risk set ups to share.

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GOLD – Gold broke the nice round number $1200 and gave it up.  That could be where we get a pullback.  This can continue higher in overbought conditions.   This also gives us a higher high than the last cycles high, and That is the start of a bullish set up.  If we see a higher low at the next ICL, and then a push to new highs would begin an uptrend. Lets see if that is what we get.

Gold –  So I drew this earlier and it is just an idea of possibilities.   Gold can pause here, or break higher and then back test.

Silver –  Compare the above chart of Gold with Silver below.   Silver has reached a resistance point and the 200sma. That did not stop Gold.  If Silver ( And Sil) follow what Gold and GDX did, they should continue higher.  Silver is slightly Overbought, we’ll have to see how this plays out. 

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At this point, I cant give any buy recommendations until we see what the various market sectors want to do, and also see if we can get a pull back in Metals and Miners . Hopefully that would present us with some buying opportunities. If you are still holding Miners, I have recommended in the past that locking in partial profits would be prudent, and then set a stop below the 8 ema.

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These 2 charts show that in a strong move higher, the 8 ema has supported the run. Many Miners have seen this since the mid Jan lows  in GDX/GDXJ.

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And if The bear market lows are in, there is no real need to chase. As seen on these weekly charts, the Miners are very beaten down. Many selling at prices seen when Gold was $800.  The upside potential over the next couple of years could be huge %-Wise. A pullback may allow you to enter at more of a low risk point.

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AU WKLY-

AG from the weekend report.

Best wishes to all, and thanks for being here.

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~ALEX