Is That Toast You Have There?

2 Charts of the $USD – Can you believe that I drew this drop in the dollar a week ago? It was based on the first drop that took place in early December.  Lets look at the dollar as of yesterday.

$USD Wednesday – This may be a piece of toast and what might that do for Gold?

Let me give you a quick idea …

The dollar is now set up to drop for weeks, because it has failed.   ( Maybe just gradually)

Of course no one knows for sure exactly how that will play out,  we may just continue lower because the stochastics is not close to oversold…

but if a Bear Flag forms in the USD like this- 

GOLD may Flag too.  This would be  rather promising for the future.

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The SPX is like a bucking bronco, but this should come as no surprise.  On Jan 27 I pointed this action out of the August lows.  Volatility is shaking people out in both directions until the the direction is played out. I still think we are due for a move higher for weeks, and this action at the lows prevents price from getting too far.

SPX WEDNESDAY – Large drop and then it reversed higher.

IWM by request – Same story. I expect choppy lows and a move higher.

Wednesday saw OIL pull a strong reversal . In yesterdays report I showed the drop in Oil as concerning, because it broke under the 20sma.  I also pointed out that that did occur at former lows, so I looked at the XLE and it didn’t look that bearish.  Was that a clue? Lets take a Wednesday look…

WTIC- looks bullish with indicators 

 

XLE – Volatile but also looks bullish. You can see how this didn’t look as cautionary as Oil did yesterday. 

 

GOLD – Playing out as expected  🙂

 

SILVER – As expected.  I read many bearish articles saying Silver was setting up to plunge. It was weak.  I’ve been calling for a POP this week using the indicators that I pointed out  weeks ago. This looks good. 

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GDX  & GDXJ –  Break out coming or a pause? They are just reaching overbought.

GDXJ– since this looks a day or 2 behind GDX, maybe this reaches the 200sma, and GDX breaks it in the next day or 2, then we may see a pullback. 

 

Take profits as you see fit, I cannot say exactly how this will play out, since we still may have THE BEAR MARKET LOWS in place in Miners after that hake out.  Trailing stop? Sell 1/2 &  ride the rest?  Wait for a break of the 8ema?  When the run is finished, we could see a 50% pullback of this recent move  – or –   We could just flag at highs and then start another leg higher? It is a tough call, I do plan on discussing it a bit more in the weekend report after further studies.

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For now, let me show you this ( I captured it days ago and wanted to use it when GDX was at the 50sma). After a mini flag at the 50sma, GDX Popped like yesterday even though it was overbought. Many sold at the 50sma because it was ‘overbought’ on the stochastics & RSI in their eyes. ( Embedded RSI 70 is Bullish to me  actually).  This is one idea of what followed.

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Maybe this can be of help…

ABX is a big part of GDX.  Lets see how it acted at this point through a number of charts that I have been posting here.

 

Measured move to $10 or $11 posted on Jan 7

ABX Jan 27 –  Could it stop at resistance at $10, or will it break through former lows  (  GDX looks the same)?

FEB 1 & ABX at $10 – I pointed out that the way it dropped could be the way it tops due to the long base.  It Just kept going down, so it may just keep drifting higher. I wouldn’t sell, I trail a stop at the 8 EMA.

ABX – near $11.  The measured move is complete at its first target, but can go higher using fib extensions. If I told you to sell at the 200sma, would you be happy?  If I say sell 1/2 and use a trailing stop you might be happier in a run away move like this.  So GDX could do this, or it may not.  Take profits as you see fit.

 

That said, I think some individual Miners will move at their own rate. We have already seen RIC, NG, GPL, MUC, etc  bottom and move higher when Gold pulls back. This is GPL,  It looks like it could go higher  (  IN fact, Silver looks like it wants to go higher).

 

GPL JAN 29

GPL –  just getting going?  I posted this on Twitter for the public , you can ignore the writing.

NEM –  I didn’t say to sell at the 200sma because of that large base

NEM –  And now we had an 11% pop yesterday.  Therefore, GDX may not stop at the 200sma, until GDXJ catches up.

And this could help GDX as noted in a prior report. Maybe NEM and ABX  flag above the 200sma and GG plays catch up.  GDX would probably flag.

So things are playing out very well in the precious metals sector. In fact,  what has been the easiest play for me in weeks?  Not the general market,  not the energy sector  ( volatility), but the precious metals market has been playing out like clock work.  It has been a LONG TIME since everything seemed to move this well right across the board like this in Precious Metals.  We MIGHT have the bear market lows in Miners,  only time will tell.  If we do and you missed a lot of this move out of the lows, there will be PLENTY of opportunity to make great % gains in 2016 after a pullback.

It is almost 8 a.m. For the sake of time, I want to release this and add a little more to it, so please check back later, and I will write in the comments section when I am finished. Thanks for being a Chartfreak reader!

 

~ALEX

 

I wanted to add that again I am seeing action in the commodities sector that I would expect to be bullish for my expectation in 2016.  My expectations are that  Precious Metals and Commodities will be the buying opportunity and make strong gains %-Wise as the General Markets lose their favor. (  You can quickly find a January weekend report  here) 

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SO let me just quickly post some set ups that are popping.  I have posted in recent reports that CLF, AA, CENX, STLD, X, AKS, FCX, CLF, VALE, ZEUS, etc look to be bottoming . These bases can run the way Miners have if they get going. 

CLF –

AA –

CENX –  2 charts – I pointed out CENX when it broke the 50sma recently, but doesnt it look like it is just getting started?

VALE – For Traders, this Might be  a low risk buy now, because your stop is below the recent lows. Bad news or earnings may cause this to pop or drop, so buyer beware  ( Due diligence).

So again, things may be possibly lining up with the markets topping, the USD dropping, Oils fall stopping? , and Precious Metals and Commodities Popping.

 

The markets are volatile, but I found a lot of bullish looking set ups for “Traders” . As I write futures are lower again, so we can see how things pull back (  light selling or panic?, etc ).   Here is an example …

FNSR –

 

I also had a list of stocks bucking the sell off  (  WMT, LULU, TGT, MATTEL , etc.  Did you see MATTEL ( MAT)  nice move.

UPL -See AREX, AXAS, LGCY, WTI, NEE, XCO, ERF, etc.  WTI may be a buy now (higher low).

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If you read along in the comments section  ( And feel free to add a comment or question.  It is actually  more of a chat area and anyone is welcome to add a thought, question, or idea), you may have seen MARIA post DNR mid day asking what we think.   Thank Goodness I said I liked it because it popped 24% on the day.  I can only imagine the GIF- Fest if I said that it looked bearish 

 

So there are many ideas, but also a lot of volatility in General markets and Oil/ Energy.  Miners look great and have performed well, but it may be time to start thinking of locking in a little profit on some ( or partial) in anticipation of a pull back.  I will hold some that do not look extended, but I do hope for a little pull back to add at a better spot.  If GDX does what DRD, HMY, SBGL did, riding that 8 ema forever, many will have missed this move.  We caught the exact lows in that shake out report from 2 weekends ago .  It has been a good ride in  MANY MANY miners, and some silver / Silver miners actually may have a bit more to go as lagging stocks.  SILVER pops Big for 3 or 4 days in a row usually,  so we may see more gains there!    Thanks again for being here.