Grand Designs

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I dont always need to know ‘How?’ or ‘Why?’ it happens.  Just like the formation of this flower, grand designs and patterns grow and develop within the markets cycles and within nature.  We watch and  wait for things to play out and right on time, we get our completed Grand Designs. Lets watch how things are playing out…

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I’m starting with the USD today.  In the weekend report,  I mentioned that I didn’t really expect the USD reversal to get too far.

USD WKLY 8-27

2 days ago we found ourselves on day 8 of the daily cycle. Expecting that it should become L.T. and roll over, we pointed out the 200sma as possible resistance. The chart looks bullish, so will that pattern of being a L.T. Daily cycle play out?

USD 8-30

USD – Thursday we saw the USD drop pretty hard and even lose the 50sma again.  We’ll see what happens after the JOBS REPORT FRIDAY. This $USD drop bottomed Gold. All we need is a little follow through. 

USD 9-1 a

USD LONGER TERM VIEW –  Even if the JOBS report gave the USD another burst higher, I do not see it taking out the overhead trend line.

USD b

 

Lets just say that the dollar is playing out as weak here and going to roll over.  let me tell you the “How” and “Why” that you will hear.  If we get a STRONG JOBS REPORT & Dollar drops, news reports will be –  “Fear that the economy is good and a rate hike is expected is what dropped the USD today”. If the JOBS Number is weak and the USD drops,  you’d hear , “The Jobs report was disappointing, and the USD is selling off as a result, with this sign of a weak economy.”    

 

This is why I rarely care about the ‘how’ and ‘why’.  There always seems to be a story given to ‘fit’ the action, but the timing using Cycles, sentiment, and chart set ups of patterns and E.W. often tell us the story in advance, giving us an  edge.  Time and time again the news just fills in whatever story seems to fit best. Thank you Mother Goose.

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Lets discuss Oil before discussing GOLD & MINERS.

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WTIC – I will admit that I am a bit disappointed at OILS deep drop. Good News: Many Energy stocks are still holding up, and several remained GREEN Thursday, while OIL looked like this.  ( See RICE, MRO, WPX, ECA, AREX, etc etc ).  This chart isn’t  just a back test of a break out, and day 21 seems way too early for a dcl in oil.   CAN the 61.8% retrace offer support?  I am not OVERLY CONCERNED.  I own a few Energy stocks, and they are holding up.  I am watching oil, but as an ICL in early August,  this should not continue to break down.  I WILL HAVE MORE IN THE WEEKEND REPORT. I expect the pattern of higher lows to remain.

WTIC 9-1

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GOLD–  On day 30, we are due for the DCL. As the USD dropped, Gold flipped higher. Most miners really looked good today.

GOLD 9-1

GDX – I have shown this set of indicators that I developed for myself in the past.  It triggered a buy today, and using these indicators, it always triggers at the bottom of an ICL or DCL within days, but rarely triggers early.  With a 1 day reversal, it triggered the buy Thursday. The timing is right cycle wise too.  Notice that it did NOT trigger a false buy last week on the 3 day temporary bottom ( red arrow).

GDX 9-1

So to be safe using cycle analysis, we usually wait for a swing to be in place.  On Thursday the GDX made a lower low again, so Thursday could be the dcl, but we need the price of the GDX  to move higher than Thursdays high as 1 point of confirmation.  Then a break over the 10sma is further confirmation, but the 8 sma  matches the rate of the sell off, so I personally wait for a move above that.  I personally bought today due to the timing and expectations of a low very soon, and a few personal indicators that tripped for me early in the day on 30 minute and 60 minute charts.  IT IS A RISKIER TRADE, only for those in front of the screen all day.   So for the readers here, it is best to wait for further confirmation, but let me mention  this.  There is a chance that this will be a L.T. Daily cycle, and this too could roll over after 8-12 days.  I WILL COVER MORE IN THE WEEKEND REPORT.  The point is, we’ll watch how it plays out, but dont get emotionally married to your position if you take one.  The better buy would be an ICL, and it seems that this is too early for an ICL yet.

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SO I Used those indicators on individual Miners. What did I see? Many triggered on a 1 day reversal here too.

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EXK –  Using those indicators on individual Miners charts, I found that many triggered Thursday too.  This was on the first day of the reversal. Often it triggers on the 2nd or 3rd day, yet still with price below the 10sma.

EXK 9-1

PAAS –

PAAS

AG – Not yet, but that reversal is strong.  Short covering could run this up quickly.

AG 9-1

HMY – A strong 11% day. You could say this triggered falsely  on the 27th, but price made up for it today, by closing above that price.  So if JOBS REPORT knocks the GDX down, I would expect that to become a final low and GDX would probably look like this next week.

HMY 9-1

So I think the lows are likely in for Gold and Miners as the USD dropped under the 200sma and broke back below the 50sma. I see that OIL is dipping down further than expected, but it isn’t broken.  I like the way many energy stocks are holding up, it  seems to indicate that smarter money is buying and holding for the longer term.  I will have  more to say about these sectors in the weekend report, for now I think that the Jobs Report may clarify whether or not THE Lows are in place, or will it drop these Miners 1 more time to shake out todays buyers.  SO THE LOWS ARE IN OR WE ARE VERY CLOSE.  The flower in the Theme picture was just a little green bud in a pot on my deck last week. It is amazing what kind of changes a week can bring

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Reminder: JOBS REPORT RELEASED AT 8:30 Eastern Time.  Markets are closed in the U.S. Monday, so take that into consideration going into the weekend. Happy Friday and have a great weekend!

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~ALEX

Note:  After the long consolidation in the General Markets, The SPX still lacks the real Push that it needs.   That can change, but for now it was rejected. Maybe the Jobs report will break it upward with conviction (  and take Oil with it?).

 

SPX 9-1

141 replies
  1. daz clark
    daz clark says:

    Thanks Alex, great reporting this week. The last section from yesterday was very interesting, I followed the DOC for a while myself.

    Have a nice weekend all.

  2. Maria
    Maria says:

    😀 tx CF awesome as usual
    Stellar mother goose paragraph … tho i dont get the reference
    *other than i know ur afraid of geese
    teehee

  3. rm
    rm says:

    thx Alex..not sure if you saw LM but he speculating we may had an early ICL..but will allow price action to confirm obviously.. this is how I am seeing it if the bull lives..

    • chartfreak1
      chartfreak1 says:

      The Miners seem to have sold off steeply in a similar way as you see in an ICL, and as I mentioned in a couple of reports, my indicators showed a similar degree of selling as ICLs have, but timing just seems way too early. End of May to end of August is 3 months….I have never seen that before. I will be watching how it unfolds from here, but very cautiously so.

      I would hate to push the idea of a possible ICL, and have readers thinking that they should try to go heavy leverage , only to see it fall sharply after 8 days or so in a huge gap down.

      Also I have looked back historically and the steep drop that we just saw in Miners can bounce & drop again- so I want to be ready for that idea.

      P.S. I have never met him in person, but I consider L.M. a friend and a good technician. We were friends in a private forum a few years ago, and emailed back and forth several times. He does a little extra work and digs a bit deeper when something doesn’t seem to add up. That is what I like to do to. Do the work, figure it out, try to get to the bottom of things – dont just guess.

      • deshy
        deshy says:

        Alex, the other key point I remember from DOC is that the 1st DC of $gold usually gives up a lot of the gains as it heads into its DCL…so the 2nd DC is where too get heavy. From the current questionable IC vs DC gives traders a bit of room that they likely won’t miss most of the run even if waiting for 2nd DC.

      • RM
        RM says:

        yep totally.. I just vividly remember a 1 day daily cycle top that had never happened before in sep of 14 I think it was in miners..thats why I have always kept an open mind to abnormal cycles and use them much more as secondary indicators..let’s see what develops as like you have always said ultim it’s price action that will lead the way. Thanks for all that you do here..

  11. miller
    miller says:

    Took profits on uwti trade this morning,,Great weekend money made overnight,, going surfing for a few hours,,recharge my soul & let the mayhem settle down, good luck to all.

  12. R Byram
    R Byram says:

    Loving the action this morning.

    Alex what are thinking about JNUG. I could sell it now, be very happy and go surfing too, except there’s no place to surf.

    Holding triples through a weekend is usually a no for me, but what are you thinking?

    • Cason
      Cason says:

      Hopefully Alex will answer but if we’re on day 2 of a DCL, it’s safe to hold until day 8-11. So, middle of week after next, I’m holding through based on DCL theory.

      • R Byram
        R Byram says:

        I’m pretty sure that’s what he said yesterday too. Alex are you chopping wood again??

        I’m thinking of putting a market stop up close to it if I do keep it over the weekend.

        • chartfreak1
          chartfreak1 says:

          So it is tricky , because if you look at past lows ( look at DCLs) you can get that initial surge off of the lows for 2 days, and you can get a pullback for a day or two also, before moving higher. In a 3x TEF- That gets tricky trying to stay comfortable.

          However, you also can get 4 straight days up and JNUG could go from $15+ to $25 in a heart beat.

          I tend to go in a bit heavy when my signal triggers a buy, and then I’ll sell 1/2 today- ( I’m Not SUPER HEAVY like when I feel an ICL is in, but heavy for a 3xetf on a 3 day weekend. )

          I want to sell 1/2 also bcuz we have a 3 day weekend and gold can go up Thursday, Friday, & Sunday night & Monday, but by Tuesday? It may start a 2 day drop and be totally normal. JNUG would only catch the 2 day drop from here to Tuesday.

          I AM NOT saying this is how it will play out, I am showing you “What I THINK” when I look at my trade. Probabilities, possibilities, likelihoods, etc

          I must admit, it sounds like it is a mess inside this mind at times, but it is not . It is more just me thinking about past trades – from past experience – and I have seen a lot of different scenarios.

          A 1/2 sell is safe for me for now. – LOL

          • R Byram
            R Byram says:

            That totally makes sense and I don’t like risking the profit so I just took it off the table. It’s the sleep factor thingy. When I’m under water or have the wrong kind of exposure the mind does not let me sleep. Now I can relax and know that I just made enough off the trade to pay for a ski vacation I just booked in December for my family.

          • Cason
            Cason says:

            I need to do that. My best trades have been in my retirement account where I can’t touch. I need to make and pull some cash out, would be given for the morale!

          • SonOfGud
            SonOfGud says:

            decided to take the profits from NUGT & TGD.. the latter having just got me back to level par at 0.50.
            i’ll keep my energies (PGH & SGY), and look to re-enter next week, hopefully with any wave2 pullbacks.

          • Cason
            Cason says:

            I held, but it’s small enough I felt ok retracing 10-15% would be little damage, risk/reward was there in my opinion.

  15. Ken
    Ken says:

    I am a little suspicious of the USD today…….and I do Not like how it was bought up after the initial drop on the Labor numbers this morning…..so I am being cautious on Metals and waiting for next week to see if we get any follow thru.
    Daily Buy Swing on Oil today……day 1 on a new DC and beginning a wave 3 very possible…..risk reward very good.

    • Bill
      Bill says:

      Ken, good info. Cautious miners? and bullish OIL. Are you bullish energy stocks as well? I ask because this market can go either way form here. IF it goes south it may drag the energy stocks with it.

      • R Byram
        R Byram says:

        I have been scaling into energy stocks since oil hit $37 and stayed green in 7 out of 10 of them this past week. The ones without much overhead resistance have held up well even during the downturn this week so for me they are a safer bet than the miners.

      • Ken
        Ken says:

        I did buy my first traunche of XLE as a possible long term hold on Aug. 2 at the ICL daily Buy signal along with USO calls, I no longer hold those Calls……will be looking to buy my 2nd traunche of XLE at this bottom of wave 2.,,,,that would make me somewhat bullish i guess…… 🙂

  16. Bill
    Bill says:

    Alex, I’m still holding AMRS. I don’t know what to make of it. Still above the 50sma, so I’ll continue to hold and watch. Any thoughts on your end?

    • R Byram
      R Byram says:

      Same boat with SB for me. The stop will come up a lot tighter tonight. The chart is looking very cooperative right now.

      • Cason
        Cason says:

        Same place with SB. Bored and don’t like it much, but it hasn’t broken down or triggered my stop so …hard to stay patient but don’t need the money elsewhere yet. So, I guess I hold a few more days?

    • chartfreak1
      chartfreak1 says:

      You caught me debating AMRS right now. Here is what I have….I still own it, it is still fine, but yes, a bit boring when you wish your money was in a stock up 11% instead. I was debating selling it and adding to my MEMP position, I like that set up on a daily and weekly, but the volume is light today, so I will hold off changing anything for now. IF AMRS breaks lower next week, I’ll jump out and likely add to MEMP..

      For now, I still own my positioning in AMRS, I still like the base..

      • Bill
        Bill says:

        I sold it, so it should move higher. I’ll take the loss on the taxes and move the money into NUGT for a while. AMRS just seemed like dead money moving sideways. I’m sure it will break higher, but when?

  18. Erik Sven
    Erik Sven says:

    Energy stocks looking good today. But not sure about oil near term. Anyone else doing any selling today because who knows what will happen over the long weekend?

    • Cason
      Cason says:

      Same thoughts here. Alex or anyone thoughts on crude oil – UWTI or USO trade here? Many of my energy stocks held up pretty well considering how steeply crude fell of so much there. Not sure if crude is a safe trade yet or not. Should be…?

      • miller
        miller says:

        IM holding all mine. (other than the UWTI trade) I like OIL right here at least for a bounce, . way oversold, Inside day today on the OIL chart and Ken pointed out a swing low. I think we at least bounce up to $46 and change. Hoping to get back a majority of losses in some and then re-evaluate which ones I want to keep at that point. It could also just start a bear flag/triangle here and continue down, Tuesday candle will tell more but as of now Im leaning on the upside. . But that’s just my plan and anyone else would be wise to ignore mine and wait on Alex”s report, lol

    • Erik Sven
      Erik Sven says:

      Just sold all my OAS, but keeping CHK. I think CHK chart looks better going into the weekend. Makes me feel better not holding it all–didn’t feel like having both was worth the risk.

      • Cason
        Cason says:

        Yahoo was showing 3.3 but yeah I was thinking that didn’t sound right. Thanks for the correct info.

        Can you help it get to 4.8 now? 🙂

        • Jim Nesbitt
          Jim Nesbitt says:

          i will do my best, it is my longest term hold in the oil space…a solid company. nothing spectacular, it moves well with the price of oil, good trading vehicle. kinda wish i had more of these types, less of the schizophrenic ones

        • miller
          miller says:

          I hope he can Cason, ive made that round trip to the high twice now, wont be a third. Don’t know why I didn’t stop out the 2nd time, ,,hope kills in this game.

          • chartfreak1
            chartfreak1 says:

            F.W.I.W. –

            DNR is a constructive looking chart pattern and could break out as soon as next week for a run to $4.75 over time. Hang on a bit more, It looks good : )

  20. R Byram
    R Byram says:

    PSCE is where I go to calm my head down about oil stocks. It’s a smallish etf, but I’ve watched it for several years and it does seem to tell the story of what the “averages” are doing. I would never play it because I didn’t come here to be average.

  22. nancytheartist
    nancytheartist says:

    Have a wonderful 3 day weekend all! Hope you all had lots of green erasing lots of the red from this week like I did.

  23. Edward Bernhart
    Edward Bernhart says:

    Thanks, Alex. The last two days certainly healed a lot of wounds! My miners and recent oil stocks made a great come back.

    • chartfreak1
      chartfreak1 says:

      Glad to hear it. I had held on to some positions and felt the selling too – but the bull market action can stop the bleeding, especially if one bought the dip at a higher low.

  24. miller
    miller says:

    Kinda Ironic how we’re all rooting for our dollars to go down so we can make some more of those devalued dollars as they go down. .Like being on a sinking ship selling tickets for the life boats,

    • Cason
      Cason says:

      No. The scale of the chart is so tight is skewed a bit. Viewed on a larger chart or short time table it won’t be so pronounced. Could we pullback again from here? Sure, I expect it, but overall bearish wedge that invalidates bull thesis? No.

  26. R Byram
    R Byram says:

    I just took the time to go over the DOC note from yesterday. Can anyone please explain L.T. and R.T.? I’m assuming left translated and right translated, but could you fill me in on how they appear and the implications??

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