Same Old Song And Dance – So Far

Fridays jobs report may change a few things, but so far the charts are showing the same old song and dance…

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SPX –  Not much change here (I added a Thursday candle and a Friday candle as a possibility of tagging the 50sma).Jobs report Friday may give us our directional move. Many expect this to burst higher and run, but at this point, the Vix Chart looks rather bullish.

USD – Day 9, I expect this to roll over as L.T., and the 200sma may offer resistance.  When the Dollar rolls, I think we will see our DCL in GOLD.  Will Friday jobs report send the USD lower into a dcl & Gold higher?

WTIC – This was in Wednesdays report. I was pointing out the 50sma as possible support and all looks fine.

WTIC –   The pullback is fine, but we broke the trend line.  That is usually a sign of price searching for a dcl. We are on day 20, and Oils daily cycles can take 30 + days to find a dcl.  Is this just setting the daily cycle trend line in a 1/2 cycle low? Time will tell, but I’m watching the Fib #’s a target for now.  ( That OIL VOLUME is not correct. Stockcharts corrected it this morning to 540,000).

I had drawn this to show a few targets for OIL, so roughly $44 is OK for Oil.

XLE – Still holding up.

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We have been watching a good number of strong energy stocks holding up well and breaking out and pulling back  ( back test).  See CWEI, RICE, ECA, WPX,MRO, etc, since they are great looking 6-8 month charts. They have been longer term Buy & Hold candidates for energy too. I want to visit AREX, and show you how it acted Wednesday with OIL breaking below the 50sma and generating lots of bearish talk about OIL on CNBC. This is one that I recommended and bought weeks ago. 

AREX – Buy that dip to the 10sma, and we did get that dip to that area. The buy was near $1.60

AREX – We see a  200% run off of the lows.  Notice how it pulls back to the 10sma at times, so I posted this chart in the comments section. My stop is below that area, closer to $2.75 to lock in gains.  It had dropped to near $3.00 ( $3.06).

By the end of Wednesday,  AREX regained a lot of that drop and closed back up at $3.32. It looks like a back test. ( I do see this as a possible 1-2-3-4-5 – a, so if I see ‘b’ & ‘c’, I will try not to get stopped out.  Or in T/A terms, If I see a handle of any sort form, I will not be afraid to add, anticipating further upside.  

AREX WKLY –  You know how good size bases act, if you have been a member here for a while.  So far, this is a Bullish weekly chart, and if it ends here or higher on Friday, it is a nice wkly break out.

NATTY –  We got our anticipated break out last week, and Yesterday I pointed out a possible back test and expected NATTY to remain bullish at support.

SO far, So good with a reversal.

GOLD –  Day 29 has us very close to a daily cycle low  (DCL). I expect a bounce to $1358ish, and one more drop to an ICL ( intermediate Cycle Low).

No peak on the second daily cycle and a break and failure of the dcl?  This is what I have been watching and it calls for a drop to a new ICL by the end of Sept or early Oct.  A bounce and a L.T. D-Cycle should occur with a dcl.

Wednesday intraday –  in the comments / chat section, I pointed out that a small move by the Miners ( GDX ) eases the parameters for a swing to be put in place here.  Miners could bottom first, so that could be Thursday on Golds day 30 , or Friday on Golds day 31 and the Jobs report.

GDX – We filled a gap, and if a low comes in soon, as in this week , we may fill the last gap at the ICL and a test of the 200sma. That will be THE NEXT BEST BUYING OPPORTUNITY for a possible year end rally.I’ll cover more in the weekend report.

So at this point my thinking is this: I am looking for a possible short term top in the USD, a temporary top. Then at that time I expect a DCL in Miners and a small run higher. The Miners will top in a L.T. Cycle most likely, and the Dollar will bottom into its next daily cycle low. The dollar bounces and eventually we get the drop in Gold and Miners that leads to a ICL.  THE BEST POINT TO BUY if you are patient.  If you are a trader, this scenario can also help you to time your trades.   OIL & ENERGY are still fine, but the selling in Oil was a it more than I expected, and the trend line break is an eye opener.  I will be keeping an eye on those Fib #’s.  You can refer to the chart in this report and keep your eyes on those too.  That trend line break is concerning me a little bit, but I still have to expect that Oil is going higher.

  The general markets have been in a sideways move for almost too long. Summer vacation and the High Frequency trading is just keeping it aloft? On Monday the US markets are closed and I have to wonder if we will FINALLY see the true market direction when summer vacation ends.  The jobs report Friday may also stir a reaction, but will it be a false break out and a sell off in Sept & Oct?  What I will need more time to know for sure.  Happy Thursday everyone!

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~ALEX

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FOR THE DEEP THINKERS AND LEARNERS :

You may want to read this later when you have more time 

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The following is a bit more Cycle oriented and maybe a bit deep, but the conclusion is important in my opinion, so I wanted to share it here. I hope the readers here are able to follow it, you may need to take some time and read it 2 or 3 times if it is a bit difficult to follow at first. 

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TESS had a good comment in our chat section on Wednesday,  Thank You Tess.  I answered to the best of my knowledge, but I decided to go 1 step further and ask THE DOC  ( I consider him more of a cycle expert) to comment on Tess’s point, since she ( I assume Tess is a She) stated that The DOC was where the information came from. I humbly digress, The DOC elaborated his thinking on the matter, and I was not completely correct in what I was thinking for how he would view the Brexit Candle cycle-wise.  I have repeatedly stated here that I use Cycles to guide my trades for timing the trades, but many years of experience give some cycle analysts certain ‘nuances’ that they have come up with , similar to Elliot Wave labeling. The DOC is a cycle expert that I have personally seen investigate and develop  various methods of reading cycles, He uses cycle bands and other features to guide him. I will let him explain ” WHY BREXIT IS NOT VIEWED AS A DCL ” by him below.  🙂

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I posted this chart in yesterdays report- Showing that MAYBE THE BREXIT CANDLE was a dcl?  To me it fit, since I have also developed a few of my own indicators that set the criteria of a daily cycle low for me.  Also, I didn’t see how we could have 1 big bullish 1st daily cycle become the peak in Golds Intermediate Cycle on July 8, and then the 2nd daily cycle had a lower low and just dropped from here.  My methods were saying that maybe we had smaller daily cycles.   I used this chart to show an alternative count to what we were seeing as being on the 2nd daily cycle. Then Tess commented…

My comment was implying that maybe we wouldn’t consider BREXIT a dcl ON THE DAY THAT IT HAPPENED, We’d need to wait until the highs were taken out for confirmation.  I then asked THE DOC if I was correct or viewing this differently from his thinking. He has been doing cycle work WAY LONGER than I have, so he is the expert in the fine tuning, and his reply was given with a helpful chart ( you gotta love that) …  And permission to use his emailed explanation in this report.  Click to enlarge .

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Docs daily chart below shows his DCL count, with the ICL, and the next DCL in late July. His email reply to me shares that he thinks we have begun the decline into an eventual ICL also.  He uses ‘Timing Bands’, and a close below those T.Bands is his trigger that we are seeking out an ICL. So his analysis does agree with me in that … we should find a DCL soon ( day 30 now) , see only a 1 or 2 week bounce, and then seek out an ICL in the next daily cycles decline. 

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DOCS CHART

DOCS EMAIL REPLY ON BREXITS CANDLE: The red writing is mine.

Click to enlarge, but I had trouble reading this on my phone. You may need to use a tablet or laptop.

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SO this helps us to see again that we are in an intermediate decline in the Gold & Silver markets, and we should not expect higher highs going forward, until we seek out in an ICL.  We expect to see a 1 or 2 week bounce soon, and that is just 1 more Daily Cycle that should basically be known as a dead cat bounce in Technical Analysis.  KNOWING THIS IN ADVANCE helps us immensely. We will not buy & hold the next DCL.  We will buy the next sell off at the ICL eagerly.