Release The Minutes!

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The Fed Minutes are scheduled to be released today. At times like this, we sometimes get a glimpse of what was behind the recent decision on interest rates.  Is inflation starting to creep in? Just how divided or united were the Fed members when it came to timing for rate hikes,  etc. Lets take a look at the charts and cycles and see if we can glean some idea of what could happen after the Fed Minutes are released.

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SPX – HMMM, This daily cycle peaked very early  (day 8), and today is day 21. There are false break downs and shake outs in life, but this should be viewed as a warning sign. Why? I see a left translated daily cycle breaking down with maybe 10 more days to go.  I see more room to drop on the stochastics, and a weak RSI.  The Fed minutes could sink this ship or perform a miracle ‘shake out’ type move and a recovery, but this is a bearish set up the way I see it at this point.

spx-tuesday

The USD has a bullish look to it on a weekly chart, but I will discuss why I think it should roll over and nullify that bullish look after we look at some daily charts.

 

USD DAILY – Many are seeing this move as a very strong run in the dollar.

usd-tuesday

 

USD – Look at the strong run leading into the end of May.  That was where the ICL took place and the USD is slightly omore overbought than it was last May..

usd-tuesday-2

 

USD WEEKLY –  This should continue to fail. It is actually due for a 3 yr cycle low. All we can do is watch for it to play out, but right for 2 yrs we are seeing  lower highs and lower lows.

usd-wkly

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XLE – From Monday, I was seeing a possible peak here with a bearish rising wedge and a channel. I mentioned that I might start taking profits from energy trades to raise cash for Miners. See Tuesday mornings report.

xle-10-10

XLE – This is not a break down, but in the past it lead to a pull back.

xle-tuesday

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GOLD – OCT 10th, I wanted to re-post Mondays chart to show that bottom in May again. 1,2 , boom. We could be on day 2, Fed Minutes Boom?

gold-10-10

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GOLD –  Day 2 ?  Or if we get a lower low Wednesday after the minutes are released,  it would bring us to day 28. We are running out of time for a Low.  Honestly, if this is an ICL, prices will be much higher than this in a week or two.  Look at June for example. Straight down in May, straight up in June.

gold-tuesday

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GOLD –  Here I am just preparing people for the release of the Fed Minutes. Yes, we could conceivably get a slam down, shake out, cleansing of sentiment, but cycle timing points toward a false break down if we see it.  Who would buy this???   ( WE WILL and I have been starting to take positions in Miners).

gold-tuesday-2

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GDX – GDX broke to a new low on Tuesday, extending the count to day 27. We are due for a low.  Fed minutes could be the catalyst that causes a break out rally as shown, or…

gdx-tuesday-a

 

GDX – We could see Fed Minutes slam down GDX and again, I think that it would be a shake out and a cleansing of sentiment and a strong rally would follow that type of a push downward, due to short covering. Please look back at May/June, Even after the huge gap higher 3rd, you did not miss the big move higher into August. Yes, it paused for a while, but individual Miners were making gains. We’ll discuss VGZ at that time,  in a moment.

gdx-tuesday-b

I think today is important because the timing is in place for some action, whether it is to quickly finish a sell off or to turn one around.  This all remains to be seen, but at the very least, I would expect volatility with the release of the Fed Minutes.  The timing is right.  Enjoy your Wednesday trading!

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~ALEX

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Just an FYI-

VGZ –  I was watching VGZ among other Miners over the past few days.  Many here may recall when we entered this trade and just about tripled our investment this past spring. Look at that run in June after the GDX June 3 gap open.  VGZ barely gapped open.  Right now I can picture a slam down as an A-B-C-D type move into a low as shown, but also…

vgz-2

VGZ – Look at the run simply from the MAY ICL.  Over 200% gains in a month?  Price is currently sitting on the 200sma, so the above mentioned slam down may or may not happen with Fed Minutes released.  Due to cycle timing, it might just be a quick shake out if it did. I am watching some of the Miners that we did very well with in the spring, in the event that they drop & reverse, or just take off higher from here. They could repeat that kind of buying frenzy again.

vgz-tuesday

 

MUX – Another Miner that was beaten down in the bear market, allowing us to make great %-Gains last spring at the ICL’s.

mux-10-11

127 replies
  2. Crystal
    Crystal says:

    While we are all twiddling our thumbs waiting for the minutes, here is the research that backs what you are seeing in your long-term chart of the USD:

    http://www.frbsf.org/economic-research/publications/economic-letter/2016/october/new-normal-for-gdp-growth/

    All signs are beginning to point to now is the timing for the start of that 3-yr cycle low.

    You should bookmark this page and time-capsule it with a t-shirt with your logo and “I told you so!” printed in big capital letters across the front!

  4. R Byram
    R Byram says:

    Just sitting here looking at the chart of AA from yesterday – it got knocked down 11.42% after it’s earnings release.
    As we are sitting here rubbing our hands with anticipation, we are also coming into earnings season again. Maybe it’s a good time for us all to be aware of when the various earnings releases are due, and to see if we can pick up any clues about secondary financings – ie has a financing recently been done, does the company need cash, is there an existing shelf prospectus etc.

    Alamos – AGI has announced earnings for Nov 10

  6. chartfreak1
    chartfreak1 says:

    Interesting to see The USD up $0.50 yesterday and Gold only down $4

    Today I see the USD up another $0.44 and Gold & Silver have reversed losses to turning green (So far).

    Seriously, it used to be that the USD would go up $0.30 and then Gold would drop about $30. : )

  7. R Byram
    R Byram says:

    CDE reports on Oct 26 and has raised production guidance slighly. They completed a 75M financing in Q2 and had cash and cash equivalents of 257M at the end of June

  8. Ken
    Ken says:

    For accountability:
    I will be Harvesting the rest of the Profits in my USO Calls (25%left) and XLE before the Fed. minutes today. This was one of the best trades this year for me. Never easy going against the “crowd”. Risk Reward was excellent at the time with the correct count.

  9. chartfreak1
    chartfreak1 says:

    A reader here emailed me and wanted me to share a chart and mentioned reading a story at zerohedge
    saying basically that ‘because of the Chinese holiday, Gold sold off in Early
    October in 2014 and 2015, and when the holiday ended, the Chinese buying
    resumed and Golds higher prices resumed’.

    This is the chart that was given to me to share. It is showing that early Oct had a Chinese gold holiday, and then Gold went higher , propped up by Chinese buying ( I do appreciate that the reader that sent this to me wanted to share some encouraging and possibly relevant info, but I do have a
    disagreement with this article and may explain it in a separate post if I have time).

    https://uploads.disquscdn.com/images/8a220795d1b541666f838d4b36eb55d5d15f5434ef63ed62236b5f6f5f8475e5.jpg

    • chartfreak1
      chartfreak1 says:

      So here is my observation on the above theory. I feel that the writer chose a convenient small time frame to put forth a theory that “China had a holiday, Gold dropped, They came back, Gold rallied”

      If the Chinese buyers went on holiday for a week and caused a sell down, then they came back and their buying is really what brought price back up- the price should have remained buoyant.

      The attached chart here shows this…

      1. The sell off was NOT caused by Chinese going on holiday in the first place, in 2014 it had been selling down for months. He chose to show the end of Sept to make his case.
      2. Both cases show normal choppiness and bounces that failed. The bounce did not last, as though Chinese buying stopped the sell off when the holiday ened. The selling continued in Oct 2015 into December.
      3. What about other years like 2012, when Gold topped in October and dropped all month? https://uploads.disquscdn.com/images/3d26900d7b750a68167d9124ba95a11274df232b05731f82cf79932e626b1901.jpg

      • Siva
        Siva says:

        Hi Alex,

        Have a nice day

        Thanks for your prompt update. Yes, you are right. The author conviniently taken only one factor (chinese golden week holiday) for gold price drop. Thanks for uncover the reality for the drop. You are always provide substantial evidance for good setups.

        thanks a lot.

        • chartfreak1
          chartfreak1 says:

          Hey Siva!

          We’re almost at the lows ( or we are) so he is going to think he was right too, when the buying starts again : ) Even now Gold has been selling off mostly from August .

          Have a nice day

  10. Tammie
    Tammie says:

    Does anyone know what this is about or is it just standard procedure….

    “Notice of a Meeting under Expedited Procedures
    A closed meeting of the Board of Governors of the Federal Reserve System was held at 11:00 AM on October 11, 2016. Matter considered: Review and determination by the Board of Governors of the advance and discount rates to be charged by the Federal Reserve Banks.”

  11. deshy
    deshy says:

    fwiw: GDX made slightly LL today lowering it’s barrier for SL (assuming we close around here of course…which seems to have been a major challenge).

    • chartfreak1
      chartfreak1 says:

      Ya know, I’m kind of looking at ‘set ups’ forming and ‘sell offs’ and ‘possible potentials’ based on how some of these ran up last time, how it is selling off now, etc. So it is somewhat of a moving target until we get that turn higher and I can really see how they respond.

      For example, TGD didnt look like much at all yesterday, just a sideways consolidation. Today out of nowhere, it pops above the 10sma with pretty good volume and a possible MACD cross over. If gold sells off, it may follow, but it showed a sign of strength there, so I’ll keep an eye on that now.

      I bought AG because I like the company and it ran so well the first time. Also almost all of the silver stocks really performed excellently. Ag has pulled back so much, that it looks like a bounce from this $8 area could tag $12 or $16- so thats a 50-100% run.

      VGZ I explained in the report, it looks like a little run higher could double, but as time goes on, I find others. What it did last May showed some good buying action and that may return.

      Look at a YTD or 10 month chart of HL or CDE. They both have held up very well in this sell off. I feel like the buyers of HL do not want to let go of it, so that catches my eye. ( Refresh for a chart) https://uploads.disquscdn.com/images/519f902da76828999c06ba755a9b56fcb5d279b71b2df40c069e84a6e13fdf69.jpg

      Top 3 or 4 that I am monitoring? I kind of monitor them all, and during this stage of the sell off they are still morphing.

  21. Bob Sheldon
    Bob Sheldon says:

    I’m starting to think that we may not see another pullback after the Fed minutes. After all, that’s what everyone is waiting for, right?

  22. chartfreak1
    chartfreak1 says:

    Where is Bill?

    Bill you keep asking me if the secondary system that I use to spot lows ahead of other safer confirmations triggered a buy yet.

    It is now showing that GDX closing above 23 should trigger one of the 2 indicators ( usually the low is in place when that happens,and even though price can still bounce around , it just doesn’t take out the lows – the lows are usually in place).

    I’m not announcing a buy here, I dont use it as a safe entry for this service, it can lead to a shake out.

      • Rm
        Rm says:

        Thanks Alex I guess these small cap jrs can often do there own thing but was just curious as I know u have mentioned as hanging in relatively ok. Thx

        • chartfreak1
          chartfreak1 says:

          I own NAK , and it is my only red position, so I know how it feels and how it looks, but the chart still looks ok.

          I think once some of these get above the 10 sma, buyers will step in with more confidence.

  24. chartfreak1
    chartfreak1 says:

    Hey Bill

    No recommendation here, but I got the buy signal on GDX that you were asking about as GDX was crossing above $23.

    It would need to close there, but that signal triggered right at fed Minutes

      • Cason
        Cason says:

        JNUG? Any thoughts on LABU? Rough couple of days, maybe resetting for next run higher? Glad I didn’t chase at the end of that last run!

        • Bill
          Bill says:

          I should have gotten out of this. I got messed up moving from TD to Merrill. Anyway. I see its at the 88.6% fibo. That could be a good spot to bounce higher. If it does bounce we could get a few days higher and a chance to get out. I don’t see an extended run in the near term. I expect LABU to perform well when the markets perform well. I dont expect anything positive from the markets going forward, near term. So, conversely I dont expect anything from LABU.

          • Cason
            Cason says:

            Thanks for sharing, Bill. Hope that it works out for you. Yeah, I’m going to stay away for now until we have more clarity on market direction. Which is down right now! But the last few weeks was a great run.

  25. Steve Tytler
    Steve Tytler says:

    Hey Alex, another request for people like me who don’t have time to watch the market all day … please make a separate post when you see the confirmed “BUY” signal in miners for those of us who are not active traders and don’t read the comments all day every day. Thanks!

    • chartfreak1
      chartfreak1 says:

      I believe that you said that you cannot take any draw down & y4es, a confirmed buy, so your buy signal is probably GDX closing above the 9 sma. Since it has to close there, there will be no intraday alert…it has to close there and goes in the next report. Usually I look for a break of the downtrend line too, but that is going to be quite a bit higher.

      I also think you trade ETFs?

      For others, My best advice is to take a starter position to have some skin in the game ( I am seeing this as bullish today if GDX closes above $23). Then I would add above the 9 or 10sma. I have actually been buying for the past couple of days and will begin to add too if this is it.

      • Steve Tytler
        Steve Tytler says:

        Thanks Alex! Miners look bullish to me today as well. I don’t have time to trade and watch individual miners I will buy GDXJ and SLW for my retirement accounts. Just want to be careful not to jump the gun since I’m not big on riding draw downs these days. 🙂

        • Cason
          Cason says:

          If you have the long eye to keep unlevered ETFs you should be good here. As Alex has said, we’re pretty darn positive we’re higher than this in 2 weeks and 2 months so if you have a fairly safe strategy (which it seems you do), should be good to plan buys here. I play options at times, which takes some serious timing so I have to watch these lows very carefully.

  28. Ken
    Ken says:

    I do not want to throw cold water on the party but I think that the Miners are still working on Wave 4 of C with Wave 5 down yet to come. Believe me I do not wish this to occur as I am Heavily weighted in this sector currently but going thru the charts that is what I am seeing in most. If so I am prepared to add at that Wave 5 low, if not I will sit back and watch the show. 🙂

  29. SonOfGud
    SonOfGud says:

    i was recently reading that one of the targets, based on historical corrections in PMs could mean a HUI retrace to 175.. currently at 200.
    also Bob Moriarty at 321, was saying he’s a buyer at $16 silver, currently $17.5
    It just fits in with what youre saying about us still being in a current wave C.iv

      • Cason
        Cason says:

        We really have to be careful here to differentiate and to have inflection points that say we’really safe (upside), or thay below we need to exit. I can hold core into next DCL but not a full ICL-purchased position, that’s no-go terrain for sure!!

  31. Cason
    Cason says:

    It’s supposed to be tough to buy ICL, right? well, I’m getting really uncomfortable, if that’s a good sign! Especially with the unfinished wave down stuff, now I feel like I need to sell as soon as I can!

  32. Cason
    Cason says:

    Market futures down fairly sharply early in Asian session, but gold up $6 from US equity close currently.

    API bearish with +2.7M add. EIA out tomorrow at 1100 AM Eastern. On Thurs this week due to US Gov’t holiday on Monday. Oil appears to have started wave IV.

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