Underlying Strength

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There was a time when I only released reports Tuesday , Wednesday, Thursday and the huge weekend report would cover Monday. I felt that the Thursday report would cover both Thursday and Friday and that the weekend report caught us up for the Monday trading. With the Bull markets of Precious Metals, Oil, and Commodities coming alive this year, I have released at least a small Friday report almost every Friday in 2016. Why stop now?  

 

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So this is just another short ( short?  13 charts  )  report to point out that Thursdays dip or slam down  in Gold , Silver, and Miners actually may hint at some underlying strength, and that may be enough to encourage anyone that is a little too light to buy these dips. Lets take a look…

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This SLAM DOWN action is getting to be a daily occurrence.  I had some work to do around the house on Thursday and mentioned in the comments / chat  section that I would be leaving for a couple of hours.  The markets had been open for about an hour when suddenly – SLAM! Notice that all 3 were slammed down. It says Gold down $-2.50, but you can see that Gold was up from the open and that was really about a $10 drop in Gold, from 1274 to 1264.

gold-slam-1Now notice that by the end of the day,  GOLD & SILVER stayed near the lows, but Miners recovered quite  a bit. This could be a sign of underlying strength. Miners have been out performing the metals quite a bit.

 

 

slam-2

 

So here is GLD – Is it just dropping down to fill a gap, maybe test the 10sma? It doesn’t look like a big scary slam down with this perspective. The SLV tagged the 200 sma support and remains above it.

gld-10-20

GDX – You can see how GDX dropped in the morning and recovered by the close. That would have been a good ‘buy the dip’, but who knew? Maybe if you see a dip Friday,  this will give confidence to add a little more, and your stop is below recent DCL/ ICL (lows).

gdx-10-20

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Not enough to comfort you?  That’s understandable, since we’ve all seen that these Miners can sell off fast.  Well maybe if some Miners had closed Up,  Green , while Gold & Silver slammed down and stayed down?

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IAG –  IAG was trying to break out from a downtrend. The 50sma may stall it, but this was impressive when Gold & Silver got dropped and stayed down.

iag-10-20

MAG Pushed Higher –

mag-10-20

EGO –  EGO dropped and recovered, and it is pushing on resistance as Gold sold off.

ego-10-20

 

DRD – a $5  stock up 14 cents while Gold got hit and stayed down.

drd-10-20

 

GSV – Continues to be bullish

gsv-10-20

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NAK  – reversed near the 50sma resistance and I pointed it out in Wednesdays report on this chart

nak-10-19

NAK – Thursday it dropped and then closed green.

nak-10-20

NAK WKLY – So much potential if they get permission on their permits. The news that I have read recently has actually been good in that area, but this one needs ‘due diligence’ as a buy & hold core position in my opinion.

nak-10-18-w

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And there were more Miners that were green.   KGC, RIC, GSS, etc. That can be confidence building.

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TGD –  I was asked about TGD in the comments section and I said I loved the look of the weekly chart. This is how I see it. It has run up from $0.07 to $0.63.  We bought this Way down at 9 cents and 12 cents and so on as it went higher. It hit resistance and has consolidated since August now. It is acting correctly so far, but requires that ‘Buy & Hold’ mentality, because it runs when its good and ready, and it goes sideways whenever it wants to also.   Look at the chart again. The May ICL had TGD near $0.23 and ran to $0.63 in 2 months. 170% in 2 months  and many did not notice.

tgd-10-20

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I hope this helps you to see that Gold & Silvers recent pullback did not cause Miners to look bearish in any way.  Quite a few ended the day Green, in positive territory. I have pointed out in a report this week that I expect some to ‘pause’ or pullback as they near the 50sma, but I am still bullish and I also do expect them to break out in time. For now we watch and wait, and if you are fairly light and wanted to add, I am seeing no reason why dips can not be bought. Please see other recent reports for some Miner ideas & charts of what to look for.

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Have a great Friday and weekend, and thanks for being a Chartfreak!

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~ALEX

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EDIT:  I have noticed some problems with DISQUS the past few days.  Currently they are not displaying the comments / chat section properly.  Hopefully they get that resolved .  If you go to yesterdays report and look in the comments below the report, I find it impossible to read the comments. There is nothing that I can do on my end.

88 replies
  1. chartfreak1
    chartfreak1 says:

    There seems to be a problem with the way DISQUS is displaying comments. Hopefully they get this resolved today, but if it is noticed here this morning, there is nothing that I can do on my end to clear it up. Thanks.

    • nancytheartist
      nancytheartist says:

      I couldn’t even get to your page last night. Glad it is here this morning. I like your Friday comments and, like Conrad, it makes the weekend easier.

  2. Conrad
    Conrad says:

    We’ve gotten used to our Friday fix Alex. It’s become our comfort blanket heading into the weekend 🙂

  3. deshy
    deshy says:

    Alex, thanks for the great work! Not fully onboard yet but easing into it… figure if this is it there will be plenty of time to keep adding. Have a great weekend.

  5. Mark Giangreco
    Mark Giangreco says:

    Any concerns, Alex, with a possible HnS pattern forming on GDX with the head formed at the August high?

  6. nancytheartist
    nancytheartist says:

    I don’t know if anyone else has SGY, but I read a blip this morning that they will be filing bankruptcy, but reorganizing so shareholders will still have a small stake in the new company. Date is not confirmed. Shares pre market cut in half. Anyone have any other data?

  7. R Byram
    R Byram says:

    I bought some Tanzanian yesterday TNX.TO in Canada and used a limit order because of the low volume. It really had a hard time filling and came to me in little bits and pieces – so it appears there are not a lot of sellers left at this level.

  8. Tammie Woodard
    Tammie Woodard says:

    With the dollar up and gold still staying up ….that surely is a good sign! The EURO keeps falling…..surely there must be some good news somewhere that will turn it back up! Not sure what that might be….but…hoping….

  9. Tammie Woodard
    Tammie Woodard says:

    TRQ heavy day, lots of buyers, up 5 cents….doesn’t seem to care about price or gold or dollar.

  11. Glmus
    Glmus says:

    Today feels like a grinder. Alex mentioned IAG. It has been grinding higher on the 30 min over the past few days and could be forming a daily cup.

    • Cason
      Cason says:

      as long as JNUG grinds HIGHER, I’m cool with that. Yeah, I have same feeling. Though seriously, wouldn’t one $30 gold rocketship day feel really good? Is that too much to ask for? Just one? 🙂

  12. Glmus
    Glmus says:

    BVN may be forming a handle on the hourly chart where the cup started back at 10/3. My portfolio of metals hit green a few minutes ago, but back to small red.

  13. chartfreak1
    chartfreak1 says:

    I did mention steel and other ‘Metals’ in a report 2 weeks or so ago, and STLD broke sharply higher yesterday, VALE is breaking to new recent highs, X and AKS are breaking out from a type of double bottom, and CLF looks very similar to the AKS chart . These look set to move higher.
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    refresh for 2 charts, notice the similarities? This bodes well for Miners in my opinion.
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    https://uploads.disquscdn.com/images/a09decf2008a0f471861ea8997127f41055d1f84c5fdf21547149d737364644c.jpg https://uploads.disquscdn.com/images/9e4d6bf6034e456d798e38b2b0c6dfeb4b5fefa8487074a3deeb6d5abaeeff2b.jpg https://uploads.disquscdn.com/images/d04c0979d140b022ee0856938b134fdde243d4df54e7d3ded2084fc190b2fe24.jpg

        • Tammie Woodard
          Tammie Woodard says:

          Haha! I have AG too….lol…had a gain in it…yesterday……:) But hey! MNGA is up 4 cents right now! I actually took your advice and got this one! Now I wish I had more!

        • Tammie Woodard
          Tammie Woodard says:

          So if one has some dry powder, do you think today is a good day to add to any…..or get a new one….with options expiry coming up? I know you said if one was light it might be good to add…but I don’t understand how all the option stuff works – only know that I’ve seen gold go down week of options expiry and then go back up….so…thoughts?

          • Cason
            Cason says:

            Tammie, I worked up this chart for you based on the expiry question. I’ve circled the last 7 futures expirations. Ok, first make sure we’re not mixing up options and futures, both of which have expirations. Options will have weekly, monthly, and quarterly and then some have index-level options. For example, with S&P you have options on S&P, you have options for the ETF SPY, and you have the E-mini S&P monthly futures contracts. Here is the CME website – go check this out: http://www.cmegroup.com/trading/metals/precious/gold.html

            Look at today’s volume in gold for the Oct, Nov, and then Dec contracts and you’ll see why I wasn’t worried. The ‘front-month’ for Gold per Bloomberg/CNBC is December gold, which the volume clearly shows. Remember that each contract is for 100 oz. of gold so that is almost 100K contracts at $126,800 gold value (no, you don’t pay that much!)

            Here is the chart. What do I see? I personally see that cylces that CF has been following and the last Thurs as a red-herring that is following the cycles, but that is just my 2 cents. CF may/may not have time to weigh in later. GL to you!! https://uploads.disquscdn.com/images/759cece203feee067622f024046e878557a473b0d15bea1052c482a028689ec0.png

          • Cason
            Cason says:

            Also, check the recent post I had for natural gas and compare the monthly price differences and then look at the lack of volatility in gold fiTunes for the out months.

        • Erik Sven
          Erik Sven says:

          I was just thinking the same thing. Not moving until silver does? So much potential–maybe waiting until options expire to rocket higher? AG: Accelerating Geriatrically.

          • nancytheartist
            nancytheartist says:

            good one…that one is in my core so it is still shining green…I would sure like it greener like it used to be!

    • Cal Staggers
      Cal Staggers says:

      John Doody recommended MAG to his subscribers last night, which may account for some of this move (some of it was me!). Doody’s recommendations are purely based on fundamentals and without regard to timing or technicals.

  17. Glmus
    Glmus says:

    Geez, I went for lunch and came back to see that the red sea washed over most of my stocks. And to think I was in the green for a few minutes earlier today. I hope we can get a rally going soon.

  18. Erik Sven
    Erik Sven says:

    I’ve been worried about volume this week “if this is really an ICL.” But going back over some charts from the May ICL, this first week up (weekly chart) is pretty similar–higher volume came later in the cycle when there was more exuberance.

  19. SonOfGud
    SonOfGud says:

    with benefit of hindsight.. shoulda been in metals/materials last week.
    then coulda just jumped on to the lows of PMs wave2 pullback.
    in an ideal alternative universe, thats exactly what happened

    • Glmus
      Glmus says:

      On both the GLD and GDX, this looks more like a wave 4, not a wave 2 on the hourly charts.
      Besides, this rally should run for a few months, so we are only in a first small 12345 leg up, right?

        • Glmus
          Glmus says:

          Assuming I am correct, we should have a few days up, then a wave two for the metals. We’ll see. Have a great weekend. By the way, I also use TC2000, probably over 20 years. I really enjoy it.

          • SonOfGud
            SonOfGud says:

            thx Gary (have i remembered that right?)
            you too.
            im only recent to TC2000.. but used free version prior to that for a few yrs.
            it does compliment the Stockcharts .com well

    • Cason
      Cason says:

      Yeah, that was really rough! Went back to the 50-day on the continuous contract chart. Interestingly enough UNG is still above – pretty darn rare that UNG out performs!

  23. chartfreak1
    chartfreak1 says:

    We used to trade Vale a lot here, and when it did a deeper dip, we focused on Oil &Miners, but Vale looks like it is now breaking to all time 2016 highs. It is hitting resistance from the early 2015 area n a 3 yr weekly chart.

    There was a time when I wanted CLF & VALE in my core, but it never happened. If anyone else did….congrats ! Great weekly chart. Nice looking weekly chart.

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