Looking For Some Change

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Looking for some change …

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SPX – No real change from yesterdays report  🙂

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Has the USD been strong?  Yes it certainly has. I was looking for a top to form as a triple top since last summer, but suddenly the charts set up ( or changed) more & more bullishly, so I mentioned that.  Now we see the USD attempting to break to new highs.  How does that affect Gold is the question on every ones mind.  That’s a valid question, so lets take a closer look.

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USD – 8 straight days higher out of the lows. For starters we could take note that at least Gold & the Miners have stopped dropping.

usd-11-16

In my weekend report, I included this chart to show how similar past ‘topping action’ was to what we see in the USD now.  We often saw Triple tops with weakening RSI.   At the end of this report, during my Gold discussion, I will discuss this further.

usd-11-11-wkly-2

WTIC –  As mentioned in prior reports, I am not expecting a strong rally out of this low in Oil.  This set up tell me that it might get to $48ish and then roll over into a more meaningful low. The Energy stocks continue to out perform Oil as mentioned in yesterdays report.

wtic-11-16.

GOLD & MINERS  (And that strong Dollar)

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GOLD – This low could be forming in similar fashion as the May ICL.  On day 26 we had the lowest trading price and now we do have an unconfirmed swing low in place for Gold. This could be day 2, or it could be day 28.  Either way, I wouldn’t think that Gold has much downside from here.

gold-11-16

GOLD – This is the scenario for a shake out low, and our cycle timing does allow for that to take place. This is less likely to me, because Gold stopped dropping even though the USD continued higher.

gold-drop

GDX –  We have had our swing low in place, but I’d like to see follow through higher to give this less of a bear flag look.

gdx-11-16

GDX –  The cycle timing does allow for 1 more quick shake out drop too, thus I’m leery of that Bear Flag look.  I feel that this is less likely, because many Miners are holding up nicely. I own some Miners that are still above the October lows  ( see yesterdays report). If we drop, I’d be buying it this late in a daily cycle.

gdx-2

GDX – You may recall that I mentioned a chance of a 2nd drop  already with this chart, and I was pointing out how that 2nd drop happened in May ( red arrow, blue arrow) .  We had a reversal candle in May, and then next 2 days were above that low to the 10sma, and then a quick 2 day drop to a new low found the bottom.

gdx-false-low

Why that 2nd drop is less likely in my mind – Using one of my other indicators, it often detects the difference between false reversals and real lows after a deeper drop.  You can see at that first reversal in May, the indicator didn’t buy it. 

gdx-crosses-at-lows

Now back to the current strength of the USD  and Gold remaining Bullish or not. 

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In my studies, I wrote a report about interest rate hikes during the past Gold bull market. Many say interest rate hikes will hurt Gold and stifle inflation, but I showed how Gold remained very bullish after each hike, and the USD actually dropped.  With the Markets at all time highs, the Fed is indicating that we may actually get an interest rate hike this December. We got a rate hike last December, and that did not hurt gold. Gold bottomed on Dec 3rd.  The USD rolled over in January and sold down through May. So let’s just take a look at where things are at this point.

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Yes the Dollar is about to break out to new highs, the highest that it has been since 2003.  If that is the case, should Gold be at all time lows?  Or if the USD is back where it was last December, shouldn’t Gold be where it was last December?  So now we ask,  “DO I SEE A CHANGE IN THE USD / GOLD RELATIONSHIP?”

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GOLD   is in the Lower box,

USD      is in the upper Box. 

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The USD is back at Dec 2015 Highs, Is Gold back at last December 2015 lows?

gold-usd

  That is not all.  I have other reasons for believing that Gold has bottomed and the USD is in a topping process. Maybe I will cover it a bit more in the weekend report.  For now, we have what looks to be a low forming in Gold & miners . These lows are either in place or have time left for another quick shake out. If we were to get another drop, I feel that it should be bought, since the timing is getting late for a DCL, and I expect it to be an ICL. For the conservative traders, looking for a safer entry, you want to wait until GDX crosses above the 10sma and closes there. Some Miners mentioned in past reports are still holding up well, still trading above the October lows.

  It has been a long couple of weeks with many long reports full of charts trying to tackle the craziness of the markets, especially with the changes since the elections. I’m sure that all of those reports will cover any activity that comes along Thursday and Friday, so if I even write a Friday report, it will be brief and may just offer a few trade set ups. Enjoy your Thursday and Friday and thanks for being here!

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~ALEX

 

 

104 replies
  2. chartfreak1
    chartfreak1 says:

    There’s our 8:30 Eastern Time dip in Gold. Right on schedule.

    Now lets see if it is a small shake out and they buy it back.

    Sidenote: Several shippers up HUGE again in pre-market. whew!

  3. Thomas Yarbrough
    Thomas Yarbrough says:

    Good stuff Alex, This shipper stuff really is nuts. There are several that still haven’t run and I may pick one up today. NVGS for example, even though its not a dry bulk shipper. The pot stocks have also taken off again…

    • chartfreak1
      chartfreak1 says:

      I had the same method, I’m not sure if you saw it in the comments recently.

      I picked up STNG and GSL a few days ago based on their lagging, yet their earnings were already released. GSL has taken off, and is even up 40% pre market now, so it is working (Until the HYPE ends). Could be temporary.

      Are you sure about that NVGS ticker? I see nothing under that.

      I saw TNK, ASC, FRO, NAT, STNG, and more as nice set ups using a weekly chart. Just watch for earnings, it may be best to make sure that they have already released them.

      Also look at a 2 yr weekly chart of DWSN. That is a bullish set up, I’m surprised it hasnt broken higher yet.

  4. marinho
    marinho says:

    Alex,
    great job. I would love to see the COT report for this week and I hope we get it on Friday before the end of the trading day. I am almost sure we are at the end of this ICL. Thanksgiving is a great time for gold to bottom, so either we have bottomed or we will bottom very soon. Poly had a great chart on his forum bullbeartalk yesterday, where he was showing the length of the cycles this year versus last year. In bear markets cycle shortened to 18-19 weeks, in 2016 it looks like we would have a 26 week cycle low in may and now a 24 plus week cycle bottoming anytime.

    • chartfreak1
      chartfreak1 says:

      As mentioned in prior reports, I exited all of my energy trades in Aug & Sept.

      I’ll discuss how I would have viewed MNGA if I was still in the trade.

      MNGA was in an uptrend and looked to be building a base this summer, from the end of June to October. It stopped making higher lows in November, breaking down from the uptrend. I wasn’t watching it, because I no longer owned it, but I would have sold that bounce if I still owned it, thinking that it might just be a back test of the lower trend line of higher lows. Then I could watch to see if it recovered and as just a shake out, or was it breaking down.

      It now would need to recover or prove itself.

    • Carlnetscouts
      Carlnetscouts says:

      Those stocks are trading totally crazy. 100% gains at the open and then losing it all in an hour. DCIX went from 12 to 20 at the open now in the 9’s.

      • chartfreak1
        chartfreak1 says:

        Yes. Unfortunately those chasing the huge runs after they are already in progress ( DRYS, EGLE, DCIX, SINO, etc ) usually get their heads handed to them on a platter as they race back to the 10sma or other support area.

        Look at DSX, EGLE, NM, using a 9 SMA. Pretty cool so far.

        It was what I was warning about with the marijuana stocks

        Looking for a lagger is a lower risk entry.

    • Cal Staggers
      Cal Staggers says:

      I definitely know what you mean, Cason –
      We may have to wait for good things in miners. Lingering at the lows from July ’15 through January ’16 produced WONDERFUL things, so hopefully this wait will be worth it.

    • chartfreak1
      chartfreak1 says:

      The bummer would be if Gold lingered at the lows for 5 or 6 days like in the past, and then started to really pop and run next week, since the US markets are on holiday Thurs and 1/2 day Friday.

      That might be frustrating for those holding miners

      • R Byram
        R Byram says:

        If anyone is bored, do what I just did. Go back and read the CF report from Jan 4 of this year titled “Time for Changes”

        • chartfreak1
          chartfreak1 says:

          Funny, similar title to todays report (CHANGES) and I was pointing out the 2nd top to the USD , expecting a drop. 🙂

          Then I scrolled down and saw AG trading in the $3’s ( later went to $19!), IAG was trading in the $1’s ready to run up to $5.75+ .

          If we only knew then what we know now!

          * yes, I was bored too

          • chartfreak1
            chartfreak1 says:

            Thanks R.B., I appreciate that –

            That report was pointing out the set ups in AG, IAG, MUX, etc

            If you really want to get excited, Miners started running after that report was written, read the End of January , and first ones in February, we were starting to making money hand over fist then : ) Maybe a glimpse of the future ?

          • R Byram
            R Byram says:

            There are so many reports, I’m just trying to skim through them when I have spare time just to get a feel for the same kind of a set up we might have now.

  14. chartfreak1
    chartfreak1 says:

    I’m going off for lunch.

    Sidenote:

    PAAS is a good looking Miner, Waiting to see if NG or IAG can recover the 9 sma – lead the way.

    NSU – Rarely mentioned, moved off of the lows and has held above the 10sma.

  17. Glmus
    Glmus says:

    Hey, DSL is still up 14%, BUT GET THIS, the day high is 4.50 and I just saw a price of 2.25. Earlier I mentioned one of these stocks can go up 100% but then down 50% and be even. Yesterday’s close was $2 so it went up 125% to the high and has had a low of 2.14, a drop of about 50%!! It may do it again tomorrow. Sure is fun to watch.

  19. chartfreak1
    chartfreak1 says:

    HEY ALL – Just a noteworthy point here – not followed by a recommendation.

    GOLD JUST BROKE THE LOWS FROM THE OTHER DAY AND PUT IN A REVERSAL . THAT IS A DAY 29 LOW FOR GOLD

    MINERS DID NOT BREAK THE LOWS. THAT IS A GOOD SIGN.

    I LIKE WHAT I SEE : )

    • frank yong
      frank yong says:

      Hi Alex

      if we are that close to the may icl, don’t you think it is likely there would be an attempt at a stop run on the may lows?

      • chartfreak1
        chartfreak1 says:

        I was leaning that way, and maybe it could still happen, that’s what keeps me cautious in a way. We do still have another few days to break it and recover within cycle timing, but it should be rather brief if it happens.

        On the other hand, the USD breaks to new highs and everyone is super bullish on the USD, but Gold cant break the May lows? I’m looking at GLD , and today it broke the lows from 3 days ago on 1/2 the volume. Often I see that as a false break down. Not enough UMPH to push through the floor.

        This late in the daily cycle, we could be at lows and leaving the May ICL in tact also gives us a 2nd consecutive higher low.

        There are 2 sides to the coin, but both seem bullish to me : )

      • chartfreak1
        chartfreak1 says:

        Hey Geurt –

        We’ll have to see what tomorrow brings, but time is getting in the daily cycle. Todays report shows the possible look of the charts if the bottom is broken out, so we can look back there for a visual.

        I do like the light volume selling today.

        You have a good evening too. 🙂

  20. MarkM
    MarkM says:

    Thank you Alex for chiming in. Your thoughts are calming. Widespread views that gold hits new lows, breaks the last ICL, bear market, head and shoulder top, etc. If gold bounces here, no one is going to buy it. (except you and those who are paying attention to you). Late in the cycle for sure, and holding on. All my charts show the same thing…Yen deeply oversold, bonds deeply oversold, Euro deeply oversold, dollar highly overbought. Emotions signal we are very close to swing time on those. Thanks. MM

  24. R Byram
    R Byram says:

    I’m up to reviewing the January 7, 2016 letter now and it is interesting how Alex’s commentary went from “hang in there everyone, it will be ok”
    To a few days later “no I don’t think its too later – here are a few laggards you could get into”.

  26. Glmus
    Glmus says:

    FWIW – Assuming Alex has this nailed and although I have ridden down many gold stocks in the October ‘crash’, I am getting ready to buy when I get an hourly buy. I eyeballed golds, silvers, and other stocks we tend to buy, and the following list contains the ones that have pulled back the least since (hopefully bottom of) the ‘crash’ on a 60 min chart. They are in no particular order. GSV,DRD,FNV,NEM,BTG,GSS,AG,PAAS,CLF,GPL,MUX,NAK. I will also look at the dailies.
    I just noticed that my account has rallied a tad since I started writing this.
    Hopefully Alex will be sharing his ‘star’ of potential buys.

      • Glmus
        Glmus says:

        The ones I mentioned have about a 15 degree angle up on the 60 min I think from their ‘crash’. AUMN, CLF, TRQ, NRP, and TGB didn’t undergo a ‘crash’ like the ones I was looking at. Thanks for pointing these out too.

        • Glmus
          Glmus says:

          Here are a few more I found. I think Alex may have mentioned some of these in the recent past.
          ABX,RGLD,DNN,NG,SWC,PVG. Keep in mind, these are only visual picks – those that resisted the ‘crash’ bottom (tho possibly down today) or have been up recently and did not participated in the wretched ‘crash’.

  28. R Byram
    R Byram says:

    Just going back over the January charts – man that was one wicked drop into the bottom in January. holy crap, I hope we don’t need to endure one of those.

  29. R Byram
    R Byram says:

    This nugget just showed up on the TD Waterhouse platform.

    In light of recent volatility in Canadian marijuana stocks, please be reminded that Stop orders are not accepted on the Canadian Securities Exchange (CSE). Stop orders include Stop Market, Stop Limit, Trailing Stop Market, and Trailing Stop Limit orders. If you place a Stop order for a CSE-listed security, the order will be rejected.

  30. Cason
    Cason says:

    Breaking to new lows AGAIN overnight. This has been horribly, horribly painful. MAKE IT END!!

    Ok, some actual data:

    Current overnight low for Spot Gold : $1205.67 about 9PM Eastern
    Going back to the lows for 24-hour spot it was $1199.65 on 30 May

    Low so far tonight on Silver is $16.55
    The 30 May silver spot low was $15.82

    As far as GLD (only traded during market hours)
    GLD on 4/7 hit a low of $115
    On 6/1 GLD was $115.20 during trading hours but it would have been lower overnight on the 30th based on spot price cited above
    11/17 – today’s lowest point was 115.44. If we opened here tomorrow, we would have a NEW LOW in GLD in reference to the May ICL.

    I hope it’s a shakeout, but we’re out of time folks. I continue to question if we can rally in the face of the impending rate hike. Could we get a 5th daily cycle? Or just a 1st daily cycle that kinda sucks until we can get past the Fed? Both might be possible?

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