Nov 9th – Storm Winds In The Future(s)

Sometimes when we are looking out over the horizon, we see what looks like a storm rolling in.  Basically there is nothing that you can do, except to be prepared. It is normal to wonder, “Will the winds of change do a lot of damage?”  “Will they just be a moment of unsettled turbulence with minimal damage?”  “Will we have to pick up an abundance of scattered debris, or will this just pass by?”

We have been taking positions in the Precious Metals markets, so this storm may be just like riding the rapids for most of us,  if things do not change by the morning. The General Markets, on the other hand,  are taking a good hit tonight for those trading in that area. We just have to watch how things settle after the storm surge passes.  Let me show you why…

While counting the votes, TRUMP was taking the lead and it looked like he was winning key states. I looked up Gold , which was down about $1.00 one hour earlier, and GOLD reacted this way.  Gold shot up $30 and Silver had already been climbing during the day. The USD dropped like a rock.

So I started taking a look at the Futures,  and this was a rather unexpected reaction. The dow was down about 500 points at one point, the SPX down almost 70. click to enlarge.

At this point I’ll say that tonight or tomorrow morning, nothing that I write in the report is going to be particularly eye opening.  I am going to release a few thoughts now, and my biggest recommendation is that we have to see how this plays out after the storm surge of emotions eases up. I gather my charts at night, and I had gathered a couple of charts already.  I will share ideas in this report as a  “Here is where we left off”. 

SPX –  I expected the SPX to rise for maybe 3 days and it stopped right at the 50sma. Lows will be taken out and stops will be run tomorrow if nothing changes.

WTIC –  I didn’t like the Oil set up, so I avoided it.  It looked like a bear flag at this point.

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  I drew this next chart of Gold thinking that the first question that most would ask is , “If this POP sticks into the open, do we just sell the Pop as an emotional reaction?”   My answer is that coincidentally, we can look at the BREXIT reaction for a possible idea, because the timing is similar.

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GOLD –

We were expecting a daily cycle low then, we were expecting a daily cycle low now.  The Brexit Pop shot up and pulled back a bit by the end of the day.  We then saw about a 4 day pause and a continuation higher. The set up is very similar now,  and since we were expecting a DCL and a POP, the move may just stick, pause, and then continue higher.

So it will be very tempting to sell if this POP stays with us until the open. Maybe selling a partial position would be fine, but I am going to see how things play out.  We have been accumulating positions since early October, however, also consider that this will be day 1 of a 2nd daily cycle. It is not likely to just give up the gains early on.

 GOLD LIVE 11 P.M. Eastern time-  It is looking like it is off to the races and will break the overhead trend line soon.

GOLD 15 minute –  The election results are not final yet. This possible bull flag looks like GOLD  could even propel higher if the results finish as they are currently being recorded ( a Trump win).

SO WEDNESDAY is going to be a day of emotions and whip saw with whatever the results turn out to be when all is said and done.  It already has been in the futures.   As I write, the above reactions are a result of Trump being ahead late in the Polls. In the Morning, this scene could be the same or different, but it is not likely to be calm yet. I am going to just watch how things play out, and if anything gets beyond my liking, I will step aside and allow whatever happens to happen.   Honestly, at this time, the futures have moved strongly in our favor, since we focused on the ICL in Precious Metals.

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I do have a request for Wednesday.  On crazy days when anything can happen, many times readers will like to ask me questions ( or they ask everyone for an opinion) in the comments section.  I would like to be able to help if I am around.  I have difficulty reading through the comments and finding questions directed to me when I leave for a few hours and return after many have posted the comical avatars and other gifs , etc.  I am not opposed to these and I do find some amusing on an easy, slow,  boring day of trading. On a day like Wednesday may prove to be, I find it hard to surf through all of the comments if I leave and return to many added jokes, so  I often just skim the comments quickly at that point and may miss a few good ones.  Again, on a slow, boring day – no problem, I am probably out riding my bike or getting something done.  On a crazy , important trading day? Maybe we can hold off on filling the comments with these until the markets close on Wednesday.  That way if some readers have serious questions, we can all help each other ride out the storm. At this point, I do think that most of us are positioned to kill it tomorrow if the futures remain the same.  Thanks !

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Best wishes to all, see you in the next report.

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~ALEX

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1 hour later after Trump won Florida.  DOW now down almost 700 /  SPX  down almost 100 / Nasdaq down 215 .Tomorrow  ( Wednesday) is going to be CRAZY!  That Bull flag in Gold will probably push Gold even higher.  Expect Brexit like conditions, I guess.