GOOD NEWS – BAD NEWS

/231 Comments/in /by

I have what I would consider to be some good news! The only problem is, the good news may also be a little bad news.

Let’s take a look…

I mentioned a few days ago that I’m used to seeing the longer Gold daily cycles run from maybe 28-33 days.  This Gold Daily Cycle is stretching out and I wanted to see if there was any precedence for this prolonged daily cycle. I started looking way back at the beginning of the Bull Run, but the longest ones back then still seemed to be 33 days ( As shown here in 2001).

gold-2001-33-day

And again in 2004

gold-day-33-2004

Then I got an email from CAL ( Thanks Cal) , and he pointed out that the last daily cycle heading into the MAY ICL was….45 days long.

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WHAT??  How did I forget that?  I actually had to go back and see for myself.

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GOLDS final daily cycle into the May ICL was 45 days!  That is good news, there is some historical precedence, so this is not the only extreme daily cycle leading into an ICL. Notice the move higher when the ICL is finally in place. Relief.

gold-45-day-cycle

AND….It has happened another time in recent times. Even the last daily cycle leading into the Dec 2015 ICL was extended. I absolutely remember how brutal this lows was, going sideways for weeks. It ended up being 43 days from low to low.

gold-2015-dec-43-day

So that is the good news,  we have seen these last daily cycles falling into an ICL stretch out and bounce around at the lows in the recent past too.  I must have blocked out the pain to not remember that  ( however the dip in May was not a severe plunge, it was more of just a prolonged sideways move.

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So why did I say in the beginning of this report that the good news may actually be a little bit of bad news too?  Well, remember that those last 2 drops into an ICL were 43 and 45 days long. We are on day 39.

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GOLD –  We are ‘only’ on day 39 Friday.  Well, a low could come at anytime, but 45 days would be another week? Ugh. Honestly, an ICL could come at any time.

1-gold-12-1

And we do have a wedge forming in GLD.  I would expect this to break out higher. I tweeted this chart out on Thursday. 

gld-12-1-b

It is interesting that the drops into the ICL have recently been stretched out as the bottom sees price bouncing around and boring or scaring people away for good. I know in the past, it has been difficult getting people to buy near the lows. Why? I would say that this relentless hypnotic action at the lows repeatedly causes people to be shaken out, and that gets old quickly.

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GDX –  GDX has continued to hold up in an area of support. Gold made new lows  (AGAIN) and GDX didn’t break the Nov lows  (Again). A drop to the lower channel is possible, but so far Miners have been holding up and some are acting very well. 

1-gdx-12-1

SPX – I thought that we were seeing too steep of a climb last week.  This looked like a rising wedge, and they aren’t usually sustainable.

1-spx-11021

 

SPX –  It actually went higher for 3 more days, and is now breaking down into what I would have thought was a 1/2 cycle low.  A normal dip to the 13 sma or 50sma.  The volume is rather heavy for one thing and …

1-spx-12-1

SOX – This is a bit extreme, so the general markets need to be monitored. sox

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When I look through the markets, it does look like TECH STOCKS are not being as favored as they were before, but other areas are absorbing some funds.  FINANCE & BANKING has done well, STEEL, COPPER, ALUMINUM has done well, and ENERGY may now out perform. Many energy stocks are looking good with OIL & NATGAS breaking higher.

This is a big reason why I want to watch the Precious Metals sector when it finally gets moving out of the lows. It could also benefit and take off like a rocket,  or this bull may be somehow going out of favor like the Semi Conductors and other tech stocks. Time will tell, but Precious Metals still should get a nice run higher either way.

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USD – Will the USD ever drop into its DCL? It looks to be on its way. This would help Gold, Silver, and Miners.

1-usd-12-1

WTIC – Oil had the follow through that it needed to break back above the trend line and the 50sma.  It is at the 2016 highs and the volume is strong. Oil hit the $50 area in June and then it started to consolidate those gains. Whether it pauses or not here, it now looks like Oil will be continuing that move higher soon, and the energy stocks have really been playing catch up.  

1-wtic-12-1

So let’s look at a few energy stocks that I posted in the comments section . They have set ups that may be worth trading if some pull back or others are laggers, especially now that Oil has reacted bullishly to the OPEC meeting.

 

AREX – This could make its ways to a break out to new highs over time.

arex-11-30

BCEI – Multi month base, breaking out with volume – Check fundamentals if that concerns you. This one may have financial struggles.

bcei

BTE – Breaking out

bte-11-30

NOG – I bought this yesterday when it gapped open and then dropped to fill that gap.  This was just a trade, nothing special. It looks like a lagger.

nog

WPX – I pointed this out as an Energy stock that got slammed down on Monday and Tuesday, and then the OPEC decision rocketed it higher.  This is hard to trade once they take off, so I wanted to show what the possibilities are. First it, and many others, shoots up & breaks out. This was up 30%, how can you trade that?

DO NOT CHASE, or just take a small partial position and have Patience.

wpx

The next day it gapped higher again and then sold off. Now we have a potential break out and back test. coming.

wpx-1

WPX –  I often see  stock charts like this, and they are followed by this type of movement.

wpx-2

CLF is an example. It didnt just continue straight up from $5 to $20, it is stair stepping higher, often leaning into the 10sma and consolidating gains. It is safer to buy a pull back than to buy a pop and have to endure a pull back.

clf-12-1

S0 the good news was that Precious Metals ( GOLD) does have precedence for extending a stretching into an ICL.  The bad news is that today is day 40 and we have actually seen 43 & 45 days in the past. This type of bouncing around at the lows and breaking to new lows is tiring and frustrating, but the move out of an ICL can be extremely rewarding too. I’m hoping that we see that soon, and want to monitor Gold & Miners as they eventually emerge from the lows. I need to see if anything here has changed the sector from Bullish in 2016 to bearish, or not. Enjoy your Friday trading and your weekend! Thanks for being here.

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~ALEX

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I did some buying yesterday, but one really should wait for a swing low and a break & close above the 10sma at least.

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Now this is a worse case scenario and I flipped a coin to see if I should even bother showing it.  It is probably a lot less likely and I didn’t want to scare anyone, but a running correction breaks out in the direction that it is ‘running’ in.  Could we see this after the Jobs report?  I really hope not, I didnt think of it until last night.  I drew it up so that we would be prepared if we got – yes – 1 final flush again.  🙁   If you look at the MAY lows, that is the type of lows that we usually see here at an ICL, and that could form at any time.

1-gold-running-correction

A drop like that in GOLD would probably cause a drop like this in Miners.

1-gdx-12-1b

231 replies
    • chartfreak1
      chartfreak1 says:

      I know. I usually see running corrections play out to the upside, but when I saw that those 2 drops into the ICL lasted 43 & 45 days, I thought to myself…what could this do with 4 more days. Then I just saw that in my head.

      I bought a risky position yesterday and may need to take that trade off the table before the weekend if we dont see Gold higher by the end of the day. I can ride the GPL, AUMN, NAK, etc, but a higher risk leveraged trade is tough.

  4. Ken
    Ken says:

    Congratulations on your CF 2 year anniversary Alex.
    Thanks for your hard work.
    It has bee a pleasure learning and working with you.
    A job well done !! 🙂

  5. chartfreak1
    chartfreak1 says:

    This is a chart of Gold 5 minute,. Watching it live was a bit too much like watching a roller coaster, really does look like a battle of bull & bear.
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    refresh
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    If you watch this real time, you definitely see the sharp push down to new lows as a fearful moment, and then it reverses higher and becomes hopeful that a rally is unfolding. Then it crashes straight down to even lower lows again ( shake out) then it ran higher in a strong run out of those lows

    ridiculous battle of Bull &^ bear. And the whole time, GDX & GDXJ just slowly climbed higher in premarket. lets hope that they know something 🙂 Click chart to enlarge
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    https://uploads.disquscdn.com/images/0e1c4afc058ef9bbddacb6ed3b8a40c48d00c82859e955f40951b9ed4be599ca.jpg

      • Glmus
        Glmus says:

        Alex recommended it, it was in a nice uptrend, and it satisfied most (it was not above my 50 wsma – rule broken) of my indicators. I have been away and see that it is only down 2.5%. Another good rule: it is only one of several golds I own. Just checked prices – AG is my big winner. I have many daily buys and a few weekly buys in my acct: ABX, AG, AUMN, GPL, GSS, GSV, HL, IAG, MUX, PAAS. This looks like the real thing to me.
        I need to check other comments.

        • nancytheartist
          nancytheartist says:

          Thanks for the answer. I am heavily in and have all but 3 of that list, plus many more. Most I bought too soon or held too long…my usual problems! But almost everything in my account looks lovely green today![so far]

          • Glmus
            Glmus says:

            We sound like twins. Only you have NAK and I don’t. This feels like the bottom. Now the game for me is to add to my strongest. I hope to post all golds/silvers above their 50wma later today when I get caught up. I had to be gone for the first hour. Thanks for your posts – they are always interesting to me.

          • Glmus
            Glmus says:

            Thanks. Just noticed a spike down two days ago too. It is only down 2.5%. IF we caught the bottom today, it will do fine once it gets over the 50wma. I plan to stay with only stocks that are that strong on this uptrend.

  8. Tammie
    Tammie says:

    Does anyone have any insights into how the Italian referendum vote on Sunday might affect markets? I’ve only done a little reading on it – seems like it is likely to be a “no” vote according to the last polls that were done before the black out period began – “no” vote would kind of mean “anti-establishment” vote as far as I can tell….likely that the PM would step down, thus creating some turmoil – also seems Italian banking stocks would fall….which in turn would affect banking stocks in U.S…..not sure how it might affect the EURO…..which in turn would affect the dollar…..anyone have any thoughts? I’m just trying to consider things since Brexit turned out to be a huge move in markets at the time it happened…..

  9. R Byram
    R Byram says:

    Alex – I’m still reading through old reports and came across your comments about $CPCE from earlier in the year (option equity put/call ratio). Does it tell any stories or have any bearing for where we are at today?

  11. WISHFULLTHINKIN
    WISHFULLTHINKIN says:

    I must say, buying at the lows is much less painful than selling at the lows. Started a position in GDX this AM. Have a great weekend, and many thanks Alex for your hard work and persistence.

  14. frank yong
    frank yong says:

    hi alex

    you said you bought some risky stuff, which you might ditch before the weekend, because of fears of a ICL ahead… at what level of gold, would you consider keeping your positions? although it would be nice for gold to close above the 10dma, i don’t think it’s happening today…

  17. Ken
    Ken says:

    Breaking News:
    In celebration of CF’s 2 yr. anniversary there will be now Friday Reports going forward ! 😉
    Until further notice…….of course.
    JK !! 🙂

        • Bill
          Bill says:

          Hi Cason, I read so much, I hope I didn’t steal your concept? If I saw it, it may have just stuck in my mind. Either way, things are looking up.

          • Cason
            Cason says:

            I was just messing! Thought it would be nice to get positive credit some time (instead of just making trouble). We’re all sharing ideas, so we want our concepts to get borrowed so that hopefully it helps someone else.

          • Bill
            Bill says:

            Cason, Im not on this board all day. I usually am around Morning to after lunch. I may have read your comments or charts on the USD, I don’t remember. I know I didn’t read anything negative you posted around thanksgiving. So, not sure what happened there. I was feeling pretty low back then with the slam down we were getting. I certainly didn’t expect it, but live and learn. I remember saying, why arent the miners going up with gold. That was the tell, I should have sold everything then. Trade well my friend. 😉

  21. Kenny
    Kenny says:

    FYI, I changed my user name from Wishfullthinkin to my real name Kenny. I don’t wish anymore, I trade by CF charts and outlook. 🙂

  22. nancytheartist
    nancytheartist says:

    Alex, what do you think of TRQ? I took a chance on it….had some bad news today regarding moving its material out of Mongolia into China to be processed so it took a hit today, but from my reading, it is a good company.

      • Rm
        Rm says:

        Thanks Alex.. just frustrated as Ag was my biggest position and sold half to buy more ric and agi which have been my 2 dogs.

        • chartfreak1
          chartfreak1 says:

          I hear ya, been that and done that in the past.

          AG was also a lagger at the lows for a bit too, I got complaints about it being ‘lame’ as it sold off oto the lows again and again. So if it gives any consolation, these ones basing out at the lows can really move well once they do get it in gear. We are seeing that in AG now.

          AGI is pushing against the 10sma ust like the gdx was. In fact, the 2 charts look very similar on a 2 month basis. If it can break above that, it should do well, and GDX just broke above the 10 today. others should follow next week.

          Look at THM 2 days ago – piece of crap, today up 12%.

          • Cason
            Cason says:

            Perspective, right? I got AG at the absolute lows. So, I think it’s doing great. And we all know how I like to complain! 😛

  25. Glmus
    Glmus says:

    Virtually all of my stocks are on daily buys and many on weekly buys. JNUG is up 11, JDST is on a weekly sell, etc., GDX is way above its 10dsma. Alex, can we say that we have seen the bottom? (Maybe you have already said it below, but I haven’t read all the posts.)

    • chartfreak1
      chartfreak1 says:

      It looks good, and It is likely, GDX CLOSING above the 10sma is another line of confirmation, timing is correct, so risk reward is strongly in favor of buying.

      GOLD is what I really go by, even though Miners can lead the way. GOLD is not even close to the 10sma yet.

      We need a few more things to say with complete confidence that the lows are in. It is likely though.

  29. Glmus
    Glmus says:

    Since we are still perking along, here is my list of mainly metals stocks that are above their 50wma. I use this to screen what stocks I buy henceforth since many stocks, not all, that did well since last Dec/Jan started to do well after they were above their 50wma, some started earlier. If I have missed someone’s favorite, let me know and I will add it to my list if it is currently above its 50wma, a show of relative strength. I own a few of these. I will try to post this every Friday for those of you who like to like to work over the weekend. 🙂 Please note that this is not the only screen I use to buy, but a place to start. Another place is to make sure a stock is relatively stronger than GLD/SLV.

    Golds above 50wma: AKG, BTG, GORO, GSS, GSV, IAG, NAK, NEM, RGLD, SWC, THM, VGZ, XPL

    Silvers: AG, CDE, EXK, FSM, GPL, HL, MAG, PAAS, SSRI

    Misc: AUMN, BHP, BVN, CLF, FCX, HBM, KLDX, MUX, NSU, PVG, TMQ, TRQ, VALE, WRN

    P.S. Let me know if I have any errors so I can correct this (hopefully) growing list.

  30. Ann
    Ann says:

    Hi Alex- Gold is sitting at the lows of the day. Pretty good day for miners, but would you need more from gold to hold your leveraged etfs over the weekend?

    • chartfreak1
      chartfreak1 says:

      Your question disappeared, you probably saw my answer below, but the way Miners are acting today, I might sell 1/2 and hold half.

      It’s a tough call, but I made out good on the first 1/2 , so locking in some gains and letting some ride may not hurt .
      I think each individual should decide for themselves based on…

      1. If We gap down HUGE Monday, how will I feel if I hold on?

      2. If we gap up huge on Monday, how will I feel if I sold?

      3. What if I held a partial?

      That is what my thinking usually is, and it serves me well at times, and other times it’s a loss. 🙂

  31. chartfreak1
    chartfreak1 says:

    In the past I have said , ” I have more than enough NAK as a core position at this point, since accumulating at 30-40 cents and adding again on the pull backs.”.

    Can someone remind me that when she starts breaking out, I might want to just add more and sell that portion in a week or so.

    MAN, NAK is whack.

      • chartfreak1
        chartfreak1 says:

        I do, I guess I was lamenting that I posted a chart early in the morning and NAK was up 4 cents. BY the time I grabbed the chart it was up 7 cents, breaking from the bull flag. I said to myself, “Well, I have enough”.

        Now I’m saying, “Would it have hurt to grab just a little bit more as a trade?” 🙂

    • Crawdaddy
      Crawdaddy says:

      My NAK position is now an official double (if I had enough sense to sell ). BTW I don’t. Thanks for getting me back on this one Alex. It was a tough horse to saddle after the last ride I took a few years ago.

      • chartfreak1
        chartfreak1 says:

        Now we just need the permits to be approved , then they can make real money or Become a buy out candidate.

        I want to take a partial off , because that is what I always do, but this one I would rather wait and see what happenes

    • Cason
      Cason says:

      I need more! I had sold back on the 11th when we had our first slam. Thank goodness that I was level-headed (finally!) enough to buy back this week before today!

      • Tammie
        Tammie says:

        You did better than me! I’m still all out on gold…..waiting for Italian referendum vote and maybe wait til after FOMC….not sure…have to study up this weekend. I was always jumping in at wrong time, out at the bottom, so decided to just sit for a while. 🙂

        • Cason
          Cason says:

          Hey Tammie, as much as I complained, I only had 2 issues 1) leverage with options. I base my options on cycles and we WAY extended as Alex discussed in today’s report. Sad face. 2) my core b/c I got it over the summer (but not a highs). The miners I got near or at Oct/Nov lows? Doing just fine.

          I waited this summer when Alex called May/June lows bc I was worried about June FOMC and BREXIT. Guess what I did? Paid higher prices! Maybe partial, less than 1/2 position a hedge into FOMC decision? We’ll hit 2nd daily cycle in Dec after rate decision and it’s gonna be GOOD!!

  32. Glmus
    Glmus says:

    Is this guy quoted any good? If so, we should be in the clear.
    ‘Count Jeff Gundlach among those arguing that the party is over. He provides our call of the day.
    “The dollar is going to go down, yields have peaked and will move sideways, stocks have peaked as well, and gold is going to go up in the short term,” the DoubleLine Capital CEO says in an interview with Reuters. “It is so late to be buying the Trump trade.”’

  33. Maria
    Maria says:

    nice end to the week…. have a great weekend all :o)
    thannnnnnnx chotfreak for all your hard work and guidance…………………
    peace
    M

  34. Glmus
    Glmus says:

    Nice day! Let’s hope the bottom is behind us. Thanks to all who posted constructively to indicate that this bottom was showing up soon. Have a great weekend. And, as Jeff Gundlach sez “…gold is going to go up in the short term.” My bet is a few months at least.
    Gary

    • Cason
      Cason says:

      We had a false start just like this on Monday that didn’t play out. I thought we’d keep moving up Tues but didn’t. But this has to be the real thing, right? Too many indicators, divergences, sentiment, and cycle factors all lined up at once for this not to go, right?

  35. Glmus
    Glmus says:

    I am thinking about buying some TLT and SDS (seriously, not because of Gundlach, but based on my indicators). This would be money over and above my gold ‘investments’. I wonder if anyone else is interested in sharing ideas here if it is okay with Alex.

    • Cason
      Cason says:

      Dude, share away. Alex is cool with that, especially if backed with charts. Just no crazy emotions! 🙂

      Thinking about same here. So, diversity is key. Getting over invested in 1 sector isn’t the best, so if you have good ideas go for it!

  36. nancytheartist
    nancytheartist says:

    Have a great weekend! All the green in my account has started it with a big smile! It is a nice present…my birthday is tomorrow and I will have much greater peace of mind going into this weekend than I have had for awhile.

      • chartfreak1
        chartfreak1 says:

        I have used BPGDM for a long time, I never find it predictive.

        It might be helpful in a small way at times, but basically I find that it is telling me the obvious…what happened recently. It shows bullish miners on Point & figure charts, so a move up basically means that few more miners became bullsih.

        Doesnt really show a trend changed until you are already well aware of it In my opinion.

        It is useful on occasion to show extremes, extremely low at sell offs, extremely high when miners trend higher over a long period of time, but….. kind of a lagging indicator, no?

        • Cason
          Cason says:

          Yes, this and COT are usually lagging indicators, as are the GLD ETF outflows. But they can help some of us with indicators and sentiment. Add that to cycles and helps you figure out Oct vs Nov for current cycle, etc. Not everyone has a CF to personaly guide them! 😉

  38. Maria
    Maria says:

    giggle.. ok .. will have to be later .. the hot tub is callin my name.. long day in MariaVille
    ps. it’s nancyTheAritist’s bday…. but thanks – I’ll save the wish .. for later .. 😉

  41. Crystal
    Crystal says:

    Looking at the five hour charts of
    Gold and the Dollar … and look, they orchestrated today’s closing as a perfect line in the sand leading into Sunday’s elections in Italy. Gold just touching resistance (and about to break through I HOPE!)

    While the dollar tests support. Sunday night should be interesting action. Get your popcorn ready! https://uploads.disquscdn.com/images/86e98131cbb3061e438be36272a65e0ac0cb3ce91888d4023c69c9f71b05834f.jpg https://uploads.disquscdn.com/images/c31a5a10519cdd661f4bae6fefcd7fbb4a82fab748e4762a48d02072e8c6b764.jpg

  42. Edward Bernhart
    Edward Bernhart says:

    I think we can expect more volatility in the markets with the Italian referendum vote which is shapping up to be a vote of confidence for the Prime Minister, being held on Sunday. It is also evolving into a vote for the EU while actually billed as a vote to streamline the Italian Parliament. Danske Bank claims negative market impact with a NO vote. Whether that affects gold like Brexit for the good or is a chance for fat-fingered-takedown remains to be seen. It will certainly serve for an excuse with a NO vote increasing uncertainty. (Who knew Italy was the eight largest economy?)

    http://ggc-mauldin-images.s3.amazonaws.com/uploads/pdf/161203_TFTF.pdf

  43. Hawaiifive0
    Hawaiifive0 says:

    Thanks for the welcome. I knew Alex when he was on BBT and I expect I will learn a lot from him. He’s clearly very good. With regard to Hawaii, thanks Cason. We live on the east side of the Big Island and right now it’s raining across the whole chain. This is very rare and somewhat disconcerting as none of us here have any heat or air conditioning and have become acclimated to warm weather with cooling trade winds. So right now it’s about 73 out and I am sitting in front of my computer with a sweat shirt on and freezing. No joke!

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