Dec 29th: High Five -Things Are lining Up

What is lining up? Let’s take a look.

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DJIA – I do believe that DOW 20,000 will have to wait for 2017. This is dipping into a daily cycle low.

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USD – I have been saying for over a week that I am expecting this USD daily cycle to remain left translated and roll over with a day 8 peak in place.  This would then begin its drop into not only a dcl, but an ICL. This will push Precious Metals higher ( Finally). Day 8 remains the ‘peak’ as todays pop pulled back.

WTIC DEC 20th chart – Over a week ago on Dec 20, I was discussing this day 19 peak for Oil. I would like to see that peak taken out to lock in the likelihood of this becoming a right translated bullish daily cycle. Oil had experienced a break out.

WTIC NOW – So Oil is still lingering near those highs and was just shy of breaking that peak on Wednesday.  Oil is within the timing for a DCL at anytime, so it may just roll over and dip down into the dcl.  I personally have exited all Energy trades for the purpose of placing money into the Precious Metals and Metals sectors.  (  In the past I have mentioned that I do NOT like to hold over 10 positions at a time.  I prefer a manageable 5-8 good ones).

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I have received a few questions about the NATGAS run out of the ICL.  I will do a review here, to show how it was expected to play out and also showing that my initial target was $4.75 area in an early Dec report. It should still eventually get there, so buying dips is possible.

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NATGAS REVIEW- OCT 26th, I was expecting an A-B-C drop into an ICL. That would be around the 200sma, between $2.45 & $2.50 by the time it gets there. That is the buy for anyone going long NATGAS.

NATGAS  DC 9th –  What an ugly A-B-C drop that turned out to be.  Scary looking, but that was the ICL, and NATGAS took off from the $2.50 lows and ran straight to $3.75.  I wrote that I would ride it and raise stops, initial target $4.75 (Nov 2015 highs) . I also drew a possible ‘back test’ to get back in if stopped out. With or without a back test, the target is $4.75.

NATGAS –  We got the back test of the Oct highs, but it did not hit the 50sma  ( I thought that it could tag the 50, it has been stronger than that).

NATGAS – The reversal was the next entry if you were stopped out. Cup & Handle  target is $4.60 ish.

NATGAS – And a break to new highs for 2016 again.  Likely heading up to that original $4.75 area, BUT I DO EXPECT A PAUSE. THIS IS A LIGHT VOLUME BREAK OUT  in my opinion. NATTY will pull back soon.

GOLD & MINERS

GOLD – Tuesdays chart. Gold did  Not break and close above the 10sma …yet.

WENESDAY – Finally we see Our Break and close above the 10sma, and at this point, this is a Green light to buy. We want Gold to stay above $1140 now.  This is so oversold, that this is likely to keep moving higher from here.  I would expect this to be the ICL and the YCL, and thus it could run higher nicely from here into the 2017 new year. We shall see.

GDX – GDX closed above the 10msa Tuesday and had follow through Wednesday.

I discussed a few bullish looking set ups in the Miners last week and again in Wednesdays report.  I will do that again here.

DRD – Pushing on the 200sma. It is an additional buy when it breaks over the 200sma if you ask me.

I’ve been showing the weekly chart as bullish for DRD & GPL for a couple of weeks. This looks like it wants to form a weekly cup.

WRN WEEKLY – This was also a weekly cup that I highlighted last week.  Just so you know how these can play out over time, this hit $1.80 on the next trading day!

More Miners that looked Bullish on Wednesday

VGZ –  How about another possible future cup formation? You can picture the possible gains.  Double, triple, etc if Golds Bull remains in tact.

TRX –  This hardly looks like it moved, but that was a 7% pop over the 10sma. I liked the future potential so much that I accidentally drew 2 charts, so they are both below. Another possible  Giant cup in the future?

DNGDF –  I CANNOT recommend this and I will not trade it  ( 17,500 volume in an entire day?), but what a bullish chart and pop of almost 15%. I am showing it to just add evidence that the sector is perking up.

KLDX – Regaining the 200sma is encouraging, and KLDX…

AND KLDX had a massive run higher and only gave up 50% of the gains.

HMY – HMY just moved about 20% off of its lows. The big picture looks like a possible back test of the break out last spring. HMY went from 50 cents to $5.00,  and that is a Huge Run! At $2, this could double, triple, quadruple if Gold remains in a bull market.

 CONCLUSION: The Precious Metals sector has now started to line up as expected, with Gold Finally breaking and closing above the 10sma. I admit, this was an agonizingly longer than expected set up, especially if you didn’t take advantage of a few side trades to kill time and make some money.  That being said, when the proper set up does finally arrive, it is viewed as bullish and that is where we are now.   I usually scour the sector for signs of Miners taking the lead and acting correctly.  As shown in the past several reports, we are seeing that with GPL, DRD, and now several other Miners.  This all makes it low risk, because your stops can be placed below recent lows and they should not be taken out.

NOTHING in the markets is a guarantee, but there are times when probabilities are lined up in your favor.  We see the USD finally looking toppy and also left translated,  with Gold closing above the 10sma? This is as good as it gets sometimes, what else do we need to boost our confidence?

Oh, Maybe this:

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 I expect that no new report will be necessary on Friday morning, because Friday should be just light holiday trading one day before the New Year holiday. Many may be traveling and Traders will likely close down early.  I would imagine that this report should cover all that we are looking for, but if anything changes, I will do a Friday report. Thanks for being here, it is another long weekend.  Enjoy!

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~ALEX

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Additional trades and reminders:

We do have some ‘longer term’ investors here, this may help you.   The Steel, Aluminum, and Iron Ore stocks took off like rockets after the Trump election results,  and many just wanted to get on board.  I mentioned then that if you dont wait for a pullback, you risk buying near a temporary top and have to ride it down or get stopped out.  Wait for the right time. The time looks right for longer term investors that may not mind riding the consolidations too.

CLF – My Longer term view from Nov 11.  CLF was Oversold, and you could just enter here with a break out of this wedge.

CLF – Buy the 1st bull flag Nov 21st.

CLF – Last Friday – Cup & handle, under the 10sma.  Think of  WRN? 🙂

CLF Now – Wednesday CLF broke out from the handles slanted channel, but gave the gains up. It is a buy in my opinion, since it could just take off now, or ride down the channel to the 50sma.  I usually buy a partial position now, and add on a tag of the 50sma, or a break higher back above that 10sma.

FCX DEC 16th – Inverse H&S break out dropping back for a back test.

FCX DEC 16th – This will be a Low risk buy with this back test. The target looked to be the rising 50sma as it meets the red break out line.  $13ish.

FCX Dec 28 – It dropped to the 50 for a buy. This is your second chance to buy with a low risk entry, since the stop can be somewhat tight under the rising 50ma.