FEB 4th – Fed Week And He Stayed On Track

This weekend we are going to just keep it simple. We are in the middle of what has turned out to be some very good trades, and they have been acting correctly for weeks now. Why get too complicated when we are seeing things remain right on track as we go forward.  To the chart!

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SPX – Personally I have not taken a trade in the general markets by means of ETFs. Individual stocks have done well, but the volatility in this sideways consolidation has schooled both the Long & shorts.

1. We had a break out (bullish) , but the VIX was down near 10 ( Bearish)

2. We had a failed break out when it gapped down, and an ISLAND TOP formed ( bearish).

3. That was negated Friday when the gap closed, and this looks bullish again. The green trend line is key going forward.

We were watching the VIX , which was indicating that the markets would likely pull back in February sometime ( I mentioned that the VIX is not a short term timing tool, I use it as a cautionary measure). Now let’s look at the weekly charts.

SPX WKLY –  Big picture I Still see a bearish rising wedge, but SPX can go higher in the short term. The lower trend line of this wedge COULD be lowered to the Nov lows, extending the upside.

SPX BIG PICTURE IN THE BIG PICTURE – This is with that wedge lower trend line at the Nov lows. You can see that it could ride all the way up to the purple line, but by Mid 2017, I think the markets might begin to top out for a bit.  Please remember that even in Bull markets, rather sizeable  pullbacks occur to soften sentiment, and you can see them along the way.

USD –  I expected weakness and that is exactly what we have been seeing. I do not think that the coming bounce in the dollar will close over 101.50. We also now have a failed daily cycle, confidence is added to the idea that the USD is soon going to drop into it’s own ICL ( a bigger ‘Intermediate Cycle Low’).

WTIC – Oil has gone sideways after breaking out. We are on day 16, but it peaked on day 3, so to form a right translated daily cycle, it needs another pop higher. The set up does look short term bullish.

WTIC WKLY –  The break out and the consolidation.

NATGAS – At the end of DEC I pointed out resistance in this area of  $3.75 to $4 in the bigger picture.  NATGAS had stalled, but when I tweeted this , I heard from traders on Twitter telling me that “The Winter COLD of January will easily push NATGAS much higher”.   The CHART said to expect a resistance and at least a pause.

NATGAS  plunged in January, right after my chart was posted. This happened last Jan when I called for a drop in NATGAS & OIL.  I don’t know why people rely on the weather to forecast price? The weather is unreliable 🙂

And I have been pointing out that we have a possible H&S going into February. Going long NATGAS because of Cold weather is the wrong approach. The charts identify weakness and strength nicely short term.  The BIG picture does show a possible NATGAS rally in Feb, so I will keep an eye on that.

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GOLD, SILVER, & MINERS

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THIS SECTOR REMAINS RIGHT ON TRACK WITH MY EXPECTATIONS FROM THE DECEMBER LOWS.  Again I caution against over trading or getting too cute.  If you are new here, please read my report on what it means to ‘Get too cute’ during a Bull run, click the link below to go there.

DON’T GET TOO CUTE

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I’m going to keep this really really simple this weekend.

GOLD DAILY – This is a bullish chart and suffered no damage after FED WEDNESDAY. We could get a pullback with a USD bounce, but I do not see a big drop coming. I will not get ‘too cute’ .

GOLD WEEKLY – GOLD recovered the drop below Mays ICL. The MACD WEEKLY is crossing higher.  I still see a Bullish big picture, though as mentioned, it can pull back a bit with a USD run also.

SILVER – SILVER dropped on Friday, but it tagged the 10sma and recovered. That drop where the Thicker RED ARROW is was also the 50sma. Silver looks to be on the Bullish Track too.

GDX – Miners  MIGHT want to dip down a bit inside of this rising channel, but it remains an upward sloping channel. GDX has danced around the rising 10 sma and remains bullish.

GDXJ – This finally got above the 200sma  (lack luster fashion will falling volume, but the set up is bullish).  Let’s keep it simple…Yes it can pull back a bit, but it remains bullish at this point.  LET ME SAY IN ADVANCE- If this drops to say $37.50 and loses the 200sma, I am not concerned.  See the weekly. $37.50 would be great.

GDXJ WKLY –  I cannot tell you enough how bullish this set up can be.   Wait – Yes I can, It is VERY BULLISH from what I have seen in the past.  GDXJ has run from $27 ish to $40 ish and looks like it wants to go back to 2016 highs eventually.  That’s a BIG MOVE higher after that long drop at the end of 2016. Can this drop to $37.50, the lower trend line?  Yes, and remains very bullish.

So to keep it simple, this precious metals sector remains Bullishly aligned and even if we get a pull back next week, we  should expect it and it would continue to be bullishly aligned.  I have pointed out certain parameters in this report to help all to see that a pullback is normal and even anticipated. The daily reports will monitor the activity as it unfolds.   Enjoy the rest of your weekend, I live in New England, so I will be busy Sunday night with friends,   🙂  therefore I wanted to get this out early rather than wait for Monday Morning.  In conclusion: Precious Metals look very good and even remained on track after our Fed week. I will point out a couple of Miners below after signing off here, so please read on.  Newer subscribers, if you have time, why not go back and read some of the recent report from the past couple of weeks to see what we have been discussing & anticipating.  Again, enjoy your weekend!

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~ALEX

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AS A SIDE NOTE  :    I SEND EMAIL ALERTS AUTOMATICALLY WHEN I POST A REPORT.   IT IS RARE, BUT AT TIMES THE SERVICE FAILS TO SEND ONE.    DO YOU HAVE A TWITTER ACCOUNT?   I HAVE 2 TWITTER ACCOUNTS FOR POSTING INFO , BUT THIS ONE BELOW IS STRICTLY USED BY ME FOR SENDING OUT AN ALERT WHEN I POST A NEW REPORT.  IF THE EMAIL ALERTS FAIL, THIS ONE ALWAYS SEEMS TO WORK. Follow me on Twitter at ….

@ChartFreakAlert

PAAS WKLY –  You cannot deny that PAAS is a champion. It has returned to the 2016 highs already and others are not too far behind. This is a real confidence builder, isn’t it?

TGD – I know many of my readers have been holding on to TGD, and I had received emails in January about whether or not it would ‘catch up’.  As you can see, it has actually done quite well and that should continue.  $0.27 to $0.43 is 60%.  I know that some are holding as core, so that isn’t all profit, but it shows that TGD is now acting correctly after a difficult slam last November.

PLG –  I am showing PLG again, because I am really getting a strong gut feel on this one. I pointed this one out on a daily basis before it broke higher, and now I’m pointing it out on a weekly chart as it is beginning to break higher. Yes- Bad news can ruin any chart, but right now this chart is screaming out to me that it is going higher. A large cup here back to 2016 highs ( Like PAAS) would be more than a double. I’m tweeting this out Monday.

BAA– BAA has had a rough time of it, but I think the recent news caused a final capitulation low / shake out. This weekly chart was captured Thursday so the candle actually improved a tad bit more on Friday. This shake out below Dec 2015 & Jan 2016 lows and recovery clears the table, cleans the slate as they say.  You can see that buyers have stepped in and pushed it back above the 2016 lows.  Did you notice that that drop was also a perfect back test of the break from a downtrend recently?

BAA BIGGER PICTURE –  It has had its struggles and thus keeps forming the boom to bust story. It can double & triple & even quadruple in the good times, and then we see it fall all the way back to the lows in the bad times. One day it may be quite the recovery story,  but for right now it is on my watch list to see how it trades going forward after the shake out lows.  It is pretty much low risk here, it doesn’t often drop lower than this, but will it bounce right back or consolidate is the unknown.  WATCHLIST.

TRX –  I have been pushing this one for a couple of weeks now.  Yes, it ‘seems’ slow and boring, but when you can patiently load up at the lows and see a possible 200% move coming? I did that with this one last MAY and many here jumped on too, riding the giraffe neck up to about a 300% gain in 2 months.  I like this current set up and I own quite a bit.