April 13th – Clear As Mud

As stated before here, there are clearly times to trade and then there are times to just be patient.  The best times to trade are after consolidations or bases finish forming , and then the trending moves out of those time periods can continue to carry positions higher.  Until that time, trading inside of consolidation periods can be frustrating.

Currently I am finding that I have been battling the markets and swimming against a strong tide. I’ve tried trading several positions, and some have had some good gains and others no gains or even small losses.  Overall, I have collected no real gains during recent consolidation periods. Let’s have another review…

XLF – I’ve been concerned with the financials, and the General Markets are going no where at this time. They have been consolidating sideways too.

SPX  from yesterdays report. This basically shows weeks of sideways chop.

The USD continued to drop on Wednesday.  It was up all day, but sold off at the end of the day, and now it actually looks like it wants to continue to fall lower.  The 200sma is below and a drop to that point would likely push Gold higher.

The Weekly chart look to be forming a bullish pattern, but it could also have more downside and even tag the 50weekly MA before running higher. It is oversold.

WTIC WKLY – Oils weekly chart is bullish with this recent run.

I NOTICED SOMETHING INTERESTING WITH GOLD & MINERS –  I want to review it here,  and it is a slight change that is taking place.   So let’s look at GOLD & MINERS, not only from CYCLES standpoint, but also just using Technical Analysis. I see Bullish implication in the bigger picture for sure, and now GDX / GDXJ  look to be playing catch up with Bullish Gold, while many individual miners are still lagging.  Clear as Mud.

.

GOLD DAILY – This was Gold on Tuesday, it jumped up $20.

IS GOLD Now At Important Resistance?

Note: This chart by Stockcharts is wrong,  GOLD closed up at $1285,  up another 7, and this shows it only break even. So Gold did  tag that trend line and stall for now.

Again, with 2 R.T. daily cycles, the 3rd daily cycle has broken to new highs. Late in the 3rd daily cycle, Gold has found the strength to break above the 200sma. The Metal itself is having a good run, but many individual Miners are just not joining the party.  This is what remains as clear as mud.

GOLD WEEKLY – Also important resistance.  If this is broken to the upside, it is really bullish using technical analysis and Cycle theory.  So is this a double shoulder H&S, or a Bullish set up? Time will tell and Gold is at resistance. A break higher here breaks this trendline & the one in the chart above.  Price projection is the magenta line if this happens.

GOLD CUP & HANDLE – A cup & handle pattern is a bullish formation if it breaks out, and here we clearly see that Gold has done that. This is as Clear as Mud again, since the upside on this would be quite big.  I would assume that this cup is a 1/2 way consolidation.  Also this is Gold making higher lows and higher highs really. I was looking at this and thought to myself, ” If Gold really took off here, it could put a ‘back test’ of the cup as the next DCL/ICL.”   But what about these lagging Miners?

IMPORTANT

GDX : GOLD –  Believe it or not, Miners are leading Gold again.  When I saw this, it surprised me, because this is considered Bullish action, and I usually buy this break.  Are Miners now following Golds Bullish 3rd daily cycle? This chart seems to be indicating that the Feb fail by Miners is now in the past.  Gold remained strong with 2 R.T. daily cycles and now gold has a 3rd R.T. daily cycle. Miners seem to be following Golds lead.

GDX – Miners are catching up now, after GDX broke above the 50sma. This is the next resistance point, so we have to see what will happen here, but again,  this looks bullish.  I DID expect this, and I would not have made much money trading this long, at this point, but I have to wonder about being short based on GDXJ.

GDX WKLY = GDX WKLY is at a resistance point, the 50 weekly MA, but it also looks like it is breaking above that down trend line. The weekly MACD is bullish at this point. Technical Analysis has been bullish, the MACD never crossed down on the daily or weekly.

GDXJ has been struggling below the 50sma, this is where I have chosen to go short as GDXJ tags the 50sma.  On Wednesday it broke and closed above it, so I have to close my shorts.  We do see that the 200sma stalled price in January, but this is a BIG consolidation in March.  Consolidations can cause a strong break & run once they get going. THAT SAID, I began mentioning that I may go long  ( JNUG OR BULLISH MINERS)  and hedge my short positions.

You see why this situation is as Clear As Mud?  We’ve seen Lagging Miners since early February and when Miners peaked in Early February, we had a BULLISH set up in Gold finding follow through.  As time goes on, it is starting to look as though GOLD remains Bullish and some Miners are trying to join Gold.  Now Gold now has 3 R.T. daily cycles,  and  GDX:GOLD has flipped to Miners leading again.   Let’s continue our analysis.

GG–  SO this is a major component of GDX.  IF GG breaks this downtrend line and the 200sma,  GG is bullish.  A break out could be purchased with a stop below that 200sma.  Please note that we havent “Missed a huge move” here.  GG has been bouncing at the 50% area, it is not back at the 2017 Highs like Gold.

CDE – I have been showing how CDE & AG are not breaking out to new highs, they are closer to Dec lows.  I am thinking that CDE could run up to the 200sma as it broke above the 50sma, so it could be purchased long with a stop below the 50sma.

AG –  Ditto,  this could run to the 200sma, and Silver looks bullish.

AUY –  AUY has not been acting in a Bullish manner until yesterday.   Again, if you went long some of these Miners,  they are still consolidating at the lows and you havent missed the move.   The frustrating part is that GDXJ looked like a ‘short’ on a 3rd daily cycle after a Peak in early February.   Now we see some Miners following Gold and it becomes unclear where they are in their timing.  AUY bottomed in Dec, and Bottomed in March. Will it now run to $4 (200sma) and then drop when Gold puts in a dcl?   Clear as mud, so if you are long, you’ll need to use & honor stops.

BTG –  BTG has been riding the 200sma for a month, you did not miss a move higher in Miners, but is this about to break out or drop? It is between the 200 & 50sma.  Again we see that Miners like BTG topped in Early February and have basically gone sideways since then.   WHAT NEXT IS THE HARD PART.

NG –  DITTO,  Peak in early February,  but NG looks like solid resistance is overhead.  Some of these Juniors still look to be going nowhere fast.   CLEAR AS MUD.

So at this point, it is very hard for me to take a strong stance one way or the other, but yesterdays report pointed out that it is often just a matter of time.   Here is where we stand:  The set up for Gold has been Bullish, and Gold has acted that way.  GOLD IS AT 2 RESISTANCE POINTS , AS SHOWN IN CHARTS ABOVE, so I am watching that area.  Miners peaked in early February, and then dropped sharply sending some right back to Dec lows and others down about 50%.  What could be said about that set up?  It was “Miners dropping and weak since February, while Gold remained strong.”  That is usually bearish and the thinking would be that Eventually Gold will drop into an ICL, and with Miners so weak, they would likely take a good beating when Gold drops.”    I shorted GDXJ at the 50sma.  THAT drop into an ICL can still happen in time, but right here and now Miners started to move higher with Gold, and you see what the GDX:GOLD chart looks like.  It is as clear as mud short term, and I am basically neutralized in this sector.   Individual Miners have differing charts.  Some are still at Dec lows, right? ( That is bearish, but they may go higher or keep basing).  Others are at the 50% pullback and look a bit more bullish, and then another group are trying to get back to Feb highs  ( 2017 highs).    How do I play this personally?   I have small long positions that I used to hedge my short positions, but now I got stopped out of my short positions.  The market turned me ‘long’ all by itself.  I have to be very cautious while this sectors “Timing” remains as clear as mud.   Many of the Miners, as shown,  have not just taken off upside, so we arent missing a strong rally, though some Miners are moving higher with Gold.    I have mentioned that SBGL, AAU, SA, SAND, and a few others looked good the whole time, so this added to the hazy picture of strong gold, weak miners.   With some Miners still at December lows,  there could be plenty of upside in the future, but right now I just  have to take things 1 step at a time with a little skin in the game, until we see Gold change direction for the next DCL/ICL.    This has been a very tough choppy period so far,  for both Longs and shorts.  It is a stock pickers game in Miners, since some are still at the Dec lows. That is why I want to just keep my positions  and trades small right now  and view them as being held on a very short term basis.  ‘Timing’ is everything, and this daily cycle is getting late. It seems that until we  get that FAT PITCH, traders could be struggling at the plate.  This has been a very choppy time for the markets, and short term trades have been best.

.

~ALEX

NAK flipped to a bullish consolidation as mentioned in this April 10th chart.  They were waiting for permits and some approvals.  I got bored and sold this base, but jumped back in with this charts bullish set up.  Did some insiders know something & buy?

Because they got approvals and NAK jumped 31% yesterday.  It closed above the 50sma, will it continue to follow through or will we see profit taking? I would THINK that we could see more buyers step in, since the news has put them in a good position for the first time in a LONG time.  We’ll have to wait and see, but it looks like the recent base may be in place.