Fed Follow Up Report

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Honestly, there was  little permanent reaction when the Fed decision was made known, but we can’t say that a lot changed.  Expectations remain the same, so lets review these markets….

 

SPX – This was in yesterdays report, please read the chart.  Also the signs of improvement in the XLF continued.

 

DJIA – I expected a dip, but this reversal after the Fed may have follow through upside. This consolidation could be forming an inverse H&S.

 

NASDAQ has been the strongest.  It actually may have put in a swing high, but they did buy it back up into the close. Earnings is still playing a factor in the individual stocks, with some gapping higher and others breaking down.  FB & TSLA released after hours yesterday and both dropped a little in after hours.

 

XLF –  I have been concerned with the financials when they broke down below the 50sma and could not recover. I am seeing slow improvement, as mentioned yesterday.

NASDAQ –  Will the Nasdaq sell off a bit with that reversal?  If so and it does remain in a strong uptrend, these are the various areas that it usually falls to.  At times it rides the upper line of the band.  Dcls break to the lower line (Blue arrows), ICLs break through and recover, but it usually rides the upper line.  So a drop to back test the break out could occur when we drop into the next dcl.

 

USD – The USD continues to crawl along the 200sma. The FED DECISION propped the dollar up, but it has been trapped inside of this downtrend and we see lower highs and lower lows each month so far.

 

WTIC – This was in yesterdays report.  I was wondering if the lows would break from March. Yesterday,  those lows still did not break.

WTIC –  I am watching $47.01, but I noticed that some Energy stocks seemed to hold up well yesterday when Oil initially sold off after the inventory report. After that, Oil also reversed higher. The selling may have dried up now.

 

XLE –  I am finally starting to see bullish divergence in the XLE.

Ray sent me a chart of the ERX asking about a possible falling wedge, so I drew this one up.  This does look like it wants to break out higher.

 

NATGAS – I have been saying that I want to go long NATGAS again, since the first trade went well off of the lows in March.  I was asked why I haven’t taken that trade yet, if I think the lows came in on APRIL 18.  It is due to the consolidation .   I may take that trade after the inventory report today if it remains bullish, but this is the reason why I haven’t…

 

My trade is going to be leveraged, and in sideways consolidations like we have had in NATGAS, price decays.  I saw a consolidation forming.  Look at the DCL on April 18th in NATGAS vs UGAZ.   UGAZ dropped well below that DCL.   I haven’t missed a thing , except for maybe losing sleep if I bought it back then , when it didn’t quite look ready to go.   UGAZ & BOIL now have filled their gaps, and Natgas may  finally be ready to go.

 

 

GOLD, SILVER,  & MINERS

 

 

It is odd, but GOLD , SILVER , and MINERS actually all have taken on different characteristics throughout this intermediate cycle.  Remember how BULLISH GOLD was, with 3 R.T. daily cycles?   GDX was strong enough to break the 50sma and reach the 200sma, GDXJ was weak, and couldn’t even recover the 50sma. Well his report is going to show something odd with the Silver set up too.  They all seem to be acting in their own way.   Lets have a review…

 

GOLD –

 

GOLD from yesterdays report –  This was an example of Gold dropping below the trend line and then the bounce into the 4th daily cycle.

Gold   sold off a little, but it didn’t break down through that trend line ( yet), it actually landed on it so far.  Not a HUGE down day for a Fed day, so a normal drop into this dcl seems to be taking place.  Notice the March drop day after day – it is best not to keep trying to catch lows in a sell off into a DCL or especially an ICL.   Please read the chart.

 

Now I will discuss what I was talking about with Gold holding up well, yet Silver has taken on a much different look now.

 

Silver was holding up well with GOLD and I pointed out that when Silver drops, it drops!  I used this chart, because there were some that felt that Silver was about to break out to new highs and they were leveraging long with AGQ. I showed this drop to warn the readers that ‘timing’ is important with Silver.When it is time for a dcl,  SILVER DROPS.

 

SILVER MAY 3 –  This silver sell off actually looks like what I was expecting to see as Silver began to sell off into an ICL.  Silver does drop sharply into dcls too, so I am NOT saying that this is the ICL, but this is usually what you want to look for when Gold begins to drop into an ICL.    This looks steeper than Golds drop at this point.

Silver –  the part that catches my eyes is that Silver resembles 4 daily cycles. It is a secondary thought, not my primary thought, since Gold has been acting so Bullish up until right now.  I’m following GOLDS CYCLES. This is a GREAT example of how quickly things can go from Bullish to Bearish in Precious Metals.

So lets say that Silver has 4 daily cycles, it can still have a 5th one too, and drop with Gold into an ICL later with Gold, as shown here.

GDX -Did Miners crash after the Fed? Some think that they did, but…

.

This is not a crash, Miners moved up higher early in the day, so it looked like they dropped a lot after the Fed, but they really just started from a higher point by the time the Fed Decision came out.  We have a big reversal day back at the lows. Not a bullish day, but we do have a possible bull wedge and if Miners can break above this upper trend line, we probably have seen the lows for a bit.

 

GDXJ – GDXJ also has a similar set up. Prior bounces were held back at the 50sma.

I posted this idea in  yesterdays report – It is a possible path of the next bounce in Miners. 

 

 

 SO we are due for a dcl & a bounce in Gold & Miners. I want to repeat what I said at the end of yesterdays report… I cannot recommend a ‘safe trade’ in Precious Metals at this point, since there are higher risks in a 4th daily cycle.   Patience can save you money in volatile situations, so any trade taken at this point should be taken at your own risk.

 We are still dealing with the Jobs report for the markets, and we have the French Elections  on Sunday.  These can cause volatile or choppy reactions in the short term, so investors have to be prepared for that.   We actually saw enough of that in March to leave a bad taste in our mouth about choppy markets.  Today is ‘Thursday after the Fed’, and that may give us a clearer idea of what the precious metals want to do.  We also have the NATGAS INVENTORY REPORT on Thursdays. I am thinking that a long NATGAS trade may finally develop. It is low risk, with a stop below the 50sma or recent lows, whichever you refer.   Again,  ENERGY may be bottoming here, so I will look for some trade set ups here and other areas for a brief Friday report tomorrow.

Enjoy the day and thanks for being here at Chartfreak!

 

~ALEX

 

Just a reminder:   I am going to be on the road next week. I will still be writing reports, but I will have to try to make them more brief and to the point.  In the past when I have done this, readers could not even really tell the difference, so I’m not expecting any interruptions with reports.  It is likely that you will see me in the ‘comments section’ or answering emails during the day less frequently.

129 replies
  1. Edward Bernhart
    Edward Bernhart says:

    Good Morning Alex, Hope you enjoy your well earned “road trip” and use plenty of sun screen. Are the channels used in the NASDQ, GDX, GDXJ, and Silver charts all the same and what are their parameters? If explained prior or in a different section, please excuse. Thanks again for doggedly staying with this market and explaining it to us so well.

    • chartfreak1
      chartfreak1 says:

      Hi Edward, How did you know we’d be away somewhere sunny? You must know my wife- lol. Yes, she booked a beach front trip, so I will be wearing sunscreen for sure.

      As for the channels- those are not my parameters, they were given to me by someone else who wants to keep them private, so I also look for moving averages that do a similar job.

      Refresh –

      On a really bullish run, I’ve used the 10, 22, 50 or 66 sma, and the 22 & 66 work well for that here. The pull backs can be gauged that way too ( Dcl or just short dips).

      https://uploads.disquscdn.com/images/ed1539dcb007e52bbd41ce7f081cb46bc53106b25d35a2f62c5031e42b6abb76.jpg

      • Edward Bernhart
        Edward Bernhart says:

        Thanks for the explanation. Actually you had a trip at this same time last year and I remembered because I’m in the Islands diving for two weeks just as i did last year. So it is not due to any telepathic ability on my part. LOL

  2. Bill
    Bill says:

    The hardest part about trading is knowing when to sit on your cash and be patient! Real hard. Right #HB?

    • chartfreak1
      chartfreak1 says:

      For me, the hardest part isn’t ‘knowing’ when…it is the discipline to stay on the sidelines even though I do I know that it is not the best timing for a good follow through trade.

      As a trader, I find it hard to ignore a good looking stock trade set up, but if the ‘timing’ isn’t right, they can fail to have follow through.

    • Cason
      Cason says:

      Finally. Adding to cash. I had some real dumb-sh!$ trades now. Now that they are all cashed out, I’ll have plenty to deploy (though less than I would have). But I can’t sit here and do nothing for a month waiting for the cycle. I just CAN’T!!! Ahhhh….

          • Cason
            Cason says:

            Throwing up all over the comments? Man, that was cold!! My portfolio threw up all over me this week!!

            That comment was for Maria, btw, not CF. And for the record, I play a mean jazz flute! (Not really)

  3. Geurt.
    Geurt. says:

    Good morning ALEX !
    Would you do me a favour? You said about Nat.Gas: “after the inventory report you will see if it still remains bullish” After the report Alex, can you give us a short update how YOU see than Nat.Gas??? Thanks a lot.
    Very good updates in your report. See you later, thanks.

    • chartfreak1
      chartfreak1 says:

      I wont be able to do that immediately after, I wont be in front of my screen at 10:30. If NATGAS goes up after the report, if inventories are dropping, it should indicate that NATGAS is bullish, because the chart in the last few reports have been bullish. I would have to enter a trade using my phone, but I am helping family later this morning with yard work for a few hours. Hope that helps.

        • chartfreak1
          chartfreak1 says:

          Just an FYI – UGAZ & BOIL dropped on the report and then put in small reversals, so they may be good to go, it is hard to tel. That said, I did not buy today- I did not get in front of the computer in time to analyze things.

  5. Brian
    Brian says:

    GDX is going to get close to or break just below the megaphone its forming on the 2hr. There is also the long term lower TL there as well. I’m going to take a shot and sell my DUST here as it hits the top of its megaphone and add to my NUGT position. risky

    • chartfreak1
      chartfreak1 says:

      To be honest, MIners started dropping well before Gold- Gold held up at the $1300 area for a while with GDX & GDXJ struggling, so I was hoping for Gold to keep dropping a bit more and for MIners to show signs of resistance to the selling, even reversal candles along the recent lows.

      We’ll see where things are at by the close, but you can see why I mentioned a week or so ago that buying during the dips to dcls can be painful. I sold my JDST on the way higher to lock in gains, but now it seems that I could have held on to the last 1/4 a bit longer

      • Cason
        Cason says:

        That’s why I was hoping GDXJ would take today’s gold drop in stride, for exactly those reasons. Darn!!!

    • Brian
      Brian says:

      And I’m taking a shot that sentiment is going to get to bearish after today for this to continue … perfect spot to reverse and catch those short later in the day…then have a real convincing rally out of the lows to draw in longs and get the bulls back on board and then start the ICL in earnst… That’s a possibility here.. they have done this before

    • Cason
      Cason says:

      A couple of significant issues here. This seems like an ICL style drop for miners and as you mention, for silver. But not yet for gold. Also GDX HAS now undercut the March lows which GDXJ already had. In a BULL scenario, that should not happen on the daily cycles. The run up was too short and DCL pullbacks too steep. Really have to question any kind of bullish thesis for PMs now, imo, until we FINALLY see higher highs and higher lows. Which we cannot see yet. The next ICL would have to be AMAZING!!! to put this back on track. For now we need to go back and trade this the way we did in the bear: 1) long 1st and 2nd cycles only, 2) no core positions holding ‘old turkey’, 3) short 3rd and 4th into final DCL/ICL for lower lows.

      • nancytheartist
        nancytheartist says:

        I sure hope you are not correct and CF’s cycles and guidance is. My account is bleeding red today but I was ready…and I know we still have the ICL to face! Just remember to evaluate your own emotions as well…it gets scary and sickening when we approach DCLs and ICLs. Stay…”frosty”…?

        • Cason
          Cason says:

          Hey Nancy, I’m dying in red today as well. Whole market is down, all major commodities and US indexes! Ok, hard to summarize these thoughts to be clear and concise, but let me try again.

          My view is actually not different from CFs. The “ICL” for miners broke in that we have a lower low now during the 3rd daily cycle, which would be unexpected in a Bull, but possible, almost likely in a Bear for Gold/Miners. Alex has talked this subject. We still buy the ICL!! But trading plans may need to adjust as we get deeper. Do we run to 2016 awesome-sauce or do we get this bullshit fantastic action we’ve had since Trump election?? I don’t know yet but stayed tuned. Make sense yet or is it still garbled in my head?

          • nancytheartist
            nancytheartist says:

            Just popped back in and my account is truly sickening….not 1 green position….and worst one day loss in a LONG time. YIK. Getting through the coming ICL will not be easy. Am learning some lessons as I see my “core” positions barely green. I think I will go watch the Star Wars movie I rented.

          • Cason
            Cason says:

            Hey Mama, at least CLF just turned green. Why? B/c it got slammed all week long already. BUT…it’s still green! 🙂

    • Cason
      Cason says:

      Now add DOW, SPY, NAZ, and TLT. How is that even possible?!! Did the money just evaporate instead of trade hands????

  8. chartfreak1
    chartfreak1 says:

    OIL = $46.90 – see the Oil chart in the report for significance.

    I’m looking for divergence in the energy stocks ( AND XLE) As Oil breaks the March lows and seeks out the ICL.

    The first scenario that I had back in Feb about a big drop, then a big back test , and a break to new lows is playing out.

    The fact that I wanted to short that last drop from $53 and didn’t when XLE & Energy stocks broke out upside is rather frustrating.

    REFRESH for May 2 chart

    https://uploads.disquscdn.com/images/62f5bf24616d807468e417deb1c39dc9d0d224c8b88a69a8b16bbc2926f3f963.jpg

    • Bill
      Bill says:

      Frustrating yes, BUT you have an ICL in front of you. Focus on our entry into the energy ICL. Do you think OIL bottoms before GOLD and MINERS?

      • chartfreak1
        chartfreak1 says:

        Yes, but by that I mean the ICL in Oil could be in a week, I think we have another daily cycle left in Precious Metals.
        They could both bottom this week , but one could be the ICL, the other a dcl.

        • Bill
          Bill says:

          One is an ICL and the other a dangerous 4th DCL. Which would you choose? Read CF’s report above if you’re not sure. 😉

    • Cason
      Cason says:

      I know, what the heck?!? Why did energy stocks fake us out like that? It was all FALSE strength or else we’d have had a sweet short on crude waiting for us! Shoot.

  9. Erik Sven
    Erik Sven says:

    What time is natural gas inventory report out? I would like to reenter as well.

      • Ken
        Ken says:

        Hi Siva,
        I am waiting for a Daily Buy Signal (unconfirmed) to purchase my first tranche with a stop below that daily low. Do not forget to watch URA, DNN, and UUUU also. 🙂

    • Glenfidd
      Glenfidd says:

      They have an excellent piece of land in Nevada, immediate neighbor to newmont producing mines, two strong shareholders in oceana and Goldcorp. Plenty of cash in the till to drill and prove up reserves. Market cap gives them plenty of credit for what they have. Certainly there is upside as they are expanding the resource but the payday will be the eventual takeover. Attractive asset

  16. Hawaiifive0
    Hawaiifive0 says:

    Woke up this morning to see that I was stopped out SWN. Lost twice on AKS and once on SWN. Catching a knife is hard. I think I’ll watch for awhile.

    • Cason
      Cason says:

      SWN had it last week. I don’t know what happened. Alex should some bullish developments in XLE above. The sector is getting OBLITERATED this morning. Clearly oil is seeking out at the low at this point. Agree, best thing to do now is just walk away.

      • chartfreak1
        chartfreak1 says:

        SWN is mostly NATGAS, NATGAS didnt have a good inventory report. XCO took a big hit.

        XLE tanked with OIL. Oil looks to be seeking out that ICL

        • Cason
          Cason says:

          We’re in shoulder season, inventory wasn’t too out of line. I still think oil is dragging it down, even though it’s really gas.

    • OO
      OO says:

      yes, …sadly the same here. Alex, any thoughts on steels and AKS in particular, please if you have a moment. Thanks

      • chartfreak1
        chartfreak1 says:

        I just got back in… It looks to me like most steel stocks should have stopped people out at this point?

        I ended my steel trades with a losing position in AKS and a winner in SID, so I sold both to even off when SID was rejected at the 50sma & Zeus started acting funny. They could be close to bottoming, but some are breaking to new lows, like AKS.

        One of the best ones ( Zeus) gave a warning drop and STLD seems to be the only one surviving at this point. SCHN may have bottomed with a higher low.

    • nancytheartist
      nancytheartist says:

      I am in still and had left a “wishful thinking” order in place which filled this morning. This has been my biggest winner since starting with CF. I want to be in when speculation begins again.

    • chartfreak1
      chartfreak1 says:

      Nice visual

      I’m still holding and was buying at the 200sma in the past…now it looks to be tagging that 200sma again and reversal, but hopefully the news is good going forward… I dont want to sell all out of this one.

  18. Erik Sven
    Erik Sven says:

    Watching this backtest on KRE. Some banks looking good. Look at RBS and IBN for example.

  20. Brian
    Brian says:

    Looking to see if NUGT will hit the top of the megaphone in $33 area before rolling over.. tight leash though

  21. Cason
    Cason says:

    DNR, OAS, SWN, EXK, AG, HBM. This is an absolute Bloodbath (and NO, I do not own all of these thank God, just a shot of watchlist or CF items, down ~10% unleveraged).

      • Cason
        Cason says:

        Is there crying in charting? If not, can we at least complain and blame others? Throw me a bone here…

          • Johnny
            Johnny says:

            Hello Cason! They increased my work load and dangled the carrot. Each time I grab the carrot….it moves away from me. Is that not strange? lol! I come home late and leave really early. I do however read the reports and comments. CF is my 2nd family & I will return, soon I hope. In the meantime, it is great to see all the funny post and good info. I love the positive attitudes and all the great newer subscribers. …..& Is there crying in charting? Heck yea. I cried so much, I added the boohoo blues candle to my Stock charts account. Its a very useful indicator! Good to see your tenacity! Take care Mr. C! 🙂

    • Bill
      Bill says:

      It was a great trade, made 60%. Now I’m looking at it, saying why did I sell. The daily wasn’t close to oversold? Bummer! ;-(

  23. Hawaiifive0
    Hawaiifive0 says:

    Okay. I’m jumping in small JNUG for a bounce. I guess I’m a slow learner.

  24. Shermo
    Shermo says:

    Gold is sitting on the middle Bollinger band on the weekly….looking for 1220 or thereabouts?….bounce then largest drop of the year coming?……

    • chartfreak1
      chartfreak1 says:

      Hey Bill, I dont use Gartleys, but I have seen them play out.

      Question : For the lower target to fulfill accurately, doesn’t the top of the right triangle need to be at the top of price? Is this something that is adjustable, or do you measure out the left triangle and then the right triangle just is what it is? Thanks

      • Bill
        Bill says:

        The top of the right triangle should be at .886 of the first triangle to be prefect. That’s why I’m showing the blue pattern as the classic pattern and not stretching it to the actual pattern. I don’t think they have to play out perfectly. If the right side is higher than the left it becomes a shark pattern. Or vomiting candle perhaps. If it is a Gartley and starts moving higher we should get a 50% retrace of CD.

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