June 13th – Right Down The Middle

What is right down the middle? As seen in the weekend report, the analysis for GOLD, SILVER, and MINERS falls into that category, but also the emails that I get from readers seem to be split between Bulls and Bears too. Let’s take a look at what happened on Monday.

NASDAQ –  2 charts from the weekend report .

#1 – We tagged the 50sma on a deeper or more prolonged drop

#2 – I pointed out that the NASDAQ  held up rather well at the 34 sma on quick short pullbacks.  ‘BUY THE DIPS’ type drops.

The NASDAQ on Monday it hit ( Slightly broke) The 34 sma and reversed, closing above it. Let’s see what Tuesday brings, but it is possible that the selling has exhausted for now and will produce at least a bounce. A loose stop below the 34 sma  may add safety, however…

QQQ – The 50 sma has held prior drops, and you have to admit, the volume on this drop is pretty serious. That is some strong selling volume. This may or may not be a buy the dip drop.  We may drop into an ICL and then resume the move higher. Prior ICLs broke the 50sma in 2016.

So…

AAPL –  This was pretty heavy outflow. Mondays reversal could be bought with a stop below the days lows, but stops are essential because if this is an A-B-C correction, the 200sma could get tagged in a NASDAQ drop to an ICL. NFLX, GOOG, FB, etc also had strong volume on their drop.

Right to Precious Metals. EMails from readers are right down the middle, with some readers calling for a strong rally after the Fed, and others discussing a crash for Gold.

GOLD – The most difficult part for me with Gold is that it has now made another new high on this daily cycle and on day 19. That is  what I would expect either in a first daily cycle out of an ICL , or right before a drop into an ICL.  I’d expect 3 strong daily cycles, R.T.,  and then suddenly a L.T. daily cycle with a sell off that catches everyone off guard. The drop into the ICL.

THAT SAID – Let me show you a Bullish & Bearish reaction after the FED MTG.  A back test of the 50sma, and bull flag DCL on day 25 or 26, then a move higher could be a dcl.

GOLD Bearish reaction – A serious drop into an ICL into day 33+.  Remember, if today is day 23, then day 33 is 2 weeks from now ( 5 trading days per week). A daily cycle CAN go 33 or more days.  We can drop for 2 weeks into a dcl.

In the weekend report, I said that I would be monitoring these sectors and looking for clues or changes that MIGHT help us to see what the Fed Mtg will bring.  Lets look at Silver.  It did change a bit…

SILVER –  So I’ve been saying that SILVER looks like it dropped sharply into an ICL in MAY, so could that be THE LOWS in MAY?    Well, Silver broke down Monday and volume did increase Friday and Monday. This is how Silver begins to sell off.  Look at that May sell off and notice how these sell offs can just pick up and crash down, so Silver may be signaling a coming drop after the Fed.

SLV – So yes, we could see this. Caution to the Longs.

SLV – A higher low after the Fed could signal a DCL and it would indicate that we saw a MAY ICL.   I hate limping on 2 opinions, but the analysis calls for both a Bullish or a Bearish result, and THAT calls for caution.  I showed this in the weekend report, and you will see it again today. I will not be HEAVILY positioned 1 way or the other, because the analysis is both Bullish & Bearish,  I want clarity first.

GDX closed down Monday, what about GDXJ?

GDXJ – GDXJ looked bullishly set up. IT seems to want to make a run to the 200sma. REMEMBER, in March and APRIL GDXJ could NOT tag that 200sma due to weakness. I shorted GDXJ in March and April as a result, so now I am watching this area. Can GDXJ now run to the 200 sma ?  If so, does that mean that we are now in a 1st daily cycle?  These are the things that come to my mind when watching this play out.

Let’s discuss individual Miners and see if we get stronger clues

GORO –  I bought this for a quick trade going into he FED MTG,  the set up has been short term bullish with higher lows.   I actually locked in my gains on Monday, and I will show you why in a minute. This CAN still go higher Tuesday.

GSV – I also pointed this out as a buy and said that I bought it for a trade going into the Fed MTG. That MACD is strong and I love this set up, but I closed this one too, and in a minute I will show you why, but this could go higher into Tuesday too.

SAND looked Bullish today, pushing on the 50sma.  Maybe it breaks out & runs to the 200sma by Fed Wed?

NG – Crystal pointed out NG in the comments section, and when I looked?  Yes, That is a nice bottoming process. Look at how flat the lows are, but the MACD is rising along with the RSI.  I usually buy that in a heart beat.

SO why did I sell GORO & GSV, if these Miners look so bullish heading into the FED???

AS BULLISH AS THESE SET UPS LOOK, THEY CAN GO SOUR VERY QUICKLY

AUY –  This junior looked good last week as it moved up & tagged the 50sma with a higher low.  I couldn’t find any news on AUY, but look how quickly these Miners can change. EGO did the same thing.

PAAS also looked BULLISH last week, above the 10, 50, &200sma.  The RSI was riding above the 50% mark, the MACD was fine.  Boom, a bearish reversal and I couldn’t find any news on PAAS.   Things can change quickly with Miners , and whether the FED DECISION is Bullish or Bearish,  I wanted to scalp gains now and be out of most positions during that announcement.

SO WHAT IF WE GET THE ANTICIPATED DROP INTO AN ICL IN GOLD?  WILL THESE CHARTS BE ‘BROKEN’?  No.

GORO  could become a great buying opportunity. Look at the drop that I drew on this chart.  I just sold it above $4 and could by it back  near $2.50? Sweet!  If I have to buy a break out higher at $4.50,  That’s fine too.

CDE – I want to own  CDE & AG.  These are very nice longer term charts.  I have been patiently watching these consolidate HUGE gains from that 2016 run. I am almost ready to enter, and I may or May Not catch the very lows of this consolidation, but another drop into an ICL may actually end up being  the next best entry.  If it takes off higher and the ICL was in MAY,  I still have TONS of gains ahead of me.

And look at this beauty, whether it bottomed here or drops one more time to the lower line, this has excellent potential.  I like the daily chart right now,  but I won’t buy it before the FED MTG knowing that we may get another drop.  I will be watching this Wed, Thursday , maybe even Friday.  Imagine if  it runs like it did in 2016?  That would lead to a break out from this wedge and back to 2016 highs and more.

Yes, I expected to be short going into the FED MEETING, but I expected that short to be in place in May and just continue to ride it down. I expected an ICL at the Fed meeting, but I think that anyone can see how tricky this has been with Silver selling off so quickly in May and Gold making new highs after new highs, all R.T. daily cycle.  It does seem like GOLD should drop into a deep ICL based on the fact that it has not had that type of sell off yet.   SOme Miners just collapsed yesterday  ( AUY, EGO, PAAS), was that a clue of what is to come?  Possibly.

Other Miners are set up with Higher lows and GDXJ closed higher.  Is that a clue or will those holding those long set ups get an ugly surprise. Honestly, Gold seems like it needs to drop, but I think that the best safest way to play this is with patience.  If you are positioning ahead of the Fed, my best advice is to keep it small,  because the analysis remains right down the middle.

Maybe Tuesday & Wednesday trading will give us a few more clues?  I’ll be watching for that. Sorry this report is being released closer to 8 a.m. when I usually release them near 7, but there has been a lot to look at, look for, and draw up.   It seems like I am doing weekend reports daily now  🙂  After all, it is a very active market going into this Fed Meeting.    Enjoy your Tuesday trading, I held on to my commodity plays.   I own AKS, NAK, CSTM, TANH, WKHS, etc.

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~ALEX