POST FED THURSDAY – SO FAR SO GOOD

We did see a Bullish reaction in Gold immediately following the Fed decision, so let’s take a look at a few charts…

The summary at the end of this report will try to answer questions about where we are in the Gold market.

GOLD – Gold peaked after 20 days on the last 2 runs higher.  We are only on day 12,  and since this appears to be an ICL,  Gold could run much higher.

Gold was fairly subdued  until the Fed Decision,  and then I captured this as it started to break out & move higher. $gold was up $6 & Silver up 8 cents.

1 hour after the Fed Decision…we continued to get follow through

GLD – I wanted to point out that in prior runs, we saw a pause roughly 1/2 way up and then some continuation.  I am now suspecting that this is an ICL, so we may not continue to pause, this can just run higher.

GDX – We do need to see some follow through to break out from this downtrend.  Notice how the move out of the Dec ICL played out, and it is possible that we will break out here and run like that. It did get choppy in the middle there, so we shouldn’t expect straight up every day.

GDXJ –  I would view this recent mini pause as a 1/2 cycle low like this.  I would like to see a move higher to break above that 200sma, and then a higher low for the dcl.   The Dcl could happen with a break out and back test of the 200sma, especially if we now get some short covering.

I have been pointing out Miners in past reports for the last 2 weeks, so let me just visit a few more and discuss possible expectations.

GG –  Goldcorp released earnings last night, and they were viewed as positive. Before that, GG back tested the 50sma and reversed higher.  That is the buy in the lesson that I posted a few days ago, with a stop under that 50sma.

ABX also released earnings last night too, and continued to rise to $16.50 in after hours.  This is still trading within a base, but may be ready to break out after earnings.

CDE–  CDE looks to be breaking above the 50sma and  I am noticing that many Miners recently formed an inverse H&S in this bottoming process. When Miners start running out of these consolidations and bases, they can move quickly.  March $7.25 to $10.25 was a weak run.

CDE – Follow through will break above the down trend line, and this could finally start climbing.

AG – Another inverse H&S  ( not drawn in) AG broke from a small down trend and is trying to close above the 50sma.

AUY –   break out, back test and reversal yesterday with that Fed Decision.

AUY BIG PICTURE

IAG –  IAG looks to be starting another move higher. I have been pointing IAG out as a leader, similar to RGLD…

IAG – This was in yesterdays report.

KGC – Inverse H&S breaking higher above the 50sma after landing on the 10sma.

KGC WEEKLY –  This was in a report last weeks & yesterday, pointing out higher lows as a bullish  weekly view.

MUX – I pointed out MUX on July 18 as it broke from the downtrend and pushed against the 50sma. The lows were June 10th. This looked like it would eventually push above that 50sma and could eventually run back to the prior highs of $4.40. Last December, coming out of the ICL, MUX ran about 75% in 2 months.

MUX-   Mux is attempting to break above that 50sma and volume increased on Wednesday too.  Interestingly, the RSI has been stuck under the 50% line for months,.  It is now above it already, even though price is still within this base. MUX looks ready to break out & run here too, and you would be catching it at the lows.

GPL – JULY 10 I also pointed out this long Base in GPL.   I saw a break out and back test.

GPL is still moving sideways, but it has stayed in the higher range of this base, I think it wants to break out and run now.  At the Dec ICL, it doubled from here.  If you buy it here, you are catching the lows.

PGLC –  From yesterdays report. It moved higher again and closed at $3.20 Wednesday.

 CONCLUSION :  This move higher out of the July lows for Gold seems to be more like an ICL than a dcl.  This is what I posted right after the FED DECISION was released and Gold started moving higher. Click to enlarge, it is a summary of past reports. We had to play it safe going into the Fed Meeting, but now what conclusion are we left with?

  So it does seem that we have an ICL.  Why?

1.  A weak 4th or 5th daily cycle doesn’t usually surge higher on day 12 Like Gold did Wednesday.

2. The C.O.T. Shows that smart money has really closed down their short positions.

3.  Several miners have already started  moving higher, some bottomed in May inside of that triangle, while others continue to form solid bases that can lead to nice moves higher too.

4.  We have been watching  GDX & GDXJ  making higher lows inside of triangle formations.

5.  It has been over 6 months since the last ICL.

These signs began to convinced me that it would be safe to buy a few miners even weeks ago, before the Fed Meeting, but since Gold moved up $13 after the Fed meeting, I now think that a move like that on day 12 also hints at the idea that an ICL has been put in place.  So again,  the last ICL was in Mid Dec, and 6.5 months later leads us to July lows.  That is normal timing for an ICL.  I bought some Miners 2 weeks ago when I recommended buying a couple, and I am now trading leverage ( Which I do not recommend for everyone, I’m just mentioning it so you know my level of conviction. ).  It looks like it is relatively safe to go back into the Mining stocks, buying a basket of your favorite Miners – just be aware of when the earnings for each stock you own is due.  Enjoy your Thursday trading, we’ll see if thursday gives us any follow through.

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~ALEX

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I used this chart in the past to show that ICL’s do arrive ROUGHLY every 4-6 months, so timing wise we are in the zone. A Mid Dec ICL to an Early  JULY ICL fits ( 6 1/2 months) .  The same time that the last one took from May to Dec.

The hard part for some is that Miners are not blistering higher like other moves out of ICLs.  Consider that a ‘gift’.  Many of these remain near their bases and lows, so they can actually be bought with little risk of an absolute break down, more chance of reward to the upside. Many of these Miners look as though they can run higher by 100% or more over the next few months.