WEEKEND REPORT JULY 29

With all of the detailed daily reports pointing out just about everything there is to look for, I like the weekend report to usually just be more of a big picture look at what happened over the past week and what we can expect going forward.  Well, there is just too much that stands out to me at this time, so I will cover the bigger picture and some of the smaller details too.

 

SPX – I understand the “buy the dips’ Theme in a bull market, but is every dip being bought profitable or easy to buy & hold? This week we saw a market slam down on Thursday, and Friday had a small reversal.  Was that ‘Buy the dip” on Friday? Notice June 12th.

 

The timing on June 12th for that slam was also similar to this past weeks slam, and price went sideways to lower for 4 weeks into a dcl. ( Each 5 candles is a week of trading). Buying that dip made no money for  weeks actually.

SO NOW LET’S CHECK OUT THE NASDAQ …

 

 

 

NASDAQ #1–  This slam down was a lot less gentle wasn’t it, erasing 9 days of a move higher, before bouncing Friday? Anyone that sold the sell off Thursday or got stopped out now has to wonder where to get back in, or should they get back in.  This looks similar to June 12 too, and buying that reversal saw it hit a lower low the next week.

NASDAQ #2 – In June price bounced and then dropped, bounced again and then dropped once more below the 50sma. Look at the 50sma now and we have a gap open down there now from June 11.  That gap could fill if this is not a reversal that just takes off higher.   That said…

NASDAQ #3 –  The weekly chart shows a possible topping doji candle and negative divergence on the MACD& RSI.  Anyone who re-buys the reversal may see lower prices again next week.   Looking at the past moves, The Nasdaq  may just go sideways to the 10MA or drop in the coming weeks.

 

DOW JONES –  Oddly, the Dow looks like it is fine, closing near the highs  ( Thank you Boeing).   🙂

The transports never recovered last week, giving us a reason to be cautious going forward.  They definitely look like they are topping here.

$TRAN WKLY –  This actually has a bearish look and the MACD & STOCHASTICS can drop a lot further, so it bears watching if you are long the general markets.

 

USD – The USD has seriously been in a bit of free fall since May. It is due ( Overdue) for an ICL, and this complicates what will happen with Gold if the USD puts in a strong bounce, but the USD / GOLD inverse relationship has not been strongly in affect lately.  I will touch on this a bit more later. Notice how this could drop if it breaks down here.

 

WTIC –  Oil looks good here on a weekly chart.  It is at resistance, but it did break above the weekly 50sma.

XLE WEEKLY –  FINALLY some follow through with these beaten down energy stocks. Not just a break & close above the 10ma, but a close above the down trend line.  This is bullish action, and we should start seeing it in the energy stocks.

XLE –  And in the big picture, it was only a 50% retrace?  That even surprised me, since the selling seemed so prolonged.  We can now look for buying opportunities in Energy with a bit more confidence.

I have nave been pointing out  ERF, RES, AREX, SPN, etc as leaders that were already bullish weeks ago.  How do you like ERF now after last week?  Very nice! Energy stocks may be coming into favor again.

 

NATGAS -I discussed the high volume capitulation low as THE POSSIBLE LOW using the daily chart.

NATGAS WEEKLY –  However, this is an important area on the weekly chart, so Natty does still have a little more work to do before we get very bullish. Buying NATGAS here , one MUST have a stop under recent lows for safety sake.  It is bullish to see that NATGAS is oversold on a weekly.

CRB WEEKLY –  Another  Bullish break out last week.

 

 

GOLD –  Gold has gone almost straight up over the past 3 weeks.  Day 14 saw a new high (  Stock charts says $1275.30,  but I never saw it touch that price. It is closer to $1270, but still a new high on day 14).

 

 

2 charts :  On this USD chart  & the $GOLD chart  below it ,  you can see that the inverse relationship with the USD & GOLD was strong.  Compare the top chart to the one below it.  GOLDS ICL ( Low) was a TOP for the USD.  A LOW in the USD was a top for Golds cycles.  I point out that the ICL in MAY 2016 & DEC 2016 for Gold on this chart, is the Highs for the USD.  This is what bothers me if the USD puts in an ICL and runs sharply higher for a bit,  so it has to be mentioned as something that we will monitor and follow as we move forward.

GOLD topped when the USD bottomed  ( USD is due for an ICL).

SO this is something that we will have to keep close in mind.

 

As a reminder:  The USD could also go into free fall the same way that it climbed relentlessly week after week after week in 2014. IF the USD falls the way it ran higher in 2014,  Gold could run swiftly upside.

 

MINERS–  I am skipping ‘cycles’ for right now, and switching to technical analysis. When I look at GDX this way,  I see more bullishness.  In past reports, I have pointed out Bullish factors, like Some Miners seemed to have bottomed in May and continue to climb higher, well ahead of Gold. The C.O.T. was bullish, $BPGDM is moving higher, etc etc.  So let’s just look at charts and see what they are telling us at this point.

 

I want to start with a story,  the story of NEM

 

NEM –  This was my June 22 chart and I was pointing out this bullish looking base forming.

NEM #2- Notice that I drew a possible slam down into the start of July ( Blue arrow) and then a break higher?  I drew this is because…

1.  We were due for a dcl and

2.  We usually get shake outs like that.

NEM did a shake out slam into July, and then took off.  NEM climbed the 10sma and 50sma inside of that blue box , so now stare at the blue box for 10 seconds  and then move on…

 

GDX –  This blue box looks much like the one on NEM.  GDX climbs the 10 & the 50sma in that blue box too, similar to NEM a week ago.  So that is encouraging. It tells us that this type of a set up Can break out higher.

Again, I’m skipping cycles because GDX & GDXJ have formed triangle patterns, so I want to just look at the charts and see what they are showing me.

BULLISH SIGNS FOR GDX SO FAR…

 

#1 GDX –  The moving averages were all over the place the last 2 months, often sloping negatively downward. With this triangle consolidation,  they are lined up nicely, moving higher or flattened out.

 

#2 GDX – We have a converging set of moving averages.  Moving averages bunched together can lead to strong directional moves, and currently GDX has moved above all of those moving averages, and they are bunched together.

 

 #3 GDX – This one is a weekly chart. Often before an explosive move, we get a tight winding consolidation.  On a day to day basis, this tight price action seems choppy & frustrating, and can lull traders to sleep.  They get bored and sell out of their positions, because they view this as ‘weak sideways action’.   Please take note of the ‘weak sideways action’ of Nov -Dec 2016. That is similar to today.

In the above chart, a close above the 50weekly MA would certainly be bullish.

 

Check out the HUI-  It has closed above the 200 sma.  The MACD & RSI  ARE SO CLOSE TO A BREAK OUT  TOO.

 

HUI WEEKLY – In Jan 2016 we broke out from a down trend from a tight consolidation for 1 week, and then took off higher.   We look like we just broke out of one here too.   By the way, when you read this chart, you will likely be reminded  that the ‘c’ and the ‘x’ are close to one another on the keyboard – lol   🙂

So that is our weekend wrap up.  General Markets saw a Thursday slam down day, which wiped out about 2 weeks of gains. This makes the General markets tricky. This  is not the first large slam down, and in June when this happened, people that bought it back watched it drop again the next week and stopped them out again.  When sellers decided to head for the exits on Thursday, Selling  picked up pretty quickly.  Especially since there was no news worthy of that drop.

The USD is due for a low, will this affect Gold?  Or will the USD just relentlessly sell off?

OIL and the XLE look Bullish, the weekly charts finally show it on a closing basis.

Natgas looks to have the lows in place, but the weekly chart is in an important area – a battle for the bull & the Bear.

Gold , Silver, and Miners …  I have mentioned several reasons that this looks like an ICL is in place in all of my prior reports.  I have been long for a couple of weeks, and I have also pointed out that many Miners look to be steadily rising, some with their lows in place in May.  Others are still bottoming & within bases.  When we get the next daily cycle low, that will be a buy  ( A higher low).  Of course, I  will continue to watch the day by day action in the weekday reports, but so far it has been a nice run up out of the lows.  A first daily cycle can peak at day 18, day 20, day 22, etc,  so I am taking things a day at a time.    The charts in todays weekend report remain encouraging.   Enjoy your weekend!

 

 

 

~ALEX

 

UBER-BULL in GOLD & MINERS?

Not so fast with the name calling  🙂

 

What if the USD bottoms and moves higher before rolling over into another continuous steady drop?

   I also remember trading the Miners during the year 2006 to 2007, and unfortunately, I need to show you this time period too.  It was also a period of ‘consolidation’ during a nice bull run.   I just wanted to show you that no one was really able to predict this type of continuous sideways movement.  E.W. didn’t help, Cycle counts were not helpful, and so on.  Daily cycle after daily cycle drove us all crazy.  Money was made & given back on a regular basis for the buy & hold crowd, and even traders scalped little month after month, because we expected it to just continue higher.  The reason that I post this chart?  Consolidations end when ‘time is up’, and sometimes these things take time.  This consolidation lasted over a year!!   The good news is that currently, we do look to be in a triangle consolidation, and that triangle consolidation does look like it wants to break out higher now, not later.