Aug 9th – Not A Whole Lot Of Change Here

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There was not a lot of change to report today, but there were some ‘significant’ changes that took place, so let’s take a look at what has changed…

 

SPX – This weekend I mentioned that the SPX could go a little higher, but unless it breaks out strongly and runs, it looks to be at the top of a rising wedge.

SPX – Timing wise we are near the timing that we can expect a drop into a dcl, and Tuesday we saw a false or weak break out that turned into a reversal. In June, this happened and we slowly rolled over and dropped to the 50sma area.

What about the NASDAQ? …

 

NASDAQ – The NASDAQ also put in a reversal. Recently in the choppiness, we have seen a slam day ( Red Arrow), then price slowly climbed higher, but then dropped to the 50sma too, even breaking below it in June & July.  We could be on our way to a dcl now.

 

USD – I’m currently watching the USD for a big candle or strong move higher as confirmation that we are experiencing more than a bounce. The timing is actually overdue for an ICL, but we have only seen weak bounces & sideways moves out of the USD since April.See blue arrows.

OIL AND NATGAS did not change from my analysis in yesterdays report. Today is the Oil inventory reports release, so we’ll see what happens to Oil after the morning release.

 

GOLD –  Gold is on day 21. There was not a lot of change here, other than Gold popping $7 in pre-market and selling off when the USD popped after that. GOLD did not break below its trend line yet, so this could still be a first daily cycle rising.

GOLD REMINDER FROM TUESDAYS REPORT- Golds daily cycle can find a dcl anywhere from this time period, all the way out to day 33 for example. I would like to see a trend line break for a dcl to form, otherwise a move higher may just be Gold finding a ‘Peak’ in this aily cycle.  I’m just watching things unfold day to day at this point.

GOLD – We are on day 22, could  GOLD pop & peak on say day 25 or 26,  and then back test for a dcl?  Yes, this was my original thought actually, and I have mentioned this before.   I find this less likely, though,  especially if the USD bottomed.   If it looked like this, we would be buying that back test.

SILVER – I received an email that Silver put in a reversal, and it was time to buy.  Please see the chart and this is why I am patiently waiting for a ‘confirmed’ swing low.  Each of these reversals came and then Silver dropped seriously.

GDX –  Also with GDX let me just put up a visual chart. Recent daily cycles inside of this triangle have been very long, and the last 2 daily cycles were 8 weeks long.  We are currently in the 5th week, so if this were to repeat, we would have 2 to 3 more weeks until we see a dcl. A DCL can come sooner, so  I’m watching it day by day, but I’m being patient too.

 

GDX AUGUST 7th – With that much time left,  I actually said that  normally I would have expected a break out and back test, but when it looked like the USD bottomed and Precious Metals started to drop below the 10sma, I dumped my leverage.  Could this still happen?  It could, but it is possible that GDX stays inside of the triangle until the dcl too.

So let me mention 2 things that I have mentioned before.

1. Recently we saw Gold & the USD drop & Rise together, and it has happened in the past too, so it can happen.

2. This triangle set up should lead to a bullish break out that runs very strongly, but I do want to be patient and avoid jumping in and out & getting chopped up prematurely.   They can have a false break out  upside or downside first also.  I am waiting for a confirmed DCL before buying and I have mental stops on any Miners that I currently own.   Some Miners ( Please see  AG, EXK, MUX, TRX, etc)  are breaking their lows and being sold off  rather sharply.  Some have told me that they didn’t use stops at those lows and are riding it down much further than they expected them to drop.  I ALWAYS mention that to protect our funds, we must  ‘USE & HONOR STOPS’.    It is painful to just hold on at this point, even if we are expecting that “It will reverse sooner or later”.   Better safe than sorry, you can always get back into a good trade, or  as I have also pointed out , ‘there is always another trade’.  We need to make sure that we have funds to take advantage of another trade.  Some have told me that they never expected AG or EXK to drop the way that they have.  “I thought that they were very good silver companies, so I just held on.”  Honestly, I didn’t expect AG or EXK to drop like that either at this point, and that is why I am being a bit cautious rather than jumping in later in this daily cycle.    The Markets are a learning process.  Please be careful and protect your funds.

For now, some are waiting patiently, and many of us are trading futures or various stocks from various sectors that includes commodities, Metals like Steel & Copper, biotech, some are trading Energy. See recent reports for trade ideas and please be aware of when earnings for each company are released.  Enjoy your trading Wednesday.

 

 

~ALEX

 

 

 EXK MATH AND MONEY

 

If someone bought EXK above $3 and held it to yesterdays price, they are down over 25%.  From there it will take almost a 40% move just to break even.  What if EXK drops further , little by little, day after day? Those numbers grow more & more as it drops.  It is best to cut losses sooner than later to be able to think clearly and protect ones funds.

  SO look at it this way… If EXK hits $1.50, it will take a 100% move to get back to break even at $3.00.  W0uldnt it have been best to get out with even a 10% loss, wait for selling to dry up, and make a 100% move later?  That 10% loss would soon be forgotten.  I will admit that at times, I don’t always stop out exactly where I should.  At times I am cautious of being stopped out on a shake out move below the 50sma, so I hang on until the close rather than cut it loose sooner, but I will not continue to ride a stock down to the point where it gets too deep %- wise for this reason.  I have done this any times in the past, holding huge losses and trying to wait to get back to break even. That gets costly and painful.

118 replies
  2. Steve Tytler
    Steve Tytler says:

    Please listen to Alex about stops. Preserving capital is VERY important, a lesson that took me many years to learn. I tripled my accounts in 2011-2012 investing in the PM bull market but then stupidly gave it all back by trading miners without stops during the bear market. Currently, I am 100% in cash and have been for over a week because I saw the market getting choppy and I want to preserve my YTD gains. If/when I get back into the market I always set stops so that I never lose more than 4-6% (or less) per trade. As Alex says, it’s MUCH harder to come back from a 20-30% loss than a 4% loss. Be careful and good trading to all!

      • chartfreak1
        chartfreak1 says:

        Yes, and I certainly don’t want to sound like I have always used stops and honored them. I learned the hard way , especially in 2008. Even after I looked at my losses and decided that I needed to use stops, I would remove them HOPING that the stock I was in was really going to bottom sooner than later and the BULL would save my position. Sometimes it did, other times there was just something wrong that didnt show up until later.

        Even now I struggle with that discipline – ithe trade needs to be removed quickly like a band-aide : – )

  3. Steve Tytler
    Steve Tytler says:

    Miners look bullish on my charts this morning. I bot a little NUGT in my small trading account in the pre-market and I may buy some in my retirement accounts. I’m playing NUGT this time around because lately it has outperformed JNUG.

    • Maria
      Maria says:

      Market Chatter: Lockheed Martin Sees Greater Interest in Missile Defense Systems Amid North Korea Tests
      08/09/2017 09:01 AM EDT

      05:11 AM EDT, 08/09/2017 (MT Newswires) — Lockheed Martin (LMT) is seeing a greater interest in its missile defense systems as North Korea ramps up long-range missile tests, Reuters reported, citing an interview with Tim Cahill, vice president of the company’s Air and Missile Defense business.

      • Nord
        Nord says:

        I haven’t calculated targets yet. I have 100 % miner position in GDXJ call options. November 15th expiry for this one, December for GLD options. I would say that miners are a buy, but yet, we cannot predict the future (or can we?) 🙂
        On my table, I see the great momentum to start tomorrow/friday in miners.

  7. RonB
    RonB says:

    Here’s a stop story. I played with DUST and set a very tight stop on it. I believe it trades in a fairly tight range of bid/ask spreads and the market is liquid. I see maximum 5% gaps recently so it is a bit scary but my position sizing was smallish, and my MARKET stop was in place. So my risk was well defined.

    But it gapped down in the pre-market below my stop and left me high and dry.

    So I agonized, wrung my hands, took out the garbage, kicked a stump and then came in and took a 5% loss.

      • RonB
        RonB says:

        Hahaha – that is the saying of the day. I’ll remember that Maria-ism. Save it for your book LOL

    • Bill
      Bill says:

      I think this whole move higher in gold this morning is related to Trumps speak on war with N Korea. I view it like the election result, Gold shot higher and then reversed. I am expecting the same here. Still holding DUST! Um, for now!

  9. RonB
    RonB says:

    a few little pop pop pop’s in the Uranium world too. I’ve never mentioned LEU here before. A US Uranium outfit of sorts that was brought back from the dead by a couple of professors if I recall the story. What do you think of that chart CF? There is almost no short interest in it.

    • chartfreak1
      chartfreak1 says:

      I remember LEU. I used to like the way it popped, but it did a 1 for 25 split and then a 1 for 11 split, so I took it off of my list.
      looking at it now, it actually looks pretty decent and had quite the run higher over the past 2 years. Seems to be bottoming at this $4 level, and that could be support from that 2016 consolidation. ( I’m not sure that I knew they were Uranium, but your right, they are).

  11. RonB
    RonB says:

    Darn I was going to listen to TAHO’s webcast this morning to see if there was any talk about their shuttered mine, but got distracted. The chart got excited for a few minutes, but dropped lower now.

  16. EJ
    EJ says:

    Hi Alex, It does appear in hindsight that we have been gambling rather than investing since spring.
    Would it not have been better to follow the old adage of SELL IN MAY and preserve our capital until early autumn.??
    It certainly is in my case trying to hang on the rugged cliff edge consequently loosing money on most trades??

      • chartfreak1
        chartfreak1 says:

        Yeah, I mean, I think every market will have good trades and some that are set up properly , but turn out badly.
        For me, Cutting my losses and allowing winners to run has been the solution. I look at charts of IPI, TGB, WRN,VALE- and more….they seem to be bottomed

        • chartfreak1
          chartfreak1 says:

          And I guess one final thought on this…. I think that trading in Autumn will also have winners and losers. We’ll have a nice run in a Miner and then they’ll do the dreaded public offering, earnings will come out and some will burst higher, others may drop.

          To avoid that, a home made basket or ETF is best

    • chartfreak1
      chartfreak1 says:

      I’d say your selling or maybe not selling could be costing you, and it may be something that you can learn from?

      I have made some pretty good money in CGIX, VSTM, IPI, JNUG, CLF, TGB, GORO, etc, and I have had some other trades where I sold for a loss, but the losses are smaller compared to some of the runs higher in many of these. My spring losses were ENERGY stocks, but those had good gains and I did sell some, while others I held on to and thye went to losses. A few other losses were Biotech, and random trades.

      The old SELL IN MAY is a saying for the general Markets actually, and it has not been the proper thing to do with the Bull market in stocks. Other areas like commodities seem to be bottoming, Miners put in a solid bottom last Dec and ran strongly, but go choppy after March.

      I dont know exactly how to answer that? I do know that some of the trades do not work out, others have been really good. As far as selling in May and going away until early autumn for Miners? I do not believe that is known in advance or even the right strategy. CDE, EXK have collapsed, RGLD, IAG, KGC , SAND, etc bottomed and are up near highs. SO I would say….No. I do not believe that stopping trading from May to Now would have helped me.

      • chartfreak1
        chartfreak1 says:

        And please have a look at charts of IPI, TGB, WRN, VALE, RGLD, CLF, X, CENX ( it got hit on earninsg though) , TTWO, IAG, KGC, etc- waiting for Autumn was not the answer there. They, along with several miners, look to be bottoming in May & June.

    • Ralph Wiederzane
      Ralph Wiederzane says:

      All trading is ¨gambling¨, playing the odds, even investing can be gambling. It´s funny how we think it´s ¨gambling¨when we have losses, but it´s intelligent investing when we have gains! And of course, always so very easy to go back in time and realize the exact point we should have made a different trading decision.

  17. chartfreak1
    chartfreak1 says:

    I’ve been stalking CVRS – vascular robotics for a while . ( VSTM also had earnings and gapped down, so I am just watching that one for now)

    CVRS released earnings this a.m. and the stock has been doing well all year.
    It Popped at the open, and then started dropping down to the Tuesdays
    closing price. Started a position at $1.82 on this drop and my stop will be the 50sma. I cant tell if this drop is going to reverse back higher or not, but the overall chart looks good and earnings are behind us ( And it popped higher initially). It may do absolutely nothing more today, and then move higher tomorrow too. Pretty good risk / reward

    It actually doubled from May to June , and quadrupled before that too, so it seems to be steadily on the way higher.

    refresh
    https://uploads.disquscdn.com/images/55e1931aef974b1d19c7c47fa72bad38b5fd446a11bcfb21c064d09b49173e1a.jpg

  18. Ralph Wiederzane
    Ralph Wiederzane says:

    Many of the biggest oi drillers are getting demolished, there are going to be some great bargains there some day. Stocks like ESV, WFT, and RIG come to mind.

    • chartfreak1
      chartfreak1 says:

      Agree, I actually really like the looks of HMY right here, overtaking that 50sma. I feel like it could do a little run and then back test that 50sma on this daily cycles dcl.

  20. Dom
    Dom says:

    it’s been a while since we had more new lows then new highs, not good for short term bullishness

  23. chartfreak1
    chartfreak1 says:

    IPI sold off below the 10sma for the first time in a while, so I was going to sell a small amount in case it dropped to the 50sma – since that is quite a drop.

    WELL…Nice little reversal there, now I want to add : )

  25. Ralph Wiederzane
    Ralph Wiederzane says:

    If EXK keeps going like this it´s going to break the bear market lows of late 2016!

    • chartfreak1
      chartfreak1 says:

      Man – 2016 lows were $1.
      Then it ran to $6.
      I wouldn’t mind taking that ride again 🙂

      Actually, I didnt ride that up- I traded it in segments though

    • Steve Tytler
      Steve Tytler says:

      AG & EXK used to be two of my favorite miners, especially AG. The recent beating they are taking explains why I now prefer to trade only NUGT to avoid specific company risk. I use NUGT rather than GDX to get good miner exposure without tying up a huge % of my portfolio. I’m still primarily a stock market investor at heart, so I save most of my dry powder to buy TQQQ. Still waiting/hoping to get a nice deep dip like last month’s tag of the 100 day SMA.

    • chartfreak1
      chartfreak1 says:

      Thanks Ed- I have that one on my list, and have been interested in it, so I’ll give it a read.

      If it keeps selling it’ll need time to repair itself, but at this point, the weekly kind of looks good.
      Needs time if this report is bad.

  27. SonOfGud
    SonOfGud says:

    looks like SN maybe found a bottom yesterday… now +13%
    I’d ridden a small amount down the slippery slope for the past month.. but fortunately trebled-up at the lows.

      • SonOfGud
        SonOfGud says:

        Maybe there’s something to be said for riding a tiny amount down.
        In those circumstances, I tend to watch like a hawk, and notice when the turn comes, to load up, which i wouldnt otherwise be in a position to do

    • Ralph Wiederzane
      Ralph Wiederzane says:

      A bit confusing, I like how out of nowhere both GLD and SLV are powering about most recent highs, feels like a change in overall mood for the positive, yet the weekly charts are both showing overbought stochastics, so at this point I am not doing any adding even as I love the low, low prices in some miners.

      I had to sell XBI this morning and reduced profit, don´t like how it´s acting for a short term long trade. It seems to trade alongside the NQ futures, so maybe the stock market is ready for a break? If so, that would lend credibility to the metals move and I might wish I had bought here.

      • chartfreak1
        chartfreak1 says:

        Yeah, I dont like it when Miners don’t lead or at least keep up either. We may just be popping into a final peak in this daily cycle, and then the drop into the dcl.

        Like you said, GLV & SLV popping nicely, but it still resembles the last couple of daily cycles that ran higher, went sideways, Popped & rolled over… seen in this chart that I posted this morning.

        https://uploads.disquscdn.com/images/1ace3bedb4a194b54aa623b4f2874f4b41ef2e3060312fd0012350cc13bce0d4.jpg

        • marinho
          marinho says:

          great point Alex. I refrained to add to my little juniors I have, but it is possible we can get to 1300 gold this time around. surprising that we get a new high for gold on day 22 and probably not finished. this triangle for miners has held us back so long. hopefully we are in the 1st DC and the 2nd DC will be much easier to hold onto gains.

  32. BayTrader
    BayTrader says:

    Sorry Mama.. I always break DNR when I talk about it. Ill throw it in the fight club bag now

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