August 25th – The Waiting Is The Hardest Part

SPX – So the SPX has a swing low in place, and the timing is right for a dcl, but at the same time, we are overdue for an ICL and this drop did not fit that definition.  The SPX was rejected at the 50sma and it is good to note that a drop to 2400 now would give us a failed daily cycle and begin to fit the criteria for an ICL drop.  A break above the trend line overhead would signal that we do have a dcl already in place and confirmed.

USD –  The USD continued sideways and has a weak appearance so far.

WTIC – Oil seemed to have put in a dcl on day 40, reversing off of the 50 sma, but it is unconfirmed at this point. If we get a quick shake out at the 50sma now, it would not be a failed daily cycle, it would be an extended 1st  daily cycle, with Thursday being day 45. Either way, it is late in the timing for that dcl in Oil.  A drop should not last long.

GOLD – I am still leaning toward Thursday being day 12, especially with several Miners already acting quite bullishly.  And again, even if it were day 33 with a day 29 peak, I would view that as bullish first daily cycle. Gold closed down on Thursday.

GDX  – Gold closed down, and GDX closed green. We also see a slow motion break out of this down trend line. So far this sideways up & down action is boring and frustrating people. I’m hoping that a break higher will change that soon.

Let’s discuss a few of the type of trades that we could be watching on Friday.

NAK– Our NAK position did not stall at the 200sma, it actually pushed right through it. NAK could just continue higher and form a large pan or cup here after reaching the $2.30 area. It looks great, but when I hold a position like this, I also always try to prepare myself mentally for the ‘what if?’, so that I wont be easily shaken from a good trade.  So what if …

NAK – “What if NAK is a fake break out of the 200sma & moves back below the 200sma Friday? Should I sell?”  I will not sell everything, since I can picture a back test of the 50sma and an inverse H&S.  If I own a LARGE position, I might sell a %, and re-enter at the 50sma if it holds price as a trader, but I think that NAK is acting correctly. I hope it just continues higher.

WKHS –  I made a nice profit on the WKHS trade in May – June,  it ran from under $2 to $4.75, but I caught only the end of that run.  I think that it might be ready to continue higher out of this consolidation, as it regains the 50sma.  I am not taking this trade, simply because I own IPI, TGB, GMO, SID, NAK, etc.

CONSOLIDATION BREAK OUT TRADES

IAG – So we have seen how stocks will consolidate sideways, break out and run higher.  IAG did it here, TGB has done it, and many more.  With that in mind…

PAAS – PAAS looks to be forming a short bull flag and could be ready to break out higher.  If Silver breaks above that 200sma, PAAS will likely follow.

SA – I see a small inverse H&S consolidation in some Miners, like SA. In June it was $9.50 and now it is near $12, I think that it wants to continue higher out of this bullish consolidation.

OFF THE BOTTOM , EVEN WHEN DROPPED POST EARNINGS

GORO – Goro (and several other) earnings report was not received well, but  notice that even without Gold breaking out, GORO is in recovery mode so far.  THIS IS NOT BEING RECOMMENDED AS A BUY, it could stall right at the 50sma for a bit.  It may have been a good short term trade as it broke from the bottom though. I’m just pointing out the consolidation after the slam down, and the recovery, because…

NSU – I am seeing some other miners that got slammed down begin to recover too. Buying this as it broke out could offer a quick scalp or day trade for that type of trader.  I would possibly sell this at the 50sma area.

EXK – So you can keep an eye on some of your former favorites like EXK, AG, etc and see if they break higher too.

VGZ WEEKLY – And in the big picture after a recovery from a spike low, we may have seen the lows on some of these Miners.

So today is the last trading day of the week, and many of the recent trade set ups are still working out fine.  Some are slower than others, but I still like various commodity stocks like SID, CLF, X, HBM, VALE, CENX, IPI, etc along with some Miners. Some Miners are climbing too, but we really need a strong break out in the precious metals sector to get this rally started. Let’s see what Friday brings our way, and then have a great weekend! Thanks also for being here at Chartfreak!

~ALEX