Thursday August 24 – It Could Be Time Again

Time for what? The clue is in the picture, and we’ll discuss that after a brief review of the markets.

USD – We were due for an ICL and not just a dcl in August, but so far this low is acting just like the other dcls, and they rolled over after going sideways for a while. If this drops and rolls over, I feel that Gold will POP and RUN higher.

Yesterday did not change anything in my view of the General Markets ( SPX, NASDAQ, ETC).

WTIC –  I believe that OIL is set up bullishly.  AT this point, going long OIL has worked since the June DCL, ICL, YCL.   What about Oil / Energy stocks?

XLE –  A couple of fake break outs so far. This is very oversold, some energy stocks look to be bottoming  (Again), and I am not invested in this sector yet.

NATGAS – Inventory reports are today.  Natgas has been choppy and pretty much an unprofitable trade for months.

GOLD – Gold is churning under resistance and I would expect a break out. I have explained my thoughts on Gold & the miners in all of the prior reports.

Repeat: If the USD drops from here like it has in the past, Gold could really POP.

SILVER –  There are other cycle guys not counting day 21 as a dcl, and they have been calling for a drop. This does not look like day 33 of one daily cycle to me, it looks like day 12 ready to break out, …

SILVER –  Silver has been crawling along the 200sma, and often price does push against resistance  before it breaks out.

GDX –  GDX dropped into day 22 after what looked like a bull flag failed. We seem to have another bull flag forming.  I am long miners.  I have stated,  “If this is really 1 long daily cycle & now drops into a dcl on day 33, how far would it drop & stay down?”  It would be a quick drop as seen on Aug 7th, but I am leaning toward a break out higher.

GDXJ –  A large triangle, and I have repeatedly mentioned how difficult and boring these can be.  Also they ignore cycle counts and they basically do their own thing, bullishly or bearishly. I would love to see a powerful break above that 200sma and a run higher.

So individual Miners mentioned here are set up bullishly, and profit has been made in some like IAG, FNV, RGLD, etc,  but this long consolidation phase in GDX & GDXJ has offered rather muted gains for now.  Consolidations often lead to a prolonged run, and I am expecting a bullish resolve sooner or later.

SO IS IT TIME FOR STEEL AGAIN?

For a few days I have been watching Steel stocks to see if they would catch up to the beautiful run that copper stocks ( TGB, HBM, FCX, etc), are having. I wrote this in the comments section …

SO let’s look at a few of those stocks.  I will say that they are set up bullishly, and look ready to break out higher soon or now.

CLF – CLF is a BUY and a stop is an easy one – below recent price action. This is a bullish sideways consolidation.

GGB – GGB is a buy as it broke out & back tested the 200sma.

SID – SID turned higher and could be ready to go too, after this sideways consolidation has held up well.  I still own it and added yesterday.  It is not quite oversold, so I am wondering if it is ready right now? I still like the set up.

X– This steel stock has been boring if anyone was holding it, but it is not bearish at all. It is a series of higher lows and an attempt to get above the 200sma weakened, but the 50sma has held. Is it ready to try again?  If the entire sector is ready to run,  ‘X’ or US STEEL should join the race.

FCX – A copper stock that I mentioned days ago, I was asked by someone that owns it, ” IS there any more upside, or should I sell?”.   This can run to the former highs fairly easily (  that would be $15 to $17 from here), but also  the set up is bullish with that consolidation / pause possibly acting as a 1/2 way point.

TGB #1 –  TGB might have put in a 1/2 way pause too, meaning that it would try to push through the resistance on the left side ( green lines).

TGB #2 –  I jumped out right before that 1 day dip, but ended up re-entering again at $1.70 with the big picture in view. If I look at this as a 1-2-3-4-5 type move and consider that resistance on the other chart,  this COULD stall out at anytime, but with the copper stocks doing so well, I decided to hang on for now and just let it ride.

I am still invested in Miners, and the set ups remain bullish overall, but the triangle and consolidations are as boring as they get.  Earnings for most of them are behind us, so I would expect some surprises to the upside as we move forward,  but again, we need to get through the consolidation period.  In the meantime, I have mentioned a few times that the commodities  ( I’m in metals and still own IPI) look good, and some trades taken there are paying off.  Enjoy your Thursday trading.

~ALEX