Fridays Ideas

Today we are just going to discuss ‘things’.

I want to mention that my Friday reports are often just going to be information for thought, or maybe some trade ideas.  This is because Friday is the last trading day of the week, just one more day to trade before I write the often lengthy weekend report.

Last weeks Friday report was a big list of Miners & trade ideas, because the run in Precious Metals was picking up speed.  Todays Friday report is going to be something a little different.  It may seem a bit random, but it will be a small mixture of ideas. A little bit of this and a little bit of that,  just thoughts that I wanted to share at this point.

RANDOM THOUGHT #1 WITH 4 CHARTS

In recovery periods, when stocks move out of a base, the rise is not always easy. If your Miner looks like this, do you feel the need to sell it on every down day? It seems that as soon as we have 1 down day ( like Wednesday) , I get the question, “Should I sell now?”  Read this chart

This is a close up of the same chart. So we see 3, 4, and 5 day dips, and this is what we may see in some of your Miners if we drop into a daily cycle low soon.  Whether you sell or not is up to you, but as you can see, in a recovery like GDX & GDXJ are experiencing, price can quickly turn back up & make up for any losses  ( like Thursday did to Wednesdays sell off).

SO let’s use KL as an example of a very nice run higher.  Were there any down days? Did it ever sell off for 2 or 3 days in a row?

KL – Yes, even a beautifully perfect run will have times when it sells off for days,  and a drop into a dcl can take days, and yes your accounts will drop in value, but in this bull run, there is also a possibility of selling during one of these dips and not being able to get back on board at the right time.

ANOTHER RANDOM THOUGHT

IAG #1 RECOVERY SET UP–  This was a chart that I posted and said was very bullish looking.  IAG was under $4 and this was set up for recovery ( inverse H&S). I see many Miners that are setting up like this, including GDX & GDXJ now…

WEEKLY CUP & HANDLE IAG #2 -After IAG moved back to the prior highs,  it just went sideways and formed a small handle for 2 months at the 2 magenta arrows.  I pointed this out as a strong buy during this recovery process.

IAG CHART #3 DAILY  – That little Handle formed on this much bigger Cup & Handle –  and lOOK AT HOW IAG JUST TOOK OFF AND RAN IN AUGUST AND SEPT! That is a straight up vertical run. No real visible pull backs, though there were down days here and there.

WHY AM I TELLING YOU THE STORY OF IAG AGAIN?  Look once more at this chart as it prepared to recover to prior highs…

Now look at GDX-  GDX (and other Miners)  look very much like our leader IAG & RGLD did when I pointed those ones out as set up to recover.  THIS PATTERN usually tries to return to former highs when conditions are bullish. Look where GDX could go.  Also see the 2016 run.

My point is :   I am seeing these patterns shaping up in the precious metals, and I am familiar with the way they usually play out. IF conditions remain bullish through the end of 2017 and even into 2018, the gains could be very big over time.  And finding the right Miners at the right time is also important. Selling on every red day is not going to help you make the solid gains that are presented in a bull run.

Guess what GG and ABX look to be doing? GG is breaking from the lows and a run to the recent highs would certainly help GDX to finish forming its cup. Please understand that they all move higher at various rates, and will have pull backs along the way.  Look at Wednesdays drop on this chart, and Thursdays recovery.

RANDOM THOUGHT #3 -I wrote an article about ‘Surprises to the upside’ last week.

From the weekend report, this is what I wrote about Gold. Remember, I had received emails 3 weeks ago saying that the COT Smart money Shorts were too high 3 weeks ago, and we needed to sell.  I was told this because “Someone wrote an article warning about it’ and it was posted in my comments section by another reader.  I say do your own research.   🙂  Last weekend  I wrote…

So while someone was writing an article  3 weeks ago warning that you needed to sell gold due to the COT numbers, We were buying and even last weekend expected higher price. Will Gold continue to melt up to that $1375 area? That remains to be seen, but so far selling 3 weeks ago, because someone posted a warning article cost some readers some nice gains.  ‘Time’ may be getting close for a pull back, but if we get a pull back, it will be a buying opportunity. I sold all of my leverage yesterday.  The weekend report will cover this sector further.

I receive questions about GDX vs GDXJ

I was also told that GDXJ would never outperform GDX again, due to the re-balance.  You probably heard that too.  Someone wrote an article about it, and everyone just decided to believe it. I had already mentioned in my report that my research indicated that GDXJ COULD outperform GDX now, based on the chart set ups alone.   I switched my leverage from NUGT in July – August, to JNUG.

SO AS A RESULT, JNUG OUTPERFORMED NUGT THIS WEEK AND MOST OF LAST WEEK

  I am now out of my leveraged positions as of yesterday.

Example: GDX AUG 31  =  up 3.32%  Jnug up over 9.43% on AUG 31

GDX was up 2.32 on Aug 31  = NUGT was only up 6.46%

I only point these things out, because people have a tendency to believe everything they read, and then post it for others to read as fact.  When I said that I bought JNUG this time around, some well meaning readers in the comments section told me that I needed to switch to NUGT, and I recieved 2 emails on the matter, saying that  ‘SO & SO wrote an article…’  – well,  I always benefit myself by doing my own work & research and sharing it here.   I had already mentioned twice in my reports that I did my own research, and what I studied showed that GDXJ was about to out perform GDX.   Will GDXJ continue to out perform GDX?  At times I think that it will easily outperform, based on the chart set ups that I see within each holding.

Let’s Look at Trades

ENPH  – This is a supplier in the Solar Energy area. They provide a form of semiconductor-based microinverter system for the Solar companies. I mentioned it at the 50sma, and mentioned watching for a break out at the 200sma, see the chart.

ENPH –  It did break out and I added to my position. This is a recovery phase too, and over time it may run to March highs.

ENPH WEEKLY – This is the Bigger Picture, and this is a very long base. The longer the base, the more energy to run higher, and ENPH just broke above important weekly moving averages. Follow through could be very profitable, if this runs in the manner that other set ups like this have done.

IPI – Another recovery stock set up like IAG that we bought.  Many know & Own IPI since the break out in June or July. It has now spent weeks consolidated gains and may be ready to run again. It could continue sideways in this consolidation, but the following Long Term chart is interesting too…

IPI – And the potential on this fertilizer stock during its recovery is big.  You can see that if IPI breaks out here, there is almost no Resistance to $5.50ish.  Their earnings were good this summer and insiders have been buying.

THM – From AUG 28,  THM was ‘Pinched’ inside of this consolidation between the 50 & 200sma.  It started to break higher and became a buy at 55 cents breaking over the 200sma, though it could back test as shown.  This stock is trying to recover too.

THM – It has moved almost 20% higher now and with this long base, THM could double or triple over time.  I would call it more of a buy & hold than a quick trade, but that is up to personal preference.

HOS – This was an energy stock that looked ready to break out in early August, so I posted this chart even though Energy has been a tough sector to trade in. Earnings had already been released, so as it moved above the 50sma here, it could be bought there or above that magenta line.

HOS – HOS has slowly but steadily climbed since that Aug 7th chart,but now it really looks ready to move.  It has been riding that 50sma like a champ.  This is a buy & hold with a stop under the 50sma.

CLF –  Since I wrote an article about Steel stocks, they have done well. CLF was a buy at the back test of the 50sma in July in the $6.50.  Is it still doing ok?

CLF –  Now $8.50, CLF did not take off higher, but has slowly moved higher and consolidated sideways.  It looks like a small bull flag, and may be ready to continue on its recovery move.  This too would be a BUY & HOLD and should eventually get to those Feb highs.

My morning reports are usually out by 7 or 8 a.m. eastern time, but during active markets, my reports grow in size to try to answer all of the questions that I get. This is a later report, being released at 8:30 Eastern, because it took about 4 hrs to gather charts & write it.  Thanks for your patience and enjoy your Friday trading and enjoy your weekend!

~ALEX