Sept 12th

Not much has changed since the weekend report, so todays report will have a short review and then I will discuss a few other important ideas.

SPX – We saw a strong gap open on Monday, and that is bullish, so that means that the ‘long’ trade lives on.   I would use a loose trailing stop, because we filled all of the prior gaps, as shown below.  We may find ourselves back here filling that gap in October? We still do not have a normal ICL, so we have to keep that in the back of our minds.

WTIC WEEKLY – Oil moved higher and I am still looking for a break above that down trend line to really build confidence in the upward path.

GOLD DAILY – Gold started to pull back on Monday. This could last for a couple of days or several days.  The FOMC meeting is next week, and that can be a turning point.   In Technical analysis, a back test of a break out is a normal occurrence, so we may see that kind of a pullback. The 50sma is rising and could be there to meet price too.  Again, this could take a few days.

GOLD WEEKLY – Reasonable targets are pretty much all aligned with the the 38.2% drop? A test of the weekly 10ma?  1300 break out back test? They all happen to be in the same area, so this is an area that I am watching. 

I do also want to point this out 2016 though…

GOLD 2016 – The big run in 2016 was very difficult to predict if you were only using ‘cycles’ and counting days waiting for a pull back.  Where was the dcl from Dec through March?  It was not visible. Shorting was impossible and surprises were to the upside.  It was just a good idea to hold on to a basket of miners and try to ride things out.  That is what I have suggested this time too ( But use stops if your individual Miner drops too much. We want to lock in gains, not losses).

GDX – GDX pulled back to the 13 sma so far.  A tag of the 50sma and a back test of the triangle would be a rather big drop from here. If the triangle doesn’t need a back test, the lows could come higher than some may expect.  I do not think that GDX or GDXJ has to pull back and do a back test. I’d like to see a bull flag form here.

SO GOLD WAS DOWN $20 ON MONDAY

EGI–  We still saw some surprises to the upside. EGI did a shake out and closed up about 7% with Gold down $20.

DRD – This can pull back further, but when Gold is down $20, you would expect this to be down more than  just 2%.    TAHO had some good news and opened up 50% and closed up 30%,  so there are still bullish surprises on down days for Gold.

MUX –  Mux got hit and was down 8+% , but the bigger picture is not broken. This may do a back test. These are normal moves, and I try to be patient and find a low risk area to add to positions. It should be time for a pull back, so I should have time to add.

AG–  AG dropped below the 50sma, but I look at the lower trend line as a possible support area.

URANIUM STOCKS – Other trades

CCJ –  CCJ put in a higher low in August after the move off of the June lows.   It found support on the 50sma and has been riding it higher.  This type of consolidation can lead to a break higher and a nice run. It is also a lower risk entry, because you can put a stop below that 50sma a bit ( maybe around $9.75)  and then I would raise it along with price once it distances itself from the 50sma.

UUUU – Another Uranium stock that seems to be holding support along the 50sma is UUUU.

IPI –  Aug 31 I pointed out another opportunity to enter IPI as it started to break out.

IPI – Many here are still in the IPI trade with me from the summer months. It started to break out Monday, the MACD started to cross, and it looks as though the next upside run is starting after this consolidation period.

IPI – I used this long term chart on Sept 7th to point out the upside potential. There is not a lot of resistance between here and $5.50

I received a good question from a reader yesterday, and copy/pasted it below

“…Gold is trading near 2016 highs yet the miners are 30 percent lower and move very lethargically compared to last year. At what point would you expect miners to take out 2016 high in gdx, Bc I see that as unlikely with a much better chance we take out the dec 2016 lows.”

So the concern could also be viewed this way,  ‘GOLD is near prior year highs already, Miners are not, they are lagging.  Is that a Bearish sign?’    Let me show the readers here something.

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This is GOLD at the 2008 sell off.  Notice that GOLD was back around prior highs in about 4 months out of the lows.

HUI – HUI at the 2008 lows did not get back to the prior highs for over 1 year.  So Gold recovered quicker than Miners, but the bull market was in full swing and the lows were never seen again for years.

The conclusion is that it did not matter in 2009 that Gold moved close to the 2008 highs quicker than the Miners did, the bull market still continued for years after that.  I thought that it was a good question though,  thanks for asking R.M.   This doesn’t mean that we are going to just get a straight up moon shot higher,  but it does mean that the Bull Run can be in place, despite Golds recent progress vs Miners.   Corrections and consolidations along the way are normal and healthy.

The market moves yesterday were pretty much as expected.  The general markets moved higher, Oil moved higher, Gold & The Miners began to pull back.  Patience and waiting for a confirmed swing low in GDX or GDXJ is the best thing to do to avoid additional losses. There is an FOMC meeting ahead on Sept 19 & 20, and that could be a turning point for markets. Let’s see what Tuesday brings our way, enjoy your Tuesday trading.

~ALEX

Interestingly:

1.  Some have told me that they want to start buying the dip, and in fact have actually done so, because they feel that the Bull will surprise to the upside.  That is fine. I am here to show you how I look at things, and how I trade these time periods.

2. Others have told me that they want to sell everything, lock in gains, and see how the selling plays out, since it could take a few more days until selling is complete.  That is fine, I am here to show you how I look at things, and how I trade these time periods. 🙂    It is , of course,  up to you how you want to trade your positions, I am just showing how I have traded these time periods in the past.