Shaken, Not Stirred – Sept 27

My emails were mostly asking about the Precious Metals and Energy,  so that it what I spent my time on.

I received more than a couple of emails asking things like, “Shouldn’t we be loading up on JDST/DUST, with Gold failing and the USD rallying?” – ” Where would you enter DUST?”  My first reply is that at this point, Gold is not failing.  Now let’s discuss this further…

 

To start:  ‘Too perfect’.  We have discussed ‘shake outs’ and other nerve rattling happenings in many of my past report.   They are designed to lure in buyers on support areas ( 50sma for example), and then a quick drop can shake buyers off, and often this will leave them behind.

Is that happening in Gold , Silver,  & Miners?   I can not say for a certainty, but let’s just take a look at the possibility  (I sold nothing yesterday). On Monday, we had upside reversals in the Precious Metals that looked great – really looked ‘a little too perfect’.  I even mentioned that several times, simply because I am used to the deviousness of these markets.    I am used to ‘shake outs’ and false moves now,  which cause people to sell and doubt the current set ups.    The following 3 charts are copies from the ones with my wording in yesterdays report.  Notice the theme that things seemed ‘a little too perfect’.

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Copied from our weekend report – ‘almost too perfect’ Click to enlarge if necessary.

 

GOLD – The reversal at the 50sma is great, but as I pointed out on the chart…’ almost too perfect’ on that 50sma ?

I wrote this yesterday as I cpied a chart from the weekend report for Silver:

So maybe things were a little too perfect?  Now lets go ahead and see if things were so bad on Tuesday that Gold is ‘failing’ ?

 

USD –  It is true that The USD is getting follow through higher.  It has almost closed above the 50sma. This looks bullish for the USD, and it is due for the lows to be put in place.  I have mentioned that this could affect Precious Metals, but I am monitoring that and we have seen GOLD & THE USD run higher together in the past (Rare, but it has happened).

 

REMINDER: For the BIG PIC VIEW

USD WEEKLY – I mentioned that this may possibly just back-test  sideways under the 94 area. The USD is, so far,  still under this 94 area.  Is The USD drop below 94  a shake out for the USD WEEKLY & it recovers? Or is it a break down & back test?   Is Gold doomed because the USD hit 93.20 ?    We’ll take a look at Gold…

 

 

This is a chart from last week too. Why am I looking back?  When we saw Gold drop to this area it was expected, and this was considered our next possible buy area.  Gold, at this point, is still in this area, but that doesn’t make it broken…

 

GOLD

GOLD Tuesday – A big reversal higher on Monday, and then a reversal lower on Tuesday.

GOLD LIVE THIS MORNING – It appears that Gold made a new low on Wed Morning, extending the daily cycle count. I do not think that this is a ‘failure’, since Gold didnt close over the 10sma, but the USD putting in a low and rallying does have me watching Gold day by day going forward.

 

 

GDX – Here I am pointing out that most other ‘lows’ saw price move higher for a day or 2, and then a quick drop lower to shake things up.

Arrow #1 is a low,

Arrow #2 is the drop a around day 4 or 5 the low.

We had that this time too, so far.     Is that all we have here is a day 3 higher low, like the other lows?  It is possible. Time will tell. If not, we are still due for a low.

Note – GDX on the chart ABOVE  could drop to the 200sma as a back test and still be fine.

These were the positive signs listed in the weekend report.  I ask myself,  how many of these are now invalid due to Tuesdays price action?

 

 

GDXJ – I am being asked to give a bearish 3x etf buy points, but the set up (for me) is still bullish, since the swing low was not even taken out yet.

 

What do I Personally do next?

 I look at individual miners to see if they resisted the Drop in Gold. When Gold is down over $10, Miners in a ‘sell off’ usually drop 7-10% in a day, right?  So I usually look for clues such as Miners trying to still go higher.  Are there any bullish Miner set ups.

 

BAA–  BAA was still trying to break above the 50sma, and closed up almost 3%.

FFMGF – up 4% and ready to break out from a squeeze play.  This is bullish with Gold down $10+

FFMGF – The weekly is great too. Remember when I went through several big picture charts in yesterdays report.  Some of these Miners have very nice big pic views.

SSRM

GSS –  GSS closed up Tuesday as it is still attempting to break above resistance too.

Shake outs will frustrate buyers,  often stop them out, and leave people behind.  Traders that sell here may get frustrated, and mentally refuse to buy it again even later as they watch it regain strength.  Are we seeing this in the precious metals sector right now?  It could be but let’s review our current set up in GDX and then see what Wednesday brings our way.  This is why I am not personally shorting Miners.

Note: I don’t like to hold leverage during times of uncertainty, and the USD does appear to want to put in the ICL either here or at the next drop. The correlation of the GOLD VS USD in the past has been inverse and therefore I have to exercise caution when it comes to leverage

 

GDX #1 Current set up – Day 31 low now making a higher low,  or if we are on day 34, a low should still be in this area.

 

GDX #2 – A break of both the 50 & 200sma would likely cause people to go short, and if it is a shake out, the short cover would cause the expected rally.

This is how ‘lows’ are formed, and I am expecting a low in this area.   I am a bit cautious, due to a few other things that I see developing  ( USD ICL / YEN, etc) , but I am not stopped out or short yet, and several Miners still look bullish to me. Enjoy your Wednesday trading.

 

~ALEX

 

NAK – I posted this chart in the comments and said that I was buying back what I sold on Monday.  I sold part of my position on the selling Monday, when volume seemed excessive in the first 15 minutes.   This now looked like a legitimate recovery  of the 200sma- a good example of ‘a shake out’.  We’ll see.

NAK –  And it then closed up 8% by the close and now looks primed for lift off after recovering the 200sma.  I like this set up as a consolidation and shake out before a run higher.

 

ENERGY CHARTS – Look for energy charts breaking bases, they are still progressing nicely.

 

AXAS pointed out in a base last week

 

AXAS – Excellent, and you should also look at WTI & BBG, WG & BTE again

LGCY- Breaking the base?

NOG –