March 3rd – Where Are All The Bulls?

Almost all of the Markets have become choppy over the past few weeks, so what happened to all of the Bulls?  We have found a few Bulls that seem to be moving forward, and I will discuss those in the report.  The others may need to be coaxed out of the fields of consolidation, before they can enjoy a nice solid run again.  Let’s take a look at what happened last week?…

 

SPX WEEKLY – Here we see that the bounce of the past 2 weeks has curled up the stochastics, so maybe the selling is done, but I have been expecting a test of the lows.  Compare last weeks drop to what we saw out of the lows in 2015, the bounce also looks very similar, so …

SPX – If we are due for a double bottom low, next week could be another down week, as shown here where I drew in an extra candle. This would match the 2015 double bottom lows.  Read the chart.

Lets take a look at the flip side.

 

NASDAQ –  The NASDAQ daily chart actually has a bullish look to it. This could represent a 1/2 cycle low and FOLLOW THROUGH HIGHER next week is important. This would be bullish if NASDAQ could resist the selling.

 

NASDAQ WEEKLY – We are on day 14, so this could still drop to the 50 weekly MA and put in a double bottom low too  ( testing the ICL or putting in a lower low , the true ICL.  Let me explain something else…

 

SOX  FEB 9th –  I posted this in early Feb when too many people seemed to be buying that dip & discussing ‘the Bulls return’ and a strong run higher coming.  CNBC was very happy with the bullish v-bottom.  I pointed out that the SOX also 1. Broke above the 10sma & 50sma, and also a down trend line, but that didn’t mean it wouldn’t roll over again. I saw weakness in the MACD & other indicators as the General Markets climbed higher, so NAZ, DJIA, and SPX could roll over too.  Now they have started to do just that.  Remain cautious and …

SOX – During this General Market sell down, I have recommended MU, CY and other Semiconductors, because that sector already seems to have had their period of selling.  MU & CY now still sit at their highs, even as of Friday. Read the chart if you are long  SPX, DJIA, NASDAQ.

 

 

WTIC #1  – Oil dropped this week after the inventory report.  I have been expecting this drop with the COT reading and cycle counts. This weeks COT level was still quite bearish for Oil.

WTIC #2  –  An a-b-c drop here  would fit an E.W. count rather clearly.  Oil $54ish? The MACD did not respond to a 2 week bounce.

 

USD WEEKLY  – The weekly closed below the 10 week MA, but the daily indicates to me that the USD can continue higher.

USD DAILY– This chart seems to indicate that the USD can make another move higher to 92ish?  This implies that Golds failed daily cycle will lead to lower prices too.  MAYBE INTO THE MARCH 21 FED MTG?

 

 Precious Metals: This is not your normal, predictable behavior during this choppy, sideways consolidation. I want to look at a couple of ideas here, because obviously more than one possibility presents itself with this type of choppiness.

 

GOLD DAILY FROM MARCH 1 – Gold had a failed daily cycle indicating more downside eventually, until an ICL is reached.  Read the chart.

GOLD WEEKLY #1 – A doji is indecision. It has reversed the downward direction with some buying into a close, but a Doji on this weekly chart can be a 1/2 way point on the way down too.

 

GOLD #2  – So I have to expect at this point that Gold will drop further, maybe even into the March 21st FOMC MTG.

 

SILVER  – Silver has been going sideways again week after week. The Silver COT improved again!  It is at ICL levels. Very interesting.

 

MINERS NEED TO BE DISCUSSED SEPARATELY

 

Miners acted separately from Gold, right? 

1. In early February , Gold held up near the highs, Miners dove down and broke December lows. 

 On the surface, this is what it “Looks” like – 

2. It would seem that GOLD will now gradually drop to the next ICL over the coming weeks, and it would seem that since Miners are already at their lows, they will just crash down through all prior lows and run stops. 

THIS SCENARIO SEEMS LOGICAL AND YES IT MIGHT HAPPEN,  but let me also discuss an outside scenario that no one else is probably even considering possible.  The good thing is that we will know very soon if this scenario that I’m about to mention is wrong.

Let me tell it in the form of a step by step story…

 

#1 GDX WEEKLY  – Miners are right back at the lows, Gold is not. It would seem that if Golds failed daily cycle sells down in the future to an ICL, Miners will have to drop lower much further and break Dec 2016 lows for a stop run.   THAT IS POSSIBLE, HOWEVER…

#2 GDX  – Do you recall when I said that Early Feb looked like a possible ICL? I then referred back to2015?   GOLDs ICL was in DEC 2015, and Miners ICL was actually put in 1 month later at  JAN 2016.  IF THESE FEB LOWS IN GDX ARE TAKEN OUT, THE IDEA of an ICL GOES AWAY, See the chart, HOWEVER 🙂

 #3 GDX ICL OCT 2008   – The ICL in 2008 ran higher and dropped almost all the way back to the ICL LOWS, but never broke them.  That is what we just saw in GDX now too.  This just shows us that IT CAN HAPPEN, So until the recent lows are taken out, that ICL in Miners idea is still a possibility. AND…

#4 GDX – I Feel like I am hearing EVERYONE say that they are “Waiting for the ‘Stop run of Dec 2016’, and I’m going to buy the daylights out of it!”  When everyone is waiting for the easy buy,  it almost never happens, so what if Gold drops and Miners didn’t, similar to when Miners just dropped and Gold didn’t?

1. If that was an ICL in Feb, and Gold drops but Miners do not,  I am thinking that No one will buy it, as this sideways chop continues.

2. But many ask: ‘Doesn’t the long consolidation shown below have to run those stops?’  It would certainly be EASY to run those stops, however…

 

Look what I have found!  In the HUI 2007 Consolidation, Not ALL of the prior lows were run in PAST consolidation periods. This may have left people behind too, waiting for that final plunge. The 2 Purple Arrows were never taken out…

 

Again 2006 & 2007 – Notice this is a similar set up to our current sideways set up in Miners. 

3 Lower lows at the blue arrows did NOT have their ‘stops’ run. We MIGHT see something like this and many will not buy Miners, waiting for that drop.

The above several charts of a possible ‘shake out ICL’ taking place in early Feb are  just a thought to keep in mind for now. If GDX  Feb lows are broken, we can immediately dismiss that idea, realizing that the ICL would lie ahead, and probably will be that stop run.  If Gold drops further toward its Dec lows and Miners do not sell off  ( say they bounce around & go sideways) ,  then the GDX:GLD will rise and Miners will be leading in strength.  

 

IF Gold sells off and Miners follow…

GDXJ  DRAWN FEB 27 – This could be the 3rd daily cycle, dropping into the next ICL.

I hope that that was clear enough to follow, but don’t worry, I will be covering the Precious metals in daily reports going forward.  With that, ‘Time & Price’ will reveal the current situations real intentions, and we will be able to benefit from the next run higher when the time is right.  That 2007’s sideways chop was just like this, but it did eventually come to an end.

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So here is what my Big Picture thinking is for the Precious Metals.  We saw Miners put in that SOLID SPIKE HIGHER in early Feb when?  When the CPI numbers showed Inflation was a bit hotter than expected.  SO?  If THAT spike isn’t the ICL, I think that it was at least a preview of whats to come as the Catalyst for the Precious Metals to finally get moving higher.  Inflation in Steel, Copper, Aluminum, and other items will creep higher and the next surprise in CPI or FED MEETING reporting could be the catalyst for the break and run we need to get out above this consolidation.  It is still a matter of time, but that SPIKE in Feb at the CPI numbers seems to indicate future intentions in this sector.

The General Markets are pretty much acting the way that I thought they might, and they could be following what the SOX already did-  a double bottom low.

OIL is also finally dropping down to seek out its ICL.  I am thinking that an a-b-c drop is in the cards.  Some short term trades have resisted the intensity of the selling (  MU, CY, GGB, and ENPH actually remain at their highs, some Metals stocks perked up like  CLF, AKS, X, etc etc) , so as things play out, we still may be able to trade successfully,  but the key is NOT to swing for the  fences hoping for a home run in these choppy markets.  We can score some runs taking smaller gains too. Keep position sizes small and manageable, and cut them loose if they go against you. That is a wrap!

Enjoy the rest of your weekend!

 

 

~ALEX

 

I mentioned that I bought CLF, and posted charts of other Metals stocks.

NUE – NUE, CLF, STLD, X and others still looks great despite Market selling.

 

CRB – The CRB bottomed and put in a higher low and is climbing higher in stair step fashion for 8 months.  Prices may be rising too, and inflation could be in the future.

CDE –  When I look at some of these miners,  they may already have their lows in place. CDE looks to be forming a round bottom

 

BTG WEEKLY– I have already mentioned a few Miners that do not look threatened by any future sell off.  BTG looks to already have its lows in place back at DEC 2016. Each sell off to a higher low was a buying opportunity that has not been violated.

AUY WEEKLY –  As mentioned in the past, THE LOWS may be in for AUY too.

Things in this sector still look to be shaping up for a serious Rally in 2018