May 5th Weekend Report

Usually for the weekend report, I like to take a step back and see the Big Picture, but for this weeks report we will have several daily charts too.  This will help us to focus on what to expect in the short term as well as keeping the longer term Big Picture in view.

 

 

NOTE:   If you have been a subscriber for a while, you may recall that I have said in the past, ‘ My observation has been that due to the shape of a Triangle, the cycle count can get obscured ( or messed up).’   My experience has been that as price closes in on the APEX, it can’t make new highs until it breaks out, so it can be bullish, though it looks weak and the count can also become unclear. Things look left translated in triangles.   WE JUST SAW THIS  with Miners in February. A triangle formed and it became bullish as it broke out, though the count was unclear and it looked weak in February until later…

 

SPX WEEKLY LAST WEEK – Last week I posted this chart, and it is a large triangle.  Lower highs look weak, but that can change later in a triangle break out.  As price approaches the apex, it looks bearish close up, because it looks ‘weak’, unable to get a rally going, right?  This is why I see triangles as tricky using Cycles, but using technical analysis, they quite often become Bullish if they break out higher.

 

SPX CURRENTLY– We got a strong reversal Friday in the General Markets, and  we have our higher lows in tact due to the triangle shape.  The 200sma is acting as support so far, and this could break out higher, which usually starts a new daily cycle ( When a triangle breaks, I often just start a new count, just like I did with Miners in Feb).

Conclusion:   I can’t tell if the break out will occur now, or will this meander for a few more days within the structure and THEN break out, we do have some apex room available.  So General Markets could be bought as a low risk trade here or after the break higher, with a stop under APRIL lows, not May. I will be watching individual stocks and see how they progress too.  The FOOD stocks are still breaking out & remain Bullish .

Now see   WINGS as of Friday, CAKE, SHAK, CHUY,  etc

 

 

WTIC –  Oil has been bullish and remains bullish, and daily cycle counts can be up to 50 days long.  I have been calling for OIL to get to around the $70 area, allowing XLE to reach former highs, before  possibly pulling back for a dcl.   Well, This move to almost $70 Friday looks more like a ‘break out’ that could run even higher, and we do have daily cycle time to do so.   So let me look at this another way…

 

OIL #1 –  If I just look at this chart as a trader looking at a cup & handle and symmetrical patterns , how would I view this?

 

OIL #2  –  I would get $72 as a minimum target, using symmetrical moves higher.  It would be a bullish break out continuation for now.

This is definitely one time ( and I have really only really seen 1 or 2 other times, once in Gold & Silver ) where the COT SMART MONEY got it wrong for months.  They have been extremely short for months as OIL broke higher. I admit that this tainted my view of what would normally have been a bullish set up.  I grabbed Energy trades eventually in March, but I didn’t expect Oil to remain near highs for this long.

 

WTIC –  The BIG Picture has always been long term Bullish, and we consolidated sideways as a bit of a back test from breaking out, and it continues higher.  It has not been a straight run higher, it has been a break out and consolidation in the big picture, after breaking from a large base. This looks like Oil will eventually return to highs again.   Seems quite Inflationary.

 

Conclusion:  In My daily charts I have recently been thinking that OIL would get to about $70 area and may pull back for a dcl., it has a measured target of around $72.    I think that we are seeing inflation gradually creep in, and Gas prices around my house have moved up 40-50cents/gallon in recent weeks.   WHEAT, CORN, SOYBEANS, OIL, METALS, MINERS are coming out of lows, and the FED did not raise rates in May.  Inflation might continue to become a headline, and by the way,  that is good for GOLD, SILVER, and MINERS LONG TERM.

 

 

 

USD #1  – The USD broke from a 3 month base, so that gives it the energy to run higher too.  I mentioned 92 – 94 as a potential target.   So I will draw a chart here as though this is topping near 92, like a false break out above the 200sma.   This would be good for GOLD  – but I honestly don’t ‘Feel’ like this is topping after breaking from such a nice base, so see the next chart too …

 

USD #2  – Bull flag to $94?  Can GOLD & The USD run at the same time from here?  It could, but we’ll just have to wait & see how this all unfolds together.

 

 

USD WEEKLY  –  The BIG PICTURE  does have the USD at a resistance area, it has stopped right at the 50 week MA.  If this holds the USD back, Gold can now run from a DCL or ICL.

THE USD looks bullish breaking from the base, but it is at weekly resistance.  We need more time to see how this plays out, it COULD get to $94 & the 200ma.

 

 

PRECIOUS METALS

 

O.K.,  Raise your hand if you opened the report and just skipped right down to this Precious Metals sector    , Yes, I understand that.  It gets exciting when this sector starts to perk up, but if you did that, you may want to also glance at the USD above first,  they have been a bit related lately.

 

 

FROM APRIL 27th,  What Do We Expect?  I expected a drop toward the 200sma, and timing-wise we could look for a low.

1. A DEEP sell off could be an ICL at the MAY FOMC MTG

2.  Or we may just get a dcl,but the FOMC is day 30 of the daily cycle

3. So  either way, I drew a bounce off of the 200sma area ( DCL or ICL) and then we break higher or dip to the real ICL.  Now lets move to today…

 

 

GOLD NOW  – It has done as expected, but it almost feels too easy to buy this, right? We do NOT have a swing low confirmed on GOLD yet, the 10sma held price down, but Miners do look to have one in place.  This means that we MIGHT be on day 3 of a new daily cycle, or we MIGHT be on day 33 with a quick shake out next week.   I do prefer that, and make it an ICL please!  With  this analysis, I am LONG MINERS and I used some leverage.

 

 

COT  –  Notice that this COTs  ‘Smart money short, Spec longs’ set up  is near levels seen at the DEC ICL.  Interesting.  This was as of Tuesday, before the FOMC Mtg.  The ICL last July was a bit deeper.

 

GOLD  WEEKLY –  I used Green arrows for some DCLs , RED for ICLs.  Is this a DCL or an ICL is the question? As mentioned above,  next week could shake down a deeper drop to an ICL.  a big 3 day drop would scare many out. At the end of this report, I will have a bonus section, but dont skip there now     – it is best to read my thoughts on Miners first.

 

 

 

GDX #1  – This looks like day 3, and GDX has closed above the trend line and above the 10sma. Look at my lower  indicators, they are actually quite bullish, with this tag of the 50sma only being a ‘test’ on my lower indicator.  I usually see this tag of the lower indicator  in bull market pull backs,  not deeper dips of a bear market bounce, so this looks like a bullish pull back.  As mentioned in prior reports,  I am positioned long.

 

GDX #2  –  The 200sma  red line has held price back, but this should be able to push higher now.  That should draw in technical buyers.  I also now can view this as an even  larger triangle / wedge, with a break out & back test. That is also bullish looking as a set up.   I am positioned long.

 

If this chart below was a chart of  AAPL, or TSLA, or GOOG –  I think it would simply be viewed as BULLISH and people would readily buy it.  This is GDX though, so now we all wait for the rug to be pulled out from under it, right?    I understand that too. We have all seen false starts in the MINERS, only to see the lows taken out, but right now, this is a bullish chart and the cycle timing is favorable for a low to be in place.

 

GDX #3  –  So I took  away the 200sma, and this is the current set up on day 3 or even day 33- I view it as bullish and I am long,  as mentioned in last weeks reports. A stop can even be placed under the 50sma.

I have had people say to me, ” I am nervous, this low doesn’t give me confidence.”.   O.K.-  That is fine, why not approach it to the best of your convictions?  Start small,  no one said that you have to go ALL IN JNUG or NUGT, right?  Start small and let POSITION SIZE be your safety.  If it stays bullish, add on dips, etc.

 

GDX  WEEKLY –  Remember last weekend we were stuck in the middle, with a FED MTG ahead that could launch us higher or lower? Well  that is where we still find ourselves, but it sure seems more likely to go higher now, right?

 

CONCLUSION:  PRECIOUS METALS LOOK GOOD, BUT THE USD ALSO LOOKS BULLISH, SO IT MAY BE SOMETHING TO WATCH GOING FORWARD.  FOR NOW, I AM LONG MINERS, I HAVE SOME LEVERAGE, AND I AM THINKING THAT PRECIOUS METALS WILL MAKE ANOTHER RUN HIGHER SOON.  GDX CLOSED ABOVE THE DOWN TREND LINE & 10 SMA, THAT CONFIRMS A DCL.  A STOP UNDER THE 50 SMA WORKS HERE.   AND OF COURSE,  I WILL COVER THINGS DAILY  IN THE DAILY REPORTS AS THINGS UNFOLD  🙂

This is your weekend update, and I will have some bonus info at the end.

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ENJOY YOUR WEEKEND!

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~ALEX

 

 

 

GOLD  –  COULD IT BE AN ICL, though the dip was not very deep??

I am going to show you why that COULD be the case.  We will know when the rally unfolds, but for now we watch for  clues as it moves along.  Let me show you just a few of the things that I am looking at currently that I have not mentioned yet.   There is more than what I will add below, but time permits me to show a few more things that I have been taking note of, and then I can release this report.

 

1.  GOLD  REMINDER from the MARCH 16th report–  For Months now I have pointed to the MAY FOMC as a possible target of a 5th month ICL .  I have posted this chart maybe 10 times.  ICLs come 5 or 6 , maybe 7 months apart, and we had one in Dec 2017. We could get one in MAY, JUNE, or even JULY.

 

 

2.  GOLD FROM APRIL 20th report  – This is a bullish set up and in my opinion,  it does NOT call for a very steep drop to set up the bullish break out.  So I drew a drop to about $1300 here, and we dropped to $1302 this week. The lower indicators are building steam in my opinion.

 

THIS IS WHERE I WANT TO POINT OUT SOMETHING THAT MAY BE IMPORTANT AT THIS TIME IN OUR PROGRESS. I drew this last week and have kept an eye on it, and now is the time to share it.

 

3.  GOLD  – Look at Gold During Golds prior Bull Market Runs on the left side of this chart.   After the 2008 Lows, the ICL dips did not really bust down below the 50 weekly ma, right?  No, during that bull move they didn’t crash very much.  See the Blue Arrows.  So recently Gold HAS been making higher lows as ICLs now too, right?  That’s a bull move.  DO you see what I am eluding too?

 

4.  GOLD  – ICLs actually held above that  blue line from 2008 onward, so last week I decided that this dip may do the same, and that alone should NOT disqualify it as a possible ICL.    So the dip wasn’t deep, but I am NOT disqualifying this as a possible ICL in a bull run for Gold simply because the dip was not deep.  THAT blue line was $1297, and we hit $1302.

 

5.  GOLD  –  I admit, the set up is a bit of a different situation, since we were going vertical in 2009-2011 and lately we are in a sideways consolidation, but we dropped to the 50 MA this week.   MAYBE that is enough before we break out & start going vertical in 2018.  Time will tell.

 

CONCLUSION FOR THIS THOUGHT:  When GOLD confirms a swing low in May, it will be  5 months after Decembers swing low.  The COT was close to Decembers ICL levels.  Even if price  holds above the blue line,  it may be enough to give us a stealth ICL.  It is not a guarantee, but my point is simply that even though the lack of a deep scary drop bothers me too ( when looking for an ICL),  that may NOT mean that this cannot be an ICL, based on the above charts.  Maybe its time to start going vertical?   I will watch this and many other things going forward, and they will be reported in the daily charts as needed.