June 21st – Golden Plunge
We have been waiting for a bit of a Golden Plunge for a while, and it is not something to fear if it happens. We are in the timing for an ICL, so the next drop could be he final drop before a strong rally begins. Let’s review the various Market Sectors and discuss Gold expectations again…
THE GENERAL MARKETS REMAIN MIXED, AND TECH REMAINS STRONG. LET’S TAKE A LOOK.
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DJIA – The Dow dipped down to the 50sma, possible support, but it could drop further since it is not oversold yet and the MACD is weak. TECH Looks very different…
NASDAQ – Yesterday I mentioned that we were due for a dcl, but the NASDAQ dip keeps getting bought up. We had 4 reversals in a row, so it was strong.
NASDAQ #1 – Tech has been blazing and even broke to New Highs yesterday, while the Dow dropped almost below the 50sma. So with Tech, we could get a higher (stronger) Dcl, and stops can be moved up gradually.
NASDAQ #2 – NOTE: There is still this rising wedge in play here, and these USUALLY break down. We are at the top, so we break out soon or break down soon. If we break higher, I also mentioned a possible ‘Runaway move’ like we saw last January, and those are best played by riding them, not over-trading & risking losing position.
EXAMINE A FEW TECH STOCKS FOR CLUES
CREE – CREE has been running strongly, but it does look like it needs a pullback. Buy the dip if it does.
SQ – This also has been very strong, but it could pull back, so maybe the NASDAQ Wedge will drop down?
SQ – Unless it goes parabolic. We’ll know soon enough with that rising wedge in Nasdaq, but this is already extended, similar to November & April. If it drops, we can buy the dip in a few weeks.
LSI – This one actually looks like it wants to break out higher. It would be a buy if it does.
IBB WEEKLY – And BIOTECH continues to look Bullish ( This is a weekly chart).
WTIC – Oil seems to have a dcl at day 49. Do Oil & Energy stocks look Bullish? Yes. Notice OIL dropped on deeply into day 41, small bounce, and another lower low…
XLE – NO LOWER LOW like Oil. This could break higher with Oil at a dcl on day 49. I would use a stop under recent lows and raise it after the rise begins ( Gush, ERX, etc) . Oil/Energy stocks may make another run.
MANY OF MY ENERGY STOCKS BECAME BUYS YESTERDAY
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DNR – Break out, this was a buy & still is a Buy, especially if it pulls back today.
OAS – Just breaking higher, also a lower risk BUY
WPX – So you could Buy before the break out, use a stop under recent lows
It looks like OIL & ENERGY stocks are setting up. I will post more in my Friday report as they set up, but check your lists too. Many recovered their 10sma and look ready to move higher.
USD – Looks like a new high on day 4. I am expecting it to top soon ( Read the chart). Slight MACD divergence is appearing.
USD WEEKLY– I mentioned in the weekly report that the 200sma could hold price back, and so far that is what we are seeing. We may get a ‘false break out’ too, and then a drop into the USD ICL. It has become due for an ICL dip.
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GOLD – We are watching Gold drop down into what should finally be the ICL. WAIT FOR A SWING LOW. AT THIS RATE, breaking the down trend line may be visible early.
I TALKED ABOUT QUICK STOP RUNS & V-BOTTOMS IN GOLD
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A V-Bottom comes from a quick sharp drop & recovery…
GOLD LIVE – We could be close. I added this this morning, and GOLD may form a V-Bottom. This really looks pinched already. When the USD tops, I think we have our Lows in place. A break higher from here has a good chance of being the lows, but it is still a bit safer to buy after a swing low is in place. ( PERSONALLY, I’d probably buy a break higher from this wedge with a tight stop and see how that goes, but I am a trader able to be in front of my screen).
GDX – We are dropping into our DCL/ ICL. This shows the final daily cycle already on day 35, which would be further along than Gold, but…
GDX Alternative Count – This count would match GOLD. It is acceptable because the 10sma did curl down into each dip, and back up on each rise. A final daily cycle may also be shorter than a mid-point 33 day daily cycle, so it can bottom in this time period.
GDXJ– GDXJ had light volume & has held up well. I HAVE GOOD NEWS ABOUT THIS…
HUI 2008 – OUT OF THE OCT 2008 ICL – THE ONLY DEEP SELL OFF CAME AFTER A STRONG RALLY. THE LOWS WERE FORMING AS HIGHER LOWS. SEE THIS CHART & THE NEXT CHART TOO…
A CLEARER VIEW OF WHAT I AM NOTICING & POINTING OUT
HUI 2008 – LOOK AT THE BULL RUN IN MINERS COMING OUT OF THE 2008 ICL. IT IS NOT BREAKING TO NEW LOWS ON THE DIPS, EVEN AT THE 6 MONTH ICL. MAYBE WE ARE SEEING THAT NOW WITH GDXJ. MANY MINERS ARE MOVING HIGHER WHILE GOLD DROPS, AS POINTED OUT IN PRIOR REPORTS. THEY ARE BEING ACCUMULATED.
THE GOLD PLUNGE actually has not been all that bad so far, but it could pick up before bottoming. That said, Many Miners are holding up well. Some Miners, like KL, GORO, etc have even resisted the selling and have been leading the way. I am encouraged by the action and we should be seeing a dcl ( and it should be the ICL) very soon.
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Enjoy your Thursday Trading!
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~ALEX
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UUUU– I have had this as a buy for a couple of weeks. It does look ready to go with that volume surge yesterday. Continue to hold or even buy if it breaks out
UEC– This Uranium Stock regained the 50sma, so I am watching Uraniums again
LSI – Mentioned above, if the markets pull back, this may not break out. If they move higher, this could be ready for its next run. It has held the 20sma like a champ! That is your stop.
AQ – This is one IPO that ran strong, and died. It looks to be recovering. I’m hoping for a back test of the 50sma for a low risk buy, but these IPOs have been running straight up if they get going, so that may not happen. The volume has been increasing on this rise.
OSG- I still own it, still hopefull 🙂 It is a bullish set up
So the MJ stocks mentioned yesterday broke out & continued higher. I am still holding and this is how I am looking at this sector…
CGC – When it was known as TWMJF, I posted this as a BUY in early May. It could be bought when it breaks out, or even before it breaks out above the 50sma. The MACD was turning bullish.
TWMJF (CGC)– And again here. This pattern should run to the former highs so buying near $20, it could run to $35 ( at least)
CGC – So here it is now nearing that $35. Stare at this chart pattern, and …
CRON – You’ll see it in CRON. These 2 stocks now trade on the Main exchanges, and I think that CRON will do as CGC has done, since this sector is turning bullish with recent legalization laws passing.
