Friday July 27th – “Calculating Route!”

Have you ever heard those words while you were driving along using your GPS?

 

 At times, especially if you veer off course too soon, GPS will give you another way to get from ‘A-B’.   It may take longer, it may have more turns along the way, and it may be a bit more frustrating.  I know this because in my travels on Thursday, my GPS recalculated my route a few times into the back roads of a city due to unforeseen circumstances.  I ended up taking many turns and alternate routes and it was frustrating, but I did still arrive at ‘B’.

 As I navigated through the small neighborhoods to my final destination, it reminded me of what GOLD & the MINERS have been doing to us, as we try to go from Golds Peak  ‘A’, to the final low (ICL)  ‘B’.   It also has been frustrating and time consuming, but that doesn’t mean  that ‘B’ is no longer out there.  We are en-route, but it certainly has not been an easy ride so far.   Lets just look at the USD & Precious Metals sector for Fridays report.

THE USD IS CONCERNING PEOPLE–  LET’s START THERE

 

 

I’ll start with out the USD Weekly chart – The USD has resistance in many areas as shown ( 100sma, 200sma, A trend line, etc), but it also has not broken below support yet.  It should be a ‘topping process’.

Look at my Green Arrow. My green arrow points to current price on the blue line, and as you can see, the USD does have room to rise up to resistance again.    Will we see 1 more short USD pop?  It seems so. Would Gold do a short drop? It is possible.

 

USD #1 – The USD had a BULLISH ENGULFING.  I got concerned reports of that, and it does look bullish, so lets take a look. People are worried that a bullish engulfing means this must now run away…

 

USD #2 –  We have seen Bullish engulfings lately in the USD, but they moved a little  higher & that was it.

USD #3 –  So we can get a pop  ( remember the weekly chart) to resistance and then roll over here too. We have been doing this for weeks, we’ve seen choppy bounces.   Look at the chart- It looks like  DCL, 1/2 CL,  DCL, 1/2 CL.  Day 8 has been the high on this daily cycle so far….

USD #4 –  SO we may just see this again, and yes, this small bounce could continue to stall Gold as we watch it continue to ‘recalculate the route’.

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PRECIOUS METALS

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An  ICL for Gold still may be in place so far,  let’s take a look…

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GOLD LIVE 6:20 a.m. –  Gold broke that trend line and looks to be heading toward the lows of $1210.70.  This still may be the ICL, the question is, “Did we have a solid confirmed swing low in Gold yet?”…

 

GOLD –  Gold isn’t confirming the ICL with any ‘follow through strength’ whether or not it has put in a final low. It has popped above the 10sma briefly and dropped again in June & July. The trend line is still rejecting Gold so far.

 

In reality, we should not yet be heavily invested, since there was no strong ‘buy’ signal in Gold yet.  I am long, but the Confirmed ICL buy signal in Gold is still ahead.  Miners were resisting Golds selling up until a week ago, so I have mentioned that holding a few Miners would be advisable, since GORO, KL, and others continued to shrug off the selling, but I never recommended leverage, even though I bought some.   I mentioned that people should not follow me until we get a conformed swing low in Gold.

That said,  I also mentioned many times recently that we could see a shake out in Miners , so be cautious.  Suddenly,  Miners looked a tad uglier that GOLD Thursday…

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THIS IS WHAT I HAVE BEEN POINTING OUT AS A SHAKE OUT TYPE POSSIBILITY

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GDX WEEKLY BIG PICTURE  –  This has been that shake out possibility posted a few times recently. If the lows were not tagged or broken, it would seem odd, but then again, miners were resisting Golds selling, so it seemed bullish as it went sideways.  Will the lows be taken out? It is starting to look that way, but only time will tell at this point.  Lets dig deeper.

Miners even looked a tad uglier THAN GOLD Thursday…

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GG-  They bailed out of GG after earnings.

NEM –  While NEM shot higher after their earnings release.

 

GDX  – Dropped after it was Rejected at the 10sma.  That was a pretty heavy volume reversal  ( GG and ABX had earnings misses).  The day 16 lows were not taken out yet, but it would be easy to do so, and that would run the stops in the first GDX chart of this report above.

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REMINDER:

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I recently pointed out the drop in Jan 2016 to ‘shake everyone out’, even though GOLD had put in an ICL in December. This was a 20 day daily cycle that ran higher above the 10sma & crashed. It CAN & HAS happened.

 

GDXJ NOW  –  GDXJ lost the 10sma & turned lower.  This was looking like a dcl, with a solid close over that 10sma, but it couldn’t hold.  It was also rejected at the RSI 50% and now it too is threatening the recent lows.  If the USD bounces, Miners could dip lower and run those stops.

 

I POINTED THIS IDEA OUT HERE TOO, as seen in 2016 when the triangle broke down & then took off higher.  It is called a ‘shake out’  or some refer to it as a ‘throw over’.   It stops people out, shorts pile on, and then a short cover rally begins. It happened in 2016, it can happen now.

 

 

I was away from the internet for all of the second half of the day Thursday, my mother has been admitted to the hospital, so I will be going back there around noon (midday Eastern time). She should be fine, but my point is that when I got outside & finally looked at charts my phone,  I must say that I was really surprised.  Actually,  my heart sank down a bit when I saw GDXJ lose that 10sma.  I honestly thought that GDXJ closing above the 10sma was a nice Bullish start, but I knew that we could also get that shake out.   “Recalculating route!’ popped into my head’.  That long windy unfamiliar drive through the back roads of an unfamiliar city is what Gold reminds me of here.

Maybe I shouldn’t be shocked?  This drop shown below in a recent report could easily happen.  Miners were resisting Golds selling, but they could play catch up now.

 

Look at these charts of Miners again.  Did they just take off upside at the ICL, or do you see a ‘ quick sharp dip’  before the ramp up?…

 

GDX DEC 2017  –  Yes, It DROPPED below support and into the ICL, then ramped up higher

 

 

GDXJ  – DROPPED BELOW SUPPORT & INTO THE ICL , then Ramped up

 

 

GDXJ  JAN 2016 –  DROPPED below support & down into the ICL, then it ramped up higher.

 

GDXJ CURRENTLY-   Hmmm, it hasn’t really dropped that far below support.  Instead, it ramped up and became a bull trap before it dropped from the highs to just below support so far.  That was not a big shake out, and I mentioned at the time that I wish it went deeper to do a better shake out.  Now it may  🙁     It could dip further with a USD bounce here.

 

A shake out now would likely have strong divergence.

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 I will be away for the second 1/2 of the day again.  I Cannot tell what will happen to GOLDs recent lows, since it did not convincingly break above that trend line.   I will be watching 1210.70.  This has now been a long, slow,  grueling sell off in Gold.  An ICL sell off.  There are hardly any bulls left and even I hate that stupid precious Metal,  🙂  but nothing has really changed except for sentiment.

  Currently the COT is Bullish, the BLEES is extremely bullish, The last ICL was Dec 2017, so we are very due for one now time-wise.  We are more than ready for that ICL, but is Gold?  Miners May be setting up for a final stop run here, it may run those lows.   REALITY CHECK:  Is the selling in GDX / GDXJ  really as ugly and brutal as many think? Take a look at this chart below. If we were just watching from the sidelines, this would be normal selling and a buying opportunity,  right?

 

 GDX PERCEPTION : I am now hearing,  “Miners will never be able to rally from this ugly sell off”.  Take a good look at this chart.  Is it really selling off like never before? No, it has actually been ‘tame’ compared to other sell offs.   By going sideways, it has taken its toll on peoples patience.  This Alternate Route of twists and turns  has been frustrating everyone, when we just want a trend higher. THIS sell off is mild so far, compared to others.

 

And we may really need to be careful if you are in leverage, since the drop on the chart can tag  Feb lows, Miners can drop to that low red line seen in the above chart.   It will be interesting to see if Gold can hold the recent lows.

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Try to enjoy your Friday trading & your weekend.

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~ALEX

 

 

AKS  – Yesterday at the market open, I was asked if AKS was just doing a gap fill , or is it breaking down.  I grabbed this chart at 9:40 a.m.  and pointed out a trend line , the 10sma, and a break out being retested.  Watch to see if this area holds.   BY the end of the day…

AKS  – What a recovery! What about the other Steel stocks?…

 

CLF, X, and other ‘Metals’ stocks selling off recovered too.

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URANIUM

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UUUU   – I mentioned Uraniums  as bullish set ups weeks ago, they popped yesterday.  Lets take a look, this was UUUU on June 20, a Buy around $2 that week on the 50sma.

 

UUUU   – It POPPED on July 20 again, and I posted this chart  (And other Uranium charts), Now UUUU was above $2.50

UUUU   – Yesterday,  this is moving higher ( $2.77 now)  and it looks very good because …

UUUU WEEKLY – The BASE is a long solid base on many of these.  A break above that area could lead to a trend higher.

 

URG   – This also looks ready to break out & run.  I bought this to ‘buy & hold’  due to the next chart.

 

URG – This is the BASE for URG and it also looks very good!

UEC   – Bulllish consolidation

 

NXE   – Another Uranium Pop

See  DNN, CCJ, UEC, URG, UUUU , URA ( The etf) Long term charts and you will see much of the same.  This area was choppy and bumpy too, but now looks set to run higher over time, as mentioned in prior reports.