July 12th – Two Faced
This report is going to discuss a few things about our 2 faced friends – The Miners 🙂
We have a lot to discuss in Precious Metals, and I want to release this at around Midnight Eastern Time, so I will cover the markets quickly and discuss them in more detail in the next report.
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The SPX, NASDAQ, and the DJIA fell a little bit and I expect it to be choppy, since we are coming due for an ICL drop and the MACD is not quite confirming new price highs. We have a day 7 peak and a swing high, but this may go sideways & chop for a bit before dropping..
Last week we were seeing weakness in OIL, since it made new highs and the MACD lagged. We had a doji and a channel trend line as resistance too. It started to go sideways from this chart onward. I mentioned watching the Wednesday Oil inventory report, because The OIL/Energy stocks did not follow OIL to new highs either. They started to improve, but we have been cautious with this set up.
WTIC – Down 5%? Wow! This is still early in a daily cycle for oil (Day 16 with a day 11 peak), so it has a lot of time to ‘trade’ here.
XLE – So we also see a high volume drop away from a topping candle in XLE too. That MACD looks like it is confirming that this is just a double top.
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USD ( UUP) – We have seen price pops like Wednesdays in the USD that didn’t have a lot of follow through (green arrows), so we’ll see how this one goes. I’m expecting the USD to top soon, and this does look like a dcl now. I’d expect to see it roll over rather soon (like the last 2 green arrows where it made new highs in June).
The USD is oversold, but look at what it did the last time it was oversold at its dcl. It went sideways, so I do think that we are seeing a topping process and this will allow Gold to bottom.
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USD WEEKLY – Normally I keep the Big Picture in view for the weekend reports, but I thought we’d need this right now. That should act as a strong wall of resistance overhead.
PRECIOUS METALS – THE 2 FACED CRIMINAL
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Pre-analysis discussion: We either have the ICL in Gold in place from day 30 and are testing those lows, or if those lows break, Wednesday was day 35, but we are still very close. That has not changed. What DID change was that Wednesdays drop in Gold really affected Miners more than the steep sell off in June did. This could mean a few different things, and I will have to discuss a couple of different possibilities for that here.
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GOLD SCENARIO #1 – If GOLD does NOT break the lows, this is where we stand. It would be day 5. Was it just a back test, and the Miners selling will not have much follow through? Possibly.
GOLD SCENARIO #1 – And this may have been 1-2 of a 1-2-3-4-5 type move.
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HOWEVER- IF THE LOWS BREAK…
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The NEXT 2 GOLD CHARTS: ON JUL 2 I proposed that since this peaked on day 17, it MIGHT need to drop into at least day 34 to make this a Left Translated final daily cycle into the ICL.
A FINAL DROP AT OR AFTER DAY 34 – Are we seeing that now, and THIS TIME the Miners will drop into an ICL type slam down too?
This chart was in the Tuesday morning report as a reminder.
THAT IS POSSIBLE, BUT IT DOES NOT HAVE TO PLAY OUT THAT WAY. I FOUND AN ICL THAT HAD A R.T. DAILY CYCLE
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GOLD – I POSTED THIS IN THE COMMENTS SECTION ON TUESDAY MORNING TO SHOW THAT LAST JULY WE DID GET A QUICK UNDERCUT LOW (DEC WE DID NOT). SO E COULD GET THAT HERE TOO.
I WAS BUYING.
I WANT TO SAY THAT AT THIS POINT, I HAD ALREADY STARTED BUYING MINERS WEEKS AGO, AND EVEN ADDING TO CURRENT POSITIONS. MINERS WERE HOLDING UP VERY WELL, EVEN WHEN GOLD SOLD OFF $20 ONE DAY. I OWNED JNUG, A FEW MINERS, AND WAS READY TO GO ALL IN WITH LEVERAGE AS SOON AS GOLD STARTED RISING UP OUT OF THESE LOWS.
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That leads us to Wednesday and those 2 faced Miners 🙂
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GDXJ – Is this just going to be a break down like the ones in the past several weeks ( 50sma & 200sma ) & then recover quickly, or will this sell off sharply? USE STOPS, because…
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This drop raises another thought that I had been contemplating, one that I really didn’t want to discuss, but at this point it should be mentioned…
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REMEMBER THIS : In 2016 the GOLD ICL was in December, yet THE MINERS ICL came 1 month later in JANUARY. EARLIER THIS YEAR I mentioned that the 2017 GOLD ICL was in DEC, but MINERS seems to get a deep sell off into Feb, as seen here. GDX made new lows in Feb. So I wondered – Are they still running 1 month later than Gold?
It raises the question, If Miners are 1 month behind Golds Dec ICL, will their ICL now be a few weeks later than Golds?
This is my very least likely scenario, because some Miners like GORO, KL, RGLD, and so many others are at new 2018 highs as Gold hit 2018 lows, etc. So could Miners NOW drop into their ICL after GOLD already started to? Maybe a 2 week delay? The answer is that they could. I just feel this to be less likely.
GDX – Well, this is our Big Picture with that deeper drop idea as a possible shake out. THIS would likely run all of the stops and allow Big Money to load up at a turning point. It certainly looks possible.
GDX – If this happened and we got a shake out & reversal, I would still pile in with leverage no questions asked. I almost think that this would be too easy though, many are expecting this stop run. Now we have to let time tell the story.
The frustration:
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This was FSM on a day when SILVER CRASHED. I was buying it…
Wednesday FSM lost the 50sma, so I had to honor my stop. I sold AUY, FSM, AXU – I still hold EXK, TRX, and JNUG. I did not want to sell the wiggles, but this was a technical fail for now.
So we are awaiting confirmation of an ICL in Gold. We could have the ICL on day 30, but if that low is taken out, we are on day 35 and still very close. Various Scenarios or possibilities are mentioned above. I have to stay focused on the Big Picture, and I am still VERY Bullish on this consolidation in GDX / GDXJ….
….but Bottoming is a complicated process. It has been even more complex with so many Miners acting very bullishly running to 2018 highs as GOLD SOLD OFF to new 2018 lows. Now Gold bounces and drops toward those lows and Miners decide to reverse & sell off sharply? Tricky! This has been like trying to hit a moving target.
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I want to release this Thursday night. That means that by the time you read this, it is possible that GOLD already broke those day 30 lows, negating the ICL on day 30. If not, remember how tricky that Dec 2015 ICL was before lift off. GOLD dropped toward the lows twice, but it did not run those stops. THE ICL WAS IN. We still could have that now.
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We’ll see what Thursday brings and the next report will again take a look at how things seem to be shaking out here.
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~ALEX
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Yes, I was expecting the move higher to take hold sooner than later, so I am a little blue today too.
