8-9-18 Looking For Confirmation
WTIC – Almost 1 month ago I pointed out that I was expecting a Bounce from here, but that it would stall and drop as drawn (possibly to the 200sma).
WTIC – Oil bounced & dropped as expected. I now expect this drop to take out the lows of the DCL ( The blue arrow) and form a failed daily cycle, eventually seeking out an ICL. I wouldn’t be surprised now if Oil breaks below the 200sma in a shake out too.
THAT SAID, For those that are interested…
DWT – 3x ETF short Oil. You could buy this after it breaks above the 50sma , or start a position here with a ‘stop’ close by. Oil could bounce around, but since I expect Oil to break down to the 200sma, you could ride DWT until Oil gets to the 200sma.
DRIP – I thought that the XLE held up well so far, but the OIH is weaker. DRIP popped above the 50sma and then fell back a bit today, but it could make a run if energy the sector drops down with Oil. It could be bought with a stop under Tuesday, I would say ( Or the 50sma if you prefer).
USD – We still have our day 8 peak, so there is still a chance that this will drop into a DCL and stay left translated. That would / Should help Gold, and the next daily cycle would drop faster into an ICL.
USD – So we don’t want to see the USD take out 95.44 upside, we want to see it drop.
GOLD – This is so close to breaking above the 10sma and trend line, that a move to $1220 should be enough to act on. Yesterday was a gravestone Doji, so we were looking to see if Gold would move higher, and it did (a little).
GOLD – So Gold had a Gravestone Doji Tuesday , which can be found at bottoms, and Wednesday was a hammer, also bullish at bottoms. WE NEED FOLLOW THROUGH NOW, above that trend line.
GDX – I mentioned that GDX had what could be a bullish last engulfing on Tuesday. I mentioned that a slight dip and recovery would lower the parameters for a swing low. We got the reversal, BUT YOU CAN SEE that we’ve had a few other reversals along the way too, right? So a little follow through higher, and some short covering would be nice 🙂 It is day 28, and that is very good for timing of a dcl.
GDXJ – I have drawn various Levels of Support, and one might think that this has to drop further to reach support. Does it?
GDXJ – We dont have to drop further, and let me explain. GDXJ is certainly oversold enough, and the RSI is where prior lows have formed, but also…
GDXJ – You may recall that on July 23rd, I drew this chart comparing the triangle now with the 2016 triangle, and I said to look for a little shake out, similar to 2016. So we should break that lower triangle line.
GDXJ – We probably have enough of a break here to stop those out that bought because of the triangle. They don’t want to risk a sudden flush.
JDST – Captured 1/2 hr before the end of the day, JDST has put in a doji at the highs. This CAN be a topping candle, but it is basically a candle of indecision, so it could just be a pause too. It is very overbought doji.
The set up is right, the timing is right , Sentiment is horrible ( That is good), we just need some upside to start and we’ll probably get solid short covering rally. If Gold rises overnight and Miners Gap open in the morning, it will be very difficult for many to buy ( Mentally difficult).
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Note: I started writing this on Wednesday night at 6:30 P.M. Eastern and GOLD just set up what looks to be a bullish rising wedge pattern as I was writing, and they usually break out higher. This is GOLD as I write, please read the chart…
Can you imagine waking up in the morning and seeing Gold up $20, well above the trend line? People would see GDX & GDXJ Gap open higher and wonder
1. Do I just jump in?
2. Do I wait for a gap fill?
3. What if we runaway and the gap never fills, like 2008 lows?
That would certainly be devious of the Mr. Market. If we wake up & see GOLD higher by $10 or more, I will write a quick report before the market opens. For now, we are just waiting to see if the set up has follow through. Enjoy your evening, and tomorrows trading ( In case I don’t need to write a small Thursday morning follow up, this is your Thursday report).
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~ALEX
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FOLLOW UP: As I wrote & did some Proofreading, Gold DID break out, but it dropped back down to the wedge. It may be a back test and this could take off higher from here, leaving many behind in off hours trading. It also could just tag that trend line / 10sma and drop back down & fumble around. It is hard to know, especially with GOLD. Patterns can be manipulated far easier at the lows i.m.h.o.. We’ll know in the morning though (U.S. time). Click to enlarge.
NOTE: As I’m sure you all know, there are additional individual risks with individual Miners. Earnings release can hurt or help, a public offering can drop the price, etc, so please understand the risks, use stops, and I always recommend a small basket ( Not just 1 Miner). Use ETFs if you wish to avoid that type of risk.
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NG DAILY – This is a nice daily set up as it rides along support at the 200sma. When we have our ICL, earnings already came out on July 28th, so this may make a nice buy at support or as it breaks above the 50sma. See the chart here, and then notice the weekly chart…
NG WEEKLY – Nova Gold has actually been in a slow uptrend for years now. It ran up 100% in 2016, and has been consolidating those gains, landing back down on support with a small Dec shake out.
AUY – AUY Popped on earnings 2 weeks ago and when Gold sold off further, it simply drifted back to the 50sma, but found support and reversed there. This is a good buy candidate if we have our lows in place, since it popped on earnings and didn’t sell off further than support so far ( I’d put a stop under the 200sma).
TRX – I Still own TRX, above the 200sma.
AUMN – I hate to say this, but I stopped myself out of AUMN, and I feel that I should have just left it alone this late in the daily cycle. It was a small starter position, average 28 cents, and I sold it for 25 cents when it broke this support ( the break is not shown here). I liked the July POP as a sign of strength, so I can always get back in if I need to.
