Friday March 29th – The Game Plan
It doesn’t matter if it is a Chess Game, a Football, Baseball, Basketball game , business planning ,or the Stock Markets- I have never known a winning team that did not think ahead and have some kind of a game plan. That’s what Fridays report is going to discuss with the Precious Metals Sector…
It is Friday, the last day of the trading week, and I just want to take a look at the Precious Metals sector. With yesterdays sudden drop, it’s good to think ahead about what should be an excellent buying opportunity as we approach an ICL. It can lead to making some very good gains in 2019. Let’s discuss that sector…
.
GOLD – This was in the Gold report yesterday…
GOLD #1 – So we got the drop, breaking the 50sma, and that should be the start of a sell off into the next dcl . It will also likely be an ICL since we are 7+ months ahead of the Aug 2018 ICL.
GOLD #2 – Back in late February at the ‘peak’ , it seemed like too much of a drop for such a bullish GOLD to do the trend line to break. As price has chopped sideways, the trend line moves higher, and now a trend line break looks much more possible or achievable, even on the next drop.
GOLD #3 – I was just looking at past sharp drops heading into the ICL, because some people like to jump in ‘short’ right after or during this sharp drop. I do think the sell off has started, but it’s good to know that it can chop sideways and then drop (blue arrows) or just follow through & drop from here (purple arrow), as seen on this chart in 2018. Knowing that can help your ‘shorting’ game plan.
GOLD : THIS SEEMS UNLIKELY AT THIS POINT IN TIME- We saw a similar loss of the 50sma in November (purple arrows), which recovered for days and then crashed for 1 day below the 50sma again( green arrow) and recovered again. If that happens here, It would seem that Gold is VERY STRONG, but it is more likely to bounce, back test , and roll over.
SILVER #1 – I have discussed overhead blue line resistance on Silver, and the support of the yellow base. Well, we are ALREADY at what would be support. If we are going to continue selling down to an ICL…
SILVER #2 – It is possible that with Silver, it breaks down as a head & shoulders. See the chart. IF IT JUST HOLDS UP AT SUPPORT WITH SIDEWAYS CHOP during an ICL sell off, then Silver is very strong. A drop back to those lows will set up a very good buy opportunity.
SILJ – The Junior Silver ETF sold off below the 50 & 200 sma, and volume was big. The divergence of the RSI & MACD was already showing weakness, and this actually looks like it could sell off to the base lows again too. That would be bad for Silver Miners.
GDX – Miners gapped down, after returning to the highs of the intermediate run. With a day 16 peak, this will become L.T. if the selling lasts 32+ days. A drop to the 200 sma should be expected, and there was a gap left behind at the 200sma. Look at the a-b-c type sell off in October to November, and I would anticipate something like that.
GDX – Again, for those that like to go short right away, or even jumped in JDST or DUST Thursday, as long as you know that Choppiness can follow that slam, that will help. So we could either see something like this after a tag of the 50sma or GDX may cut right through that 50sma. Time will tell, but it does look like the sell off has begun, I’d look for a drop to the 200sma.
.
GDXJ also has a gap near the 200sma.
.
I will discuss a few more thoughts below. Currently I am only invested 40% and have 60% cash. I own a few MJ stocks and bought a small DUST position to try to hedge my AG position while I examine how Silver & Silver stocks are going to react. As my AG sells down, DUST should at least ease the pain. I will discuss AG below too.
The selling could last off & on for a couple of weeks in Precious Metals, and there will be other trades along the way. It has been requested that I still post trade set ups for the traders, but let me tell others this…. ‘Holding cash can be very rewarding if you are trying to just be patient and ready to BUY at the bottom of an ICL sell off. In a move out of the ICL, Miners can double & triple under the right conditions. After such a nice run in 2018 to now in the precious metals sector, we saw GOLD likely completing that large Base. We’ve seen GDX ‘shake out & recover’, it is exciting to think that we are going to get a pull back before what should be an even stronger launch higher. The next ICL can offer some trades that will make excellent gains’.
You definitely want Cash to buy with if we get a drop into an ICL. The recent run in 2018 to now may be small compared to what follows.
I AM TRAVELING & WILL BE AWAY ALL SATURDAY AND SUNDAY MORNING, and it will be impossible for me to write the weekend report early. I am hoping to have it released by Sunday night ( U.S. Time). This is basically a preview of the Precious Metals sector to hold you over until Sunday. 
.
Enjoy your Friday trading!
.
~ALEX
.
So at this point, I just want to discuss a few Miners and discuss what a game plan could be as we anticipate a sell down. Obviously we will need to adjust as we actually see how these sell off, but this is a way to prepare ourselves mentally to buy if we get a sell off that looks bearish.
.
AG – I bought AG near support and expected it to hold up. Yesterday Silver and SILJ took a hard hit and it makes me wonder if Silver is going to drop all the way back to the lows. If it does, what will happen at support for AG or some of the others? I bought a small DUST position as a hedge until I figure out whether to sell my stake during the next few weeks and re-enter later or try to ride it out. I WILL NOT ride this back to the lows near $5. Support must hold.
KL #1– Last September after losing the 50sma, KL was a buy at the 200sma, and it ran up 100%. Yesterday it gapped below the 50sma and was down another 6%. CAN IT REALLY drop to the 200sma again? That would definitely be a gift and it is possible…
KL #2 – In an ICL drop, anything can happen, so look at the chart. KL has already dropped $6 from $36.71 to $30.78 yesterday. The 200 sma is another $6 down. It may or may not happen, but having a game plan helps, because if this drops from $38 to $24, it will look like something is really wrong. KL dropped $2 yesterday alone. Dropping $6 more is not impossible.
MAG #1 – MAG has had equal dips on the run higher, as shown. This is normal bullish action, but a deeper drop is evidence of the start of a correction. The 200sma could be 1 target…
MAG #2 – Normally, I’ve seen Cups simply form a handle as shown here. That may happen, but if Silver crashes down to the bottom of the Silver base, Silver stocks may take the ride down too. If MAG drops to the 200sma as seen in the chart ABOVE, that will be a gift of a buy.
So I will be focusing on Miners during the pull back and looking for entry points when the selling dries up. WE MAY GET BOUNCES until then, but if this is the selling that leads to an ICL , they wont last long. I will continue to monitor this sector daily and keep you informed.
.
ACB – ACB & HEXO looked like they back tested support, so we’ll see if this area holds up
.
HEXO – This was posted at 10:30 a.m. and it held up all day.
HEXO CLOSE-
CTST – A nice bullish set up, but earnings were due
CTST – This is what an earnings Miss will do . It will resettle, maybe dance around the 200sma and start to shape up again later, but those knee jerk earnings reactions can be ugly. It is best to know when your positions are due for earnings and be prepared ( sell some?).
Other MJ stocks were mixed, some higher some lower.
.
Finally, I am still watching BITCOIN, and it really looks ready to break higher from this base, but many of the Blockchain stocks are less than bullish looking ( MARA, RIOT, etc, but XNET looks good). Other BITCOIN Stocks should fair well if it breaks higher, like BTCS. GBTC , etc. Enjoy your Friday trading, but remember that for some here, waiting with some cash to deploy in Miners in the future can be very rewarding.
