May 2 – Post Fed Trading

As expected,  The intra-day trading during the 2 p.m. Release of the Fed Interest Rate Decision  and again during Chairman Powells speech was quite eventful.  Let’s discuss what we have with the markets now…

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SPX DAILY  – We have been looking for a top to form around the Fed Meeting.   This is a bearish engulfing on day 37,  and I would expect these highs to be the peak for now and we should see the drop over time.

SPX WEEKLY  – So the SPX  Gapped higher in the morning and sold off after the Fed, as expected.  We now have a weekly reversal candle if this holds or sells off further too.   That could be the top for now,  with a new high   ( Bull trap) and then drop to a dcl.

 

 

 

TRAN – The TRAN already began selling last week, so this may be leading the way.  SO far,  the selling here has been nice & orderly, it is approaching support.

 

SQQQ for experienced traders –  This is an ultra short the Q’s,  and it has a reversal looking ready to move higher.   It is a bit risky trying to short a bull, but for those traders using the odds-  the odds do favor a pull back with this cycle count and set up.

 

SOXS WEEKLY (for experienced traders)  – SOX WKLY has a break higher too.  I am expecting a pull back in the General Markets.

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USD FED REVERSAL – The Dollar dropped, but reversed into the close.  This actually looks bullish with the Fed reversal, and this makes me think that maybe Gold will make a new low   (Silver & Miners did).

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PRECIOUS METALS

 

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Was there the anticipated volatility around the FED MTG?  Oh Yes there was!  Silver broke to new lows, Miners broke to new lows, yet GOLD held up, even above the 10 sma for the most part.  That raises  more questions rather than gives us clarity and the answers that we needed.  Another day or two may answer all the questions raised.   Let me show you something.

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GOLD DAILY –  If you worked all day and then saw this Gold Daily Chart at the close,  you might think,  “Oh good, nothing happened, Gold is at the 10sma and the Low from last week is fine.”   Well,  let’s see what happened intra-day.

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GOLD 5 minute chart – Initially it looked like a strong rally would take place  in Gold when ‘No Rate Hike’ was announced, and no doubt some Bulls started piling in, but was it that initial ‘head fake’? …

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That rally  started to collapse As the FED Speech started.  Powell discussed  “weak inflation” & Gold sold off .  The rally was gone  and that’s not all…

 

 

It Just continued to drop .  Well that ‘Rally’ got Ugly pretty quickly , and it looked like GOLD was doomed, but…

 

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DAILY CHART :  Some people got out of work  and this is all they saw on the daily chart.   What Fed Rally & Crash?  The daily chart of Gold at the close looks ‘ok’.    So for GOLD, it still may be a normal day 6, with the low in place.   SO FAR.

 

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THIS WAS GDXJ AS THE FED DECISION WAS RELEASED. This was a 5 minute chart and it also initially rallied.  I actually watched this real time and thought that we might just take off, but I knew that the Fed was speaking, and I really have seen this before.   These Knee jerk reactions often are false moves…

 

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GDXJ – This is what happened next.   The FOMC MTG is always a tricky time to be in Miners.

 

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What about Silver: 

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SILVER   4 HR Chart– Silver dropped to new lows during the sell off.

 

SILVER BIG PICTURE –  However even with that drop, this wedge and support can still be considered  valid, as long as it doen’t break down Thursday or Friday.  If it does fail, Silver could drop to the bottom of the base.

 

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Now let’s discuss what we might have happening here with this mixed picture.  FOR NOW:  IF YOU HAVE NOT ENTERED, OR IF YOU GOT STOPPED OUT,  IT IS BEST TO LET THIS SETTLE BEFORE RE-ENTERING. CYCLE-WISE, WE ARE DUE FOR AN ICL ON A WEEKLY & MONTHLY BASIS, BUT THIS CAN REMAIN TRICKY FOR A FEW DAYS.  LET’S REVIEW.

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GDX  – This was in yesterdays report.  It was “What if we break down and find the low after a shake out? It could be an extended daily cycle.”     GDX NEVER BROKE ABOVE THE 10 SMA.    This idea fits, even if Gold Bottomed & holds up ,  because Gold & Miners often bottom on different dates.  BUT WHAT ABOUT SILVER?  It made a new low with Miners – Can IT bottom after Gold?  YES, and I will discuss that later.

 

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GDX 3:34 p.m.  –  I posted this 1/2 hr before the close,  saying that if GDX can close above $20.50,  it closes back above that 200sma.   That could be a day 41 dcl,  since Gold held up.  Now we need time to see if this holds or let’s go.

 

 This may not have stopped some out, please continue to have your stop in place in case this sells off.

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GDX –  So with all of that intraday whip saw action,  GDX ran up to the 10sma, dropped and filled that gap, and even broke the 200sma and recovered.    So is that the lows on day 41,  because GOLD held up?  Tough call right now, let’s watch how this plays out.  USe stops, you can always re-enter later if it shakes out,  but now if it sells down deeply.  That RSI does look like it has divergence, doesn’t it though?

 

 

GDX  – This was in yesterdays report too, as if we saw a short 23 day daily cycle.  Day 23 would be a DCL?  I see this as less likely.  This would obviously mean more selling since we’d only be on day 18.  This is when stops will take you out and we can buy much lower.  How might this play out if it was day 18? …

 

GDX  – A break down and a deeper drop.

 

 

Before the close,  CAL wrote this in the comments.  That triggered a thought in me.   Click to enlarge if necessary….

 

 

That got me thinking:   Often we see capitulation lows when JNUG has high volume spikes in a sell off.  It may not be THE low to the day, but as you can see here, often when we see High Volume Spikes in a sell off, the sellers all leave at once and price goes higher in a day or 2.   That was a high volume spike, so that is encouraging for the Bulls, and something to look for too.

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Did we have all of our questions about the Precious Metals answered on the F.O.M.C.Day?  No, unfortunately we got the same old directionless whip saw,  with lows being taken out by Silver and Miners, and Gold holding up into the close.  So that leaves us wondering :

—  Is Gold the true precious metals set up, with a true low in place?

—  Could that high volume JNUG Spike indicate that this is just a shake out in Silver & Miners?

 

—  Will Precious Metals Miners recover or have they started a sell off that will eventually see GOLD break down too?

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  What about that question from earlier, “Can Gold bottom while  Silver & miners break down? I though Silver & Miners lead Gold?”  I will address that next at the bottom of the report,  but for now we need to see what Thursday does in this sector.

 

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~ALEX 

 

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GOLD ICL  DEC 2015 –  So here we saw a DEC 3 ICL in Gold,  but…

 

 

SILVER ICL DEC  2015 – Silver actually bottomed on Dec 14th, 7 trading days later.   So SILVER CAN break down after Gold bottoms like we just saw, and it can still recover later .  Gold was on day 7 here.

 

   MINERS Looked like they bottomed in November .  OF COURSE WE ALL KNOW THAT MINERS BROKE DOWN BRIEFLY AND BOTTOMED 1 MONTH AFTER GOLD & SILVER.   This type of confusing action,  with Gold bottoming, and Silver breaking down,  and then Miners dropping to new lows much later,  got everyone to throw in the towel and give up on Miners.   THEN IT TOOK OFF HIGHER.  We bought it and rode it higher here in January after being stopped out.

 

 

Trust me when I tell you that I had people cancel subscriptions, give up on Precious Metals, throw in the towel, etc with all of that sideways choppiness broke down.  I still remember the comments section too,  with  people screaming,   ” I hate this!! These Miners will never go anywhere.  No one likes Miners anymore,  they are worthless!”

Then Miners doubled, tripled, quadrupled, and so on.   DO NOT GIVE UP, REMEMBER THE BIGGER PICTURE…

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GLD MONTHLY – This Monthly chart shows years of churning & building energy in a base building process.   Yes, it is difficult trading these daily cycles. When this finally breaks out higher,  the gains should be very good and very fast.  That break out & run could come after the next ICL is defined.   This will be a giant Cup & handle.

 

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Side Note:  URANIUM STOCKS started to perk up again

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UEC – UEC reversed off of the 50sma and broke through the 200sma.   These have been very choppy and hard to trade, but this is a bullish set up.

 

 

URG –  URG has almost doubled this year so far, but again,  it has not been an easy BUY & HOLD.

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GOLD THURSDAY MORNING :  As I proof read the report this morning,  GOLD is selling down.   WATCH THE 1266.30 area ,  that was the day 32 low.   Is this day 39?  I do see possible divergence with this selling, plus the JNUG Volume spike would say that this is possible.      I Bought the lows,   we had a swing low, and that is what we buy-  however,  One must still allow themselves to be stopped out in case selling picks up,  and the low is not the low.   We can always re-enter when we get clarity after the Post Fed Selling finishes sooner or later.