Wednesday May 8th – Could This Be It?

 

In yesterdays report, we were looking at a reversal candle that took place after gapping down Monday.  If it broke higher above the bearish wedge that I had been pointing out,  it would be bullish (rare),  but I used this chart to show that even after a strong reversal candle, price can just sell off the next day.

 

SPX – After the first hour of trading,  the SPX sold off and made a new low, so I captured this chart. This can continue lower.

 

SPX – The rising bear wedge broke down.  This is day 41, and we are watching a drop to a dcl , as expected.     This can drop further, so we’ll just patiently wait for a swing low to form.  Take note of this…

 

VIX- We have a volatility Index Break out.  Octobers break out started a major sell off into the end of last year.

TRAN – So far,  The TRAN dropped to the 200sma and bounced. TRAN and RUT ( IWM)  have been choppy and sideways, but they could break down if this selling continues, because the volume looks to be getting heavier.

TQQQ – A drop off of the top can be quick.   Did you know that The TQQQ took back 25 days of gains in 3 days off of the top.  Anyone that added near the top ,  thinking that a break to new highs would be extremely Bullish,  lost even more than the last 25 days.

WTIC –  I  was thinking that we have a reversal in OIL at the 200sma & 50sma, so I went long GUSH.   Oil dropped Tuesday, it did not break to new lows like the markets did.   Volume was a bit heavy though.  Today IS OIL INVENTORY,   so we’ll see how Oil plays out.   CAUTIONARY NOTE:  AT TIMES, OIL FOLLOWS THE MARKETS.  Watch that 200sma.

Gush remains above the lows too, but I closed my GUSH position for now for 2 reasons_

1.  The Oil inventory report is due & Oil can follow the markets lower

2. Miners did something interesting and I wanted to personally focus on the Miners Wednesday.

 

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GOLD DAILY – Gold has a swing low and it closed over the 10sma. It moved slightly higher Tuesday and a solid break of this down trend could indicate that an ICL is in place.  I think GOLD above $1300 is very promising….

 

 

GOLD AS I WRITE 12 Midnight Eastern time –  This looks like Gold wants to go higher overnight as an inverse H&S, it could run to $1300 .

 

 

SILVER  – Silver is pushing on the short term down trend line.  Silver did not move that much on Tuesday,  however…

 

MINERS DID!

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REVIEW FOR THE MINERS:

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I pointed out that GDX never broke above the 10sma to confirm the Daily Cycle,  so it was getting late as it dropped to a Day 42 low.  I said that this could be day 2, and We now have divergence at the lower lows too. This may pop higher…

I also pointed out yesterday that this could be day 2, and that Miners stalled under the 200 sma in a similar way in January. They had low volume then too, but it didn’t matter, they quickly popped higher with a surge of volume, so …

 

GDX –  So on Tuesday I mentioned in the comments that I bought JNUG early based on what was written above in yesterdays report and the weekend report  ( I was early , so it was a bit of a risk that I could get stopped out with a quick drop lower).  I bought due to Golds set up, cycle count , and low risk since I could use a tight stop at the lows.    The Miners were still trapped under the 200sma, but Suddenly Midday they began to take off higher, just like January.

 

GDX – It did close a bit lower AT the 10sma, but volume increased,  so I do view this as Miners putting in a dcl a week after Gold did.  I look at the chart of gold now, and see a slight undercut of that low too.  SO GOLD may be on day 3 also.

 

GDXJ –  GDXJ also pushed higher and tried to close above the 10sma & a down trend line.   So this would likely be a dcl in place, and day 3 was Tuesday.   The BIG  question is whether or not this is an ICL(?), or will this roll over as left translated, maybe by day 5-10?   We wont know until time passes, so I take the trade and watch it play out,  but remember…

 

Remember that this was in Yesterdays & The Weekend Report too–

 

GDX WEEKLY FROM THE WEEKEND REPORT –  We have seen Mild ICLs in the past, so this COULD BE the area that an ICL will form.

 

MINER APPEARANCES

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AU WEEKLY  – So doesn’t the weekly chart of AU look Bullish?

 

GPL – GPL ran up 116% from Jan lows and now has pulled back 61.8% perfectly.   It then regained the 200sma and moved sideways breaking a down trend when Miners made new lows, so to me, that Looks Bullish too  ( I Bought GPL yesterday too).  I Still own AXU too. 

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AG – This silver stock has lost the 200sma a couple of times now, but regained it again yesterday.

AG – A break of this trend line may be the start of the real run.

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So now we have a lot to watch going forward.

—  With the drop in Futures after Trumps Sunday Tweet about China,  It was expected to be a choppy volatile week in the General Markets.  The China Trade Talk deadline was Friday, a DCL coming due, and a bearish rising wedge playing out.  A sell off started.

—Oil was due for a low, and it may have one at the 50 & 200sma,  but the Oil inventory reports today and oil CAN follow the markets-  watch Oil.

—GOLD & SILVER looked bullish, but the miners broke under the 200sma to new lows last week.  I have pointed out the cycle timing at that low  (day 42)  and the Bullish divergence.  It is a buy as a daily cycle low,  and now we watch it to see what kind of progress it will make.

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So neither you nor I can tell Precious Metals what to do from here,  so our choice is simply this:

– Do I want to buy the lows now and ride it with a stop under the lows in case it has one final daily cycle lower?

– Do I want to just buy some better looking individual Miners,  maybe ones that didn’t break down when GDXJ made a day 42 low?

– Do I want to wait and see how it plays out,  knowing that an ICL should still give Miners months to climb higher, and you can enter later with less risk of a drop to stop you out?  The choice is yours, I am in  (again)  🙂

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Enjoy your Wednesday trading !

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~ALEX

 

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GOLD 4 HR CHART UPDATE – As of 6 a.m. Eastern Time , the inverse H&S Looks to be breaking out higher.

 

You may find some Miners set up like AUY, where they look like the lower low was really just a back test of the recent break out.  That is a good set up too.  It is quite oversold, and even if they just run to the 200 sma , that is a good trade.