Friday May 7th – Jobs Report
The General Markets finally had enough follow through to stage a 3 day rally out of the lows. I have been watching the 50sma and the coming Jobs report. That report is released before the Opening Bell, so we will know soon enough if the Markets like what they hear. Let’s look at our charts…
SPX – The jobs report will be released before the market open, let’s see if the SPX can either ‘tag’ or get through that 50sma, or will it sell down?
VIX from yesterdays report: I said , ” There is a chance that this VIX tags its 50sma, when the SPX tags its 50sma, then we’ll see if they reverse or break through (Jobs report Friday).”
VIX – The Vix did reverse at its 50sma Thursday, so again, we’ll see if Friday brings ‘market gains’ or ‘market volatility’.
Maybe today, after that Jobs report, we’ll get a glimpse of what the Markets really are made of under the surface.
WTIC – I really do not think that Oil will bounce very much. Cycle count has it on day 22 of what’s usually a 30- 50 day cycle! That gives the possibility of a lot of downside. And lately the Markets have also done what Oil has done, so…
OIL DROPS & THE SPX DROPS TOO? – If we are going to get 2 legs down of equal length, what will that do to the SPX? Things look bearish, but I am not short, I want to see how this plays out on Friday.
Basically, I am focused on Miners, but I’m also covering the markets, just in case they pull a surprise to the upside after this correction. At this point, it is a 3 day bounce after a big sell off in May. In the past, summer trading has not always been a great time to be in the General Markets ( “ Sell in May and go away ” is the famous saying), so I just want to keep an eye on this area and see if a continuation on the down trend takes place.
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USD – We had a reversal in the USD Wednesday, and then Thursday the dollar was rejected at the 10 & 50sma. If the USD keeps dropping, that may give Gold a little more upside.
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HOW ABOUT THAT YEN? Remember that the YEN often moves the opposite of the USD, and the same as GOLD. It is at resistance and it may be ready to break out now. IF IT PULLS BACK, WE COULD SEE A GOLD PULL BACK to DCL. I WILL BE SCREAMING “BUY THAT DIP if that happens!!”
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THIS IS A RUNNING CORRECTION. They often leave people behind, as hey wait to ‘buy the dip’ that never comes. Is GOLD doing that now?
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GOLD – Gold actually had what looked like possible ‘reversal candles’, but then it followed through higher with that USD reversal / rejection . Gold is running away and not letting those waiting for a pull back enter comfortably. That MIGHT continue as a running correction – we’ll have to wait & see.
GOLD – This could even form a bull flag and just continue higher. THIS is the reason that I have been saying that you at least want to own some Miners, and add if we do get the dips.
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SILVER – Silver is trying to break out, and the volume is very good. I know that some Silver stocks seem to be lagging or slow, but it could be a great buying opportunity when we look back later. I think that owning Silver stocks will pay off down the road.
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Often I base my trading on volume, but I wanted to show you how GDX & GDXJ work. After the close, I have always noticed that they add a load of volume ( could be dark pool trading, etc, doesn’t matter). My point is that you can’t trust GDX if it looks like light volume, I have seen them add 10 million, 15 million, and 20 million AFTER THE CLOSE. I have heard some people say, ” Volumes on the way higher is light, I’m selling my positions”– And then the Markets add volume at the end. Let’s take a look…
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GDX – This was GDX when the market closed. I saw 28 million 1 minute before the close, and then…
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GDX – They added 20 million at the close. So if you see GDX or GDXJ rising and volume looks light, remember that they could add 10 to 25 million in volume at the close. It is very deceptive, but it is an adjustment that I made a long time ago.
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So now I am just going to COPY exactly what I wrote in yesterdays report, because it still applies and is a good reminder. The following was in yesterdays report as to how we could see this first daily cycle play out.
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GDXJ #1 – If we ever get a pull back 🙂 a tag of the 50 or 200 sma & reversal could be a buy.
GDXJ #2 – Inverse H& S formation, where it gets a bit choppy again? This is becoming least likely until the 2nd daily cycle.
GDXJ #3 – We could see a repeat of that small flag ( this time to the 50sma), one similar to the Feb dip. I can see this happening, but so far Buyers keep stepping in.
GDXJ #4 – So the ‘lock out’ runaway move is not out of the question, and that is why I have been saying that you should own a few Miners at least, and buy the dips when possible. This forms a CUP, and a handle can be the dcl.
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The lock out’ runaway move:
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GDXJ 2016 – Another look at our 2016 run shows sort of a runaway move that locked out buyers waiting for the big dip to buy. Notice that it often had a sell off day big enough to wipe out the prior days gains. Those were big 1 day drops ( possibly scaring people out ), but within 1 or 2 days, it was at new highs again. THAT is why that move left people behind. A Big down day scared people out, but then the dip was too quick to buy. So we need to try not to let a big down day or 2 affect our Big Picture view.
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So there are many different ways that this can play out in the Precious Metals sector, and I’m talking about Bullish ways. I feel that the ICL is in place and GOLD has been strong. Fridays Jobs report may cause a dip, right? It may just be a short lived dip, but any 2-3 day dips may just be a good place to add or ‘buy that dip’ 🙂
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I’ll discuss a few trade ideas below, Enjoy your Friday trading!
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~ALEX
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LODE – Lode is hanging around near the lows, but we had a small discussion about it in the live trading area. A long base like this can eventually run higher ( Like my EDXC & ENPH trades). If we are going to have a big bull rally, LODE will play catch up.
This was my 2nd BUY on ENPH in FEB 2018. The first buy was because of this nice long base .
It got very choppy and hard to ride, but I called it a BUY again at $6…
Today it is $15!! It got bumpy, choppy and rough, but WHAT A REWARD. PICTURE LODE doing this 🙂
EDXC – I was buying EDXC at 2 & 3 cents and put that in my reports. I liked the sector and the companies story. I said that this base would reward us one day. I actually held it for over a year+, and then it ran …
EDXC – Then we saw this. This is OVER 2000% from 3 cents. I got cute and sold early, but THIS IS WHY I WILL STAY IN LODE 🙂
LODE – Back to Lode at $0.18 cents a share. Let’s just say you buy $1000 worth, you get 5,555 shares. If it follows this chart and hits $1, your $1,000.00 becomes $5,555.00. If it hits $2, you have $11, 110. If it gets to $3, you have $16, 665. If it goes to $15 like ENPH, you …. you get the point. 🙂
LET’s LOOK AT MINERS & PROGRESS, TO BUILD CONFIDENCE
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This was the NEM BUY, when it showed strength in this pattern on a down day for Gold on May 17.
NEM -That is a very nice run. The MAJOR MINERS are probably being bought up by Funds, the Juniors will catch up. STAY FROSTY!.
MAG & KL are running straight up, that can give you confidence that this sector is bullish too.
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FROM YESTERDAYS REPORT ( For confidence)
AEM JUNE 1 recommendation – This inverse H&S was about to break out, and the upside potential looked great.
AEM – So far it is continuing on its way. Buy a dip or bull flag if we get one, this looks like the big Boys may be buying it ( Funds, etc).
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SO-LET’s LOOK AT OTHERS STILL CLOSER TO SUPPORT , AND THOSE CHARTS ABOVE MAY HELP GIVE US CONFIDENCE OF THE BULLISHNESS IN THIS SECTOR. JUNIORS MAY PLAY CATCH UP.
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SBGL – I like SBGL, it has actually doubled since the AUG lows. Currently it is Bull Flagging above the 50sma, so it can be bought there with a stop if you wish. And remember…
SBGL – The Big Picture on SBGL has a lot of potential. This was a rocket in 2016, $4 to $18.
USAS – WE SHOULD BE LOOKING FOR PULL BACKS TO SUPPORT. USAS is in a base and dropped to support on the 200sma.
USAS – The Big Picture shows the potential.
IF WE EVER GET A DIP, I WILL BE LOOKING FOR BULLISH SET UPS AND PLACES TO ENTER THAT ARE LOWER RISK. Of course I have to give the reminder that individual stocks have risk, so buy a small basket, or an ETF. If 1 drops and 4 go higher, it won’t hurt as much.
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I SEE GOOD & BAD EARNINGS, that’s why these markets are tricky.
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Look at ‘HOME’ – Down almost 70% in a day
SMAR – Earnings has some stocks popping & some dropping, so it is really a mixed picture. High Volume reversal after earnings, this looks great. It can actually be bought with a stop at the 50sma, but maybe not if the jobs report drops the futures down.
SNAP as a recommendation of mine May 29th, if it breaks out here. And it did…
SNAP – I do like those set ups ( similar to VSLR, FSLR, ENPH, etc), and once they break you move your stop at the break out.
So look at the SNAP BUY POINT again…
And compare it to my FSLR recommendation yesterday – You can see the similarity, and Solars aren’t following the Markets ( in case they sell down), and FSLR broke out and is above the 50 sma & the downtrend.
AND YESTERDAY I POSTED FR – This is a bullish set up & break out. It ignored the sell off and instead consolidated with a triangle flag.
FR – The follow through, so you can see that these consolidations and break outs can be good buys.
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URG – POP above the 50sma and Bull flagging. I will say that Uranium stocks have been a bit choppy though.
Let’s see what Friday throws our way with the Markets and Gold. If gold finally dips down, I will be hunting for bullish set ups after the selling slows down. If you are currently lightly invested in Miners, a pull back will be a nice opportunity to add. If it just keeps running, enjoy the ride.
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And this reminder: Some have said, ” I locked in profits, where do I get back in?” If we get a runaway move, it will be very hard to re-enter. I saw it happen in 2016 and it is best to at least have some skin in the game. Accept any draw down, as long as it doesn’t get below supports or stops.
