June 4th – A Break Through

Monday had a lot of follow through action with the precious Metals Sector, so we’ll briefly review the markets and then discuss the Precious Metals with much more detail.

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QQQ – I’ve been saying that the Markets are due to bounce for a couple of days, but it is struggling to bounce.  I do expect one, but it needs to be watched, since it may just be a back test.  QQQ crashed Monday, and that may be a capitulation for now.

DJIA – The Dow was able to close green after printing a DOJI candle, so we’ll see if we get that bounce this week.

WTIC – Oil put in a DOJI too, so it may be ready to bounce also?  The OIL / Energy stocks seem to think so…

 

OIH  – OIH, XLE, and XOP did close slightly Green, so on the bounce I’d watch that 10sma. I was asked “Is this reversal a good buy?”   It is considered ‘a buy’ in a way, a reversal can be bought with a tight stop, but it may  or may not lead to good gains or any real follow through.  If someone buys-  they should use a tight stop, Raise your stop over time, sell a pop, etc ,  but I am personally trading the Miners.

 

OAS  – Some of the stocks aren’t  breaking down nearly as bad as Oil has, but remain in a base and actually a few do look Bullish at this point.

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PRECIOUS METALS

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REVIEW:  Recently in my reports near the day of the FED MINUTES,  I pointed out that GOLD bottomed the day after the FOMC MTG, and then with Fed Minutes,  it also reacted bullishly that day, with a higher low, so I felt that the ICL may have been in place.  This weekend  I pointed out that we have confirmation of that ICL being in place- this was discussed in the weekend Big Picture report.  How was Monday?

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GOLD  – Day 14 was a higher low at FOMC Minutes.  Was it an early day 14 DCL or just a 1/2 cycle low? Maybe it was a dcl,  but honestly the thing that really matters is that  THE LOWS are in place ( ICL) and this is a strong move higher.   With an ICL, we don’t worry about the choppiness as much, the lows are in place .  These ICLs only come twice a year, so the  Lows should be in place for Months now.  THAT IS WHY I FOCUS ON THE BIG PICTURE DURING ICL PERIODS.

 

SILVER – Silver is breaking higher and silver stocks should really start to move when Silver does.  Silver can make fast gains and you can buy  …

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Silver can make fast gains and you can buy USLV ( 3X)  or AGQ  ( 2X) for added leveraged gains on Silver.  Honestly,  Silver Miners often make great %-Gains, but there is added risk of bad news, etc.

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FOR MINERS:

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PLEASE NOTE:  GDX GAPPED A FEW TIMES IN 2016 after both ICLs,  but they DID NOT ALWAYS FILL soon after.  Waiting to buy the gap fill would leave you behind, especially in June.

 

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GDX #1  – GDX is launching like a rocket, and I would say that at least the first gap does NOT have to fill.  THE BIG QUESTION:  Will this just rip higher with short covering and buyers piling in for fear of missing the move like 2016, or will it chop around & consolidate these gains during a market bounce and fill a gap or 2?

 

EXAMPLE GDX #2 –  Yes, I’ve said that we  could see a runaway move leaving chasers behind to buy later like 2016 (see the chart) , so you want to own some Miners by now in case that happens, but also …

EXAMPLE GDX #3 –  I can picture this normal back test of the 50sma, also being a gap fill, and forming an inverse H&S  at the next dcl.  Either case is entirely possible, so how do traders handle that? …

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So instead of the small picture, focus on what I have said about the Big Picture at an ICL…

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GDX – So instead, focus more on the fact that we have an ICL confirmed in Gold,  the Miners bullishly have much higher lows than September, and they are close to fully confirming their ICL too.  The gains over the next few months could be VERY BIG, but only if you are invested in them.    🙂   Those GDX ICL September  lows of 2018 were Never broken  (ICL).  May lows of 2019 may Never be broken (ICL) too.  These Higher lows are bullish and I have discussed this base set ups potential  many times.

 

Note:  So I have been encouraging for weeks that we should OWN SOME miners, and add later.

1. It has been choppy and NOT EASY, but  I’ve said that some may want to just start small, and add later.

2. I said that I thought that Silver Miners will probably do the best over time too, though some Gold stocks like KL may out perform again too.

3. The idea is to at least have a small basket of positions that you can ride if we go straight up, or add to if we dip and chop.  That way you are covered for the above GDX chart #1 & GDX chart #2.  I will continue to point out the lower risk entries as the days go by, but I did already point out many along the way  ( KL, MAG, GFI, etc.)  I will discuss Miners further at the end of this report too…

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Look at that 2016 run of GDX again – The run out of the 2016 lows left many behind , because they ‘feared a pull back’ & ‘waited for a dip’.     ON THIS CHART IN 2016, Which dip on this chart do you think they were comfortable buying in 2016?  No dips were big enough.  Here at Chartfreak, we were buying at the lows and individual miners all the way up. Gains were huge.   I will discuss this at the end of the report too,  since we COULD see a great move similar to 2016 again.

 

GDX WEEKLY  –  The Big Picture is shaping up Bullishly, as expected.

 

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So I will continue to discuss Miners below, since many would like more information in this area.  I DO NOT want to make anyone paranoid, but I have to repeat the cautionary reminder like:   Some individual Miners could have a bad reaction to bad news, maybe a Mine floods, a public offering under the current price is announced, etc.  There is always risk, so to minimize risk,  buy a small basket ( or an etf, like GDX or GDXJ) and use stops.  Keep position size reasonable, based on your own risk tolerance.  Doing this, you may be able to just relax and watch your miners gradually chop higher over the next few months.  There are More charts at the end of this report.

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The FED speaks this morning,  so will that rally Markets? Will it stall Gold? Time will tell.

FED SPEAKS, CLICK HERE TO READ MORE

Enjoy your Tuesday trading and as always, thanks for being a Chartfreak with me!

 

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~ALEX

 

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LET’S LOOK AT SOME MINERS, SO I CAN GIVE YOU SOME IDEAS OF WHAT I AM LOOKING FOR AND WHY I PRESENT DIFFERENT MINERS AS BUY OPPORTUNITIES.

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GFI  – SUPPORT AREAS: You may recall that I chose GFI as a buy here 2 weeks ago, because of the reliable support level and high volume reversal. I said that this is showing strength despite the choppy sector, because it cannot even fall to the 50sma. This was a buy.

 

GFI  – A break out was also a buy,  so these are things to take note of, because…

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GFI  –  The strength during the tough choppy times can lead to  EXCELLENT follow through, as seen here.

 

IN THE WEEKEND, I POINTED OUT ANOTHER MINER WITH A WEEKLY LONG TERM SUPPORT AREA with this BTG WEEKLY Chart.

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KL & MAG  –  These both had higher lows while Gold & Silver was selling off, so I featured them early as bullish and   ‘Buys’ too. KL could be bought on a break out, and MAG was a buy later…

 

KL  – KL broke higher, did a mini shake out, and is now taking off  to new highs. THIS IS A BULLISH CONSOLIDATION that did not sell off  to new May lows with Gold. I can see KL running to %50, $60, and so on.

 

 

MAG – Now MAG is breaking out after slightly piercing the 50sma Friday. This will make new highs soon too. If it back tests the 50sma after Fed Powells speech,  BUY IT 🙂

 

 

MAG WEEKLY BIG PICTURE – And then when you look at the Bigger Picture, you can see these as leaders.

 

 

SBGL  – SBGL has been a bit choppy for 2 months, but now broke from a descending wedge with a good 5 or 6 day rally. Look how quickly it picked up speed & overtook the 50sma Friday & Monday. Is this a good company to own for a major rally?  Is it overbought?  Read the chart…

SBGL  –  That recent strong rally  looks like it may be just starting to push up from within a large base.  Look at the great run of 2016 and notice how  SBGL bottomed early in Aug 2015.  It was choppy, and then became a rocket ship.  Today it bottomed in Aug or 2018 too, has become a bit choppy, but upside potential may be massive, if we are entering a major rally.  This is just a base, and SBGL has more than doubled since last August already.  BUY A DIP or take a small position and add over time.

 

EXK  – A Silver stock.  So when I see the beaten down Miners just getting going,  I see the potential gains ahead and just start a position. Look at the sudden burst of Volume in EXK. Whether it is buyers piling in or short covering, that doesn’t matter to me – this happens at lows and at the start of strong moves.  Let’s REALLY look at this move in EXK…

 

EXK DAILY  ( Typo on the chart, not weekly)   –  FOCUS ON THE BIG PICTURE, USE STOPS IN CASE OF A BAD DROP,  & TRY NOT TO FOCUS ON THE WIGGLES.  Look at our recent move and I compare it with that sudden POP in volume in 2016 ( green arrows), Silver looks ready to run now and these Miners should do very well.

FSM  –  Very oversold, FSM is just getting going too,  so if you wanted a Miner that is improving but not over-extended,  this could be the next bubble to float to the surface.  It hasn’t really broken the down trend yet,  but let me show you why I think this is a buy with a tight stop at last weeks lows…

 

FSM  –  FSM got trashed recently, but Silver stocks did that before the 2016 run too. Miners were hated and everyone sold them. This may be THE LOWS for FSM, so it can be bought with a stop under last weeks lows.  This ran roughly $2 to $10 in 2016.

USAS – I posted this as a buy Monday in the live trading area below the report. Read the chart…

 

 

USAS Big Pic  –  THIS IS BULLISH.   Silver & Silver stocks like EXK, HL, FSM, etc has been crashing to new lows, this Silver stock did not (similar to MAG & KL). When Silver runs, this is already ready to go.

 

VGZ  BUY last week  –   So this was at the lows and was a buy as it broke the down trend.

VGZ  MIDDAY  – I posted midday that it was cutting right through the 50sma, up 5%.

 

VGZ  – Closed up 12.5% and broke above the 50sma. VGZ is up about 35% off of the lows in a week!

VGZ  BIG PICTURE – And I had this in the weekend report.

AUY – Also breaking from a wedge, AUY is moving higher. It is hard to buy once they get away from their lows, because we fear a double bottom pull back  ( And it can happen). Someone could start a SMALL position & add on a dip or break out of the 50sma?  Here is why I like AUY…

 

AUY BIG PIC – It is really just getting going too.  Not buying near the lows in 2016  would have been regrettable.

 

CDE –  Near the lows, I posted this Monday roughly an hour into the trading day (and tweeted it out later). It broke the wedge and volume was surging.   CDE is likely a BARGAIN  UNDER $3 before a Major run in Silver.  I think so…

 

CDE – I cannot promise you the same results as 2016, but wow!  Currently we have RSI divergence at new lows and CDE is a well known Silver company.  $2 to $18 in 8 months of 2016… Enough said  🙂

 

See also AXU ( also a buy recommendation here under the 200sma), ALO, HL, ASM, EGO, as double digit gains out of the lows.  HL is just starting , but had a nice pop.

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AKG –  I posted this reversal in the weekend report.  It looked good and then out of nowhere  ( I couldn’t find any news at the time),  it dropped Monday…

 

AKG –  It made NEW LOWS 🙁  and then recovered, so that was an example of how tricky these can be.  It still looks good since it recovered, but some may have bought it and stopped out with a tight stop.   Again,  I don’t know why it dropped, but it looks ok again.

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URG – I just wanted to mention that Uranium Miners looks to be setting up too. I am focusing on Precious Metals mainly, but thought that I would mention it.  See  UUUU, URG, UEC, DNN, CCJ, etc