Tuesday June 25 –
If you re-read the weekend report, not a whole lot has changed on Monday. The markets actions, especially in the precious metals, does not leave me with anything new to say, except for maybe some stock picks. We have a runaway move that is due for a pull back that will not happen. 🙂 Let’s take a look at our markets…
SPX – After breaking to new highs, the General markets have stalled. Is this a top or just a pause? It is hard to know for sure, but here is a clue…
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VIX – Keep an eye on the VIX. A burst higher on the vix could cause the markets to sell off. We also know that the economy has softened enough that the FED now wants to cut rates, yet the Bulls think that ‘nothing has changed, well have 5 more years of Bull market’. Maybe we do with the Feds help, but only Time will tell.
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WTIC – Oil continued higher, and is heading for strong resistance. There has been a change in the relationship between Iran & the US, and it is affecting the Oil Route & gave us an early daily cycle low. For now, Oil should reach the $60 area , and will need to be re-examined.
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USD – The USD broke below the 200sma and continued lower. Gold continued higher. If that is a dcl on day 22 and this is only day 7 , The USD can drop much further over time. Day 7 or day 29? Let’s look again at the bigger picture…
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USD – The USD broke down & is dropping, this is very bullish for Golds Big Picture.
SHORT TERM: It is very oversold & could bounce & back test that 200 sma, but again, this may be very EARLY in the USD Daily cycle with more room to drop.
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GOLD DAILY – Gold just continued higher. I originally had a $1447 target, but I did NOT expect it to get there in 1 or 2 daily cycles. $1409 was 1 of my initial targets as a measured move for the first daily cycle. Since that has been surpassed , I have Fib extension numbers that I will give in this report. . $1447 was my intermediate target, but since this is more of a runaway move – lets step back again…
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GOLD WEEKLY: To break from a big base & over resistance, you need a surge of STRONG VOLUME to push higher. WE DEFINITELY HAVE THAT NOW.
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GOLD WEEKLY – Gold can run to over $1500 on this chart and not be unusual, so this intermediate daily cycle will likely take Gold to $1500-$1600.
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GOLD DAILY – These are my Fib extension ‘Targets’ as a measured move going forward
$1441 – $1452 , and $1462 for the short term.
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GDX – GDX continues to runaway, leaving those that waited for a pull back behind. We bought the lows, and I have continually mentioned NOT SELLING EVERYTHING, hold on to a basket, just knowing that this could happen.
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GDX – Not only are buyers flooding in, but ‘Shorts’ are capitulating. Those who shorted this thinking that it will crash, are deep in the red now. I drew a box around the 2016 runaway move & over-layed it to where we are now. It won’t play out just like this, but I am trying to show that shallow pull backs may be what we see for a while. Notice the volume needed to break through resistance from a base like this came in last week.
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We had another big gap in GDX last week, so I did think that this time that gap would fill, but Monday saw GDX & GDXJ & many Miners just continue higher. It defies logic to what many have known Miners to do, and those shorting each pop are being punished. At this point, it is often best to go back & re-read the weekend report for the Big Picture View. That is what really matters.
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I will have some trade ideas below, enjoy your Tuesday trading.
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~ALEX
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USAS LAST WEEK – I was looking for laggers to catch up, so I have posted this base of USAS repeatedly as a buy, and this is June 20 as the break out BUY. Notice that I mentioned HIGH VOLUME IN THE FIRST 20 MINUTES OF THE DAY. I love high volume before a break out…
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USAS – So the laggards are playing catch up. Look at that volume as it pushed higher over resistance. Let’s look for a couple more, as we continue to ride the leaders higher.
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EXK – EXK has been slow out of the bottom, but have you noticed the volume? THAT could be important, bulls and bears fighting, but shorts will cover & bulls will win, so I call this a Buy.
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GORO was a buy with this Big Volume POP & trend line break. If you don’t own it, let me show you how it is progressing…
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GORO – That pop was at the lows, then we saw a bull flag under the 50sma, and Monday it broke out. VOLUME is big, I think we have a battle of the bulls and bears, but the Bulls should win this one.
GORO BIG PICTURE- This is a Big Bullish descending wedge, and that Volume may be ready to push this up & through resistance. The weekly volume ( on day 1 of the week) is higher than the past years of an entire week. Wow.
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ALO – The daily chart of ALO broke the 200 sma Monday after crawling ( & some would say ‘lagging’ for a few weeks). The big picture?…
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ALO – This is a massive base and this weekly chart shows strong divergence for the past year. THIS IS A LAGGARD WITH GREAT POTENTIAL. It is a buy here, or wait until it gets above the $0.79 (50 week MA).
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NOTE: I love some of these charts. EXK & GORO volume flooding in is a bullish sign to me. That said: THERE IS NO GUARANTEE ON MINERS FUTURE PERFORMANCE, BUT I AM SHOWING WHAT THE CHARTS ARE POINTING OUT IN THIS BULLISH SECTOR. USING A STOP ON THESE MINERS IS IMPORTANT.
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HL – I liked HL as a bit of a LAGGAR still near the lows. It got above the 50sma when I drew this…
HL – Monday it popped & lost the 50sma, so I mentioned ‘watch it at the 10sma, this could be a shake out & recover the 50sma’. Losing the 10sma would be bad.
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HL – L recovered after bouncing into the end of the day. It is again above the 50sma . Most Miners are surprising to the upside now.
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HL WEEKLY – And HL is still very close to the lows, volume is increasing, and the potential is good.
Those are a just a few of the lagging stocks, still not extended and closer to their lows, that could play catch up over time. EXK & GORO are showing unusually high volume, and that can precede a move higher. ALO is still in the base.
