July 12 – Enjoying The Ride?
When the markets can’t gain any upside traction and they rise and fall repeatedly, that is choppy trading. It can play on ones emotions if they pay too much attention to it day by day, so we’ll discuss the current choppiness and review our expectations…
SPX – Nothing has changed with the SPX, stops would be raised anticipating an eventual dip into a dcl. This looks like it will be right translated, so the next dcl can be bought with a stop, expecting another run for the highs. This also may keep slowly climbing higher and just back test for the dcl.
WTIC – Oil also popped a bit higher on day 25 and has broken the down trend & other resistance. Notice how price acts around the $60 area on this chart. That is what we are experiencing now.
USD – The USD dropped to the 200sma & bounced, and that bounce didn’t help Gold. The USD may just chop around like it has in the past, or it could even run higher. We’ll have to wait and see.
GOLD – I drew this today, and it basically looks like Gold could have a lot more chop left in it if this flag plays out. Drawn this way, we aren’t at the APEX yet & gold could drop if the USD pops. This would match the USD reversing on that 200sma. So this BIG FLAG was drawn from top wicks to bottom wicks. However…
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GOLD – If I cut those ‘wicks off ‘and draw it this way, it looks much closer to being ready to go. We are at the Apex. I guess time will tell, but if that is a new DCL, we’d be on day 7. Breaking down below $1380 from here would be confusing, I expect this to break out like a bull flag should (higher).
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SILVER – Silver remains basically the same, and remained over the 50sma. .
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YESTERDAY I WROTE ABOUT THE GAPS IN 2016. The price would POP with a small gap, and then drop the next day or 2 as you can see on this chart. It seems that this is what we saw Thursday. It can be a tough ride day by day.
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GDX – So GDX gapped open Wednesday, and tried to close it Thursday. We could still see more downside & chop, even putting a small handle on this small cup because…
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GDX – I also mentioned yesterday that with many Miners, I see divergence in the MACD & RSI, and breaking to new highs at this time can be tough. If we had a large surge of volume and a strong up day, the RSI could curl right up with price.
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So at this point, the set up remains bullish in the Precious Metals sector.
With the recent ‘Choppiness’, I’ve been asked a question by a few readers about whether or not I can see any way that this would fail? “This set up seems too perfect, too good to be true. I feel like everyone is looking at the same thing, so Can you see any way that it could fail?”
Well, I certainly would hate to panic anybody, because this is an excellent set up,but the answer to that question is, ‘Yes, of course there is always a way that a trade set up can fail. NOTHING is 100% in trading, but the odds certainly are in our favor‘. I will have to answer that question in more detail in the weekend report for all here. I feel that if I have 1 or 2 people asking me something, there is a chance that 10-20% of my readers may have the same question and just are not asking. Do not worry at this point, the set up remains Bullish, just a bit choppy. I feel like there is only a 5% chance that this could fail. I have shown the Bitcoin run & other bull runs like AAPL, NVDA, NFLX, etc in the past, to show just how choppy a Bull Run can get. It is Bullish unless it breaks apart of breaks down.
BITCOIN HAS BEEN A VERY CHOPPY BULL RUN – Look at some of these Drops. They usually took place before a nice launch higher.
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Think about this: People are now concerned and nervous holding Miners, but this is while GDX & GDXJ are near multiyear highs. That is a bull run for you 🙂
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GDX & GDXJ – At 2&1/2 yr highs, a choppy flag formation cannot be ruled out after breaking out of this base. This is boring, frustrating, and on a day to day basis, it concerns many traders. This remains bullish above this break out.
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We’ll see how the final day of the trading week plays out shortly, enjoy your Friday trading!
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~ALEX
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#1 – GOLD LIVE AS I PROOF READ FRIDAY MORNING – This is how Gold looks this morning ( 6:20 Eastern Time). It can move higher, but at the same time …
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#2 – GOLD LIVE AS I PROOF READ FRIDAY MORNING – I can see that as a mini bear flag with a downside target back at the lows near $1380ish ( USD Bounce?). That is another $20 down if it happens, and that will make many Bulls nervous.
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UNFORTUNATELY With this chop, A flag may form on GDX / GDXJ – , because there is still room to drop here too. We are near the GDX highs.
GDX & GDXJ – From the point where we are now, GDX & GDXJ are breaking up above the prior highs from a multiyear base. These formations usually continue on to former highs, making a ‘Cup’ or a ‘Pan’. This is how I expect this to play out, and if it does, our accounts will reflect excellent gains, if we don’t bail out too early. Use stops, raise stops, and ….Enjoy the bumpy ride until we get to our destination.
