July 31 – Fed Wednesday – Sshhh, Just Let Him Sleep
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I love the way Bears look when they are asleep. So peaceful. Let’s hope he stays that way. 🙂
FROM YESTERDAY: We could see a drop into a dcl, but it doesn’t have to be a very big drop.. his is what I wrote…
NAZ – As I continue to watch the General Markets chug along higher, The MACD went flat (Diverging ) as price reaches new highs and this really looks like a bearish rising wedge, so that leads me to think a couple of things.
1. We may not have that dcl yet, stops need to be under that recent swing low, and
2. That DCL could come near the 50sma like I originally thought. Therefore,
3. These markets may drop after the Fed. The MACD died.
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WTIC – Wednesday is the release of the Oil Inventory report. This looks Bullish with the break out above the 10, 20, 50, 200 sma & down trend line on day 8. We already had 1 false break outin July, but To back this up, Energy stocks, which have been sickly, also reversed sharply higher…
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XOP – I was focusing on Miners and then in our live area, Peter (Thx Peter!) mentioned the XOP & GUSH, as well as oil on day 8. Look at that bullish divergence! A deep new low in price with the MACD at much higher lows. GUSH is a 3x etf vehicle to play this. This is a low risk buy with a stop under the lows, and then raise it with price as time goes on…
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XLE – The XLE is holding the 50sma, also a buy with the current Oil set up.
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OIH – Even the OIH has a very strong reversal with strong MACD divergence. That means that many energy stocks must be reversing higher too? Oh yes they are…
DNR – Up 14%, but this is not extended, this is a buy. Buying this would not be chasing it… this is beaten down & oversold, so it can run like it did in March. This will probably be a shake out. DNR could do a quick run to the 200 sma, which is a 100% move.
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LPI – Another 15% gainer, this is also oversold and bursting through the 50sma, so Oil/Energy stocks are suddenly looking like bullish reversals.
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Are you drawn to Oil & Energy stocks? Now is the time to check your charts. Check your watch list, because they all started breaking out. I am obviously loaded up with Miners, but now we have an option if some of our Miners get extended and look a bit toppy. HOS, LPI, OAS, DNR, BAS, NOG, CRK, WTI (buy right now) WLL (buy right now) etc, all look to be bottoming. The Miners bottomed in May and have been rallying for 2 months. If Oil recovers, these beaten down energy stocks may snap back in a similar manner.
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WLL- Honestly, this is tempting. If I wasn’t heavily invested in Miners, waiting for another Pop higher, I’d be buying these at the lows. These look similar to the Miners in May at the ICL in some ways.
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USD – The USD does have room upside, but look at this move by the USD, and think about what your Miners have done as the USD ripped higher for 3 weeks. Precious Metals have resisted the inverse relationship to the USD.
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GOLD – This is SUCH a BULLISH looking chart, but You know how tricky Fed days can be shorter term. Anything can happen, even fake out moves in the opposite direction before the real move kicks in. That said, as I mentioned in yesterdays report, the last 3 Fed Days were Bullish for Gold, Silver, and the Miners.
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SILVER – Silver has formed what should be a Bull Flag if it breaks out higher, and this steady move has been…
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SILVER – That steady move has been while it chews through resistance that could have reversed it with the USD Climbing. Silver has been acting bullishly inside resistance with a rising USD, rather than dropping down.
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GDX – We reached $28, but $30-$31 is the next likely target.
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GDX – Which of course matches this chart expectation from MARCH that we have grown to love. Then a dcl would form the ‘4’. It is a FED DAY though, so we have to cover the opposite case scenario again too.
GDX – A quick POP higher, and that peaks the daily cycle. It would still be right translated and the dcl (50sma?) Would then be a buy for the run to $31 in the next daily cycle, which also matches the chart that I used below this one…
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That matches the chart that I used here. So it is a FED DAY, I expect a rally to continue on Wednesday or Thursday, but this chart is possible too. This would be a DCL and then a run to $31ish. It remains bullish either way as a right translated daily cycle. Look over at the 2016 run, we did have sideways chop & a dcl on the way higher.
GDXJ – Day 20. So we had an ICL near Fed Minutes in May for GDXJ, then a 1/2 cycle low in June. A Gap & rally at the June Fed to day 23. then a dcl in July. We saw a rally and what I think is a mild 1/2 cycle dip now, so it would seem that we will make one more run higher for this daily cycle, and then the dcl dip. THAT WOULD BE MY BEST GUESS BASED ON WHAT I SEE IN FRONT OF US.
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GDXJ SAME CHART – Here I just want to point something out. Most of the daily cycle is sideways chop, and then you get a 3 – 4 day sprint higher for bigger gains. See the Blue arrows- gains come fast in 3 days. The FED DAY could release a 3-5 day rally, and then a sideways chop.
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GDXJ – Stepping back helps you to see what I mean. The bigger gains often come fast in a 3-5 day spurt. We should be due for a quick burst higher.
AUY – If individual Miners are any indication of what we will see with this bull flag in GDXJ, it does look good 🙂
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Fed day, what can I say? The Gold, Silver, and Miners charts are very bullishly set up, they have resisted the USD climb. It has just become hard to trust Fed Days reliably.
The start of another small rally may already have begun with the reversal off of the 13 sma, but trading still may be boring and choppy until 2 p.m. Eastern Time. Actually, there is a chance that we could drop & not even see a rally on Wednesday, but we could still GAP HIGHER Thursday, like we did in June with that continuation gap the day after the Fed. It is a Fed Day, so basically ‘anything can happen’. The set up is encouraging though.
At this point, all I can say is that I still have my Miner Positions, but along with that, OIL/ENERGY stocks also look very bullish (at least short term). If miners start to dip down into a dcl sooner than later, that may be a nice place to park some money for a week or so and see if we can squeeze some gains out of that sector too. That is an option, but for now I have stayed where I am investment-wise.
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Let’s see what the Oil inventory report and the FOMC MEETING can throw our way today! 🙂
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~ALEX
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MAG – This was MAG as a buy in Tuesdays report…
MAG – It is breaking out. This is stock had a great run and looks ready to go again.
NGD – I posted this chart of NGD in the live trading area, and it is a buy. It closed only 2 cents higher from here and a stop can be placed under the shake out lows (or APEX) .
NAK – NAK popped 65% Tuesday, so we have surprises to the upside in the sector.
USAS – USAS reversed at the 13 sma as a buy. This is a Silver stock, and I like it long term too.
HMY – This was in yesterdays report. I was pointing out the many Bull Flags popping up. They are a buy as they break out.
HMY – And HMY gained a bit more Tuesday as volume increased.
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GORO & THAT 200sma – GORO is still pushing along that 200sma ( Can we get a Final Fed Push higher?).
I had a good number of Miners in yesterdays report too, many do look good after the recent consolidation. Look for set ups where they have rested or reversed on the 10 or 13 ( even the 20 sma), they may even have formed a bull flag. Those seem ready to go. I’ve been watching RGLD, GOLD, AEM, AU, etc – and these Bigger companies are also in a strong rally. It is easier to buy a nice pull back to the 50sma, but our Miners are not doing that at all yet.
AU – This was a buy near the 200sma in May, but it hasn’t pulled back sharply for another easy entry. Now it needs to be bought near the 20sma & hope that it doesn’t drop to the 50sma. This is how people got left behind when they wouldn’t jump in at the May lows. Thankfully, we loaded up at this ICL, just like 2016.
