September 14th Weekend Report – The Bigger Picture View
If you go back and read what I have been writing daily about the SPX, I have been calling it bullish for over a week, and cautioned NOT to short this market. Notice what I wrote in Last weekends report…
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SPX WEEKLY SEPT 6 – The Markets broke higher out of the trading range that we’ve been watching. I would expect them to run to the previous highs next week and maybe into the Fed Week. After that, they’ll be due for a dcl, so we’ll see how this plays out. For now it is ‘Big Picture Bullish’.
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SPX WEEKLY – In my daily reports we saw the SPX in a trading range forming higher lows, so a break of the 50 sma was anticipated and then a run to prior highs. We are on day 28 and as you can see, we are almost at resistance and soon it will be time for a pull back into a dcl. This was a R.T. Daily and we have higher lows, so we could break out to new highs on the next daily cycle. 
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TRAN WEEKLY – The TRAN & RUT have been pointed out as at least short term bullish too. This could break out & run, since the stochastics is mid point. I have warned in the reports not to short this market.
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VIX WEEKLY – As the VIX drops to what should be support, the markets can ‘peak’ their daily cycle, and then as they drop to a dcl, the Vix will probably pop.
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WTIC WEEKLY – Oil is still a bit confusing. It actually looks like it wants to break down on the weekly chart, and we have a high volume reversal after breaking out early in the week. That said, Oil & Energy stocks seem to be telling a different story. Let’s look at the XOP & XLE…
XOP WEEKLY – With price dropping to a lower low, the MACD made a higher low (Bullish). It is also breaking over the weekly 10 ma with BIG volume and I remained long my Energy stocks.
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XLE WEEKLY – This looks as bullish as week 2 last December, and it didn’t stop there, so I am bullish & long these stocks for now. USE STOPS.
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AND THEN I SAW THIS …
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OIL PRICES CERTAINLY MAY POP ON THAT NEWS MONDAY
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USD – The USD turned down at resistance as expected and dropped last week. That did not help the Precious Metals like it usually does. You may recall that The USD was rising with Gold too, so the ‘opposite’ correlation that we may be used to has to be viewed as slightly irrelevant for now.
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COT – Gold dropped for the last 2 weeks and we finally see the Smart Money exiting some of their strong short position. It is a minor drop , but that is what we see heading into a dcl.
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Click to enlarge any charts
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GOLD WEEKLY #1 – Last weeks reversal on the weekly chart followed through to the down side. We are getting late in the daily & even the intermediate cycle. We may have more downside, but a low is due. READ THE CHART
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GOLD WEEKLY #2 – Since a DCL (Daily Cycle Low) is due, we should expect Gold to bottom & move higher soon, and that could happen around the FED MTG Wednesday. That DCL can be bought , but THEN WE HAVE TO WATCH IT PLAY OUT. We could rally to new highs again, since the last daily cycle is R.T., but we also could put in that a-b-c drop that I have been cautioning about, as shown here, with an ICL ahead.
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GOLD WEEKLY #3 – So here I am just showing some Fib numbers, but remember this too…
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GOLD WEEKLY #4 – I showed this last week, and this dips back under $1400 as a possible back test ( $1380ish). This is very possible, so we’ll stay alert. It would also give us an ICL about 6 months from the MAY ICL, and that is very common.
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SILVER WEEKLY LAST WEEKENDS REPORT – This was a LARGE HIGH VOLUME REVERSAL from overbought conditions, so a drop was expected.
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SILVER WEEKLY – Silver had a drop of over 3% this week too. I feel that we should expect more selling after a strong run like Silver just put in, so…
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SILVER WEEKLY – We could get a bounce after the FED MTG and then Silver may rally out of a dcl, but then become choppy on a weekly basis. THIS would represent a dcl, maybe just a 2 week (?) rally, and then a drop into the ICL. Just a guess, but it does fit the past criteria and a back test too.
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GDX WEEKLY – This is last Fridays chart and it showed that GDX could also drop down and back test the break out area. Here I showed it as an a-b-c drop , using a dcl as ‘b’, and then a bounce & another drop. That still may happen, but…
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GDX WEEKLY – GDX dropped so fast this past week (6.5%) that it could easily reach the back test area this week if Miners keep dropping. It is only about $1 to $1.5 away and GDX could EASILY drop 50 -70 cents a day, so we’ll have to see how this plays out. Look at the drop on May 2016.
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GDX WEEKLY – As pointed out in past reports, GDX could also give us something closer to this.
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GDXJ DAILY – And this week on a daily chart I’ve pointed it out this way, with ‘c’ acting as the next dcl. This could happen near the fomc mtg, the timing is right.
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The next 2 charts were in last weeks reports and they help us to see Daily cycle counts as being ready for a DCL. THAT DCL can be bought with a stop & moved a bit higher as it rises out of the lows. Then it will continue to be monitored as it moves higher.
GDX – GDX gapped up toward that 10 sma on what could have been day 2, but it rolled & sold off. I drew this midday, and it then sold off and closed under those ‘a’ lows.
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GDX – Rejected at the 10sma with a new low on day 29. This CAN BOTTOM AT ANY TIME. Friday would be day 30. I am showing a measured move possibility on this chart.
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So the General Markets are near prior peak and in the timing to start a drop into a dcl at any time, HOWEVER, they can run higher first too. We see room to run in the first chart of this report, and the Vix has room to drop, so again I would recommend that readers do not short this market.
OIL is puzzling. It looks like it wants to drop while Oil/Energy Stocks moved higher this week & Friday. XOP, XLE, OIH remained bullish looking, so we’ll use stops and see what happens.
Gold, Silver, and Miners are on day 31 Monday. They started to accelerate in their selling, and a dcl comes due right around the FOMC Meeting, so I do expect a buy-able low soon. It could rally to new highs or it may roll over & Sell off a week or 2 later, so it needs to be monitored. I may be able to tell what it will do after the bounce starts to take hold, and I’ll cover that in my daily reports.
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Enjoy the rest of your weekend, and rest up- we probably have a volatile week ahead of us with the FOMC Meeting!
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~ALEX
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