Fridays October 18th

Fridays report reviews the markets, recent stock picks along with new stock picks, and some additional information on the Precious metals!  Enjoy…

 

SPX – As we near the prior highs, the MACD seems weak and a small wedge has formed.  These can just cause minor pull backs,  so for now we could see a pull back to the 10 sma & then an attempt to break the highs.  This MIGHT eventually roll over as the 3rd daily cycle,  but it is too early to say yet.  I still hold long stocks in tech.

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WTIC  – Oil moved higher again on day 10, but …

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XOP – The OIL & ENERGY Stocks represented by XOP & XLE ETFs did not respond. I am not invested in this sector yet.

 

USD – The USD has dropped quite a bit, but GOLD could not break out above that trend line.  Now the USD is coming due to bounce.  I think we’ll see a back test  of the 50 sma and as it bounces, GOLD may dip to the ICL.

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  In yesterdays report I wrote:  ” It looks like we are going to get a bounce in Gold, Silver, and the Miners, but price should remain ‘heavy’ until the lows are in place.  We have overhead parameters to keep an eye on, and it has been choppy & sideways during this daily cycle.  The 10 sma, 50 sma, and trend lines remain overhead.”  

  All of that is still the case,   EXCEPT THAT SOME MINERS ARE NOT ACTING  HEAVY AT ALL.    Some Miners are beginning to look bullish, and I want to discuss this observation.

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GOLD  – Gold was rejected at the 10 sma again.  So far it is acting as expected, but it would need to turn down sooner than later.  The trend line would be a limit at how high it could go and remain normal action awaiting a dcl / Icl.

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SILVER  – Silver closed under the 10 sma and the trend line is right above current price.

 

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GDX – I have a day 7 peak and a day 22 low.  I do not think that the day 22 low is a dcl.  GDX tagged the 10 sma & dropped, and GDXJ did too.  So this all looks to be playing out as expected,  but I DO see some individual Miners showing Bullish Price Action.   I need to discuss that.

 

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IMPORTANT UPDATE : I mentioned yesterday that CDE, HMY, & AG were starting to look Bullish.  Ralph asked me what if Miners break out over the trend line , 50sma, etc?  Do we label it an ICL?   I wanted to give a thorough explanation, and I think that all should click on this and read it to understand my view of Cycles and where we are now.  An Intermediate Cycle contains smaller daily cycles. In the beginning, out of an ICL, they are strong & usually climbing higher. They peak after 2 or 3 month (daily Cycles) and the next ones sell down into the ICL.   This often happens within 6 or so months, and that is where we are now.  This is how I view the current set up…

 

GOLD  – This is what I think would be a likely scenario if we are to get another Mild ICL.  The low would still be ahead, but it may not drop as deeply as some prior ICLs.  It still COULD drop deeper in a flash drop v-bottom type low, but a mild ICL similar to the one in May would not have to. It seems that some Miners are already catching some buying.

 

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Could the ICL already be in place?  Do we have an a-b-c low & now where we get a break out & back test higher low at the fomc?  I have to doubt that.  That  recent low acting as the ICL seems very unlikely based on past ICLs,  but  it could be possible that some individual Miners may have their lows in place

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Next I want to look at and discuss the set ups in some of the Miners that look to be  strengthening, rather than weakening. I will give you some ideas that I have been thinking as this plays out.

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Enjoy your Friday trading!

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~ALEX

 

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1 Thing that I am considering: Some Miners went vertical out of the may 2019 ICL, yet others did not run well from the ICL in May. THOSE SIDEWAYS MINERS have consolidated for months now and may not need to sell off further. So some of these may be ready at any time.   Look at GORO—

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GORO  – I’m noticing that stocks like GORO did not have a big rally out of the May ICL, so it has consolidated for months.  It had strong volume Thursday, and that is not common in a final daily cycle / ICL drop.   Thus GORO may have its own lows in place now. If it breaks out, it is ready to act on its own  ( Like SBGL).

 

NSRPF  – Doesn’t this resemble what GORO did? It ran , dropped ran dropped & chopped.  It did not make it back to the  March highs. It chopped sideways forming a 4 month consolidation, but it started to break out NOW.   If Golds ICL is still ahead,  some Miners may still be ready to act on their own and just back test at the ICL drop ( fomc?).

 

SIMILAR TO GORO & NSRPF, WE HAVE HL , WHICH ALSO CHOPPED AND BASED OUT SIDEWAYS AFTER THE MAY ICL…

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HL  OCT 9 – Over a week ago I pointed out on this chart that HL looks bullish . A large base formed as price was bouncing between the 200 sma & 50 sma.  I said that I would buy it if it broke that 200sma & closed there.

HL   – Well it looks the same after 1 more week of chop.  Can it break down short term if we sell off?  Yes, but it also looks like it could break out. I am keeping my eye on this one too. I could picture a break out now & back test at fomc too.

 

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AU  – During trading Thursday,  I posted this observation.  Gold Silver & Miners were still under their 10 sma, but here I wrote about individual Miners Bullish action …

 

AU  – So let me discuss AU again.  If this was not a Miner,  let’s say it was a tech stock chart set up, I’d say that it was a buy.  It has a bullish MACD, an inverse H&S, and could be recovering as a shake out below the 50 sma. It could be bought with a stop under either moving average.  ( It dipped 30 cents into the close & closed AT the 50 sma).  There are others…

 

 

 

AG   – The down trend is broken, 50sma is recovered, this looks flat out Bullish,  despite GDX & GDXJ under the 10sma.  So I am seeing several SILVER Stocks that may be under accumulation as the sell off nears its end. (CAN it break down? Yes, but this is a bullish set up).

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CDE  – CDE is another of the Silver stocks and was mentioned in yesterdays report.  It is under the 10 & 50 sma & downtrend,  but it may have just put in a shake out low.    That would be an ICL for CDE alone.   This long sideways consolidation ( July – now) builds energy to give it a nice push when the break out occurs. And this is what I’m talking about…

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And this is what I’m talking about. When I look at this, I am tempted to start a small starter and add on either an ICL  ‘drop’ or a ‘Pop’ 🙂   A V-bottom drop from here & recovery would simply be a good place to add.

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AXU  – AXU is another Silver Miner. This one had a great run out of the ICL, $1 to almost $3.   Its very oversold & starting to show signs of strength. Selling near $3 and buying under $2 is a great trade ( Though I expected this to tag the 200 sma).  One could actually start a smaller position & add on a tag of the 200sma or a break of the 50 sma. 

 

 

NGD   – NGD had both a big run, and then a sell off and months of chop.  This doesn’t super bullish yet, but it did possibly shake out & attempt to recover.

 

 

 

HMY – I owned this on the first run, and did very well with it.  Now I want to own this on the next run too.  If I wait much longer, I might be buying it up where I sold it  🙂    That is fine, I didn’t ride it down & used the money for other trades like Shippers,  but if this breaks the 50sma, I may  just start my smaller position.  I can use a tight stop, OR  just add if it  breaks down into Golds ICL.  A tag of the 200sma would have been normal, but that may just happen another time.

 

 FINALLY – LET ME JUST THROW THIS THOUGHT OUT THERE AS A LESS LIKELY SCENARIO…

GOLD #2    With some Miners perking up Bullishly, as scene above, I want to show a 2nd scenario.  The ‘What if…?” IF Gold breaks that upper trend line & starts to run, that is obviously bullish, and then I’d have to view the final low of the sell off as the reversal candle 10 days ago.  This is less likely & hardly deep enough to be a textbook ICL,  and gold still looks set to dip lower.      GDX & GDXJ  put in lower lows Tuesday, while Gold did not.

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TECH

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TSEM  – I pointed out TSEM as a bullish consolidation buy, and it is getting the bullish follow through as expected.

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I  also wanted to mention this:   I could  see some of the above miners prolong their break outs in a sideways consolidation like TSEM.  If they break higher now, when gold drops into an ICL, they can put in a higher low.  See the chart.  Scroll up & down over TSEM & HMY to see the similarity.

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FIT   – The Fitbit recommendation off of the 50 sma is also having some follow through.  Look at the first big run from August to September, this 2nd leg should be able to the 200 sma for starters. ( Sell $1 higher from here?).

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GOGO  – I thought that this looked like FITs set up too. This had a BIG run out of the August lows.  A repeat of that would be excellent.

 

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SHIPPER

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SBLK  – I own SBLK and it seems to be forming a small cup & handle , and if so, this handle would be ready or almost ready to break higher. Buy it here, or buy the break out.  ALSO…

 

SBLK  – The Shippers run well, and a break here could run to the $15 area. That is another 35-40%.  A stop can be placed below the red line & raised as it moves higher.

 

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TEVA   – This is a buy too , the volume is good and it broke above the 50 sma. This is a nice base.   TEVA is a well known pharma company that used to trade at $60 just a few years ago. It looks ready to go.