November 12th Trading
SPX – The SPX reversed at the 10sma again, so if you went long, your stop still has not been hit, but it is getting late in this daily cycle with a day 25 peak and we are on day 27. I would start to expect a deeper pull back any time now.
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WTIC – Oil is above the 50 sma and below that 200sma, it remains choppy and is also on day 27. Oils daily cycles can run longer, so Oil may be a little more than 1/2 way through the daily cycle. It should be R.T., but it is still struggling to make upward progress.
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GOLD – Gold started that drop into the DCL 7 days ago and made a new low again on Monday, day 29. The weekend report covered a lot of ideas in this sector, with Fib Numbers, targets, etc. Day 29 is starting to get late in the daily cycle, so I will begin to watch for a confirmed swing low.
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SILVER – Silver made a new low too, yet some silver miners like HL & CDE are near the highs, and PAAS, SSRM , and SVM also still look very good. That 200 sma looks like an obvious target for Silver, but we’ll have to wait and see if we do a shake out or find support.
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On day 30 Tuesday, We should now be very close to our next dcl. We could see a reversal any day now and a swing low is likely the DCL. The question still remains with GOLD & SILVER : Is this the final daily cycle into an ICL, or do we have 1 more? Time will tell, but I will buy this next low Long just in case it just takes off higher and keeps running. Then I will raise stops and take it step by step, and that will be my recommendation for readers here too.
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GDX #1 – GDX made a new low, but the drop is pretty tame so far. I’d love a flush down just to end the selling with conviction. Notice that blue triangle that I had drawn several weeks ago, and…
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GDX #2 – If I now adjust the upper trend line, we still have a long triangular choppy pattern that is not really good for the Bulls or the Bears. GDX has been rejected at the 50sma repeatedly, so a move above the 50sma may be a good sign in the future. The cycle counts are hazy due to the nature of triangles. Will we do a shake out to the 200sma & then rally, as drawn here? We’ll see…
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GDX #3 – If Gold & Silver are on day 30 Tuesday, GDX could follow Golds timing into a DCL , maybe by the end of this week near that 200sma?
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I want to show you 3 Silver stocks that are still acting bullishly, despite the drop in Gold & Silver. Silver is at 3 month lows.
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CDE – CDE is at 6 month highs. It bounced off of the upper and lower 50 & 200 week ma for years ( 2016-2018), and then it broke down to the ICL in June. Now it broke above the 50 week ma and seems to be heading to the 200 week ma. The bottom line is that it is ignoring the drop by Silver and looks to be under accumulation.
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HL – Notice that Hl dropped sharply last week and then recovered. It broke to new highs Monday and is also ignoring Silvers drop. Silver is at the lows, HL is at the April highs.
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SVM – SVM released earnings and has been favorably accepted too. I want to show you something interesting about this 2 month small cup…
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SVM WEEKLY – On a wkly chart that small cup could actually be a ‘handle’ on a very large ‘Cup or Pan / Handle’.
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Would I see anything wrong with holding one of these Silver stocks? Not if you can take a little choppiness, in case we see that going forward. These Silver stocks are acting much better than the rest of the group,so holding a position in one or 2 is probably fine going forward. If they drop, they will probably rebound quickly after a dcl is in place. I sold my HL for profit and actually re-entered it on the drop / reversal, but I am not currently trying to give the impression that I am buying Miners. I am waiting for a dcl. If we are on day 30 today of a final daily cycle and dropping to an ICL, these Silver leaders could really out perform as they trend higher after the lows are in. What if we have 1 more daily cycle heading into December? These Silver stocks may just finish their rally soon & simply drop back to recent lows. It is odd to see such strength this late in a final daily cycle, so it does show that some Silver miners are acting more bullish than usual. This could be accumulation where big money has to buy on the way down and they end up propping up price. We will continue to monitor this sector closely, since we are now on day 29 as of Monday.
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Enjoy your Tuesday trading!
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~ALEX
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IVPAF – IVPAF is a different story all together, since Copper plays a good part in it. I just wanted to point out a possible buying opportunity coming with this drop. Watch the 50 & 200sma for possible support.
Don’t forget about X, AKS, TGB, FCX, etc , which also have pulled back near support areas. I will try to cover them in the next report. Watch for earnings releases, which obviously can affect the stocks performance.
ADDITIONAL INFO THAT MAY BE HELPFUL
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JUST A THOUGHT TO SHARE. I hear people say that GOLD could not be near an ICL, because of the ‘short’ positioning on the COT has not dropped to prior ICL levels. I am hear to say that it does not have to drop to prior ICL levels. I already wrote about that in a past report last summer, but I will touch on it again. Commercial shorts are often producers hedging their price, and they tend to stay hedged during Bullish times. Let me start by also saying this: Silver Miners are not supposed to be at new highs this late in a daily cycle, right? But they are, so we adjust to that. The COT ( to many) is not supposed to be highly short near as we near an ICL. This may help some to adjust their view a little. I have pointed this out before, I will do it again here…
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GOLD COT 2016– Look how much the Smart Money Shorts climbed out of that 2015-2016 ICL. The COT Shorts climbed Up, Up, Up, but how much did shorts drop as price dropped into the late May 2016 ICL? Did it drop back to 2015 ICL levels? No. It only dropped for 2 weeks. It basically dropped to where it was 3 weeks prior. It only pulled back to the early May readings, not the former ICL levels.
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GOLD COT MAY 2016 – Here it is again, and the COT dropped quickly at the final 2 weeks of May only, and landed no where near prior ICL levels. Now let’s look at Gold 2016…
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GOLD 2016 – Do you see Golds drop to new lows in May? Very Mild and it was mostly sideways, not a Deep drop like we usually see. In this case, ‘time’ became more of a factor, not a deep drop. Gold bottomed in early Dec 2015, and roughly 6 months later it bottomed in may 2016, but that was a VERY MILD dip. The lows of March were hardly broken, the 200sma was not tagged, and the COT didn’t drop a lot, but Gold did take off after making slightly new lows in May. Gold went on to make new highs into June, July, & August.
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And this was the COT all year long. It climbed out of that 2015 extreme low short situation, and stayed rather high for over a year, except for that little 2 week dip in May. So recently we saw our COT climb out of Lows and stay high too.
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GOLD COT SEPT 2009 – Many recall that GOLD BOTTOMED IN OCTOBER 2008 after a massive sell off. Notice here that the shorts of the COT climbed all year long in 2009 & into 2010, and they did NOT drop much at the end of 2009 and into 2010. The shorts kept climbing, but The next Icl was late Jan 30 2010.
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GOLD WEEKLY 2009-2010 – There was about a $200 drop in Gold in a-b-c manner to the Jan/Feb 2010 ICL, but the COT did not drop to prior ICL levels. Those commercial Shorts remained relatively high…
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Look at the time of Sept 2009 that I have pointed out on this COT Chart. Notice how high those COT Shorts stayed right into 2010, compared to prior ICL levels. This reading was not even close to prior ICL’s, but …
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GOLD – This orange line is when those Sept Cot shorts peaked on that COT and after that they stayed high into 2010. This drop started in November 2009 and went right into Feb 1, but the COT remained high that whole time.
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GOLD 2008 – 2011 – (Ignore the blue writing, I drew this chart up at a different time as we broke from the base). So here it is again. As the price of Gold dropped from Nov 2009 – the Feb 1 2010 ICL, the COT did not drop much at all and the rally continued that way for years with Mild dips.
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I just wanted to point this out because some have been telling me that we cannot be near an ICL, because COT levels aren’t as low as prior ICLs. In May 2016 people held on to their short positions because “Smart money was short” and rode them as price took off higher. At times, We need study history to lose a Bias. I am here to watch the markets, and listen as they tell us what could be going on. I certainly do NOT remember Silver stocks breaking to new highs on day 30 of a 4th or 5th daily cycle in the past, but I see that now. In addition to that, we may not see the commercial shorts drop to prior ICL levels, but they probably did already close a good amount from last Tuesdays drop through today, it just doesn’t show up on the recent COT yet. This Fridays COT may show a good drop.
So beware of expecting a much deeper drop in the COT just because the Shorts are relatively high compared to the last ICL. History shows that waiting for a big COT drop in shorts may not be all that reliable.
