December 20th- Get Comfortable
When I chose the LOGO for Chartfreak, I chose a Lion because they are often known for their courage. They Seldom back down when challenged, and courage is often something that is required in the the stock market too. At the same time, we as traders want to think ahead of the various possibilities and be prepared when the circumstances call for it. We want to be ready for just about anything within reason and I want to discuss that in todays report.
With that in mind, today is Friday and we are on day 28 for Gold. I want to explain 2 possibilities that will have us deciding how we can best be ready for anything. We need to be courageous, and yet we also want to get comfortable with our current situation and its possibilities. Let me explain:
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GOLD – Gold is on day 28 and that makes us aware of the fact that Gold is coming due for a DCL. We also may have a triangle forming and I have seen Triangles in the past ignore cycle count and just move higher. With those 2 things in front of us, it presents a bit of a challenge. A lion is courageous and seldom backs down from a challenge, but they aren’t reckless either. They stand up to or face that challenge, so lets discuss this.
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GOLD – I got to thinking that since this is day 28 on Friday, GOLD can open Sunday night and trade for hours before the US markets open. So thinking ahead, I was thinking:
1. What if Gold trades up $10 Sunday night and then another $10 before the markets open in the US? That is up $20.
2. It could just as easily trade down overnight Sunday too.
3. The challenge is that this Would affect your GDX / GDXJ open one way or the other.
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GDX – For starters, let me remind everyone that GDX is a very bullish looking set up really, and many individual Miners are plain old Bullish. Some are at recent highs. That adds to our being comfortable as we are invested in this sector now.
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GDX – Now if GDX opens Monday with Gold down $15-$20 or so, GDX could gap down like this. JNUG OR NUGT would drop sharply. So are you currently positioned in a way that you will not panic, or feel dread? This chart helps us to see that we want to be personally comfortable with our current holdings, even if we get the gap down. That said…
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GDX – If Gold trades up Sunday night into Monday, you honestly could see a $1+ Gap open in GDX or GDXJ. Are you invested enough that you will be comfortable seeing this? Let me discuss this further…
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GDX SAME CHART : I have had some say that they own a miner or two, but they are “…waiting for the next DCL to load up.” Would you be ‘Comfortable’ Loading up on a gap open? Triangles can break out higher. If it gapped open like this, would you then start to think . ” Maybe I need to wait for the gap fill?” And with this I remind my readers that…
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GDX – We just had that very situation in May 2019. When this gapped open, I declared that it was a break away Gap and you had to buy it, because I have seen these gaps never fill. Some were not comfortable Buying a gap open. They emailed me and wanted to wait for the dcl. Do you see a clear dcl on this chart- a place to add? EVERYDAY I told people not to sell, and add if they still needed to add.
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CONCLUSION: Yes, we could gap down Monday, so be invested at an amount that will keep you comfortable with a pull back to a dcl. With that reminder, know that we could see a big gap open on Monday too. You will need the courage to just buy & hope for the break away run.
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I put the above lesson out today simply to prepare everyone for what could come our way. Everyone trades differently, and each has their own risk / reward tolerance levels. We need to be courageous at times, while also being comfortable with whatever comes our way. I have covered this sector since that May ICL, and will continue to do so, but at times we all need these reminders, and I hope that this review has helped each one moving forward.
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I have been pointing out some Energy, Biotech, MJ Stocks and Miners for a while, but today I wanted to show a couple more Bullish set ups in the Miners.
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LGDTF – I would say that this is a low risk/ reward buy with a stop. It regained the 50 sma and is a long bullish consolidation since it tripled out of the June lows.
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AKG – AKG also recovered that 50 sma yesterday. This broke a downtrend on Dec 2 and seems to have back tested it too. AKG Doubled out of the MAY/JUNE lows.
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AXU – I mentioned AXU as a buy when it broke from these November lows. It started to perk up again Thursday, so I mentioned adding to it in our live trading area near the open. This was AXU midday retaking the 10 sma with good volume for the short period of time that it had been trading.
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AXU – I added yesterday, it closed up 7.37%
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EQX– I also added to EQX yesterday , mentioned it in the live trading area with this chart. It closed with 1 million in volume.
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HMY – I like the long sideways consolidation in HMY, the break above the 50 sma, and the volume yesterday.
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ACB – In the MJ Sector, I’ve also discussed this massive sell off and how it may now be bottoming. The gains if these recover will be great! I have also discussed the risks, so being aware of that, ACB Looks like a double bottom low. Easy to buy with a tight stop.
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CRON – Cron has a higher low and is trying to regain that 8 ema, 10& 20 sma. The MACD is rising and these look like they are setting up bullishly.
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ACRGF – This strong pop off of the lows was pointed out as under $4 to $7, and after dipping down to the 10 sma area, it has consolidated and made slow progress too ( $5 back to $7). A recovery in these MJ Stocks will gradually make great gains, but the sector is also higher risk & can have big drops along the way.
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AXAS POSTED ON DEC 16 – Many of the Oil / Energy stocks that we’ve watched have had that strong high volume pop off of the lows. It regained the 50 sma, so I posted this chart when it only had 1 hour of trading Dec 16th…
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AXAS – Along with the high volume POP In AXAS, this is also the kind of follow through that we are seeing in many of these moves off of the lows. DNR, WTI, etc have been running nicely. IF you see a high volume Pop out of the lows in an energy stock, you may want to enter the trade.
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There has been a lot of good trading in the markets this month as the 2019 year ends, right? Lately we discussed everything from Tech stocks like AMD, MU, TSEM, to Recent lows in Energy with the XOP, DNR, WTI, OAS, WLL . Biotech has had some excellent moves too. The Miners have had bullish runs even as Gold & Silver pulled back. We discussed & rode Miners like SVM, HL, PAAS, CDE, etc recently, and the trading looks very good going into 2020. MJ may now be bottoming and these can run swiftly once they get going too. 2020 could be a great year in many ways as these sectors shape up. The Precious Metals sector looks especially bullish, as mentioned in each weekend Big Picture report. Things look very promising going forward, with exciting times ahead! Todays report was just a short term reminder, but longer term the Miners look like they will give us some more excellent gains.
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So while you enjoy your Friday trading, todays reminder is simply to remember to position yourself (short term) in a way that you can be Comfortable, no matter how things play out! I am personally pretty heavily invested in Miners, with a few other trades on too.
Enjoy your Friday as well as your weekend!
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~ALEX
