Thursday January 30th
NOTE: Unfortunately, I hit the “POST THE REPORT” button accidentally when I tried to hit the ‘save’ button. That means that this report was accidentally released at 10:15 p.m. eastern Time. I am actually not finished yet, but will work on it now and you can refresh it later to get the full idea. It has not been proof read or completed. Sorry about that.
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SPX – SPX landed on the 34 sma Monday, similar to the Dec dcl, and then it reversed. The markets ran higher in the early trading Wednesday, but sold off after the Fed. We have seen a pause at the 10sma in past runs, so we wait and see.
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WTIC – Oil opened up and sold off.
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UUP DURING JANUARY – I wanted to point something out to the Chartfreaks (You). The USD has rallied out of that ICL steadily in all of January, so most would normally expect GOLD to drop all month, right? …
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GOLD DURING JANUARY – Gold did not drop after the first week. This is impressive, because it shows us that GOLD held up amidst a USD Rally. What will happen when the USD drops into the dcl? Gold may take off higher.
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GOLD, SILVER, HUI & THE FOMC – Here we saw the Gold & Miners climbing slowly at first, and Silver sold off heading into the FED MTG. After the Fed released their decision, they all climbed steadily higher together, right through his speech and right into the close.
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GOLD – So with a dcl in place days ago, GOLD landed right on the 10sma and moved higher Wednesday.
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SILVER – Silver broke to new lows, so THIS might be the late DCL. I can picture an inverse Head & Shoulder pattern forming if we chop out of the lows rather than just rocket higher. That said, We COULD just rocket higher, and these lows look like the dcl.
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GDX – THIS IS WHAT WE NEEDED TO HAPPEN. GDX landed right on the 34 sma Tuesday not breaking the dcl (lows) and turned up Wednesday. With some fomc follow through higher, we have a dcl with a day 10 reversal that should push higher. If you bought that DCL with a stop under those lows, you were not stopped out.
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JNUG – I posted this during the Fed Speech. It at least gives you a low risk entry where a stop can be placed at Tuesdays lows or the dcl again.
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ELYGF – Some Junior Miners actually made new highs, IRVRF made new highs and closed up 8%, and ELYGF closed up 16% ( this was only 12% on the chart below midday). BALMF closed up 16% , and WLBMF closed up 20%, so some of these Juniors are finding buyers here, and this is encouraging. Lets look at a few Miners…
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GORO – GORO reversed right off of the 50sma, so I posted this in the live area at 11:20 a.m.. The good thing about a set up like this is the Risk / Reward. You can buy these with a tight stop under recent lows, but the upside potential is great. So this was a buy with a tight-ish stop. .
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GORO – It closed up almost 12%, so it looks to be on its way higher. That is encouraging for the sector.
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HL – HL reversed also, so I mentioned that in the live area and here it closed up about 6%. I owned this last week and got stopped out at the 50sma, but that doesn’t mean that I won’t re-enter a trade if it recovers and regains a bullish look. This could run up to new recent highs and quickly make that small paper cut loss back 🙂
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OR – Mark M. mentioned this Wednesday in the live trading area and it is a nice ‘Inverse H&S’ set up. Notice that it bounced right off of the 50sma and volume started to increase today. When this breaks out, this could break out and run straight up to the $11.50 area really.
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HMY – HMY dropped to the prior lower trend line ( It was a nice pan / handle, but unfortunately it fell apart). It put in a reversal on the with the fomc mtg and became an a-b-c drop. It is oversold & can also be bought with a tight stop.
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PAAS – This was a Buy on Jan 24th. NOTICE that the middle trend line break back tested as a last chance to buy.
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PAAS – This one just back tested too. PAAS is a buy again. Click to enlarge.
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SA – I don’t love this set up quite yet, but it is interesting. SA been lagging and choppy since the Nov Icl. This could push away from this as a base at any time and now it does seem to be climbing the 34 sma possibly waiting for Gold to run.
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– The General Markets did not close over the 10sma to help confirm that a low is in place, but we are late in Cycle Timing, so we probably have the lows in place.
– The Precious Metals acted bullishly all day, into the Fed Mtg, through the Fed Chairman’s speech, and right into the close. That bodes well for the sector, with the Miners finding support & reversing on day 10 out of a dcl. We’ll see what Thursday brings, but it looks like the sector wants to continue higher in this 2nd daily cycle.
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Enjoy your Thursday trading!
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~ALEX
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BY REQUEST: I mentioned in the live area that certain H&S patterns are weaker set ups than others. I was asked to explain a little of that idea, so I will do that here. This is just a small lesson on the H&S Pattern. When I am looking at a H&S, I have found through experience that there are certain features that either increase or decrease the probability that it will play out. Let me explain that below.
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HEAD & SHOULDER – when I see a H&S pattern, I look at the right shoulder. If that shoulder is lower than the left one, it may be struggling to find buyers. I also use the volume & if heavier selling shows up, the probabilities of a break down increase.
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HEAD & SHOULDER – I see many call this a H&S, and that could be one, but when I see this it is showing some strength. It is still higher lows and higher highs. The UP volume is stronge than the Down volume. This, to me, is LESS likely to break down as a true H&S.
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VERY RISKY, NOT FOR EVERYONE:
I was asked how I called a few of the large moves in the smaller MJ Stocks, so I was going to point out some similarities in these bases. Look at charts of CNBX, CBDS, NXTTF, BLOZF, NUGS, etc etc and you’ll see what I am talking about, these have had explosive moves of 100% & more. For example…
You may recall that I called CBDS a buy and said that I own it. It was crawling along the 34 ( I also use the 20 or 50 sma too) in a tight base.
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CBDS – It then POPPED as volume increased and look at the MACD rising – those are a few things that you want to see,
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CBDS – This is CBDS now. I sold mine when I was up a bit over 100%, but it continued higher today. The good news is that I switched that CBDS money to NUGS, after mentioning it in the live area.
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NUGS – NUGS had the same base and good volume popping in. NUGS popped over 55% Wednesday! You can just take the money as a quick trade, or see if these are really recovering, because like I said, CBDS, CNBX, NXTTF and others are just continuing higher out of these bases.
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CNAB – This may not be ready yet, but I am watching it and a few others daily, because they have the signs of progress as they craw along the bottom. It could use a few more Volume pops. I also like BLOZF and have my eyes on EDXC ( An old favorite).
THIS SECTOR & THESE TRADES ARE REALLY ONLY SUITED FOR FAST TRADERS IN FRONT OF THEIR SCREENS MOST OF THE DAY. THEY ARE NOT GET RICH QUICK TRADES, IF YOU TRADE THEM, TAKE A SMALL POSITION AND SEE HOW THAT WORKS OUT. FINALLY, I DO NOT BUY EXTENDED ONES, BECAUSE THE PRICE CAN SNAP BACK 20,30, 40% too. I try to buy them in or near the base.
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Let me show you one more thing with BLOZF.
The sell off base, the volume pop, the MACD rising with higher lows, etc. Price runs from 23 cents to 80 cents in 2 weeks. GREAT! However, if you jumped in at 80 cents, it quickly dropped to 40 cents (cut in half). These need to be traded correctly. They need to be bought near support. Wrong timing can lead to a big drop.
