Tuesday April 25th – Shippers

 The USD dropped on Monday, so let’s take a look at how the markets reacted. We are waiting for DCLs to form in precious metals and patience is needed. That can make for very boring days, but eventually we should see a continuation rally higher. Then I also want to discuss the set up with Shippers. They can be choppy and difficult when they consolidate, but they are bullishly set up and they are trending higher too. I’ll discuss that at the end of the report.

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The SPX dropped and recovered to green again, so basically it has been chopping sideways.

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I was expecting a dip into a dcl, and thought that we could see a shorter daily cycle, since the first 2 were around 50 days long each (that is longer than usual). If the USD drops though, the markets could continue to chop at the recent highs.

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WTIC – Oil did actually reverse right where we expected it to. The gap filled and price turned higher at the 50sma, so this should just be a 1/2 cycle dip. Oil should continue higher from here.

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The XOP (Oil Stocks) should also move higher from here after this dip. I also noticed that along with the Oil stocks reversing, Shipping stocks look good too. I’ll include a couple at the end of the report.

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So The USD often only has roughly 25 day daily cycles, but the USD just kept hopping lower over and over, without a clear dcl. I have a hard time thinking that the dcl was on day 41, since that is the length of 2 daily cycles, so I would say that day 35 is the dcl. You can see that the weakness in The USD has returned and this is not acting as strong as the bounce in January and February.  WITH THIS DROP, I EXPECTED A MUCH BETTER POP IN MINERS, and we did not really see that.

 

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GOLD put in a small reversal and is within the timing for a dcl. I think that the back test of the triangles downtrend line on day 35 is likely that dcl. Gold is not completely oversold, because the selling has really been a choppy sideways move.

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SILVER should be trying to form a sell off into a dcl too, but it has been holding up well. Silver did break the 10sma, but so far it has found support at the 20sma. We MIGHT have a day 29 dcl, but that is usually early ( 32 days is normal). Many Silver stocks sold off more than Silver has. Please notice that Silver clearly bottomed around March 9th, but...

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SILJ – Silver stocks bottomed early (with Gold) before March. That means that SILJ is late for a dcl, but it seems to be a bit weaker than Silver. If the USD continues to chop around, I would say that Silver & SILJ could drop to the 50sma, but again, we are in the timing for a swing low and a dcl. That will be the buy.

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GDX is also in more of a slow-motion fall as it slowly drops and seeks to find the next daily cycle low (DCL). This is boring but it shows the strength of the sector, since Miners usually crash right down into a dcl. GDX had a double bottom in March with the second low slightly cutting under the first one, but whether you count from the first low or the 2nd, which represents Golds low or Silvers, we are still due for a DCL at day 31. This COULD drop to the 50sma if the USD continues to chop. The next Fed Mtg is next Wednesday, so it really doesn’t seem to line up with anything timing-wise.

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LET ME JUST POINT SOMETHING OUT HERE, SINCE THE FED MEETING IS NEXT WEEK:

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  COULD THIS slowly drop to the 50sma if the USD continues to chop? Well, The next Fed Mtg is next Wednesday. That really doesn’t seem to line up with anything timing-wise, and we would be on day 38, but it COULD play out that way. That would make this week VERY boring for the Gold bugs, but look how quickly Miners can then rocket out of the lows (see that gap down dcl in November). So…

 

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So if this price action continues ( we’d have a slow-motion dip into a dcl near the Fed Mtg), that would make this week VERY boring for the Gold bugs. We’d probably see a choppy drop down into the lows, but look how quickly Miners can then rocket out of the lows when the dcl forms (see that gap down dcl in November). So we just have to wait and see how this plays out, but Gold and the Miners are due at any time for a dcl, while Silver seems a little early. As time moves forward, I will start to post charts of Miners to show how they may be lining up for a buy.  Enjoy your Tuesday trading.

 

~ALEX

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I noticed that the Shippers / Tankers often follow Oil and if oil bottomed, then Oil stocks (XOP) and Shippers can be considered as a buy. We already discussed buying Oil stocks with the recent higher low, but what do the shippers look like?  They look good again (thought they have been choppy too). Shipping stocks can include NAT, TK, FRO, TNK, SB, NM, STNG for example.

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TK – The shippers can be very choppy as they consolidate, but when they run, they can run nicely. Some traders just like to just ‘buy and hold’ off of the lows, others try to jump in and sell for profit, but with Oil bottomed and the 1/2 cycle low in place, these may be ready to go higher.

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FRO– This is up almost 150% in 1 year, but again, these can be very hard to ride. The saying is “Buy low and sell high”, so these dips are the way that you buy low. FRO is trying to regain the 50sma as Oil tries to push higher too.

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TNK – These are choppy and can be difficult to just buy and hold, but again, they are also trending higher and making gains over time. This could be ready to break out higher and run with Oil, or it may chop in this consolidation, but these are near their lows and can be bought. TNK ran from $27.50 to $47.50 in 2023 alone, but it went sideways for 5 months before that.