Thursday July 13th – Look Who’s Running
USD – LAST WEEK on July 7th I used this chart to show a sharp drop in the USD. This made the Dollar look like it could fail by breaking that low at $101.48. I wrote on the chart as well as in that report that “We need to pay close attention here”, because a failed USD is what we were looking for to help Gold & The Miners to reverse and head back to the highs (Put in an ICL). Gold and silver had bull wedges with divergence, and the Miners were also showing divergence. I now view the Precious Metals Sector as having that ICL in place, and that will be discussed later in this report.
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I now view the Precious Metals Sector as having that ICL in place, and that will be discussed later in this report. I started with that thought, because I have also been thinking that we may get a pullback in the general markets. If that is the case, we MIGHT get sector rotation, so we would probably want to think about that too. Are we ready to watch a pullback in the General Markets and a rally in Precious Metals (& maybe small caps like EV & Clean Energy and Oil)? Will money rotate out of one and into the other? I know mine has started to 🙂 , so with that in mind, lets take a look…
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NASDAQ – We have bearish divergence and what looks to be a possible bearish rising wedge. This COULD just drop, fill the gap, and break out higher, but if March wasn’t an ICL, then this would be the 4th daily cycle, and a pullback could develop. We’ll see.
THE SPX also has that rising wedge (not drawn) and macd divergence. On day 11 this looks like a topping candle, so I’m wondering if we get a pullback in this bull run and a rally starting with the Miners.
WTIC – After a very choppy number of months, Oil became trapped under the 50sma in May – July. Oil was finally able to break out last week and I expect a rally to the 200sma and then maybe a pause with a dcl.
XOP – So Oil Stocks became bullish and a buy recently. The XOP was actually able to push above the 200sma, so it may eventually form a dcl a from as a back test of that 200sma. We discussed XOP or GUSH as one way to trade it, or NOG, APA, VET, WTI, ERF, MRO, VLO, and a number of other Oil Stocks that could be bought and held with a stop. Charts of VET, ERF, APA, etc were in Tuesdays report.
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And now we get to the USD:
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As a reminder: I have been discussing USD 3 yr cycle for a year now. This reliable cycle allowed me to call for the rally to end and Gold to bottom last year. I had this chart in the weekend report
1. We had the initial drop for The USD from the top and Gold ran from a shakeout low to the all-time highs.
2. The USD has had a multimonth sideways move, giving us and ‘a’ & a ‘b’ of what I expect to be an a-b-c drop.
3. The USD failed this week and that should begin the next leg down, as drawn on this chart. This should also send Gold into a breakout rally beyond recent all-time highs. YAY!
USD: So last week I mentioned on this chart that we needed to pay attention to this and Miners. I said that Miners could now be bought with a stop as they reversed at the lows, but we’d watch to see if this breaks down or not.
THE USD continued its slide on Monday, and the MACD was weakening, as seen here. So Miners could still be bought (usually just starter positions at this point, since we didn’t have confirmation).
The USD Failed on Tuesday. This means that the USD should be in a failing or weak stage for the next couple of weeks (then a dcl bounce and then I expect even more downside). This would be confirming that Miners were a buy.
And Then On Wednesday The USD REALLY FAILED!
It lost everything that would have been considered bullish in 2023, and Gold , Silver, and The miners took note of that!
With The USD on day 13 and having only a day 9 peak, The USD has weeks to show further weakness before a dcl comes due.
USD – That doesn’t mean that it can’t bounce. If it bounces and miners dip lower, that would be a time to buy the dip of the Miners.
GOLD surged after breaking from that Bull Wedge with the USD drop. This is only day 9 for Spot Gold, and this could make its way back to the all-time highs very quickly if that USD just rolls over.
GOLD – Notice the RSI was unable to gain 50% in June, but it is doing that now. The MACD is crossing up too, so these are signs of Bullishness that also add to the confidence that things are shaping up and Golds weakness (correction / consolidation) is ending.
SILVER sliced right through the resistance of the downtrend line and then took on the 50sma too. I captured this chart midday, and it is bullish confirmation too. Silver stocks were up very nicely on Wednesday. Many Miners were only up 1 or 2% at the open, so it was easy to buy or add, and some miners closed up near 10%.
This was The GDX at midday Wednesday. Why am I am pointing to our last 2 ICLs where GDX broke above the 50sma?
1. I wanted to show you that in November, GDX sliced above the 50sma and just kept going. No pause.
2. In March it surged above the 50sma, stalled the next day, and actually dropped back below it 2 days later to the 10sma. It then rallied strongly, so if we ‘pause & drop’ like March, buy that dip 🙂
3. The lack of a pause in November is a reminder that you need to own at least Some Miners now, because they CAN run away higher, especially if we see short covering.
Recently I was showing the similarities on GDX Now and GDX at the March double bottom lows at the 200sma. Now with Wednesdays surge in price as well as volume, and break of the 50sma and the RSI 50, the similarities continue. So…
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The similarities continue, so we may be about to see a strong rally in Miners from the 50sma to new highs.
Again, any Pause along the way could be a nice opportunity to buy or add.
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I usually have the Bigger Picture in the weekend reports, but here I just wanted to show how The GDX ETF could rally out of the ICL to former highs, pause, and then break out to new all-time highs.
On June 29 I pointed out that many Silver stocks like EXK had strong divergence right at the lows. It also had a 5 wave drop, which often is the end of the selling, so things started to turn bullish using technical analysis in June.
EXK then broke out from the downtrend on June 30, so I showed that with this chart. This became a buy with a stop – a very easy low risk entry.
And on Wednesday EXK shot up all day long and was up 11% by 1:53 p.m. et. This may pause, crawl at the 50sma, or break through. Any of those would be considered a good place to add.
FSM also took out the 50sma, so we saw strong moves in the silver stocks yesterday.
KGC had a really strong run out of the March lows, and then when it came time to pull back, it dropped and churned sideways rather than to drop and continue dropping. Notice that in just 3 good days, KGC is very close to being back at the highs already. That is a healthy looking chart to me.
The Big Picture Weekly chart for KGC shows a down trending channel with a breakout, a back test and the beginning of a recovery.
AU was in my report last week as a Miner that dropped to the green 200sma and uptrend line. Well…
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AU stayed at the 200sma until yesterday when it gapped up and gained 7%. I’d expect another solid run from AU now that we are moving higher again. Did you notice that when AU Gapped higher in both the November and March rallies, those gaps did not fill? So that may indicate that this one may not either.
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EGO was pointed out in my reports as a Miner that also churned sideways rather than just continue dropping in June, and I said that this could recover to the highs again very quickly.
EGO is rapidly heading back to those 2023 highs. EGO ran from $5 to $12 already, I expect it to get well into the teens and possibly $20’s if Gold breaks to new all time highs.
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RGLD was also pointed out last week as a Miner (Royalty co.) that may have done a shake out at the 200sma. That is always a buy with a stop if there are other bullish signs involved. The MACD had already crossed up and the RSI was at 50.13.
And now RGLD taking off higher too.
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Wednesday was the release of the CPI Numbers and we saw some great action in various sectors, but most important to many of us was the drop in the USD and the Pop in Gold, Silver, and the Miners. I do believe that we now have the next leg beginning and you need to be holding AT LEAST a starter basket of Miners as things continue to unfold.
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I’ve been pointing out the bullish wedges and bullish signs in Miners for a while, but more importantly I had the opportunity to point out the failed USD in yesterdays report. At that point, the Miners were off to a slow start, opening up only 1% or so, so hopefully that gave everyone time buy. We are still at the lows if you look at the November rally and March rally to compare those to where we are now. Many of these Miners could double or triple again over time once Gold breaks to all-time highs, so the best idea is to buy and hold a starter basket and add if you want once things further prove themselves later. We may even ‘pause’ at the 50sma and dip back, like we did in March, so we can look for that possibility too. Enjoy your Thursday trading!
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~ALEX
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BITCOIN : This dip does not have to happen, but I count Bitcoin in days of 30 & 60, so I wouldnt be surprised if Bitcoin is ready to dip lower over the next week or so. That would possibly take the shine off of it temporarily.
HYZN, AYRO, and SFT ( Auto and EV Auto) pushed higher and started to break from their bases yesterday. Here you see HYZN up 16% , so I just wanted to point out this sector again as progressive and bullish.
