Thursday October 12th – Breaking Free
After watching that waterfall sell off in Gold drop it down into an ICL, we are seeing Gold breaking free, as expected. More on that later, but first lets do a market review.
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SPX -We continue to see progress after the lows in the General Markets formed last week. This is only day 6 and price is above the 20ema. If you did a buy and hold on SPY, QQQ, SOXX, SOXL, SPXL, TQQQ, etc, I think that it would be safe for you to raise your stop to the 20 ema. You will now have locked in gains if it drops and can raise it to under the 50sma later.
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I pointed out the bullish set up in TSLA, and it did not break out yet. If it dips down to the 50sma that may be a good entry, if it breaks out that may be a good entry too. TSLA could easily run to $300 plus on a breakout.
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OIL JUMPED WITH THE ATTACK ON ISRAEL, BUT I HAVE BEEN SAYING THAT THE CYCLE COUNT IS TOO LOW. IT SEEMED TOO EARLY TO BE A DCL IN OIL. YESTERDAY I SAID…
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WTIC – Oil usually has 45+ day ‘daily cycles’ and that is why I have a hard time believing that Oils reaction to the War on day 30 has put in a dcl rather than a half cycle low. If Oil breaks above the 10sma I may have to reconsider, but for now I’ll call it day 32.
WTIC – Oil sold off yesterday when it was rejected at the 10sma and lost the 50sma. This agrees with my thoughts that the day 30 lows may be ‘roughly’ a 1/2 cycle dip. Oil usually has 45 day daily cycles, plus or minus a few days.
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XOP – Oil stocks, however, bottomed in March and May well before Oil did, so it could be showing a dcl 5 days ago. I am pretty surprised that the gap did not fill yesterday with Oils drop, so we’ll have to wait and see if this breaks higher or fills that gap going forward.
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The USD is due for a dcl. When we see one in place, I think that the USD may just chop a little higher for a few days, but then start to roll over sooner than later. That action MIGHT cause Gold to dip a little and then continue higher.
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In past reports I was calling for a low to form in Gold around day 32 or so. On day 34 we got that nice reversal candle and I said that this alone could be the buy with a stop under that low.
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GOLD AT 5 a.m. ET Thursday : TODAY IS DAY 4. After putting in that reversal low, GOLD then burst above the 10sma on day 1 as another buy signal and now it has pushed even higher for day 4. This is very early in the daily cycle, so we should see more upside, even if the USD does eventually push higher and Gold dips down.
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SILVER at 5 a.m. ET today: Silver bottomed a little earlier than Gold and today is day 7. Silver miners have been lagging, but I think that this might change sooner than later and I’ll explain that below at the end of the report.
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GDX has been gapping higher in the morning and many miners have gaps that have not filled. This is where the ‘buy & hold’ basket of Miners has come in handy. Next we’ll see if the GDX wants to break out above the 50sma (?), or will this be a temporary resistance area?
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Things are really playing out well so far, and there have been no pullbacks in the miners yet. This is great, but if and when we do get a dip, you can add to your current positions. I also want to discuss the lagging Silver stocks a little below, after a quick Bitcoin update. Enjoy your Thursday trading!
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~ALEX
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BITCOIN – I no longer cover Bitcoin daily, and during this 4 week rally I have stated that I think it will roll over and drop into a deeper low (an ICL). As Bitcoin rallied, Crypto stocks dropped to new lows (MARA & RIOT well under $10) and this seemed to confirm that Bitcoin would roll over. We may be seeing that dip start now and after a 4 week rally in bitcoin, MARA and RIOT are still near the lows, well under $10. Lets take a quick look…
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MARA rallied strongly from $3 to $20 in 2023, and we traded that well. It has now been selling off relentlessly and I warned against buy & hold on these bounces. It was fine to try to scalp them or trade them, but I mentioned that I think this goes even lower when Bitcoin dips to the next dcl. MARA looks like it could get down to $6! I am starting to see MACD divergence though, so is a low going to form soon? I am thinking maybe in a month or so. I am keeping my eyes on things and will cover Bitcoin in the weekend report again too.
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MINERS
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REMINDER: Yesterday I said about lagging Miners…
You may want to run through your list of miners like BTG, EGO, SA, SAND, FNV, RGLD, OR, IAG, KGC, GFI, NG, NGD, NEM, etc. Using their chart, do you see ones that are moving off of the lows, but still fairly close to the lows? Buy a starter and add if they dip.
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BTG jumped the 50sma yesterday, so we are not really seeing the 50sma act as resistance on many of these miners.
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LOOK AT HMY, GFI, AU, etc. These are the better S. African Miners and you cannot help but notice that SILVER MINERS ARE LAGGING WHEN YOU COMPARE THEM TO THESE.
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HMY is ripping higher and not letting new buyers in. If you didn’t buy & hold HMY, GFI, AU, etc, you got probably locked out. That said, we do see ‘laggers’ in many miners too. Silver Miners are really lagging, so let’s take a look…
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HL AT 10 am – I noticed that many Silver Miners are being held down at the 20 ema, so I posted this at 10 a.m. and pointed that out. If they break above this 20 ema, they likely will run to the 50sma next, so…
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HL actually ran up in the final hour and closed above the 20 ema. That may be an important break to watch for with our Silver Miners.
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So keep an eye on EXK, or buy it, since it is pushing up against the 20 ema at the close too. This is also a bullish wedge.
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FSM is a leader in this area, since it already broke the downtrend and 20 ema. Volume piled in yesterday, so I am thinking that Silver miners may be ready to go. EXK, FSM, HL, AG, SSRM, PAAS, MAG, etc should be on your watchlist or in your basket of bought miners 🙂
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AG – Again that 20 ema has been acting as resistance short term, but once price gets above that, I’m wondering if the Silver Miners finally start to join the race with earnest.
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AS A REMINDER, YESTERDAY I WROTE THIS:
I just wanted to point out that KGC put in an ICL with what now looks to be a shakeout and recovery. I know that there is a gap that could fill if we get a dip in the sector, but this is buyable as a starter position and then add if we dip. It may just run higher from here too…
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UPDATE: KGC did move higher, gaining that 50sma. Again, just buying and holding has paid off on many of these miners as they recover from the sell off lows.
