Wednesday October 9th – Miners Did What??
.
The General Markets have been choppy this week. Actually, you can see Up, Down, Up candles for the last 2 weeks, causing that sideways chop, but with yesterdays push higher, it is becoming a little clearer that day 41 was most likely the dcl. THE SPX is looking ready to break to new all-time highs again.
.
THE SOXX bounced right off of the 50sma and I love the way the 50sma dipped down and then curled up from above the 200sma. That is bullish action, so the semiconductors are looking good and should play catch up, running back to prior highs too (or more).
.
WTIC – WHAT CAN I SAY HERE? Take a look at the size of the candles during the June-July daily cycle. Those are normal days for Oil. What we have here are extremes and it becomes a bit unpredictable and definitely a ‘trade at your own risk’ sector. So Oil was rejected at the 200sma, and then bounced at the 50sma, all in one day. Oil could drop all the way back down to the lows or it could reverse and breakout.
.
THE USD has been on a tear higher, and up until yesterday, Gold and Silver did not react to it. Yesterday Gold and Silver dropped rather sharply, but it caused a very interesting set of circumstances, so let’s look at the ‘Precious Metals’.
.
Let me just say that Gold dropped out of its pennant and Silver plunged yesterday, but oddly, the Miners did not follow. In fact, several Silver stocks turned green!
.
GOLD – I just wanted to point out a few things here.
1. Gold bottomed on day 28, but it has bottomed even earlier in this bull run. We are on day 24 so a dcl could form early.
2. Gold is on the way down to the next dcl and it also appears to be in the 3rd daily cycle, so an ICL may come after another month or so of choppiness.
3. …continued…
.
The USD bottomed and is now going to probably spend at least 2 daily cycles moving higher or sideways, so is Gold ready for a dip into an ICL? Most likely ‘yes’….
.
3. It is usually not likely that we will get an ICL on the 3rd daily cycle with the USD now running higher for 2 daily cycles (but we have seen them go 4 months from ICL to ICL in rare situations). The last ICL was very mild and made up of choppy sideways trading (the magenta triangle), so this may also be a mild choppy sideways period into November. I’ll discuss this in the weekend report.
.
SILVER slammed down yesterday, losing over 4%, but as mentioned, some Silver stocks actually turned green. I was thinking that Silver might start to try to sync up with Gold now(?), with some selling and sideways chop of its own, but Silver also may put in a dcl and rally, since the Silver stocks seem to think so.
Look at the April-May Magenta Box and the blue arrow to the left of it- We may see that ‘slam down and chop’ happen here as we form a dcl. I see many similarities…
.
IF SILVER is going to now ‘sync up‘ with Gold, it may chop sideways as Gold chops sideways, rather than break out and run. If so, an ICL could come sometime in November for both sectors as The USD peaks and rolls over.
.
SILVER – It is not out of the question to see Silver break to new highs as Gold meanders sideways, since Gold broke and ran to new highs as Silver chopped around.
.
So again, with Gold and Silver selling off sharply yesterday, GDX was only down 4 cents? It dropped to the 50sma and bounced from there, and as you know, this is very strange for Miners to act this way when the Metals dropped sharply. I actually expected a break of the 50sma, as shown on the following chart…
.
I DREW THIS CHART OF GDX FOR YESTERDAYS REPORT, saying in part…
.
GDX – With the last 2 dips, price lost the 50sma for a few days and then recovered. That price action formed a lower trendline. If Gold and Silver chop sideways for a few more days (complete the pennant, for example), Miners may lose and regain the 50sma. So GDX is in a wide and sloppy trend higher.
.
GDX reversed at the 50sma on day 22, but it bottomed on day 23 for the last daily cycle, so I really can’t explain this price action with Gold and Silver slamming down. It could be another early dcl, we’ll see. We ARE heading into Inflation data Thursday and Friday with CPI & PPI numbers.
.
I just wanted to show you that with Silver down over 4% in a sharp drop, AG was up 1.29%.
.
EXK reversed higher and I posted this chart midday to show that, with Silver crashing lower. It continued higher and closed up 2.4%!
.
The General Markets look ready to move higher, Oil remains volatile, and as Gold and Silver sold off, the Miners reversed and showed strength that they rarely do in that situation. I’m not going to pretend to understand exactly why, but it MIGHT be accumulation in anticipation of a dcl in the Metals. It MIGHT be that the Miners are going to lead a run higher for Silver, but really that is just a guess, we’ll have to wait and see. Its a bit risky, but Silver stocks could be purchased with a stop, since they showed that strength. Bitcoin is below, enjoy your Wednesday trading!
.
~ALEX
.
FROM YESTERDAY:
BITCOIN – With a day 59 low and then 4 days higher as of yesterday, we seem to have that dcl near day 60. Yesterday was the ‘Pop & Drop’ candle for Bitcoin, so what started out as a morning rally ended up as a pop and drop for some of the Crypto stocks.
.
BITCOIN – I just noticed on this chart that Bitcoin seems to be bouncing or stuck in between the 200sma overhead and the 50sma below price. This may be what is causing a ‘stall’ in the price return to former highs. It SHOULD be temporary resistance. Crypto stocks are choppy and difficult.
