Tuesday June 3rd – It’s All Coming Together
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SPX – This should be day 5 of a second daily cycle. Price dropped again in the morning, but buyers stepped in and we got a reversal again. That is 3 reversal days in a row now and the set up should led to a run higher during the 2nd daily cycle.
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WTIC – Oil actually popped in a big way on Monday, and even though it opened above the 50sm and then sold off, leaving this as L.T., the Oil stocks are acting more bullishly. Oil remains choppy for now.
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XOP -As you can see, Oil stocks made a day 23 peak and then sold off back to the 50sma. When I looked at individual stocks, they are a bit mixed with some bullish and others just choppy. See NOG, VLO, WTI, VET, APA, OKE. Most are sideways off of the lows like Oil.
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We got a new low on Monday, day 30, with The USD.
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GOLD broke out above a downtrend line and shows up as day 11 on Stockcharts. This appears to confirm the idea that we now have an a-b-c down into a mild ICL. The trendline may or may not get back-tested.
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Going back to the breakout with PLATINUM in May, I had been comparing this to the Silver set up. It was very similar and so I was anticipating that Silver would breakout too. I recommended buying Silver stocks before that breakout. Platinum did a breakout and then a back test so far, but it did put in a reversal yesterday.
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SILVER DAY 11 out of the recent low. It did do the same thing as platinum on Monday. It surged and broke above the March highs, also confirming that we had an ICL with that slam down reversal on April 7th. Silver stocks responded very nicely, and since this is only day 11 of what should be a 2nd daily cycle, we can expect this to run higher over time. It could stall or pause and flag sideways the way Platinum did, but over time it should continue higher.
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GDX also responded to Gold and Silvers move by surging to new highs too. You can count 12 days out of the lows for The GDX ETF. Volume popped and this should also continue higher over time.
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AG – Last week (May 27) I pointed out AG as a Silver stock that was set up bullishly. We knew that Silver could breakout, so this was a buy as it gained the 200sma and started to break the downtrend. The MACD was bullish too.
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AG – The following day I showed that this is not weak looking, the volume was good and the set up continued to show that Silver was becoming more bullish in that consolidation.
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AG – After a back test of that trendline, Monday saw First Majestic gap up and it popped 11% in the first 10 minutes of trading, so I pointed this out in the commenting area. Silver stocks were running strong on Monday, but you can see that with that gap, it was better to buy last week when these were recommended.
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FSM only popped open about 3%, but it bullishly gapped over the 50sma, so jumping in there would have been just fine. It continued higher and was up 13% by noon, so I pointed that out along with other silver stocks just to show how good they were doing (No midday swoon at this point).
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FSM – The big picture for FSM has been long choppy consolidations followed by a strong run in early 2024 when it broke out. We then had another long choppy consolidation. If FSM breaks out and repeats something like that now, FSM would only be halfway finished with the run, but if Silver starts to accelerate to $50+, These silver stocks could do much better on this run over time.
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FSM closed up 12.14% and is close to a breakout to new highs.
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IAG was breaking out with Volume last week, so I posted a couple of charts about it (May 28). I mentioned that former leaders like IAG, HMY, KGC, etc looked to be ‘lagging’ a bit, but they were bullishly set up. IAG was a buy as it broke the downtrend. The volume was Bullish…
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IAG pulled back into Friday and then Gapped up 3% and started to run so I posted this chart before 10 a.m. yesterday. It was up 6% by 9:52 a.m.
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IAG was still running and these stocks didnt pull back midday like they often do. IAG was now up over 10% and volume was strong for 2 p.m. at 17 Million. It closed up with 24 million in volume, so the Gold and Silver stocks both look good right now.
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AAGFF was up 16% on Monday and has formed a large base. Many of he 5 letter Miners are now starting to join in. A good number of these have lagged, but they often join in over time and they can also play catch up rather quickly, since it doesn’t take a lot of buying to push them higher.
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DNCVF popped up around 20% and then sold down to close ‘up 16%’. You can see that it has been sideways and choppy this year, but these smaller explorers, miners can start to run more steadily if Silver starts to run swiftly too.
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VZLA is a leader, and I wanted to point out a chart that shows how swiftly a stock can run once it breaks out from a choppy consolidation. VZLA broke out in May and has had several 2-3% days ever since. Over time that adds up, and then it popped 7% yesterday with Silvers burst higher.
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So we have the General Markets acting bullishly and now the precious metals sector has really perked up again too. I would continue to recommend trying to ‘buy and hold’ for a while after an ICL, rather than trying to time the pullbacks, because the Gap Open higher like we saw on Monday does make it hard to start or even add to positions at that point. If we do get ‘pauses’ and pull backs, that could offer a lower priced entry. Bitcoin should also be setting up again, and yesterday I did see price action worth talking about, so I’ll cover that next. Enjoy your Tuesday trading!
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~ALEX
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BITCOIN was actually down yesterday, but eventually it bounced off of the red 34 sma again and turned Green. The interesting thing is that when Bitcoin was red, I saw the crypto stocks rising. That is something that we have not seen for a little while, so let’s take a look at what that may mean.
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BITCOIN could have a low at day 54 and that may be why Crypto stocks started to move higher. The problem is that it is not completely oversold and a drop to the 50sma could still come in at day 60, but let’s take a look at Crypto-stocks. They caught my eye on Monday…
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IREN reversed at the 20 ema, and Bitcoin was still red.
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MARA did ‘o.k.’ with that April to June Bitcoin run, but after the recent pullback it started to look bullish with Bitcoin down on Monday. It reversed at the 50sma, so it is possible that the crypto stocks are being accumulated. I’ll explain that a bit further shortly.
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RIOT was actually up 5% after a reversal at the 50sma, and again, Bitcoin was red. I saw similar price action with WULF, CIFR, SOS, etc. In fact…
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SOS actually looks like a bullish pennant styled set up after releasing earnings a week or so ago. So this sector may be the next one to run higher. Let me briefly discuss accumulation…
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Let me briefly discuss accumulation. Accumulation seemed to be taking place with Silver, and I pointed that out a week or 2 ago. I said that I saw Silver itself dropping down at times, but Silver stocks dipped and then recovered a couple of times. That does NOT mean that the stocks won’t drop during accumulation, but it can mean that they wont drop as much as the Silver, or in this case, Bitcoin drops.
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For example,
I felt that AG was being accumulated & moving out of the lows as Silver churned sideways. Notice that after breaking out, it Pulled back and back-tested that trend line last Thursday and Friday. So it still pulled back while under accumulation, so what does that mean for Crypto stocks?…
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So Ag and other Silver stocks still pulled back while under accumulation, so what does that mean for Crypto stocks?
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That means that Bitcoin has a day 54 low, and that may be all we get, but if it does drop lower? If Bitcoin does drop down into a new low closer to day 60, a stock like RIOT may simply do a little ‘shakeout’ and make a slight new low, or even just a double bottom low. So they can pull back again, but the chop may be milder with accumulation buying stepping in. If you are interested in this sector, you could start a small position and add on dips, as long as you understand the choppiness that may remain here for a while.
