February 21 Weekend Review

Last week I started my weekend report by mentioning that I was going to show you something that may be surprising to many. Do you remember what that was? It was the Gold and Silver ‘peaks’ in 2011. We’ll discuss that again briefly, because last week seemed to show that Gold and even the Miners could be playing out in a similar manner as what we saw in 2011. First we’ll go to the General Markets…

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SPX – The markets have been so choppy and difficult that cycle counts really are uncertain. Throw into the mix that the Supreme Court has gone against Trumps Tariffs and you have more uncertainty. The good news? It is possible that this was all one daily cycle and now the SPX regained the 50sma on Friday. That may only be day 3.

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THE WEEKLY SPX does still have a bullish set up as it reversed at the 20 week ma.

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THE NASDAQ is weak, but it did reverse on higher last week, nearly closing at the week highs. I don’t like high volume at the top, because it looks like ‘distribution’ and the MACD is weak, but we’ll see what happens next. It is possible that the markets will continue higher out of a dcl with these reversals in place.

 

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THE IWM (& SOX not shown) continue to simply looks bullish. The weekly chart shows higher lows and higher highs, and that is the definition of an uptrend. We do have 6 weeks of sideways chop, and that is why it has been lackluster.

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WTIC – Oil looks to be breaking out and it has been strong as seen during the weekday reports with daily charts. Oil stocks have been doing well too.

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COPPER – Late last summer and into September and Oct I mentioned Copper stocks as bullish. I highlighted TGB and WRN and mentioned FCX. Copper ran strong and is now consolidating. This may be an entry point for this sector…

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COPX ETF – This could consolidate further, but it also may be ready to run again. This is the ETF.

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TGB, WRN, and FCX all look very similar.

Using TGB you can see that it did run well, it is now consolidating and going from overbought to oversold, and it may be ready to run again soon. I am using TGB because they just released earnings last week and dropped Thursday. but reversed higher Friday. This MIGHT do what it did in October-November and crawl sideways until it tags the red 50sma, and it was a bit bumpy in Oct-Nov, but when it ran, it ran well.

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THE USD spiked down 4-5 weeks ago and then started to chop higher. It has overhead resistance in several areas, so it may struggle to climb higher (choppy). Noteworthy: The USD was higher last week and so was Gold, Silver, and the Miners.

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GOLD – We see Gold rising up and it has done that in the past during consolidations and then simply became choppy, but I want to mention again that I said I do think that Gold can run higher. Why? Because in 2011, as seen in last weekends report, Silver peaked in MAY and Gold rallied one more time and peaked in September. I also see Gold and Silver Miners bullishly setting up, so we’ll keep that in mind (though there are risks).

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GOLD has put in longer consolidation early in this run, but as the run ramped up, the consolidations do often become smaller, because the bulls are ready to buy the dips.  That can shorten a consolidation.

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I WANT TO SHOW YOU THIS AGAIN AS A REMINDER: 

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1. SILVER peaked in MAY 2011.

2. AFTER THAT SLAM DOWN, it DID consolidate and chop sideways for about 3 months (2.5 daily cycles).

3. The risky part is that after that 3 month consolidation, it took all of those gains away in a 2 day crash. Please study the chart with the above 1,2,3 points.

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1. GOLD did NOT put in a final peak in May 2011 with Silver. Gold rallied one more time after Silver peaked.

2. It did sell down sharply in May, and it also then consolidated sideways for 2 months.

3. Gold then rallied sharply into August & double topped into September.

 

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The above charts are interesting since they show Silvers blow off top in May 2011 and yet Gold ran again. I feel that we may be seeing bullishly set up Miners and Gold now too, so I will discuss that again below too. Again, it comes with risk since Silver has had that slam down selling.

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Speaking of that slam down selling, here we see SILVER with what looks to be a a-b-c down and now some consolidation or bottoming. In 2011 this chop higher lasted for 3 months (or 2 and a half daily cycles , if you want to view it that way). So this can continue, and as Silver chops sideways, I am already seeing Silver Miners continue higher right now. Silver is not even close to prior highs yet, but some silver stocks are!

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SILVER dropped from the peak and that was followed by 2 more red weeks, so this is the first positive week for Silver, and yet some Silver stocks released earnings and headed back to the highs without Silver. The stocks are bullish again, as Silver is trying to stabilize.

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GDX WEEKLY: Miners are bullish. It was only a 2% gain for the week, but you can see that the reason for that is that the Miners opened up back at the lows of the prior week before rising back up. This chart looks bullish and only had 1 slam down week, similar to October.

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IS THE GDX PARABOLIC?

Yes, it does appear to be, but when you consider that this is a weekly chart, and that it has paused twice, it does look like it could add on 1 or 2 or 3 weeks more. So GDX can make another run higher. Let me draw that…

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Well, all I did here is open up the space above GDX and add the parabolic curve height.

By doing that, it seems like I could add another weekly candle, or 2, or 3, so I have added 2 candles here. Again, THERE ARE RISKS to Miners if the Metals drop, but in 2011 we saw that the Silver crash/drop in May became an ICL, and the next 2 & a half daily cycles were normal.

 

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LEADERS & LAGGERS : Now we’ll peak at Miners

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AGI is at new highs already! They released earnings at that drop 4 days ago, but then it took off higher.

 

FSM released earnings and then took off higher too. Even if Gold & Silver don’t make new highs, these are going to sooner than later.

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EGO – I want to point out that initially after earnings, some Miners are selling off, like EGO on Friday. We’ll have to watch and see if it strengthens next week and becomes a buy on a reversal and push higher.

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EXK has earnings next week (Friday before the open), but it is a bullish set up right now. If Silver bounces higher, this should get back to the highs or better.

 

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NGD also has earnings next week, but the setup is bullish as Gold moves higher. That drop hurt from $13.50 back to $9.50. Ouch, but now its $9.50 to $12.25 and it could keep going to $15 plus if earnings are good.

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KGC is another lagger after earnings but keep an eye on it. If Gold bounces higher, it may take KGC with it.

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So at this point we do see bullishness, but the chop has been very difficult in several sectors. We are looking at reversals higher Friday, so next week we need to see some follow through, rather than this chop and slop. Toward the end of the week some of the Miners started to perk up and in just 2-3 days they began to run back upward and toward the highs. There are laggers and some with earnings next week, so there could be opportunities there for traders here or even to Buy and Hold (maybe for a couple of daily cycles? Just remember that there are known risks. If Gold or Silver sells off, the Miners would likely follow).

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In New England where I live, we are due for a possible Blizzard Sunday night through Monday night, with 40-50 mph. winds. I could lose power and also will probably need to do cleanup of the snow more than just once, so I may or may not be in the live commenting area during Mondays trading. I hope that everyone is enjoying their weekend!

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~ALEX

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BITCOIN -So far there is no change to Bitcoins weakness, and this sideways choppiness has been similar to the last daily cycle.