The market volatility has been whip sawing people left and right. What used to look like the perfect set up falls apart in just a day or two, so having ‘stops’ in place has been very important. Lets take a look at the markets and then review some very interesting things that took place in the Metals and Miners area today.
SPX- This bounce was expected.
USD – Still making slow Progress, but it isnt doing anything to impress me yet. It has closed above the 50sma , but it has done that recently and rolled over. I’ve been pointing out the overhead blue line as a possible target.
WTIC– Some energy stocks started to show signs of life, even though OIL popped & dropped back down.
XLE – we see a little reversal and good divergence. The energy stocks are oversold, so they may be leading, indicating that Oil could break higher.
BBG – This energy stock was up 10% and is in a descending wedge. Rather strong divergence, I really like the looks of this. A break out is bullish and other energy stocks have a bullish look too. Go back & look at the opening theme picture… I decided to wait for follow through or confirmation before jumping in.
NATGAS – I posted this NATGAS chart in the comments section today. We hit a low of $2.51 by the days end and the lows at the green arrows in April are at $2.48 . NATGAS reports are released on Thursday, if this is a bullish report, you may see the lows here.
Better than that would be a break of the $2.48 lows and then a reversal /close back inside. THAT would be a stop run and a low risk buy.
GOLD SILVER & MINERS –
Welcome to crazy-ville. I have A LOT to say and may have to save some for another report.
1. If you worked all day and I told you that today we watched Gold drop down $17 and break below the 50sma, then close down $11 still under that 50sma, what would you think the Miners did today ? Exactly… so lets take a look.
Gold – Stochastics , MACD, RSI 50sma…not pretty.
GDX – While Gold takes a dive, Miners do a bullish engulfing? In what appeared to be recent weakness, GDX MACD did not cross down.
Miners usually lead a move by Gold, that is why we often look to the GDX:GOLD chart (Or GDX:GLD) to see if the Miners are leading. It is also a buy signal that many use in various ways. I have a buy today on this chart, and possibly further confirmation tomorrow.
I listed a number of bullish looking Miners a week ago, and even though we have had whip saw action in this sector, some are still nice set ups. I do not think that cycles are playing out very well, but the T/A is. Lets review.
ABX – last week and now. It is actually further along , so it is even better now.
NG – I showed Nova Gold above the 50sma last week, and this is NG now.
AU – 2 charts . This was from this morning and the second one is at the close. It closed higher, RSI ended higher and the volume increased as the day went on. This with Gold down $15 most of the day.
SA– nice move with Gold down $15 most of the day too. This is a buy i.m.o.
I used this chart in last nights report to show that a system that I developed ( and has only had 1 whip saw in the last 3 yrs) never gave me a sell the miners signal, even when GDX dropped to new lows.
Strange, but it is still on a hold signal. Even the MACD is holding up on GDX as we remain at the lows.
Looking at todays bullish move higher in many Miners with Gold getting hit, what can I say? I have to report what I see and I dont think that the miners were a head fake today. I think it is Bullish action, and the charts look bullish too. I know from recent conversations that many are getting cut up buying miners and getting stopped out. I have too . For some, it may be best to wait and see if we do make more of a sustained move higher and enter on a pull back. Others (traders) may want to take starter positions in some of the Miners. Possibly a safer looking one, one that hasn’t broken down and remains over the 50sma. Maybe one sitting on support. See examples above in this report.
If Thursday has some follow through buying in the miners, I am going to write a follow up report Thursday night. I did some extra research and I will explain what I think might be happening. It is actually bullish despite all of the mixed signals and jerky whip saw action in the sector lately. If we do not get the follow through, I will not need to release that report.
I plan on taking a few starter positions today.
~ALEX
Time Decay 
Have You Been Trading Metals & Miners?
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might be a bear paw replacing those fingers in your header next week 🙂
LoL – Beek , nice to hear from you again.
( I think my hand got stuck in their once or twice last week).
Great charts. Every time you get buy and sell signals based on your systems would be much appreciated if you could post it here.
Thanks knight,
I dont and wont put every system trigger in every report, it is a waste of time and can look flip floppy when the more sensitive ones trigger and go away. I put them in the reports on an as needed basis. Some are early and need others to confirm. I dont tell my readers to buy just based on one buy signal system, but I have been told by readers “You got a buy signal so I bought, what do I do now?”. Or like in the comments section yesterday, I said I got a buy in GDX:GLD and a reply was, “I thought you never lost the buy signals?” They were thinking of a different buy system triggered that never called for a sell. So it can get confusing, unless I discuss the importance of the signal.
One ‘buy signal’ in one system is not a buy signal for my report. For example, if I see GDX:GLD trigger, I may show you in my report if I anticipate that others will follow because we are on day 3. On the other hand, If GDX is in the 3rd daily cycle and on day 14 and GDX:GLD triggers because GOLD gets slammed & miners dont GDX:GLD may trigger, but I wont mention it.
Cycle day 3? What?
It’s a hypothetical example Bill…not where we are currently…if that’s what you are asking?
Thx Chris, that is correct.
Bull flag on Crude? We should know pretty soon. Looks to be strengthening. Refresh.
WTI broken above the resistance line. See if holds tonight.
Alex thanks. I am still bemused/confused by this price action in GDX vs GOLD, What type of confirmation should we be looking for today with GDX and GOLD to make a bullish move? As GOLD is still trading weak at present @ 1113-1114. Thanks
Good question, and the answer is only clear if the moves are obvious.
For example a strong reversal by Gold , and another day higher by miners would be further confirmation that Miners were leading. I can picture Miners just moving higher and GDX crosses above the 50sma – and gold lingers at these lows ( GOld hit $1110 yesterday, so if it doesnt break down further), we may be seeing strength .
Overall I looked at Miners, and they arent breaking lows & crashing ( ABX for example), and we have a good number still above the 50sma as shown in the report. It was more of a ‘Miners selling off while Gold held up’ recently that kept us cautious and cycle count moving forward did too.
There are many things to look for, but if I was buying individual miners, I am looking for a chart that looks healthy . SA, NG, etc still look like long candidates. And I plan on a report later if I see things playing out well for the Miners. IF gold is weak and Miners drop today….I assume that at this pint no one will try buying that .
and for any that got stopped out last week and tired of it, they may want to wait for more than a day to see proof and then buy a pullback.
a few wrote to me that they bought and sold JNUG 6 or so times for big losses. JNUG cant have a tight stop , moves much greater, and therefore stopping out is with bigger losses over and over again. Not recommended at this point.
Thanks Alex, that helps my understanding.
SANDY –
Something else to look for. Yesterdays slam was high volume… todays lingering at the lows looks like a test of those lows. It wont last if it is.
This is a rough channel for Gold, but a break higher outside of this channel is also bullish, especially if Miners follow higher. (REFRESH)
Hi Alex. I currently read a couple of other (and very different!!) analysts to you but who I have immense respect for along with yourself. Without hopefully breaching any copywriting rules etc I will say that one has VERY similar thoughts to you regarding the gold miners sector currently and believes an important low has just been put in place. I’m seeing that as ‘great minds thinking alike’. I’m certainly not suggesting everyone should go out and immediately ‘load up’ on miners as neither are you…as we know full well, life is NEVER that simple…but after what has been a real tough patch for many of us if not all, I’m personally feeling a lot more optimistic about what is coming next and dusting off my ‘buy list’. Another excellent report. Thanks as always Alex.
Thank You Chris
In my overall big picture…I keep entertaining the idea of commodity lows and market highs as a very strong possibility.
I look back at other lows and they all look so easy to buy, but in real time ? The mind always fears after that type of sell off that it is not done to the downside.
Time will tell, but for some Miners , I would say we saw lows a long time ago ( Again, see a 5 yr chart of RIC, LSG, NG, etc. Lows have been in for a while.
I couldn’t agree more Alex. Very much the same ‘big picture’ view but judging it all in ‘real time’ a completely different challenge to assessing prior completed patterns. But nothing quite like a good challenge!! 🙂 As you say time will tell and in a few months we’ll probably look back and think how obvious it all looked!! Lol
Alex, what’s your thoughts on the VIXY here? Above the MAs, but MACD and RSI headed lower. BEAR flag forming?
No opinion, it moves in a way that I am not thoroughly familiar with. I have never traded it.
The MACD does look quite weak, but again I’m not familiar with watching it .
Anyone else see a H&S pattern on GDX? Refresh
I do see that pattern on your chart, yes. But I still won’t go long here.
yep.. im watching, and its still holding
Looking even better now!
http://screencast.com/t/WpurpxTKm
Nugt up 966%, if only?
NIce POP in oil. Looking back at the flag in my report, this move to $47 puts it above the downtrend line …a break out if it holds
CF .. does crude usually follow xle … chartwise?
Not sure M.
NATGAS ( see report) broke the lows of $2.48, as it went to $2.4720. So I will watch for a reversal or follow through through the day and maybe for a few days.
Inventory report in 15 mins
Right , and lately that Always moves it one way or the other.
The initial move may be a false ‘head fake’ type. Like if it sells off into lunch time ( 12 Eastern time I should say), and then might exhaust and reverse higher.
Wow, nat gas. Just Wow! But here is the good news – my heating bill this winter is going to be CHEAP since nat gas is essentially completely free at this point. Whoo!
And Miners playing that weak game again
Many Miners regained and lost the 50sma so far. It’s a cautious move, not a strong one so far. May be another head fake.
I was looking at buying “AG” for instance. It started strong, but is back below the 50sma.
I liked SA and maybe NG too…both pop & drop, so need to see follow through or we may have the same old song & dance.
S and Gold doing OK
Yes, not bad, but I’d like to see Gold close back above the 50sma. Currently at that point now.
‘Mind your eye’ with oil! Just spotted on my daily chart that’s its up against a key ema I use and which topped the last three rally attempts on 31 Aug, 17 Sep and 23 Sep. So although I have a pottential bullish break from a wedge on my 4 hour chart, my daily chart still looks more problematic. Just something to be aware of.
Thanks Chris
Gold’s 10 DMA has now turned downward. I think you’ll be hard pressed to find an example of that happening mid cycle where gold turned back up in a meaningful way. Not a good sign in any case. Doesn’t mean it collapses from here; maybe just some choppy triangle-like action. What do you think Alex?
And if it’s forming a triangle here then there’s the probability (?) – or at least large risk – that it’s a continuation pattern. At least it indicates that whip saw action may be in its future for a while here.
I am firmly convinced that we are going to see what CF described earlier in the week as the churn similar to the last 2nd DCL, April-early May timeframe. I will try to find any serious pop in the 2x day timeframe and go short. Expect another big waterfall at some point. Best thing that could happen for us is rate hike, gold crashes and puts in final low then we can go to town with CF’s buy list. A chart freak can dream, right?
I HATE that scenario of that sideways churn like we saw in March to May. 🙁
we’re back on with the GDX/J coils again..
which way break this time?
Oh, I don’t like it either!!! It just seems like the highest probability, but doesn’t mean that is what I want. I want the large directional moves that may come later! 🙂 I’ve lost enough to ‘maybe’ setups for now…
Rare, but I have seen it. It was in the bull run though. I cant remember recently seeing it.
Yeah, that’s my assessment. It just makes me very cautious and skeptical that we’ll see a major rally in this 2nd DC.
Fooled again……..
Not if you didn’t buy anything…
Oil did not like 46/47. However, US$ weak. 5 hours to go to end of session
GDXJ, NG, RIC, etc did not like their 10sma
I don’t like oil here – I think too much of yesterday and this morning’s move was geo-pol based on airstrikes in Syria. The Wed inv. report was extremely bearish! I have too much exp with geopol giving a pop to gold. What happens when it comes off? More downside than the original upside. OUCH!!!!
Thanks for the chart of NovaGold, Master CF – I’ve been following it based on strong fundamentals
Just bought it at $3.51 – sitting on 50-day MA and at the bottom of it’s September trading range; giving it a close stop loss, as you well pointed out
And thanks for all your analysis of miners, it really helps. I can’t help but think that, even tho’ there’s frustration right now, this time next year, they’ll look good. Been following GDX/J for years and began accumulating in late July, so…
I couldn’t have found you at a better time!
Hey Cal, Thanks
And I look at some of the weaker looking Miners now and they “could” be just trying to put in a consolidation bottom, not a break down. It is frustrating at this stage of the game ( 2nd daily cycle), but it’s worth watching .
I will post a chart of ABX – to show ‘possible’ bottoming action, and compare it to some others like AUY, NEM, IAG, EGO, etc. They are lingering near lows, but do they have to break down? They could but they have some bullish signs within. I still may post that extra report tonight or tomorrow morning on miners.
Thanks for that! Those tall green volume bars and shorter red volume bars also look good
And the CAN break down, but they look like bottoming so far. Maybe they do break down in the 3rd daily cycle, so we should keep that in Mind.
Shorting the 3rd d-cycle might be a good choice if weakness lingers
Or, if gold & miners show some life into a 3rd DC, that might be a good time to sell calls to lower the cost basis? Being vigilant never stops!
nice perspective, thanks for sharing!
wow shippers… even drys…
**shippers waking up…
yo – CF.. do i have to change my name in order to get an answer from u?? (and a thank you) LOL
Hey Maria, sorry, I am at my parents house taking care of a few things so I am in & out today .
I haven’t honestly observed if XLE leads OIL or not. I assumed maybe it would, because smart money may take position before the anticipated turn.
K..tx
hate to sound negative but another one of those days where if you aren’t short, you are losing. 🙁 Gen market seems to be rebounding after S&P tested the 1900 mark. Notice that volatility is still down 3% with Dow and friends in negative territory almost all day.
Jobs report tomorrow may make life interesting. Not excited about holding gold into that. I think the recent volatility is actually B/C we don’t know when the rate hike will be so we have uncertainty. Just do it. Sure, maybe some ingestion immediately but watch the far end of the volatility curve flatten quickly once done…
Lower than expected jobs report + they revised August down. Gold and silver are really popping for now. Let’s see if it can hold and build on the gains. That was a stick save. I think a better than expected report would have sent the miners on another seious decline with new lows.
Def agree with you, Carl. That was a helluva miss, too. None of the ‘goldilocks’ reports we have seen semi-recently. The only issue I keep thinking of – the markets like to worry and worry in advance. So, how long until the instant gold euphoria of no rate raise now turns into fretting about Dec and Jan? Reference the ‘no taper’ issues of 2013 where each pop was met with – but, what about next mtg? That was a serious pain!
Other thought – looks like the markets had short to intermediate term bottom put in this week – now called into question on week data. That may have helped integrated (base metal) miners, energy, tech, bio-tech, etc. Though it likely would have crushed GLD and pure gold miners. These are interesting times. But I don’t want interesting. I want profitable!
All true. No way you could have reentered a position before the report. This was pretty much a miracle. Just wait for a good retry point. It will no doubt come. The 50DMA has been stopping rallies since May. It’s at 112 HUI today. Let’s see if this can push through it. Even if it does their will likely be a retest at that point.
I remain cautious. We got above moving avgs last Thurs, also. And we know how that ended…
Will have to see what markets and CF have for us next week. I still think a few days of pop is just setting up a short entry. To be sure, we have had great single and couple day moves, but overall this ICL has been an enormous disappointment.
Other than some now way out of the money GLD, I had already lost my position so this likely won’t really do me any good. Glad for any that caught this move!! But to stop out beforehand (as I did) and re-enter before Jobs Rpt with no knowledge would have just been flat gambling.