This report will only cover Gold, Silver, and Miners
GOLD – If you are familiar with Golds cycles, then you know that this first daily cycle was right translated (it peaked on day 21, more than 1/2 way through that first daily cycle). We would now expect the second daily cycle to break the highs of day 21 on the first daily cycle. Currently Gold broke down below the 10 & 50sma , but volume was light. We are on a trendline. If we break it and move higher, that shake out could make room for higher price.
Let me show you why I am thinking that Gold & Miners may be faking their weakness. As mentioned earlier, I found something quite interesting regarding the recent volatility & Head fakes.
EDIT: Friends – after having the above written, I dealt with a glitch with my web site and I was temporarily locked out of my ability to write this mornings report until now. I have access now, it it will take me quite a while to put it all together, so I will be back with a part 2 later in the day. My deepest apologies.
I will leave you with a chart that I had prepared at this point. I had a public post under the blog tab in case you missed it, and I have been pointing to bullish looking Miners – despite Golds weakness. I used this wedge as an example. There is still a little wiggle room, but it may break out today.
This is a chart that I prepared for this mornings report. It is a wkly GDX chart. If this bottom has held every ICL, then we are pinched between the lows and a break out. Bullish looking if it breaks out higher.
This was my GOLD chart 2 possible scenarios for the next ICL. I will explain these charts better in part 2.
Again, I am sorry that the report is not complete, but I have been leaning to the bullish side despite all of the noise that we are seeing. (See yesterdays report), and Gold just Popped as I write. May not look like much, but it went from $1103 to $1132. That’s HUGE. 🙂
Thanks for understanding and re-read yesterdays report and the public post for now as a refresher, and I will try to get this out later today. As I wrote at the end of yesterday report, I was buying a few choice Miners on the pullback .
~ALEX
Have You Been Trading Metals & Miners? 
Abnormal Cycles Part 2
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Alex, your crystal ball seems to be back from the shop! So the probabilities are to now expect a better of 1st DCL in both GDX and $gold? Thx.
Now if we can get those wheels trued on that bicycle
So far a relatively muted response by miners. I always look for at least a 2:1 relationship between miners and gold as the “normal”; if greater it’s a strong move, and vice versa.
It’s rough and not definitive, but generally a good guideline.
Getting a bit better as I wrote that.
PLEASE don’t misinterpret this note. I am all on board with Alex and his current views and want gold/silver and PM miners to go up as much as anyone. I own enough of the stuff!! But I just wanted to post this daily chart of gold so that we also keep perspective even after today’s nice launch higher on the back of weak payroll figures. Bullish or not…time will tell…we have a couple of very important near term hurdles to overcome. The falling trend line that links peaks in Jan, May and Aug and also coincides with the 111 ema that has been highlighted recently. These converge around 1150 which is also very close to the Mar ICL (prior support now resistance??). And of course there is the prior minor peak of 24 Sep around 1155. So in my humble opinion 1150/1150 is a VERY important hurdle and where gold will have to prove itself in the very near term. To finish on an optimistic note we do have two minor higher lows in place now but need to get past 1155 to produce a higher high and give more evidence of a developing uptrend. As I say I’m just trying to keep perspective on where we currently stand and hope felow CF’s will find this helpful.
Well written as always Chris. Thanks for sharing.
Thanks Bill. Just hope I can contribute a little to a great ‘melting pot’ of thoughts here. And just want us all to stay as safe as possible, especially after the last few weeks, which I think have inflicted a fair bit of pain!
Pain, to say the least!
Agreed, we have to break out of this triangle – to the upside, of course! I still have some exposure but not nearly enough now – grrrr. This has been a real b$#%$ of a trade to stay with.
And if GDX was in a diamond bottom then it just broke out; now it has to hold it.
It’s always good to look at the other side of your trade. Nicely done.
As you say OFT, NOTHING easy about recent price action and I thinks it’s frustrated the hell out of most if not all of us. But even if we did end up breaking out properly and running hard for the next few weeks in this 2nd daily cycle, although you might feel you’ve missed a lot I would be seeing it as part of a MUCH larger and MUCH more significant bottoming process that is seeing a bear cycle morph into a new bull cycle. IF…IF…that eventually proves to be the case then there will potentially be multiple months if not years of significantly higher levels to come, which will make anything you miss now pale into insignificance. So don’t feel too frustated…the REAL fun may not have even begun yet!! 🙂
Yeah, it’s tempting to feel as if you have to get in at the bottom; it’s a great feeling to do so. In fact it’s a dangerous “drug”, for sure.
Couldn’t agree more. Nothing quite like the ‘buzz’ of catching price lows. But in the longer term it’s a very dangerous game..at least for me…especially if you don’t have tight stops. I’ve learnt the hard way that trying to catch ‘falling knives’ is not my personal style as thrilling as it can feel if you do nail a low. But for me I’m happier to see moves start and prove themselves a little before climbing on board. I also tend to aim for catching multi-week/multi month moves rather than very short term trades. It’s just where I personally feel more comfortable. So in that sense probably more of a trend follower, which requires more time for price trends to develop and taking a somewhat longer term view. But that’s simply what suits me personally and won’t be to everyone’s taste I know. Bottom line is to find the style which you are most comfortable with and most importantly proves profitable for you over the longer term. So I consider myself the tortoise rather than the hare!! 🙂
The issue with miners has been if you wait to it ‘proves itself’ and gets above moving avg what have you just done? Bought the top. Every time. 🙁
It’s certainly not been easy of late Cason. I’ve been sitting on my hands a LOT of late and when i have dipped it it’s been with very modest amounts of capital. I think it was JD mentioned a few days ago about reminding him to NEVER, EVER buy anything below it’s falling 200 dma. For longer term trend followers that would be considered a simple and arbitrary divider between longer term bull and bear cycles. In trying to enter positions near major lows and capture the maximum upside you are invariably still figthing those longer term downtrends and until those turn it can make life a lot more difficult. I suppose its pretty much a case of higher potential reward/higher potential risk!
That’s basically what I am playing for now. I am going to pass on this one – chasing at this point just hasn’t worked for me this cycle. (I am still holding a bit of GLD as I have stated earlier this week). At this point would rather watch 3rd and 4th cycle to see what the set up is for any potential bull:bear transition which at some point would hopefully provide higher % chance of success. We’re flipping coins right now.
Looks good so far. Monday will probably be the important day. I expect the bulls to try to reverse the stock market sell off on Monday and take gold back down. If gold can weather that and continue up then we’re in good shape. There was an intermediate trend line break early this morning. That needs to be negated by gold making a higher high soon.
It also looks like the dollar may have formed a left translated top on day 5. This would also indicate a left translatred intermediate cycle.
I agree and the first thing that I thought about this morning. I was ‘stuck’ with a few GLD calls after the recent 1155 fail. I cashed out of half this morning to at least ensure I got something for them. I kept a few just in case we get a 2nd (unlikely) day up in a row, but if we do at least I’ll be ready. Still thinking I’d be a net seller on big pops in this sector.
FInally!!!!!
Yes! I sure was sweating yesterday. Holding positions in 3 miners and GDXJ since mid week.
When the Fed raises rates? Oh aye.
Having just posted re gold ealrier I will also add that AEM (one Alex has highlighted) is looking great on it’s daily chart. The recent bottoming looks incredibly similar to last Nov/ Dec and also potentially creates a much larger x2 bottom. IF…we continue to mimic last Nov/Jan we could see a move towards $34/35 over the next few weeks. Currently at $27.
But I can’t figure out why so late in the cycle? the first cycle dropped bottom late and then we are already half way through 2nd and now talking about getting the pop? Just doesn’t make any sense. We’re too close to the next drop for me to have a lot of faith here. Or maybe it’s getting burned 3x in a row that’s making me gunshy 😛
Maybe it seems late . Day 15 out of possible 33 day cycle…could go higher for 10 days and then drop. Not saying it will, but that would be a 2nd daily cycle with a right translation to it.
Sure would. I could jump in GDXJ/JNUG again, but if I did, it would crash on Monday. I don’t want to do that to the rest of the subs! 😛
GL all.
http://tos.mx/kE2OG1 GDX 4-Hour
No matter how many ways I redraw the yellow trend line, the market is above it
Gotta mean something positive
wow.. dq..powering on… ;o)
Maria, I remember you posting this 3 days ago, what’s your expected upside target?
yeah.. roundabout there is my first target…
SPY has come back from almost 30 down to up .3%. GDXJ settling down some but GDX holding strong. Wouldn’t it be awesome if gold and market could go up together for a few days? Long SPY calls for a spin back towards 50-day. Re-assess at that point but will pull position if we even get close.
New here, enjoying everyone’s posts and appreciate the insight.
Thought this was encouraging:
http://peterlbrandt.com/precious-metals-could-be-bottoming/
Welcome here Manny !!!!
Yes welcome Manny – glad to have you here.
Good old Peter B. he has been around for a long time 🙂
skyrockets in flight…… ;o)
https://youtu.be/2NUkhMq_iRo?t=45
man.. what a day…thank u CF for all your hard work.. … ;o)