Safety First

Each trade that you take has some risk to it. Some trades are low risk  set ups with higher probability of success and others are just plain risky, depending on the set up.  We will discuss that a bit later in the report. 

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SPX– The Fed didn’t change this chart very much.  I still see similarities between the double bottom in Aug & Sept, but it is weak. Notice the candle for Wednesday rallied on the Fed and gave it up.  The buy the dip crowd is weak. We are not oversold yet, but getting there.

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USD –  No change.  I thought that the FED would rally the dollar, but it bounced higher during her speech and then sold off promptly ( at the 200sma) .  That  said,  it’s getting oversold and I still expect a bounce and then we’ll see what it looks like then.  For now, this really is acting weak.

$WTIC – Oil is where we saw some change.  This has plenty of downside likely with daily cycles running into the 30+ day area.  It’s odd that XLE & some oil stocks were holding up today, a good number have higher lows  with lighter volume selling.  Odd.

WTI – Here is an example, but for now I am just watching how things develop here, as I expect OIL to sell off further  ( Target now $24 as mentioned in yesterdays report.) .

GOLD, SILVER, MINERS

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I mentioned in yesterdays report that some miners like NG, SA, NGD, etc ( And Silver & Silver stocks) may have lagged a bit and could play catch up even if GDX flags here.  This a.m. it looks like the reversal in GDX at the 8 ema will travel higher  ( $18 pre-market) . Trading now is higher risk in this area , but  we may be seeing a runaway type move that leaves people behind.  We are closer to the timing for a DCL.  Traders know your risk tolerance, and circumstances  ( Are you in front of a screen all day? )

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GOLD – In overnight trading, Gold ran above another  pivot point at $1205.70 and is right under then next one at 1232.00 as I write.  🙂   The Gold bear is in hiding. 🙂  CAN IT GO EVEN HIGHER?  YES.   Many people are tempted to jump in and feel they are missing the move, but that leads me to my theme picture.  The risk / reward is not in our favor here, yet some stocks could be “traded” by traders in front of the screen . Chances are  likely that gold will pull back soon .   Reminder:   Dust is going to chop people up as this nears a temp top.

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GOLD WKLY –  Just look at the GREEN ARROWS on a weekly chart . They show a similar move at the end of a 2nd daily cycle, and what happened the following weeks.  If the bull has returned, this could run further, but this one is extending.   If you want to trade this sector, enter any trades knowing your risk tolerance and trading circumstances and use stops.  This could drop back quite a bit when it is done climbing.

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GDX Tuesday  – GDX can make a higher high, a double top, etc as mentioned in yesterdays report.  I drew this Blue Box to point out that trading dust at tops can be tricky.

GDX 2-10  – GDX reversed on the 8 ema and put in a Fed reversal.  It is at $18 pre-market as I write.      Do some miners look like they want to go higher? Yes.   Are we due for a drop, thus it is no longer a low risk entry?  Yes.  Again look at the box on the left.   Dust will probably move 20% per day on the way down, but sometimes you get 1 down day, 1 up, 1 down day, 1 up.   It may become very tricky trading. 

That said…

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There are some stocks that look as though they want to keep running or even play catch up.   RIC, ABX, NEM, GG, NG, etc etc  all reversed at the 8ema and look set up to go higher.  They lagged a tad bit on the last run.

We all know DRD, HMY, SBGL, and others that really ran well in the last run up.  Even ABX, NEM ran very well.  RSI 85 on many. 

Notice that NG is moving along, but less overdone in the RSI  area.  It didnt run as well as even ABX, NEM, etc.   Maybe some of the Juniors want to play catch up.

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I   can’t and wouldn’t recommend these trades to just anyone, because it goes against my idea of a low risk trade.   If you are an experienced trader, in front of the screen, then you may find trades like that ( on the 8ema and holding, reversing) scalp-able.    One could have put a stop  under the 8ema if they bought that reversal as a trader yesterday. 

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Also LSG may have retested Wednesday on it’s drop.  I captured this at 10:30 Eastern Time  and was going to post it as it sat there for an hour at $1.04, but then it reversed higher quickly , before I could put it in the comments section.   Also as a Fed Wed, I was cautious to mention it.   This could be support and a long term buy if it drops again and support holds. 

So there may be “Trade” ideas out there, but with current market conditions and volatility, patience is safest for medium to longer term buyers.  I did mention that core positions at this point in some of the ones that bottomed in 2013 or last summer was reasonable, and now we see why.  We will eventually get a pull back for lower risk entries, and we may be seeing a bear market bottom.

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~ALEX

After I posted  my report  and proof read it,   I realized that some of the charts that I loaded late last night did not ‘save’ to the report. They were…

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GDX –  I drew this idea at noon yesterday when GDX reversed off of the 8 ema,  as can be seen by the time stamp on the chart.  People were buying dust and I was mentioning that a reversal on the 8 ema should be respected.    I also want a higher high  ( We now have it pre market)  to give us a solid right translated cycle.  Day 17 , this will be R.T. 

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This chart of AU was to show those missing the move that IF the bull is back, future gains will be  as good as the ones we just experienced. Those who missed the move will have another chance.

AU –  went from $12 to $41 in 6 months, but it wasnt straight up.  Buy the dip mode was in play.