May 2, 2016 Update
Not a whole lot has changed from the weekend report, but we can still review our information and update our outlook if needed.
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SPX – This was from the weekend report. Notice that either cycle count that I had in place showed that it was late in the 1st daily cycle. We are due for a DCL and the start of the 2nd daily cycle may have already occurred on day 38 or Friday with that reversal.
So here is the SPX from Monday …
Monday saw a swing put in place from the reversal candle on Friday. The pull back didnt even drop to the 50sma, and now we can see if the markets will roll sideways like the last few times they have been at the former higher ( last fall) , or will they break out into a continuation for the bull market? The weekly chart ( Shown in the weekend report) was pointed out as remaining bullish.
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In the weekend report, I said that the Dollar looked like toast with this chart . Monday , it proved that it is…
USD – This is actually a break to new lows. Looking at the live USD feed in the column to the right, we see that Overnight we actually hit 91.88. It is a failed ICycle, and calls for follow through to the downside. I expect a somewhat convincing bounce first, and then it will continue lower. MY point this weekend was that the run higher in 2014 was bad for OIL & Commodities. This drop should be the opposite.
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WTIC – Oils cycle counts are usually long. They run from 30 – 50 days! The first daily cycle was 36 days , with a peak on day 25 ( R.T.). Now we’ve made new highs, and I have expect Oil to run to $47 – $50 in the 2nd daily cycle. We are there, are we done? It is still early, since we are on day 20 .
-We COULD drop to a DCL on the 50sma & 200sma as shown, but I put the 10sma ( red line) in there to show how it climbed along the 10sma in the first run higher. We are still above it, so I’m watching that. I’d like to see OIL tag $50 at the top of the channel and then drop.
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This is the CRB chart from the weekend report. I’ve been discussing the 190 area as resistance, and then possibly being ready for a move to a DCL.
The CRB May 2nd– Read the chart. We are dancing around the 200sma as expected. I can still picture a quick run to 190 and then a drop to test the rising 50sma too. Or…
As drawn on April 25th in the chart below – just crawling along the 200sma into a dcl, then pop higher. All I’m trying to point out is that most scenarios are quite bullish, and I think individual Commodity stocks are doing there own thing. I’m not selling my commodity positions based on the CRB movement, they do not often correlate.
ZEUS for example: Some stocks I’ve pointed out like X, ZEUS, BOOM, etc were up very nicely today. Others were pulling back. If I’m trading the CRB, I’ll follow that chart, If I’m trading X, AA, CENX, HBM, CLF, etc , I use their charts. 🙂
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NATGAS – Rejected at the 50sma in March, it finally pushed above it. Rejected at the 200sma in April, it has dropped back to the blue rising trend line and the break out trend line . Can it drop to the 50sma again? Yes. Does it have to ? No. I would think that the light blue trend line would hold for several reasons, we’ll know Tuesday.
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GOLD – Was that a topping candle? Yes. IF Gold drops to an ICL from here, it may tag the 200sma. If they continue to buy the dip and climb this wall of worry, it may just be a back test of the recent break out from a multi week consolidation along the 50sma.
GDX – GDX is stretched so far above the 200sma, that it is just very extended. It should be pulling back soon. I had a target of 27 recently after breaking out from that consolidation, but if Gold drops, Miners would likely follow.
Not a whole lot has changed from the Weekend report. I really like the set ups in Commodity stocks that we have been looking at. Even though some commodity stocks may have had a RED DAY, I want to remind you of how these things often play out. That will be an added lesson at the end of this report. So for now, that is our update. Have a great Tuesday trading, things still look bullish in Energy , Commodities, and even some Miners with bullish set ups continue their push higher ( See TRX,EGI, BAA, TGD, MGH, etc ) .
Use caution in Miners, DO NOT trade extended miners. They tend to drop FAST when the music stops. 
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~ALEX
Lesson / Reminder :
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If you were here for Feb through April, you likely remember that we were holding CLF and VALE and they just consolidated for a period of time? It was boring! We may or may not see that again here, so just in case we do, I will show you what I mean as a reminder here.
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VALE – I posted the possibility of a sideways move as we entered our 2nd buy of VALE on March 15th at the 20sma. I wanted to point out that it may not just blast off, it may consolidate for days / even weeks.
VALE – April 6th! Weeks later it was boring the daylights out of us, as it continued bouncing around sideways. I encouraged us to add on the dips above the 20sma , since it remained bullish.
VALE – The run was GREAT! The comments / Chat section lit up when CLF, SID, VALE, etc ran strongly higher. VALE ran from $3.50 to above $6 in a couple of weeks. When we sold that rally, it was to buy a pullback. I just want to remind readers that before the explosive move higher, there can still be sideways moves too.
SO here we see that VALE could just start running higher as drawn. OR…
This is a reminder that it may not. It could repeat what it did in March. I just want to prepare the Chartfreak readers that this is how these stocks can move.
That is what we see happening in AA for example. Recommended April 13 , I thought that it was ready to break out then and now, but it continued sideways too.
It is starting to move higher again now, but it still hasn’t just blasted off straight up. It too has had its boring times.
What did you think of that ZEUS chart in the report earlier. At least the Steel stocks went straight up, right? X and ZEUS. Straight up!
Or was it? This is the same exact chart as above . It looked like it ran straight up in the chart above, but not if you were invested in it day to day through March and April. SO try to ignore the day to day wiggles if you are buying a commodity stock that has already run higher and pulled back for you to enter. It may be consolidating, it may have down days : )
FINALLY –
HBM MY CHART FROM APRIL – We had seen a long consolidation and it looked like an inverse H&S ready to break out, so I’ve been recommending this one for a while now.
HBM – It is taking off higher. HBM just ran from $3 to $5.13, but today it pulled back to $4.85 . Yes, It could just continue higher, but …
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HBM – It also may consolidate, something like this at the 200sma. We dont know for sure. As we have already seen with CLF and VALE, HBM could go sideways if it consolidates gains on the way higher. IGNORE THE WIGGLES if it remains above the 200sma.
HBM – It already released earnings when it took off higher. Now in my opinion, it has proven that the chart set up was Bullish and remains valid. If it consolidates, it may be a buying opportunity to those that missed an entry.
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Evep consolidation for several months. Breakout to 3.59, pullback to 3.00 area, then breakdown to 2.64. You spoke of buying the pullback. Any thoughts now.
Hi Mark, 3 thoughts…
1. Cute Dog
2. I posted this chart in the comments yesterday. ( refresh). If it breaks this support, it may drop to $2 , but so far it looks to be back testing support.
3. I dont just jump into a pullback as it is pulling back. Buying a pull back is what we do instead of chasing as it runs to new highs or runs higher in a trending move, like commodities.
So it requires watching how it pulls back and look for a reversal off of a support area, like a moving average or trend line acting as support , etc . You wont catch THE lows, but you get price lower . If you buy the pull back and it fails, you stop out and wait for improvement or move on to a new stock that is running.
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if Europe is any idication, commodities likely to get hit this morning. FINALLY, I’m learning patience from Alex and don’t just jump every time a stock is down 5% just b/c it’s on sale, but looking for support areas and strength first. So holding off on a any additional purchases from my cash right now.
I continue to like WPX as it is still above key mvg avg and doesn’t pullback hard like others. Watch OAS as approaches 20-day at 8.95. BAS looks like fried crap again, as usual.
You noticed BAS too??
Did you see LGCY and BCEI
Actually bought BCEI 5 minutes ago. Might have more downside (don’t they all?), but there was heavy leap call buying last few weeks in BCEI, so thats a big +.
Earnings come out on 5-5-16….just for your info. 🙂 I have no position, but am watching. 🙂
I know WT. So do a lot of other energy names I have, but the call buying was heavy enough that I think this beatdown is a fair entry price for a longer term hold. All things being equal, if this was the miners selling off like this, we’d all be buying hand over fist right??? Thats what we think we would do, but when it does happen, it’s hard to pull the trigger and buy. There’s a lot of goid names getting sold down hard last few days.
Forgot to mention, dropped WTI and replaced with BCEI.
hopefully numbers aren’t bad tomorrow otherwise …
I’ve got my fingers crossed Moe! A lot of these energy stocks report next few days, so this might be people not wanting to hang around for earnings. ATW, RIG, MRO, BCEI, all report wed and thurs. HK next week, I think.
Let’s hope for a ‘pop’ and steady run up and worse case this investment turns into a long term hold.
LGCY is difficult, because the 50 sma and the break out where support is is down near $1.50 .
It ran up about 400%, so dropping 50% of that is a given, but dropping to the support area is possible too.
more like BAS-tard.
dumped me out at the lows & then takes off ….. grrrr >:[
I’m right there with you!!
Any new watch area for OAS? It is still dropping.
AHHH… a reassurance day from our wise leader. Thanks.
The comment section really goes quiet on pullbacks, doesn’t it??? I think I might start using that as an indicator.. 🙂
Yep – I go into analyzing mode – Checking 10 minute, 15 minute – 30 minute charts, hrly.
Checking daily with indicators and M.A.’s
Then I try to avoid looking at my acct balance : ( I am fairly heavy CLF, VALE, HBM – with good gains, but HATE giving them back ) . CLF could fill that gap, HBM could drop to the 200sma. Thats more downside.
Back to the charts….
It’s funny, I was somewhat heavy in MEMP from the recommendation at the very lows. It is inside of a base , so I figured I lighten up at the top of the base, and I did. It is my only green stock today – the one I dumped a bunch of. SO goes the market. ( EVEP green too)
When Miners pull back, it will feel worse than this. They will be down huge in a real sell off, and often day after day.
whats the rationale behind keeping a ‘core holding’ of miners, when you know (as well as one can know these things) that it will be a painful correction for any holders?
Hi SOG –
Alex can give a better answer, but I thought I’d add my two cents fwiw!
I have friends who sold their GDX after 35% gains because it was due a rest and they wanted to get back in at lower prices. As you can imagine, they are still waiting. Having a core position allows us to continue being in the up trend in case we’re not right about timing the smaller tops
For me, I have no illusions about being able to time anything after having caught the bottom, so I’m just holding miners “Old Turkey” and not selling any for at least 2-3 years
hi Cal
no stop loss at all in case off
I missed this question…
So S.O.G. – One rational is that we mentioned certain miners that have Bottomed long ago (bottomed yrs ago) –
I showed 5 yr charts of NG, RIC, BAA, TGD, LSG, etc etc back in January / Feb near lows and mentioned taking a position as a core and riding out the ups & downs is ( In the U.S., not sure about other places) Advantageous for tax purposes. Your capital gains tax is reduced quite a bit if you own a stock for over a yr. vs holding for less than a yr.
Some prefer a core position to just buy low and hold through a multi yr run, if that it what we are heading for. It also prevents over trading, jumping in and out on the wiggles, if one is prone to ‘over-trading’ .
Hi Ray,
I was fortunate to get in close to the lows, buying from late July to late December, and I feel that the bear low is in. My stop loss is GDX/J making new all-time lows.
I may be giving you a long-term investment answer to a trading question!
Waiting….Think gold and silver miners might be starting the pullback
I feel like a kid in a candy store……will nibble a little…maybe:)
I am using the 22 sma for VALE, and I have bought each tag of the 22 sma.
I was going to today too, and it tagged it, but I didnt dare to buy.
That MUST be a buy signal! : )
I will add to this comment below with a chart…
I didnt buy today due to this, plus the markets are selling off pretty good. If we get a reversal, then I’ll probably add .
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Refresh
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That’s a good call Alex, its hammering that $5 support either way and if it breaks Im thinking it would get ugly quick but a reversal there would be good sign.
Cleaned up the portfolio today on this smackdown. Gone BAS, HK, CIE. Added to VALE, CLF, AA, MRO, RIG, HBM.
I’m thinking that the commodity stocks are acting correctly too. Some of the Energy that were just now breaking from a base, havent established an uptrend yet, may retest bases , etc.
Other Energy stocks have ( OAS, WPX, SM, SN, etc ) and may just do a normal pull back, so there is a lot to watch. I like your ‘housecleaning’ approach though. Out with the bad, in with the good.
Long VALE at $5.20. (22MA is gold)
blessed art the cash holders…
Alex, Thanks for mini-lesson on step-wise consolidations, eventually, with patience, as good or better than straight ups!
Sure, it turned out to be good timing, since we do have a dip today, but this selling in SOME stocks looks a bit dramatic, and in other stocks looks more normal ( So far).
Thats why I may have trouble buying the dip, I wont buy until I see a reversal . CLF looks normal, even if it fills the gap, VALE is on the 22 sma, and that has been normal. Other energy stocks have had HUGE gains, so a pull back is normal, but I may want to wait and buy MINERS if we are going to get a deep pull back on those.
Isn’t it ironic though, that we are all waiting to buy miners when they pullback, but we might be scared to death to buy the rest of these commodity stocks here?? Buying these beatdowns is easier said than done!!! We think pullbacks are nice and orderly, and we can just jump in and higher we go!! Takes a longer term approach to jump on these beatdowns. Hope some out there are adding a little to good names, not speculative stuff.
Nice move by CLF on the 3 minute chart right as it tagged the top of the gap
Did that really happen? It had a surge of volume ( 888,000 in 5 minutes) and price ramped up From $4.72 to $5.15- Like a FUND jumped in at the top of the gap support.
Then it sold off a bit – that was a crazy move real time though
Thats the difference between a quality stock and a no good stock.
Yeah, it jumped on big volume when they released earnings a week ago.
The gap was $4.72 and right when CLF hit $4.72 today, 888,000 shares triggered a buy and drove it to $5.15. CRazy to see that.
That just seems like BIG BUYER was sitting with an order at the gap.
And “SO FAR” – Vale will not lose the 22 sma.
That could be a low risk entry with a stop just a little below it too.
That could be the difference between someone putting in a market order instead of a limit order.
Not for that many shares though…
SDRL just tagged the trend line and reversed?
BAS moving higher
and filled the gap from the 27th too – hope that’s what I’m seeing
What were the big movers during the last leg higher in Energy? I know LGCY what were some others? SDRL, AREX?
I think DNR was a big mover….and OAS..
EVEP has held up better than other energy names in my watchlist. Might lead for a rebound.
Yes, Agree and BWEN is the best on mine, but SXE also looking to attempt a reversal.
NCQ says…”I am not a commodity” – Continues the break out
ibb ready to reverse
Anybody know what is oil at right now?
$43.67
43.72 WTIC. It’s down 3% today. If you want an active chart for it go to http://www.dailyfx.com/crude-oil
And they were actually saying that GOLD is a good buy this year yesterday. 🙂
We dont trade on “Hope”, but this is at least “pretty” so far . Refresh
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I kind of expect a back test of that base, but maybe not.
Added evep, lgcy, and sgg today
NCQ is now up over 21% .
Alex, I might have stumbled onto something here. Some were mentioning BAS, so I looked at a weekly of BAS, CIE, CLNE, and HK. Don’t these have the SAME look in the weekly that the other bigger commodity names had before their runs? To me they do! So could it be, the larger names that led the commodity run (VALE, CLF, AKS, AA,etc..) start consolidating because they broke out first, while these other names make their runs soon, outperforming the bigger names?? Just a possibility. Wished I would’ve seen this earlier, before I sold out of some of those to add to bigger names!!! I think they’ll all be good in the long run, but I get the feeling these smaller names might just outperform in the next few weeks. Thoughts??
Yes, thats the same idea that I was pointing out in Energy bases. That some already broke out and ran, and we were catching LGCY, BCEI, HBM still at the base set up stage.
One of the best bases I saw ( Did not follow through much yet) was / is BTE.
I pointed it out in reports a couple of weeks ago.
Refresh for the chart from April 22 . Stellar looking base
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Quite the base on AREX 1 yr chart, MEMP & EVEP. That is why I liked those too
Wait, it sounds like you read all of Alex’s reports!!
Read them yes, remember them, not so much! Has Alex had that in his reports? I might have missed that…. I’m gonna have to start to reading those things a few times! How did you do today??? As much fun as a root canal??
I ate it, big time. But I grabbed some HBM and BCEI. Now, it’s just up to hoping and praying. Kicking myself for not taking 1/2 of OAS and WPX off – they were both heartbreakers today. I guess your BAS sale was just what it needed to get going!
I did buy back BAS and CIE though. When I noticed that those weekly charts looked like the others did before taking off, I bought them right back. Lost a couple % on BAS buying it back, but CIE was the same. I’ll keep them as long as they’re above the 50 sma. All the others are good until they either break below 50 sma, or more important, their weekly uptrend. Like you, and everyone else, I’m hoping these hold! We’ll see..
hey guys…for oil… could/do any of you EWs see this as an ending diagonal somethin somethin like this??
ken?
chris – u alive? ;o)
https://www.tradingview.com/x/ohBFMffL/
Can ‘2’ go below the start of ‘1’ ?
ill have to check the rules… i get mixed up. but i cant now… 😡
No. But I think she’s figured that out by the time I got on here. 😛
lol… i crack myself up… clearly i have some strange propensity to count those ending diagonals that way… when given a clean chart to mark up (at work) I went and counted it just as I did the first time…
but… it sort of works out … kinda …. giggle ha ha ha
I wonder what’s gonna happen to poor ‘cycles’ now that I have moved on to studying them… LOL
Let’s do the count so that it’s still bullish so then I can get out all of the plays that I got clobbered on today!
now that i think of it .. ken i think i already sent that to you… and you kickedMybutt on it… sent me back to the drawing board .. when OBBBBVIOUSLY I never went …. lol ;o)
ImNaughtyLikeThat…
I did “gently” kick your butt. No worries. 🙂
😀
..that’s what friends are for… :o)
much much appreciated…thanks for the quick response… I know you were prob making sand castles out there on the beach…
*giggle
NCQ now up 40% : )
HBM down 11% why?
Scroll up & Look at the very last chart in the report. Its just normal activity .
What I meant was, they are both copper miners, but are going in opposite directions!
I’m not a mind reader – lol Say what you mean 🙂
Maybe NCQ had good news
Youre not? What am I paying you for?
My 2 cents : )
hey… i cant bring up CRB on tradingview.. can u?
Cariboo Rose Resources L? Sure
o brother……….. attempting humor again?
Yes, I can see the CRB
welllllllllllllllllllllllllll … whats the ticker?
CRB
lol.. i dont have that… will you post a chart so i can see it .. then i can click on the ‘ticker/symbol’ on the chart…
pretty PLEEEEASSSSSE ………
Ummmm……..let me just show you my CRB count, it is cleaner than OIL.
Swing Sell also today………..pretty confident wave 1 is complete now starting an A B C wave 2 correction.
Hope this helps……….Tonto.
UrTheBest ;o)
thanx (read my comment below.. lol)
Looks like you count shows that I missed my sell point. 🙁 🙁
I did post this same chart last Friday …. looked heavy to me And had 5 waves up, it was due, how deep of a correction will commodities have is the next question…… 🙂
That’s where Alex comes into play …… 🙂
Let’s do some Maria magic and just change it until I don’t lose a crapload of money again like today! 🙂
Alex or whom can and are willing to answer.
Many people know I’m still in DUST. Question is and was when will GDX and or GOLD has the support line, so I will sell my DUST?
How looks the EW in GDX, is it still more to come down, what are your thoughts?
Thank-you so much for reading all my stupid decisions.
Kind Greetings.
Geurt,
I dont think anyone knows for sure when the GDX will really sell off and finally drop into the lows that are expected, but when it does, I think it will be deeper than many expect.
Sorry I cant be more specific. Maybe someone else has something to offer.
posting an update of that weird GDXJ symmetry that i originally posted around last summer… because its still just weirrdddd.
it predicted $42 GDXJ by september 2016.. and its nearly made it!
I like weird!
no way i believed it would shoot up in (almost) one big impulse like it has…
should trust the charts more 🙂
…. not that this chart is gospel,, but perhaps GDXJ a pull back to the line around $30 then finish off with a 5th wave up to $42?
Thank-you so much ALEX, I’m also feeling the GDX will go deeper than my wanted. Trust you keep an eye on GDX in the report.
Chief you wrote above
I think it will be deeper than many expect
so basically you think gold and silver stocks ( gdx gdxj) will drop more than a 50% pullback ???? or a 61% pullback
Kind of thinking deeper as well.
Hey Guert, good luck. I dropped my short on Fri when indexes hit new highs. Sure, I sold the bottom, but trading rules are rules, had to respect them. My opinion only, I think you can hold here as long DUST doesn’t go to new lows, GDX to new highs. If that is the case, you’d have already endured max pain. When we do find next ICL, I’d recommend a sell regardless of being down, etc. Don’t let Dusty fool you twice.
Dear friend, let me know (also our dear friend ALEX) WHEN the next ICL comes. You are right Cason… not twice again please.
Thanks a lot Cason!!!
WARM GREETINGS.
Is AUMN a 6x ETF?
LABU is. It had 6x the losses of IBB today.
Alex, was wondering if you could take a look at the FCX chart? Stairs up and elevator down; it’s not a pleasant ride trying to hold a core! Thanks:)
The most impressive thing about today was the relentless selling in some of these stocks! BCEI couldn’t muster any sort of intraday strength. Same for AA, CENX, MRO, ERX, RIG, and others. Thats more sellers than buyers. This could be a LOONNGGG couple of days/weeks for us. AKS and VALE managed to hang on to their ma’s, but that was it. All of these are still in a weekly uptrend, so let’s wait and see how the week plays out. Hope you all are hanging on….
Wow, probably my worst trading day of the year. Certainly, at least since 1 Feb. I guess that is how bulls work, get longer and longer until you take a hammer to the face. Really missed the, ‘you should have sold already’ memo. Also underestimated my ability to outlast the ‘wiggles’. Alex has made the point multiple times about how it looks easy after but is hard during. Should have ensured more profits however.
Ha! Just asked you further down how you’d fared today!! Never mind…. hey it could’ve been worse!!! At 4pm I didn’t think my day could get worse, then I went to cut my hair….. my day got A LOT worse!!!!! I’m actually more upset about my hair than today’s action…that says a lot!!!!!!
Wait, oil is up 1cent overnight from API. We have a chance!
I feel your pain, im right there with you. But that memo only comes out after its too late, Haliburton had bad numbers and guidance, their merger with BH fell apart, and took most all oil stocks down with it, not helping was oils tumble as well. I think Oil could drop again tomorrow, $42.95 maybe , but with the news of global slow down and China slowing, commodities just got hammered across the board, may be a long haul from here for some but the good companies will rally and some will be on sale again soon I hope. Its a wall of worry, But my portfolio got slaughtered as well, watched profits drop and losses deepen, Been a bad few days but im in most for long haul so no worries really, most will be worth more next year than now,. I had quite a few hit my buy points today but just couldn’t pull the trigger with all the red I already had but WMB hit my buy of $18.50 and I wish I had jumped on it, AXAS was one I pulled on, scaled in a bit at $1.29, buy point was $1.25 but it reversed at $1.26. May have more downside but its a long term as well so ill buy more if so. Hope and fear kill, don’t fall into it. sell the losers, hold on to the winners.. Id like Gold to correct so I could pick up some miners on sale as well. Best to all,
Thanks, Miller. I had some pretty solid gains after last week, I shouldn’t have gotten greedy and waited for the pullback but just taken at least 1/2 off the table when I could. I am holding thinking of the long haul. It’s just that I lived through the commodity bear and its maulings the last 4 years so it’s hard when your thinking is reinforced that once it goes, it crumbles. Yeah, the China news didn’t help. I finally quit trying to find the top in gold, so that means it is here now.
GDX/J have not closed down 3 days in a row since bull started in January. If it closed down today (futures down hard), would be first time and a decent confirmation of intermediate top. Nothing is absolute. The other indicator is I covered a poorly timed short. I found a top by selling a bottom, SOG-Style. You’re all welcome.
Jobs in Friday so I wouldn’t make any crazy bets in the space either way.
VALE way down pre-market…..being sued for billions…article in wall st. breakfast Seeking Alpha.
I have no position.
Yeah, I saw that. That’s why it was $2-3 in the first place. Figures they would sue once I buy in.
API private sector payrolls comes in light, real light, preview for Friday.