June 11th Weekend Report

After we review the general markets, Oil, the CRB, etc, this weekend report will focus mainly on Gold, Silver, and Miners. To the charts…

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SPX – This is a Fed Week, so I am watching the markets very closely at this critical area. This is rather early in the daily cycle, and if this is “the Peak’, it will likely be left translated. We saw a slight break to new highs and then it gave them up. On day 15, I’ll we watching this closely going into the Fed mtg.

We may not see a lot of strong directional action leading into the Fed Meeting, but I tend to think that Janet Yellen already made strong statements after the weak jobs report was released. The difference could be if she make statements about future events.

THE USD – Please note the Dollar ut in its expected Daily Cycle Low. 2 strong days higher, YET GOLD WENT HIGHER TOO.  Why is that Noteworthy?

My MAY 3 chart –  I am expecting that this is just a bounce in the dollar, and I drew it to 96 or 97 below. It seems that GOLD is rising with the USD for that reason.  Usually the dollar rises and Gold drops quickly. 

OIL WEEKLY – I have been expecting a dip into a DCL, then a rise to near $60. Oil has not dipped as much as it has gone sideways. 

WTIC DAILY – Day 47, Oil has been very strong.  This is 1 possible path.

CRB DAILY – Day 22 has the CRB ready to drop into a daily cycle low. Day 22 should prove to be very right translated, but the drop could be similar to what we saw in March. 

CRB WEEKLY – looks similar to the 2008 lows. It had a lot of volatility in the first year, and then really ramped up after a sideways consolidation.

 

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GOLD  SILVER & MINERS

 

GOLD REVIEW – I had mentioned weeks ago that I thought we saw the ICL. It was getting late timing wide for that meaningful / trade-able low. I said that a break of the trend line overhead offered more confirmation, and we got that.

 

This chart was posted on Thursday. On Friday we also saw the USD move higher (See chart in the beginning of this report)  and yet GOLD, SILVER, remained green again, Miners broke to new 2016 highs and closed slightly red.

In February we saw the USD rise and Gold went sideways.

 

GOLD WKLY – This weekly is telling me that we saw an ICL too. What kind of follow through will we get? That can vary, and I will discuss that further in a minute. 

 

GOLD June 10 –  What kind of follow through?   Gold is on Day 8 , and we are getting follow through.  I wanted to point out 2 things on this chart.  Why?  It seems that as soon as we get a Red day in Gold, people think “The move higher is now over.  We are left translated.” Then they quickly sell.  It may be helpful to look at past post- ICL action.  Read #1 & #2 on the chart, we could see either.

 

SILVER – A perfect 50% pullback and a nice run higher out of the lows.

SILVER WEEKLY – It also may or may not be a straight shot higher.  See the chart.

 

GDX WEEKLY –  I actually drew this chart in January. I expected a blast off of the lows, and then we hit a bit of resistance and I thought our ‘cycles’ might bounce and look like this .

This is GDX now – So I am drawing 2 possible paths.  I have reason to believe that either could happen. Time will tell.

1. a sideways consolidation due to resistance on the left side 

2. A rally continues because those who missed the first move will not want to miss this one, so more buyers could pile in.

When we break from a base, I have repeatedly shown that the results can be explosive.  This was NEM, and GDX could be in a larger base and act this way too.

 

 I posted this chart on May 17th in my report to you, pointing out that a run to $1400 is possible. Since I posted this, GOLD dipped to $1200 and may have built up necessary steam to proceed. I updated with BLUE LINES. Now $1400-$1500 is even possible.

 

ICL ACTION

Here I am using my own personal indicators and comparing it with the move out of the lows in 2008.  Before I began ‘Chartfreak’ I developed several ways  to prove to myself if what I was seeing was either genuinely improving bullish conditions  or just  bear market rally action.   What I see happening remains quite bullish, resembling early bull market action. It also looked to me that an ICL just occurred.

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More about Golds follow through at an ICL

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I know that when Gold starts to drop, I often hear that it is ‘weak’.    When Gold has a red day around day 7,8,or 9, I hear  ” This is going to make Gold  left translated and thus will roll over and fail.”   This is how emotions are conditioned after a lengthy bear market where many have sustained great losses due to Precious Metals failing at critical points.   YES- WE SHOULD REMAIN CAUTIOUS, but we need to have a plan to avoid endlessly jumping in and out.   To combat that feeling, I want to post charts that will help the reader to understand that a dip in Gold from here is not necessarily bearish or Gold ‘failing’ early  ( after all, we may see Red with the Fed MTG Wednesday, right?).

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I posted this in the Comments Friday.  When I called this an ICL in Dec, I got flooded with emails on each dip.  I heard

” This is ‘Weak sauce’ -an ICL cannot act like this, it is doomed to fail.” You may remember that I posted lengthy weekend reports in December on the YEN & GOLD , on The FED raising interest rates not hurting Gold, I showed my personal indicators that pointed to an ICL, etc.  I tried to help readers to see that this could be how an ICL acts.

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Look at this Intermediate Cycle Low  (ICL) on Dec 3rd. Those lows were never broken, but there were scary sell offs. I think one of them was the Fed raised rates and we had a steep slam that back tested the tredline, and then recovery. So the ICL that I see right now in Gold actually looks WAY more bullish than this one did. If it is the ICL, the lows cannot be taken out, so a ‘stop’ is placed there.

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Past ICLs – Lets also take note of past ICLs. Even in bear markets, they are very trade worthy rallies.  Notice that some (The last 4) took a while to really get going.  This is a weekly chart, and some ICLs took weeks to move out of the lows. Look at the current one.  It is the ONLY one starting with an RSI of 50 too. This looks like a  bull market ICL.

GOLD June 9th – Again pointing out that we broke the overhead trend line, and last Dec 3rd Gold didnt just rocket higher. This may take some patience.

 

Cautionary note :  I have to caution that last Dec when Gold put in the Lows, Miners went sideways and formed a shake out in Jan.  So lows for GDX came 1 month later. I still see GDX as having put in its ICL, because it just broke to new 1016 highs. This chart was Thursday, GDX closed slightly red Friday,  and may be closing the gap.

So that is the weekend report.  You can see that I am trying to point out the bullish things that I have been seeing to build conviction that Golds new meaningful lows (ICL) from the recent consolidation look to be in place.  Remember that ICLs can run for 6 months from low to Low. This is just starting.  Knowing that would help one to view things this way –  

1. If Miners drop heading into the Fed Mtg, it may be a buying opportunity  -or- 

2. If  Precious Metals continue to rise going into the Fed, and then drop after the Wed Fed meeting, it could be a dip into a 1/2 daily cycle low, and then we will move higher again next week. THAT could be a buying opportunity too. 

We will have to see how this plays out. I will be looking for MINERS low risk set ups next week.

 Note:  It does get tricky at times after the run starts. For the past week or two, I have mentioned that some Miners are leading, and that is also Bullish to me.  Now GDX, RIC, SSRI, AG, CDE, MUX, etc all just broke to new 2016 highs and guess what? Not many really wanted to buy, not many believe it again because of the “Gaps” below. ( Not here, I mean in some other public blogs) .

MUX – Bullish, I have mentioned MUX a few times last week in the comments, saying that it looked ready to break out.  Now too extended to buy. Add on a pullback. 

Fast forward to Friday:  Now that many Miners  broke to new highs,  people did want to jump in and guess what? Leadrs like RIC, CDE, AG, etc. reversed at the highs. Short term false break outs.

RIC –  Puts in a huge reversal candle after breaking out.

 RIC – If you believe that the Bull has returned, it may just be a matter of trying to keep the big picture in mind. Try and pick an entry that looks reasonable in a bull market. Will those 2 gaps now fill with the Fed Mtg? This may not be easy.

I will be analyzing Miners going forward and will post them if they continue to act correctly. Look at Miners From Jan 15th.  That is when the move from its ICL started . Buying in February was still very profitable, so stay tuned and well be looking for Miners to take positions in.  Have a nice Sunday and we’ll be watching thing on Monday for clues heading into the Fed Wed Mtg. 

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~ALEX

 

P.S.   I  dont want to confuse anyone, so I wasnt going to mention this, but I should.  MINERS bottomed 1 month after Gold and I need to look into that going forward. Dec 3 2015 was the ICL for Gold,  Mid Jan for Miners.   Could that happen again or are they in sync?    I was looking at E.W. for miners and looked like GDX just completed 1-2-3-4-5 to me, and now would have a small a-b-c correction, but it would still be BUY THE DIP . A Larger a-b-c than shown here below 4 would put the ICL for miners there. I am not going with that conclusion right now.

 

This report is loaded with information, please read it more than once, read the words and read what is written on the charts. I certainly dont mind answering questions, but sometimes I get questions that lead me to believe that someone just skimmed the charts and didn’t bother to read my words to understand that chart fully.  🙂