Fridays Check List

Tonights report is going to be a great lesson on how we can view things as the markets ebb and flow , breathing in and out.  We’re at the end of the week and we saw a little selling in Precious metals Wednesday followed by an immediate reversal Thursday. Does that reversal mean that the selling is over? We will look at a number of things that help to give us confirmation as to whether a short term low is either in, or may not be in place yet.  Also buying the dips tips.

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WTIC –  First a chart of oil, since many do ask about the energy sector that we were trading over a month ago. We had a reversal Wednesday, but I pointed out that I still see weakness going forward.  Patience is needed here. 

WTIC –  That reversal vanished  on Thursday.  This needs to prove itself, and it is still proving to be weak.

Now on to Precious Metals…

This report is brought to you by 5 hour energy.  I was only going to use 5 or 6 charts, but I had a 5 hr energy drink earlier and we ended up with 16 or so   🙂

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GOLD – Thursdays reversal does not confirm that the lows are in, but they may be. Timing is right, but we need to wait for a break of the overhead trend line…(read the chart).  Also, are we seeing GOLD over $1340?   Keep that in Mind, that would be a great start.

$SILVER – Silver put in a very nice reversal on the 22sma and this daily cycle is 35 days long. It has NOT back tested the break out yet, but that doesn’t always happen. Unfortunately, that volume is not real, stockcharts got it wrong, it was much less, but thats fine for a reversal.

SILVER – The last daily cycle for Silver was 42 days long, we are at 35, so it is close enough, but we ‘could’ drop  further. No confirmation yet.

GDX – From the ICL to now, GDX has pulled back 38% and reversed at the 34 sma.  It has done that in the past , as shown here. That may be it for a pull back, it may crawl along the 34sma like it did in March & April and then run higher.

GDX – Fred mentioned in the comments today that GDX also reversed at a 50% retrace of the last run higher.  We see that GDX also filled a gap and turned upward.  it ‘Might’ be done dropping, but we do not have confirmation yet…

GDX – In the past we had sharp drops, followed by moves higher, but the lows were not in place yet. We would like to see a break back above the 10sma. This “Could’ overhead gap fill and fail.  However, Read the bottom of the chart.

GDX –  In a discussion today in the comments, I was saying that even though we are at day 38 of this intermediate cycle, I’m not selling and I’ve added on the dips.  I drew this chart to show why. Notice that in the first intermediate cycle,  If you sold on day 38 or less, you never got back in lower right up to this day.   That  DOESN’T mean that this Cycle will just run higher and higher.  I do expect it will eventually lose some steam as we run out of buyers and people take profits, people will stop shorting it and no longer will we see short covering, etc. I am just saying that for now, on day 38 of this cycle, I am buying the dips, and will be selling the rips.

SO I mentioned in the comments that I bought AUMN & TGD at the open.  IF I am saying that we dont have confirmation of a low, why did I buy?  

1. My cost average is very low, since we were buying Miners in late May and early June. 

2. Adding on the dips wont hurt if we are expecting another run higher. 

3. Low risk set ups offer a place to put a stop if the trade goes against me.  Lets take a look at those 2 trades and the possibilities there. 

AUMN –  Notice prior support at the 10sma.   I may be early.  This is 1 idea of what could happen now that AUMN pulled back to around the break out area.  It ‘back tested’ the April 11 highs…

AUMN – This shows that we may NOT be at the lows, but over time, I think this will still work out as a good trade.  I can stop out if it fails near the blue line.

TGD – I bought TGD as it is back testing the cup & Handle break out. It tagged the 10sma as my BUY. NOTICE  that I know that it could drop further, so I may add again if it does, as long as the cup hold up.  

TGD –  Of course, I am hoping that it just takes off from this level, and that is a possibility too. It back tested the Jul 1 highs today.

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GSS –  I sold my GSS yesterday due to the topping candle.  All of a sudden, surprises come to the upside in a bull market, so it tags the 10sma and rips higher.  I got in near $0.60 avg cost basis, so it was a good trade, but I think I got ‘shook out’ and this wants to go higher.    If it dips again, I may re-enter, however…

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MGH – By request for John, Thanks for the reminder!  This actually looks rather special.  This may be where my GSS funds go, or at least some of them.  Good consolidation, A few “signs of Strength” and  MGH is possibly dropping to the 50sma, it is not over extended by any means. And…

MGH WKLY –  THIS is where it looks rather special. A few good signs of strength and now it has popped over the 10weekly MA and the 200MA.  Look at the relative strength on this weekly chart.      Is it ready to go right now?  I cant tell, but it does look very good. This could be an easy double, maybe a triple if it giraffe necks out of this base ( No promises!  I haven’t checked their fundamentals or when their earnings come out.  DO DUE DILIGENCE).

YES – Please do ‘due diligence’ on your positions. Check when their earnings come out and right it down on a post it note, or set an alarm on your phone, or computer, etc.  decide whether you will hold through, or sell some, or bail out and re-enter after.  Share that info in the comments section for others, they will greatly appreciate it.  We have a great community in the comments/chat  section. In time, If Gold stays up near $1300 to $1400 or $1500,  the Miners will make larger profits than they did when Gold was selling at $1040-$1100.  $200-$00 more per oz adds up. The surprises may be to the upside with earnings too, but recognize and reduce risk as necessary. 

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SO that is where we stand.  We should be near the lows, but we can see further selling.  We may not, the lows could be in, it is hard to tell until we get further upside confirmation.     I feel that we can look at various individual stocks and find areas near support as shown on AUMN, TGD, even MGH,  and take a small position or add a little to what you have.  We can always stop out if things get reckless and then wait for things to re-group and stabilize.  Right now the charts have been very trade able. They have been acting correctly all along, and they usually do in a Bull Market.

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Have a great Friday,  have a great weekend, and thanks for being a chartfreak!

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~ALEX

I just noticed SWC.  It is about to break out to new highs.  It may be one of the strongest stocks that I see set up right now. I’m still looking.