JACKSON HOLE
Welcome to Jackson Hole Friday, please make yourself comfortable, we may experience some volatility. 🙂
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DJIA – I still think that we should get some downside, as we are expecting a dcl.
USD – The USD still couldn’t break out higher.
WTIC – Bull Flag on the pull back so far.
GOLD –
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Gold is on day 25 of its daily cycle, and it is within timing to put in a daily cycle low
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With that small day of trading that we saw on Thursday , a slight push higher would put in a swing that could mark the lows.
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A Jackson Hole drop below $1310.70 will mark this current cycle as a failed daily cycle ( lower low).
GDX – Very oversold, and a flush out type sell off Wednesday, we saw a dip to a new low and then a reversal on Thursday. That could be the lows in this daily cycle. Jackson Hole Friday may begin to confirm this with a push higher. I would actually like to see a GAP DOWN Friday morning, and then another reversal. I think that that would flush out the last of the sellers and trap shorts, but this is as overdone as what we saw in January in may ways!
A bounce in Miners during a final weak daily cycle can still move higher for 8-12 days, so miners are possibly good trades for traders, once the lows are known to be in place- I will explain a bit more in a moment.
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If you re-read yesterdays report, you will see that I said that I have many different ideas as to what might be happening. SO bearish looking, but 1 idea is actually quite bullish. Miners were breaking down rapidly, and we just had to view this as possibly leading the way first, and Gold would break down on Jackson Hole Friday. Due to the severity of the sell off in Miners, I posted this chart below showing that it actually looked much more like a drop into an ICL – it was even steeper than the old bear market drops. After such a strong run, it would be normal for Miners to correct 38-50% of that entire move to clear sentiment and get people to hate Miners again. To become too afraid to buy them. However, I can see how this could be bullish too, but we wont know until after we see what Gold does on Friday. I will discuss my thoughts in this area in the weekend report if it is relevant.
SUMMARY:
Oil and Energy stocks are acting correctly, I have been encouraging taking some positions in these minor pull backs. I think that we are seeing the lows forming here for this precious metals sell off too. Jackson Hole may finish the job. As mentioned yesterday, The GDX sell off was much more like a drop into an ICL than any dcl. This should be bullish for a good bounce and we’ll take it from there step by step. We WANT to see GOLD hold above the recent dcl of $1310.70, because I could then view that drop by the Miners as a “Fake out” failure in Miners, a flush out capitulation type low. Gold is the engine and the Miners will follow. If Gold remains Bullish with a higher low, and then takes off higher after Jackson Hole, Miners could sling shot. If Gold finds a Jackson Hole drop below that $1310.70, we then have a failure across the board and will go forward cautiously. After Friday we should have a better idea of what we are looking at in precious metals. I expect a bit of a rally from here either way after Wednesdays flush out, but that remains to be seen. Enjoy your ‘whole’ Friday of trading.
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~ALEX
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JUST TRADING
Trades – I posted this chart within the first hour of trading in the comments area. AUMN had some strong buying in the first 1/2 hour and broke the down trend line, so I bought it as a trade. I thought that the 50sma could stall it, but it ran through it and closed at $0.83 ( next chart)
AUMN – Slingshot . After days of constant selling, AUMN did sling shot out of the lows. At the close, this actually has a very bullish look to it. I didn’t see any news on it, so this may be an indication of what these oversold Miners can do. Do you see that tight downtrend? That is 1 thing I was looking at to buy this, a bullsih engulfing that broke the down trend line. If it bull flags, I may even add to my position.
TRX – I also was watching TRX , it has the same tight down trend line. Day after day selling, it could bounce nicely. It also has the 50 & 10sma as resistance, but if that was a false break down / wash out sell off, this could sling shot too. I may buy this as a trade if it breaks higher Friday. I like the pattern and it is very oversold. I DO NOT SEE SUPPORT to the left though, so I am also cautious with this one. I need to see strong volume come in as it breaks higher.
THM – False break down? If Gold holds the lows and shoots higher, a move back above the 50sma could prove that this was just a shake out. Then this could sling shot too. These will only sling shot if Gold holds up and the Miners wash out was a false break down.
AREX – Preparing for a big break out? I want to see increasing volume if it does break out.
BBG – Possible rounding base forming.
WPX – Roughly $8.50 to $12.50, barely dropping. Bullish.
Yesterday’s big BoW number for GDX was correlated with some good gains in miners today (e.g., AUMN). I wonder if the not quite as big, but still big SoS number for GDXJ today will be correlated with losses in miners tomorrow? I dunno…
So you’re saying volatility : )
I wouldn’t doubt it
Looks like AUMN up another 7%. GDXJ just doesn’t have the “pull” of GDX I guess:) Wish I had bought some–nice trade, Alex!
Alex ,,, I don’t get it, … Do you ever get any sleep ? We’re 6 times zones apart yet you are always on board … you are killing me !
I remember the sub fees that we wasted back in 2011 so I am so glad that you started your own thing.
AND, you have the best support crew, … you have collected a very talented group of intelligent traders and I appreciate what everyone here has to say … including the humor….(and Maria’s cuteness) 😉
Hey Moondoggie – I probably do not get as much sleep as I should, but an occasional nap helps 🙂
Thanks for the kind words, and you know Maria is going to LOVE that comment – LOL.
I also really appreciate everyone contributions in this comment / chat area too. I have had a few readers email me and say that they cant contribute because they are at work and it isn’t allowed, so we have some that would like to add to the days thoughts and can’t.
giggle.. ;o)
Whoa – 6 hrs of sleep. Now your on my schedule
I see someone else is burning the midnight Oil
IMAGINE THIS….
WE GET A WASH OUT , SLAM DOWN IN MINERS. EVERYONE IS STOPPED OUT. NO ONE WANTS TO BUY BEFORE THE JACKSON HOLE SPEECH BY JANET YELLEN. THEN SHE SAYS,
“WELL, INFLATION SEEMS TO BE PICKING UP FASTER THAN WE ANTICIPATED…” AND BOOM!
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Refresh.
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That would be a bummer
Alex- did you see my thoughts on aumn yest? I know one of the Elliot wave sites put out a fresh buy alert yest in aumn which def contributed to the volume spike as its a thinner name and cheap so to buy a decent usd amount takes volume. The long term potential here could be tremendous if this bull is real.. Do you see this as a long term hold or just a flip Type trade? Ty
Answer to your last sentence : It depends upon your personal trading plan. I can see holding AUMN as a core position. When I discuss buying a trade here, it is usually because I see a trade set up. I may already own it as a core position from long ago, but for the trade I am just discussing my recent reason for entering and how I may trade it. I did read where you wanted to just take a position and let it ride. So yes, you can buy & hold if the volatility doesn’t bother you. This one dances a salsa.
I have traded AUMN for a long time, and accidentally made some pretty huge gains in 2009, and again in 2010 when it broke from a weekly wedge. It giraffed pretty big-time
On a long term chart, it has a great base and great potential, but it is one that gets volatile and hard for many to hold.
I took this trade based on a set up, and I either continue to add on the way up if it looks like it is acting correctly, or I may sell if I see weakness and expect a cycle top.
WHEN AUMN closes above $1.05 for several days, I think it could get explosive to the upside.
Core positions are simply held longer term despite volatility. As long as the company doesn’t go BKRPT – it can do very well in the long run
yep thanks Alex.. with names like this I usually buy a good chunk and sell a third when/if I get lucky enough o double and than put a stop at break even and hope it goes a lot higher.. the long term ew counts point up and if gold is in the beginnings of a bull and the company is not a BK it could be a great 5-10 year trade. I don’t mind the volatility as I never trade on margin. the key is just not to get to heavy in any single name.. 3 percent positions tops is my calling card in these speculative plays and usually I will max it out at 15 percent of my trading account.
Yes, that’s a good plan. I do the same as far as trying to buy heavy at the lows, I add on the way up coming out of an ICL when the trade proves successful, and then sell a good chunk nearing a possible top and may hold the rest as core
I’m pretty much full on my core at this point. .
Alex, do you set stops on your core holdings and just leave them in case something unexpectedly bad happens? I read RM’s plan below, but I would like to know yours…?
Hi Nancy
I don’t think people understand my core positions. When we were at Lows In Mid January, I was saying that some stocks bottomed years earlier ( RIC, LSG, etc). and should be bought as Core. Those lows will not be threatened without plenty of days of selling, and I would notice that in my account and might take action, but I do not see the lows from January as being threatened anytime soon. . RIC could have been bought at $1 or $2 or $3, and it ran to $11.50. It is still at almost $9, so where would I need to put a stop? I monitor them, but I bought most of them Much lower. Some are up 500% or so.
What others do with their core will depend on their cost basis
Thanks.
Alex I see what you mean about riding the ups and downs in miners. It is much harder in real time than it seems looking back at old charts.
Definitely Johnny – . Even now if you look at a 5 yr chart of THM. That has so much potential, what a beautiful 5 yr wkly chart. And it looks like it would have been an easy ride from Jan to now, but it is very difficult if you just look at recent 3 month activity.
The Big Picture shows that it ran from 18 cents to $1.40. Serious serious gains, but buying and riding out the ups and downs distracts people, usually because the first thing they look at is “My account took a beating today, all I see is red, I need to sell.”
Buying these dips will eventually pay of big for those holding a core too.
I bought THM for about 9 bucks back in 2011 and sold for about 2 bucks in 2013. Emotional buy. Emotional sell. Didn’t use stops back then or look for value setups. Oh… what a way to learn. *bort*
Eric, Sorry I’m late. Wow! That is a hard lesson. One thing that crosses my mind is once these stocks near 0, then your chances of a long time loss may diminish. I got in TGD for .39. There is not a lot of wiggle room there. I am off to work. Have a great day Eric!
Thanks, Alex! Once again I’m tempted to change your site’s name from Chart Freak to Sherlock Holmes – LOVE the “hole” report and the clues you’ve sniffed out. (I, too, wish I could post more here)
TGIF
Thanks Cal, appreciate the feed back : )
Alex, do you know if it possible to buy options on the VIX ? Scottrade does not show option chains for it but Id thought it was possible.
I do not know, maybe someone else does? I used to trade UVXY.
By the way, you might have caught the lows yesterday in BTE’s pull back : ) Nice trade
Fasten your seat belt – Entering turbulence!
LOL! SO true. Big fast reaction to nothing. Already recovering.
Gold –Smack Down–Hold on to your miners!!
This could give you your reversing candle, Alex.
Yes, It was very convincing drop –
Maybe Not if you expect it ahead of time though : )
Now I’m hoping for a reversal of the reversal of the reversal candle into the close. : )
what a flush,,,,
I am waiting until eod but it looks like Janet has sparked selling in the USD which is Very Good for most commodities.
Oil breaking out of its bull flag……………….
Id like to see it close above $47.75, ,,$48 preferably,
Daily swing Buys in Oil and Gold/Silver………
Morning Alex. Just musing here, is it possible that miners just put in a short(ish) ICL and gold a Half intermediate cycle low?
Has that ever happened before? Or is that not possible?
Thanks for the reports as always.
Hi Daz
I was thinking something similar when I said in my report that this could be bullish, but we need to see what Gold does today . A break of the $1310.70 would nullify that idea, but Miners breaking down and recovering becomes more of a possible bullish shake out for Miners. That is also why in the report I mentioned that Gold is the Engine and Miners would follow.
This is one of the ideas that I wanted to discuss in the weekend report.
Love that final flush “Shake out”.
Added to AUMN and Bought AXU, but many others look good, with volume finally pouring in.
CONSIDERING THEM TRADES, AND WILL MONITOR GOING FORWARD
MUX dropped good and now is up $0.20 – so I think Janets threat of an interest rate dropped Gold, Mentioned increasing inflation is the real mover.
Hi Alex
Any thoughts on AG. Got quite oversold…and beaten down a lot
thx
Alex, Can I get your thoughts on PGH,,getting real close to my stop and just curious on your opinion or stops? Seems like it could see $1.45 rather easily from here.
PGH 1.5 bill debt, 3.2 bill deficit, current ratio of .75 and trading flat. This is my last zombie. do I take the hit or take the risk………
I’m trying to decide same thing…sit and hope it will come back…or sell and just get out….I’m thinking I’m going to give it a little more time…since oil is supposed to be early in it’s cycle I’m hoping it’ll be able to pull itself up…
Im right there with ya,,chart looked good up until last two days,(,pretty much like everything else I’m holding,,lol.) Next real support $1.46 then $1.40,,dont know if I can stomach seeing if those even hold, depends on OIL price from here I guess and today doesn’t bode well it seems. Il probably see how $1.45 does and sell on the break or the bounce.
I’m sure having more fun being in these stocks that have solid balance sheet and are moving up. They might not have the characteristics of an explosive stock you are looking for though but at least they are not bankruptcy candidates PXT.TO. PPY.TO, RICE, REI, SRAQU
I still own it, but it didnt do as I had planned. It broke above the 10sma on a daily , and I thought that it should hold on.
I am going to give it a bit more time, because the weekly chart ( 2 yr) is still somewhat bullish to me
I know youre a busy man,, Thank you.
Not too busy to answer a question if I am here.
What I am doing is ….Pull up a 2 yr weekly chart of PGH, look at just the 30 ma. That is support for now. It is pinched between the 10 & 30 and that can be a good thing. When they pop higher ( if) they usually run well.
Unfortunately, because it is a weekly chart, it can drop below and recover by next friday and still be ok, but I think it is going to hold up. If you get stopped out, just remember that a pop above the 30 & 10 ma later would be good, and get back in. I dont let a shake out keep me out if the set up is still valid.
I like the weekly chart.
So glad you made this comment.
I actually just added this to portfolio today (finally). Good as the lowered entry allows me some room during this continued ‘wiggles’ phase. Lasting longer than I originally expected.
yeah.. busy .. takn naps all day…;)
I was practicing “Same Old Song And Dance” for the band,
then I read your stuff and …………..yup……………same old song and dance here too – lol
*pretend band
*Pretend hates me 🙂
Well that didn’t last long. HUI negative, at least for now. Very volatile.
I should have sold NUGT on positive vol. I’ve had two positive pretty good trade exits and missed both. Was probably just too busy to have taken leveraged trade. Oh well, small position, we carry to next week. Onward!
big reversals
Any thoughts ladies and gents.
Haha! I was wondering same thing…..what’s everyone thinking? 🙂
Carnage,,lol
Alex, love to hear your thoughts on $USD up by 75 and $gc essentially flat (I would expect a bigger hit in $gc with this move in $usd) and $oil up. Not sure which one is bluffing at this point?
Maybe there is a disconnect. It seemed odd to me that the USD did look ready to break out in my chart, and was early in the ducycle, but Gold was getting late and should find a DCL soon. No break down yet, so there is hope
Here goes oil breaking down again, I’m guessing it’ll close in the red or very close today as well, ,,nasty day for my account, very little green
Yeah, bad for my account…making me wish I had sold all my core and everything along with the kitchen sink about a week or 2 ago to lock in profits that were there…..
Does anyone know for a certainty what is happening with all this volatility? Green to Red to green to Red . Probably not, but we did expect volatility , the theme picture is probably what a few people are doing today ( not chart freaks, just the crowd). at least that’s what I expected….a bit of a ride. The USD does look strong, it is a break out. Will Gold break those lows and form a failed dcycle? I do not know, so far so good..
I dont know if this is just me being observant , or just too hopeful : )
But if you look at prior lows, they look fine, unless you ride them real time. Real time they look like the bottom is going to give way.
So here is what I am looking at, although I am not sitting in front of the screen all afternoon, I have been away.
I think we could be putting in lows here, but just keep your stops ready. and refresh for a chart
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And remember….It isn’t even 3 O’Clock Eastern Time yet. We could see green by 4, maybe? 🙂
Lets see if they buy it back into the close after getting everyone to bail out
I have not been following commodities as long as you, but in the short time that I have, it seems that natty, gold, and oil, all seem to take turns in the spotlight on a rotating basis. Seems like maybe it’s been Nattys turn?
At least in my account the only saving grace this past week has been UGAZ , CHK,
I’ve noticed that a bit too, they did rotate a bit at times, but I think we had both Energy and Miners running together from February onward. Maybe they alternated weeks.
CHK has been good to me, shame on you for UGAZ – lol
I also wonder if all of WS is on vacation – it’s AUG, it’s Friday, it’s HOT! — and what we are seeing is machines just playing against each other with algos – (and jamming to Daft Punk)
Yesterday lows for GDX is $26.64. Todays bounce put in a swing low, and so far $26.64 isnt taken out. SO FAR.
If it gets taken out, it just adds another day to the daily cycle, and then we’d be on day 24.
At day 23, yesterdays lows, this is actually still a Right Translated Daily. That is if yesterdays low holds.
Aren’t I a spark of hope?
went long NUGT on GDX double bottom
Weird day
A light in dark places…..:) Hahaha! This is for all the ladies here…couldn’t resist the LOTR quote….have to have some fun on a day like today….:)
yeah… or sumthin…
teehee
ray of hope…
*more like a steely hot branding iron to the backside ..day in … day out …
*u .. not GDX
It would seem above all else the FED is intent on a strong dollar to make the management of our huge debt more palatable. Since they can’t raise interest rates without increasing our debt they will try and make our currency more appealing than other currencies so they buy our debt without having to pay higher interest on our bonds. They are also trying to manage risk within the system. Unfortunately they added the risk by dropping interest rates and pushing investors into equities. Now that equities have exploded all that is left is to talk them down with idle threats and innuendoes. There was a lot of smoke coming out of Jackson hole today.
GDX INTRADAY HOPE
We see a break out & divergence at the
lows. You may recall in one of my comments I said that it was best to
look for divergence at lows for a lower risk set up, when asked why I
didnt take the GDX trade that works out 97% of the time.
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You
look for an area that seems to be shaping up, and this is showing a
possible break out & back test of todays falling wedge.
Time will tell ( refresh) click to enlarge
Wow…what a crazy day. Up down up down. I hurt my back and have been resting away from the computer for most of the week…I better drag myself out of my recliner and go look at my account. Could not be worse than it looked a couple days ago…I hope.
OK, red overall, but not too bad. Was cursing NAK when I looked, but it is reversing again already. Up Down Up Down….
hava great weekend folks.. enjoy the last few droplets of summer ;o)
Still holding all positions over the week end. Technicals on GDX and GDXJ looking like a short term bottom to me……
The USD did a 180 on us today grrrrr……….
Is what it is at this point, have a great weekend all,, markets gonna be furthest thing from my mind as im floating down the Blackwater river this weekend , cold beer and hot weather is my forecast, Best to all.
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