The Fed Said “No Hiking” Again

My High School Sociology Teacher used to start his class by saying,  ” O.K. friends, no fooling around here. I have a lot to cover today, so let’s just get right into it.”  I miss that, and I have a lot to cover too, so lets just get right into it!  🙂

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SPX – I discussed that the NASDAQ, IWM, SOX, XBI / IBB, and so on had already made the break higher, as the SPX lingered. The Fed Decision gave it a good push and we have a confirmed DCL and we’re on day 7. It is still oversold , and I would expect a break out to new highs sooner or later.

$USD – We got another rejection at the 200sma.  A drop into a DCL / ICL seems to be in order for the Dollar, since we haven’t seen an ICL for the USD since May. If those May lows are taken out, this would give Gold / Miners the Pop needed here, but I’ll take it 1 step at a time for now. A regular dcl could come quickly.

WTIC–  Oversold, Oil looks to be heading higher. I believe we have a day 33 DCL, and this is day 1 of a 2nd daily cycle. Oil looks Bullish to me and is a low risk buy at this point  ( SCO, UCO, UWTI for experienced traders, ETC).  See  RICE, REI, OAS, XLE, etc.

NATGAS –  A bullish break out to new 2016 highs.

GOLD, SILVER, & MINERS

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The Fed continues to make a solid case for this bull market, and I have to wonder if intermediate cycles can actually shorten in a final phase of the bull run? That may be a discussion for a weekend report some day in the future. For now, we have to take what we get and work with it, so lets see what we got.

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GOLD – Gold is acting very tricky when all things are considered ( Cycles, Sentiment, Tech Analysis, etc). If that is not a new dcl 3 days ago ( And how could it be?), then we are on day 13 and everything has been Left Translated in this consolidation so far. Can we rush to new highs now and then drop into an ICL?  Sure, I pointed out in yesterdays report that that is what we did last April & May after a Fed Wednesday.

GOLD – Daily cycles can last 30+days, and we are currently on day 13. Will this become right translated? Please notice on this chart that if we get a run to new highs, lets say maybe by day 23 or so, it can take several days. We have seen Gold slowly climb day by day in the past, so Gold can actually rise for a week or two more OR Pop in 2 or 3 days like it did in April – May 2016.

SIDEPOINT: Could the shake out move from September be an early ICL? It just seems way too early, Mild,  and unprecedented ( 3 months), but Silver & the Miners do look like they put in an ICL.  Sentiment was bad for Miners and suddenly we have a burst higher on day 13.  If Gold breaks out above that blue line, I would have to say that it could be a new IC and I will discuss why in the weekend report if it does break out higher. For now, I will discuss Silver & Miners and reasons to take a chance and buy.

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I was watching the action after the Fed Announcement and wanted to see if the buying suddenly sold off into the close, or could it hold the highs? What I actually saw was a rush of buying, then a sideways move and further buying into the close.  That is usually bullish.

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SILVER – Silver does look good here.  It looks like it wants to break out and run. Silver miners also acted very well today. Repeat: The Fed continues to make a solid case for this bull market, and I have to wonder if intermediate cycles can actually shorten in a final phase of the bull run? I ask myself that because a consolidation like this can easily result in a nice solid run higher. 

GDX –  The GDX surges 7% higher on day 13? This is acting like it is coming out of an ICL. If GDX breaks above the 50sma, I think this rally can continue with zest. As mentioned, Sentiment has been in the dumpster and that can cause a short covering rally too. I think that it is well worth taking position in some miners, and I will explain that shortly.  GORO, RGLD, & RIC should be evidence enough  🙂 My CORE Holdings did extremely well today.

Using Technical analysis, this looks like a break out from that steep sell off with a 3 day burst, and then a slow back test. It can now run much higher if people were shorting it, so I am watching that 50sma for signs too.

GORO -I pointed out this bullish set up and Goro, RGLD,  & Ric and others were already near their 2016 highs after a strong 3 day rally in early Sept.

Goro – broke to new 2016 highs today. How bullish is that? RIC is at the highs after surging 13%.  RGLD is at highs too. This is very bullish action after a steep multi week sell off, right?

SO I am just going to point out some Miners that have reversed, and show why they hold promise. IF Miners are coming out of an ICL, you want to own more.  What if they are just surging up in a final daily cycle like we saw in April to May 2016? They are still worth entering and simply honor a stop, this way you dont get left behind.

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GPL – Why bullish?

1. It already has done a public offering, so that is behind us.

2. It is breaking above the 50sma ( I posted this after the Fed Release in the comments, it closed higher at $1.44 , above the 50sma). 

3. The MACD is Bullish and

4. The first run in 2016 was huge  ( 500%!!) , this consolidation was necessary and can lead to big upside if an ICL is in place and it breaks out. Even just a return to former highs is big.

GPL – AUG 26th I pointed out the big picture. Look at that 2nd run in 2011.

ASM – I also posted this chart in the comments after the Fed Release at 2:30, it is a buy with a stop reasonably close below. This looks ready to break out and the %-Gains could be nice. A break of the downtrend line usually leads to a run higher, so again I am watching that 50 sma while I own it. If we get a future drop to an ICL, it would likely just act as a back test and not a drop to the 200sma. It can be bought here with a stop below the Magenta line.

HMY – HMY took off with good volume after the Fed release, and it closed up almost 12%.  Is that it?  This looks ready to break out too. Please read this chart from 1 – 3.

HMY – If this is going to just Pop & Drop while Gold finds an ICL, it still looks very promising. Place a Stop under the 200sma, and raise it as it trades higher if you want.

HMY BIG PICTURE – What a sweet looking set up. Notice that HMY was pushing along the 200 weekly M.A. and then burst higher and could be a simple back test.  One caution flag is that it did not quite tag it on the back test, and it isn’t quite oversold on a wkly chart. Still, this is a very good set up in the long run.  I might take a starter position here and just add if it dips down later.

So look at miners in a similar manner to what I have pointed out here. I saw TGD, BAA, AG, CDE, SSRI, KGC, VGZ, MUX, etc etc all looking like possible low risk entries with upside potential.  AT THIS POINT, I cannot tell if this will pop and drop into a final ICL, or was that an ICL in Miners. After seeing how Miners reacted to the 2 p.m. announcement and then continued buying it into the close, I feel that not owning some Miners would be  mistake. We’ll just monitor positions and give then a little wiggle room.  If we see a Thursday morning pullback, it might be a buying opportunity.

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Along with Miners,  Other Metals/ Commodities have been setting up as mentioned here when I pointed out STEEL & COPPER here last week. 

Fed policy  seems to have given other commodities the go ahead too. I see interesting bases on the etf WEAT and Corn, and I had mentioned that ZEUS, X, and AKS were bullish set ups in a recent report, so lets look at a few charts and examine the progress.

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X –

ZEUS – My Sept 19th chart, ready to break out?

ZEUS –  Break out , it is still a buy with a stop below the 200sma somewhere. This could run to $30 or higher again over time.

AKS  from Sept 19th report, breaking out with a bullish set up.

AKS – Follow through

CLD –  Broke to new 2016 highs.

So you can see that with no rate hike, we are seeing pretty bullish action and follow through in many of the set ups that formed after the corrective phase.  Some like CLD, GORO, RIC, RGLD, EXK, AKG, etc are back near or even breaking to new highs, so that adds to my reasons for wanting to hold a core and at this time and take a few trades from the recent set ups.

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 Trading and investing is often made up of pullbacks, consolidations , and basing action after each run higher. A final dip into an ICL in Gold & Miners has been the shake out before a run higher for years. Golds recent pullback and slight break of the lows was mild, but we have seen a serious pullback in Miners and many of those Steel stocks.  This sell off / consolidation activity leads to buying opportunities in bull markets.  I had to lean to the cautious side going into that Fed decision, because based on cycle timing, it is not clear whether the consolidation and selling was complete.  It is early for an ICL, I have never seen one at 3 months.  It is still impossible to know whether or not the selling will have a 2nd leg down, or is it complete?  At this point, it looks like the FED  re-ignited all of the markets, except for the $USD. This was and is a buying opportunity for now, and we’ll see how it plays out.

Summary:  The SPX chose its direction today, and The NAZ, SOX, IWN, XBI, etc. already broke higher before Fed Wednesday.  (  By the way,  I.P.O. TWLO has a great looking chart set up at this point for those that like bullish Tech stocks at a higher price). Oil had a bullish inventory report and seems to have put in a DCL on day 33.  Commodities are coming back to life after a pretty serious sell off, and for now it seems that the Precious Metals want to run higher too.  I’m seeing what I would consider ‘low risk trade set ups’, because we are still somewhat close to the lows. I took some positions after the Fed Release and watched to see if they held into the close.  They actually ran higher into the close. Now I will be looking to add more on Thursday. A morning pull back would be a gift, it is wasn’t a slam down sell off .  Lets see what Thursday has to offer us.

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~ALEX

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NAK –  Stop below 70 cents.

IAG – What if Miners were just back testing the break down? There are still great gains in a double top.  THIS IS UNLIKELY the case, I am just pointing out another nice set up for a run higher.