STILL WAITING – OCT 7

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We are still waiting and maybe, just maybe, the Jobs report FRIDAY before the bell will act as a catalyst. Lets discuss why it would be great to see the futures in Gold higher before the market opens.

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$GOLD – To start with, we have been expecting this type of a deep sell off since the summer. This is becoming deeply oversold, from the Brexit buying to this recent steady exit.

gold-10-6

This is what I wanted to point out for Friday…

GLD–  As an active trader, a large gap open becomes a buy signal ( for Miners too – it would mean that Gold can run higher and Miners would likely follow).  HOWEVER – If that gap fills as the day goes on, the ‘abandoned baby’ is nullified. With the type of selling that we’ve seen, it would likely hold due to short covering on a Friday. Please read the chart.

( For conservative investors avoiding risk, you want to wait for a swing low & confirmation, and I will identify that when it happens, likely next week).

gld-10-6

 

GDX – Day 24 ( and we have seen upwards of 30+ in the past at times) and a dip below the 200sma could act as a shake out, running stops that were placed too tightly.  GDX closed its gap, so no real abandoned baby here.  Notice how the last ICL in May saw price linger around the 50sma. That could happen here too since we have more time-  so time will clarify the picture.

gdx-10-6

HUI – This was a reliable support system that I had come up with.  In 2001, 2002, and 2003 it almost perfectly caught daily cycle lows and ICLs.  In 2004 the HUI formed a ‘W’ pattern and broke that support deeply 2 times.  2006 it only dipped below support for 1 week on 2 occasions.  In 2007 it also dropped below for 1 week.  After the lows in 2008, it didn’t really violate that support line until the 2011 top. We are at that line now, leading me to believe that we are at lows or extremely close, since it used to tag the line or only dip slightly below it for a week.  Also notice how price moves away from that line after the tag. Solid rally.

hui-10-6

GDX WEEKLY – I have a measured drop reaching $22.08, but we may be close enough with the drop Thursday. The channel shown is also the 2 lines from the HUI chart, but a quick dip to the orange line and $22.08 is about all that I would expect for further downside.

gdx-10-6-2

  We are still waiting and we have been very patient-  but I am thinking that if we are still in a bull market, the selling is about exhausted and a rally in Miners is very close ( or here).   Patience has paid off. JNUG was $20 last week, people in blogs that I looked at were buying it without stops, today it was under $10. Many in the “buy the dips” group have experienced a lot of pain by not waiting for the right timing.   We have done very well here.   In recent reports I have been discussing how TRX and a few others are no longer selling off, this is encouraging so I added on little to my core on Thursday, and I may be buying small positions Friday as an active trader, depending on what I see. For example, with almost 8 straight days of selling in Gold, GPL and CDE are also holding up rather nicely. Lets see what we get with the jobs report Friday.

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 AS MENTIONED IN PRIOR REPORTS, TO BE ABSOLUTELY SAFE AND CONSERVATIVE WITH LESS RISK –  One would wait for a swing low and a break above the 10sma. You will miss THE LOWS with this approach, but you will not miss the rally in Miners.  This swing low & confirmation will probably NOT happen Friday, because the selling was so steep. The 10sma ( or 8 sma) is up near $25.  If things line up properly Friday after the jobs report, and we do get a reversal, the weekend report will have charts showing set ups in Miners.  Most Miners will probably look very good and be low risk entries at that point anyway.  Enjoy your Friday trading and the weekend!  We’ve earned this one!

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~ALEX

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SPX may break out higher, because BKX, IWM, NASDAQ , etc have improved. I’m not really sure that I like the set up longer term, I see some weakness and want to watch how this plays out.  I’m thinking that shorter term , we may get a bump higher.  I am not trading in this area currently. I have been focused on Energy, Metals/ commodities, and Precious metals.  See also CLD, SID, CENX, CLF, AKS, X, etc.  CZZ just broke out with pretty big volume. 

spx-10-6

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SAND, TRX, and a few more are starting to look interesting

sand

trx-10-4

122 replies
  2. Rm
    Rm says:

    Thx Alex.. I held on and ha e taken a ton of pain as I bought to heavily near 27.5 but am playing for the long term and I have plenty of powder to add. Hopefully this 2016 rally wasn’t just a big dead cat bounce before we get finished off.. any level in metals that would make you think new lows ahead as your base case. Ty

    • chartfreak1
      chartfreak1 says:

      Hey RM,

      I am not exactly sure that I understand your question when it says ‘…as your base case”?

      However, yes, I do have 1 sceario where this was all 1 big dead cat bounce and then down we could go to even new lows, but I am giving that a 5% chance of happening and a new bull market ( Phase 3, the strongest one) is beginning as the most likely case.

    • Cason
      Cason says:

      hey, leaving some of that powder dry was the key. If you were all in, this would have been tough but now you have plenty of love to spread around!

  3. SonOfGud
    SonOfGud says:

    i bought a lil starter in AUMN yesterday (eeek!)
    think i could just about stomach another 15% drop if thats what it took to bottom out.

    • Bill
      Bill says:

      “My opinion only”, I bought JNUG Yesterday. The US Dollar was up overnight but looks to be dropping now. I think we will be fine Today. Hard to tell if the lows are in, but we have to be close. I bought because I can take a day or two drawdown, but I don’t want to miss the next move higher.

      • Cason
        Cason says:

        I’m with Bill, watched USD tag 97 last night and above this AM but I nibbled on JNUG at yesterday’s close. Small enough than -15% was sustainable.

        Sold DUST, that was a solid ride. No need to get greedy this oversold, take what you get and look for long entry!

    • chartfreak1
      chartfreak1 says:

      Hi Bob

      I was looking at TGD the other day and I noticed that it was holding up above the Sept lows and with the high volume, they could not drop it down, in fact, it closed green.

      That has a bullish feel to it. I like it.

  7. chakrit
    chakrit says:

    Great post!
    Just subscribed yesterday. I rarely see good quality& precise technical analysis post like this before. I have been in gold for a while and your post will help me timing entry/exit better. Thanks.

    • chartfreak1
      chartfreak1 says:

      Hey Chakrit – Thank you and welcome to Chartfreak! Happy to have you here.

      May I recommend when you get some free time (if you haven’t already done this), why not go back and read some of the posts from earlier this week or last weekend, and you can see what we have been expecting and looking for going forward.

      You said that have been in Gold for a while, so you may have some good gains and maybe a little bit of giving some gains back this past couple of weeks, but I do expect a run higher, so you should be fine making back some of the recent drop.

      • chakrit
        chakrit says:

        Thanks for suggestion. I will.
        Yes, I gave back some gains in past few weeks. I studied macro fundamental and I believe that gold will rally in longer time frame (1-2 years at lease) This should be the beginning.

        • chartfreak1
          chartfreak1 says:

          I agree – it’s these choppy waves that tend to choke us at times, but on the bigger long term charts they are just ‘ripples in the pool’.

          Most here are holding a “Core” position from purchases made in the spring, and we only sold partials near the top, so they are still green but suffering from the draw down.

  8. Ken
    Ken says:

    BB trade possible today with GLD GDX SLV…..depends on the close, if interested.
    Daily swing signal confirmed this morning……

    • Cason
      Cason says:

      Hey, you stole my comment! I’m on mobile so low resolution so looks like gap filling so far. Canot we power higher from here or is this a caution flag? B/c I already did the “Nailed It” happy dance…

    • chartfreak1
      chartfreak1 says:

      yup – and what that usually means is that we could bump around the bottom for a bit rather than a break away / short covering type of low.

      Now we’ll have to see if we can get some shorts covering into the close before the weekend to raise prices back up ( A likely scenario).

      • Bill
        Bill says:

        I think that’s about right. I expect sideways for a few, but when this takes off and your not on board it may be hard to chase. In caseits not obvious, this is just my opinion

        • SonOfGud
          SonOfGud says:

          not obvious at all… i thought you were reporting on a vote taken by the whole of the financial world.

  11. chartfreak1
    chartfreak1 says:

    For those pressed for time….It’s easy to trade, you just buy it and place a ‘stop’ below the recent lows ( The low of the abandoned baby).

    In other words, if yesterdays lows are tal]ken out…you’re out, based on an abandoned baby trade

  12. Crystal
    Crystal says:

    Is this a legit breakout of Natty? I am on on phone – as I am for almost all of the day, every day — taking a quick look at the Fifelity app and seeing higher bid to ask volume which seems like a good thing …. still holding most of my UGAZ , it thinking this might go higher?

  15. Carlnetscouts
    Carlnetscouts says:

    Not yet I guess but soon. Tried a little JNUG this morning and got stopped out at a small loss. I think we will rally for a week or so then go back down for a final low.

  17. deshy
    deshy says:

    Alex,
    Bit of a silly question. So far GDX has not negated it’s low from yesterday while $hui has. Which do you follow for an ‘official’ SL? If the $hui it just made it hard again b/c of that opening. Whereas GDX suggests the worst MAYBE behind us. Thx!

    • chartfreak1
      chartfreak1 says:

      That’s a great question Deshy, certainly not a stupid one. If HUI breaks lows , then it cannot put a swing in until Monday. GDX still has one in place, right?

      I personally use the GDX, and if the lows were broken, it just adds another day. If not, I consider it a ‘swing in place’, but it is unconfirmed. It may become confirmed next week with a close above the 10sma, so then I will watch for follow through in the HUI next week.

  18. chartfreak1
    chartfreak1 says:

    I walk outside for an hour or so with Gold up $7 , and THIS is what I get? Gold down $11? : )

    I kind of like what I see in MIners, but right now I need to go and read some comments below.

  19. chartfreak1
    chartfreak1 says:

    Look at the GDX chart in the report above again, where I pointed out how price danced around the 50sma, and said that it could do that here around the 200sma. It just doesn’t look like a big deal when you look back at that 50sma, and you say ” I would have easily bought that and those wiggles wouldn’t scare me”.

    Then today we do the some dance around the 200sma, and some are probably ‘uncomfortable’ in some way.

    Enjoy the dance.

  25. chartfreak1
    chartfreak1 says:

    I’m just thinking to myself, If I was short Gold or Miners all week, would I want to stay short over the weekend? Or lock in gains ?

    As the day goes by, of the miners continue to make a comeback, it could gain momentum as more shorts begin to cover.

  26. Maria
    Maria says:

    Hi guys..happy friday
    Great report teach.. i luv luv that gdx chart mannnn..its a thing of beauty studying the confluence of price, trendlines, support, resistance, stochs,backtests…dang sexy ..just cant wrap my head around the coolness factor of it all…….the hours slip away in a blink of an eye..
    #Captivating #WhatMidniteAlready?
    #ChartFreakette. #NeverGetsOld

    https://uploads.disquscdn.com/images/a7d58df988b83159899706b9a3a50394bd5e55bc6b1cbbc675525b1f329063c3.png

  28. Ken
    Ken says:

    For accountability:

    Harvesting 75% Profits on my USO calls, in case Crude continues higher next week, very happy with the Trade. Holding XLE for now.
    Expecting a wave 4 correction….will ReEnter USO Calls at that wave 4 bottom.

  30. Glmus
    Glmus says:

    For those looking for a bottom in gold (and shares), the Daily Sentiment Index is at 5% which ties it for the lowest % of the year – two other times. This suggests that a bottom is nigh. Now we need to get solid reversals. Have a great weekend.

  32. Johnny
    Johnny says:

    Alex…..Thank you for the HUI with the W pattern. I don’t care who you are……that’s good stuff! Have a great weekend Alex and fellow chartfreaks. 🙂

    • Tammie
      Tammie says:

      yippee! That is one I’ve held onto and have a tiny loss in….been hoping it would make a move if I was able to hold on til the low is in…would love to get more but have been waiting…..

  34. Tammie
    Tammie says:

    Can’t wait to catch up on all the posts and information – my 6.5 hr trip today has taken almost 9 hours due to traffic/accidents on the highway……finally in front of my 2 big screens again!!! happy happy! Not sure I’ll be happy when I look at my stocks…but…..glad to be home! #wouldratherbeapassenger

  35. Tammie
    Tammie says:

    I guess the stock offering by ECA really didn’t hurt it at all…..I had sold all of mine just before they did this and have stayed away….didn’t want a GPL repeat…but…..looks like there was no reason to stay away!

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