Slow Race To The Finish Line

The SPX ( Left Translated) dropped to break the prior lows and then put in a shake out reversal.  It has struggled at the 50sma, and now that it faled, I expect it to roll over, possibly after tagging that 50sma again.

USD –  Possible swing high? Good for Gold if so.

WTIC – I said that this could form a handle as it hammers out a 1/2 cycle low. Maybe even a bull flag?

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Pure bullishness with that consolidation and break out / back test.  I wish I took the trade, but I was focused on Oil & Miners. As I mentioned before, it has been in ‘buy the dips’ mode.

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GOLD – No swing in place yet, but we have one in SILVER & MINERS. Read the chart.   $1267.60  is the high to watch. 

$1243.20 is the low not to be broken.

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THIS LITTLE RUN DOWN IS TO BUILD CONFIDENCE  FOR THOSE THAT MAY NEED A LITTLE MORE REASSURANCE

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Lets just think about this for a few minutes.  If you have been subscribed here for at least a few months, you know that I was calling for a dip in Miners when they were near the highs and still making higher lows. You also know that I was saying that $22 was a likely target  ( I did widen it out to $22-$25, but had good reason to look in the $22 area).  And I said repeatedly that I’d be looking for a low in late September or early October. I then said not to expect a V-Bottom, but we might dance around the 200sma, like the May ICL where price danced around the 50sma.  If these things happened, then  we should look to find a buying opportunity if these things all come together.  So for confidence, we review…

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AUGUST 22nd and Miners were still in an uptrend making higher lows,  I was expecting this steep drop to the $200 sma area. We needed to shake out bullish sentiment and make even Gold bulls nervous about buying .

GDX Aug 24 –  2 days later I called $22 and the 50% fib number as a good area to start buying if things played out correctly.  By that, I mean cycle timing, a deep enough dip, fear, etc.  I first expected another run higher as shown on this chart ( L.T. Daily cycle to suck the bulls in for the slaughter) and that would look like a H&S drop to the 200sma.

That  H&S type drop to the 200sma has now occurred.  

 GDX OCTOBER 10 –  I then said that we might want to expect price to linger at the 200sma , just like it did at the May ICL ( see the blue circles). People then looked at the May ICL and laughed a bit and thought, ” I would buy the heck out of that easy to see bottom! It was obvious that a low was forming.”    🙂  Well, we have the same formation now , not so easy to buy, right?  

NOTE TO SELF: In “Real Time” – Emotions, News events, Fear of the unknown, Negative News Articles and write ups about the C.O.T. levels  and supply and demand, Janet Yellen,  etc etc etc play into your decisions.

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Flash forward

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So even some bulls are thinking …  ‘Now we lost the uptrend and we lost the 50sma, and the 50sma is curling down, we are making lower lows. This feels wrong and the BGPDM is showing how Miners are losing the 50sma and 200sma and the C.O.T. is ugly.  This is bad.“.  SO they become nervous and even a bit worried,  bears become emboldened and start drooling over short positions and buying DUST / JDST,  PUTS,  etc.  And we don’t see much real buying in Miners yet, we see fear.

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GDX OCT 13 – Not many people are buying it, are you?  If not, that’s fine, we didn’t get a confirmed swing low until we get a close above the 10sma, but if you do not want to buy yet, then you see the truth of the story. People are waiting for the bottom to fall out. They are nervous. “That Janet Yellen can’t be trusted”.  There are a million reasons why this could drop further.  That is good,we want negative sentiment and a tough to buy low. Cycle timing tells us that we are either at a DCL or even better, an ICL.   If this rolled over and broke down now, we’d be on day 30 and it would likely just be a quick shake out. GDX remains oversold.

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We each have our own trading style, methods, precautions, risk assessment, and so on.  I encourage the reader to be comfortable entering when they are ready, and waiting for a confirmed low – a close above the 10sma is safer, but I wanted to show that we are getting late in cycle timing and the above little review is a confidence booster that we are getting exactly what I expected.   So yes, there are always risks and unknowns that can morph or change things, but timing is showing us that this snail is about to cross the finish line and the race to the bottom looks to be ending. 

No doubt about it, buying or adding on a Friday is even tougher, so the question for some are – Start a position? Add to a position? Wait to do your shopping next week , since there is plenty of time if this is an ICL forming? It’s up to you, but being here you have a lot of extra information to help you make your personal trading decisions.  Thanks for being here at Chartfreak!  Enjoy your Friday and weekend.  If the lows are confirmed as being in today, we will focus on lower risk set ups & entries for Miners next week. 

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~ALEX