Step By Step

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Things have been falling into place step by step this week. In this report, I just want to point out a few things that I am watching when it comes to our positions in Miners after a brief review of the Dollar and Oil.

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USD – This looks bullish really, but it is very stretched according to cycle timing. It should roll over into a dcl soon. The Precious Metals are ignoring the USD when it rises now, possibly a sign that the Dollar is ready to dip down.

usd-10-19

WTIC – Oil wants to break out higher, and is putting in a handle or consolidation at the $50 area as expected. Daily cycle count is 20 and Oils daily cycles are tricky. They can be 30 days long or 50, but even if it dipped down now, Wednesdays peak is making it more likely to be a R.T. Daily cycle  (Bullish).

wtic-10-19

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GOLD & MINERS

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GOLD – Gold put in the swing low this morning and recovered the 200sma and the 10sma. It is still oversold, and I would love to see a good old fashion  POP. Gold used to be up $35 in a day, so maybe we’ll see that when the dollar dips down.

gold-10-19

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  I am Bullish, but I need to go over a few  “What ifs…” because they come to me in Emails. This is a series of charts to cover the “what are you looking for now that the swing is in place?” and “What if…”

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GDX – This is the WEEKLY chart and GDX has a weekly swing low in place if it remains strong Thursday and Friday. Does this “Confirm” that we have an ICL and not a DCL? No, but the weekly timing is right to have an ICL, and it is very likely.  SO I EXPECT MINERS TO WORK THEIR WAY HIGHER FOR WEEKS, BUT THERE WILL BE DIPS ALONG THE WAY. DON’T SWEAT THE DIPS IF THEY DO NOT VIOLATE ANYTHING.  Lets discuss this…

gdx-wkly-icl

 

GDX  DAILY – In MAY we launched right out of the lows, so most are kind of expecting that now, but notice the ICL in January. Slowly, day by day, it drifted higher and left doubters behind. People were afraid to buy and many said, ” I will buy the dip!”  Look at January to February – It didn’t dip. Notice the 50sma and purple trend line? We will discuss that area.

gdx-10-19-a

 

GDX – Look at the move out of the MAY lows.  It did have a pull back around day 10 and may have looked weak and struggling to some. Count the days, that pullback was over 2 weeks long. We could get that around the 50 sma and it wouldn’t surprise me.

gdx-10-19-b

 

GDX – “What if…?”  I DO NOT think that there will be 1 more daily cycle, but if we did, it may do this. I’m going to zoom in and point something out…

gdx-10-19-c

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GDX ZOOMED IN – When the daily cycle had more time, I did discuss the possibility of a quick shake out and recovery.  Now that we have a swing low and a break above the 10sma and follow through, the lows are in place and time is basically up. We are on day 6 of the new daily cycle, but it would be day 33 if this was still all one daily cycle. Then the drop would add 2 or 3 days.  I do NOT think that a drop will lead us to a 36 day cycle. That said, Read the chart.

gdx-zoom

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SO NOW lets look at various Miners and examine what I watch going forward.

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NEM – Notice that NEM bumped against the 50sma and could not break through on our final daily cycle in September. It also did that in Dec & Januarys final daily cycle. Now I expect it to break above that 50sma. Lets continue this discussion…

nem-10-19

 

GG – Coming out of our January ICL, GG moved to the 50sma and paused for a day or two, and then it broke through. GG just failed to recover the 50sma in the last daily cycle, so I am watching that here too.

gg-10-19

GORO – Goro stalled at the 50sma today. The 50sma had been support in the run higher, it now would act as resistance, so I am watching to see if it can break back above  ( it might have to pause for a day or two).

goro-10-19

NAK– Many of the juniors are already back at their 50sma. NAK reversed today near the 50sma. Notice that the 50sma was holding NAK down in May & June.

nak-10-19

 

TRX – TRX was halted at the….yep…50sma Wednesday. Will it simply pause? Form a bull flag?  I am watching these types of things going forward.

trx-10-19

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So from what you saw above, can the miners pause? Can they pullback and still be fine?  Did you have 4 green Miners Wednesday and one Red one and think that there was something wrong with the red one?

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AUMN –  This went Red Wednesday, but if we just put in an ICL, this will be much higher in the weeks to come. It may just be pausing to break out above the 50sma, pausing after a 20% up day. 

aumn-10-19

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So that gives you an idea of what I am watching, and what can possibly happen going forward.  In future reports I just want to focus on trades and charts.  If we put in an ICL, and I think we just did, be prepared to relax and just chill out, even buy the dips, unless the recent lows are taken out.   I do think that we have caught the ICL after a nice sell off. A month or two from now these Miners should be quite a bit higher, and our accounts should be too. Enjoy your Thursday trading day!

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~ALEX

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MNGA – I Tweeted out this chart and also put it in the comments Wednesday morning.  I was buying the morning dip here around 71 cents, even though it was up 4% already. This base reminds me of our  AMRS trade. You can see the potential here.

mnga-10-19

MNGA –  It closed up 12% and looks like it want is breaking out.  I may add on a pull back , since I do see the signs of strength coming in.

mnga-10-19-d

AMRS TRADE –  We have held this for a while, and the gains have been great. Do you see similarities in this base?

AMRS 8-16

I have decided to hold mine as core, probably as long as it remains above the 80 cent area (Blue line). It is very overextended and I’d expect sideways or dropping bouncing around.  It has tagged the 9 sma repeatedly on pullbacks in this run higher. Anyone who just wanted a ‘trade’ can sell anywhere around here for 100+% gains.

amrs

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Please review the last few reports for ideas on chart set ups.  I will have more low risk set ups on pull backs or as they present themselves. 

107 replies
  1. Johnny
    Johnny says:

    Thanks Alex. This was a confidence builder. Now I can concentrate on my day. I am going to grab more coffee and read this again. That’s the good thing about your writing style. You can read them over and over. I remember last summer, AUMN darted up and down many times a day. Now that we are here at the low again, maybe it won’t be as nerve racking since we know it could happen again.

    • chartfreak1
      chartfreak1 says:

      Thanks Johnny,

      I try to write the reports to build a little confidence that the
      wiggles are normal, and the markets do not just go straight up even
      though we call it a bullish set up. We have parameters to watch and
      the rest is noise until something breaks.

      And the psychology of the markets is a funny thing. People who would not start a position until the lows are confirmed just want a pullback to get in, and those who positioned themselves think that any pullback now is a sign of weakness, or begin to show concerns that the Lows might not be in, etc.

      • Zoli Nep
        Zoli Nep says:

        Alex, great point re confidence and that ‘good old fashioned POP’ in Gold. GDX has been great but just can’t help noticing the weakness (in my view) in gold. Coming out of an ICL where one would expect bigger moves due to sentiment and shortcovering and it can’t even muster a 1% move? Is something not right? Thanks!

        • chartfreak1
          chartfreak1 says:

          Look at the Dec 3rd 2015 ICL, that should answer your question.

          It was one of the more frustrating ICl’s I have seen. Miners didnt bottom until over a month later too, adding to the mental chaos : )

          • Zoli Nep
            Zoli Nep says:

            Thanks, I knew you were going to say something like this 🙂 I was watching that from the sidelines which was a bit easier 🙂

          • nancytheartist
            nancytheartist says:

            It is reassuring that you have a track of diverse experiences that you draw from…thanks for sharing this view with us all.

    • Conrad
      Conrad says:

      Hi Alex. SSRI and PAAS seem to be moving well despite the Silver crash and recover over last couple of weeks. Would you recommend them here?

      • chartfreak1
        chartfreak1 says:

        Hi Conrad,

        I do, but it also depends on trading style. I look at both and see both at a downtrend line ( ready to break out or ready to pull back and try to break out later).

        So some may wait and buy the break out. If it pulls back to build steam to break out, some may enter on a pause or pull back. “Entry” will be based on personal style at this point. For me, I usually go with a starter position and add of the pullback if it is light, or the break out.

    • Chris
      Chris says:

      ECB said they did not discuss extending QE beyond Mar’17 at recent meeting. That MIGHT be a ST factor at least in the currency arena!?

  7. SonOfGud
    SonOfGud says:

    could be a nuthin nuthin day rather than a sumthin sumthin day.
    half the miners are red, half are green… mostly ranging -3% to +3%

  8. R Byram
    R Byram says:

    the usd index started monday morning at 98.12. After all the gyrations it has moved a whopping 4 cents to 98.16 at this point

  9. chartfreak1
    chartfreak1 says:

    GOLD and the USD moving higher together again.

    Things that make ya go – HMMM

    So today is cleaning my chimney day, I will be leaving for about 2 hrs, see if this looks any different when I return.

    Someone mentioned legal/ medical marijuana stocks . I have been watching those and there are a ton that are acting extremely bullish. It may be an election thing, since legalization has been occurring across the U.S.

    charts like CBIS , NDEV, CANN, CVSI, CBDS, etc are ridiculously impulsive

    Check out a chart using just an 8 sma. CBDS , GRNH, EDXC, and there are many more, but they can shoot up 20%, and shoot down 30% – some are quite volatile.

    Very interesting as legalization for medical use begins to spread

  10. Tammie
    Tammie says:

    Dollar bouncing up and down….more up than down….EURO had an initial pop to Draghi’s comments that they didn’t discuss extending their QE past March….but then the gains were gone and EURO went down again…..keeping dollar more elevated…

  12. Tammie
    Tammie says:

    DRD, TGD, AUMN….have all stayed positive today while most else has fallen….DRD earnings report already came out (but I haven’t found a copy of it yet)…interesting that AUMN is holding strong since it was red yesterday….

  14. Aniket
    Aniket says:

    I think next week is a option expiry week for LBMA/COMEX contracts. Historically they take down metals during this time.

    Any thoughts?

    • Tammie
      Tammie says:

      I was thinking the same thing…I have it marked on my calendar so I’d remember – seems like every time there is option expiry metals go down….so I wanted to be light metals then…but….just loaded up in past couple of days…so…..?

      • Aniket
        Aniket says:

        That’s one of the reasons I am still on sidelines. I might miss little upside(?) here but based on past data, 9 out of 10 times they smashed metals during option expiry week. And always it has created better entry point.

    • Cason
      Cason says:

      Oct futures expire next Thursday. CME group showing always expire last Thurs of the month. But Dec is current front month contract, not sure how much effect this will really have. Contango is minor. the crude oil and natural gas contango on contract roll? Now that’s a beast!!

    • Glmus
      Glmus says:

      You’re not alone. Nasty day for both. Luckily I had some DRD to balance them off. GSV had a nasty day yesterday, so maybe these two will repeat GSV’s 2+% rally today.

    • Cason
      Cason says:

      Good news for me, I haven’t added yet. Stupid work was so busy, got to the computer to check a 4:15 and everything is closed! Let’s go Friday!!

  20. Cason
    Cason says:

    Dude, if we can get the 50-day from here on GDX, I’m good with that. I’ll pullback some off the table (leveraged) for sure. Just need one of those big +$30 days. That would be awesome. Though we have some alright miners gains, and really gold has barely budged.

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