So That’s How The Internet Works

This report is all about How the internet works, and Gold, Silver and Miners.

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This is how the internet works…

GDX – This was from my weekend report, and I showed how the 10sma could be tagged by GDX and the drop would back test the trend line.  Totally normal, so we were ready.

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GDX MONDAY –  When it actually  happened, this was exactly what  we knew should happen.   Well, the  internet lit up with Bearish chatter.  I was hearing that Gold was about to get crushed, Miners were ‘crashing’ , and the USD was rallying!  T-H-A-T is how the internet works now, fear breeds fear.  Is this soooooo bad?

Well  lets discuss Tuesday and see …

GOLD – I have mentioned that Gold has been strong , holding up while the USD rallied. It used to be that the USD would pop a little, and Gold would be down $30. Lately we’ve seen GOLD GREEN and the USD GREEN. Tuesday morning was no exception. 

Gold ran higher, re-gained the 200sma and the 10sma, and looks ready to break out. 

1.  I really want to see price continue to close above $1268  ( 200sma) and

2. move above $1275.90 to make a new high on day 12 or more. 

Lets say that this daily cycle lasts 24 days, a higher price over day 13 makes this Right Translated ( R.T.) and gives it bullish character. With Gold moving above the 200sma and holding up as the USD rallied, all I am hearing is that Gold is going to roll over and ‘Plunge” to new lows into November.  So far I see signs of life, but lets look at more charts.

REMINDER –  I told you I’d use this chart again. 🙂   The ICL of DEC 2015  was B-R-U-T-A-L as it was just bouncing off of the lows, threatening to give way to lower price for weeks.  Oh, and believe me,  ‘The Internet’ was declaring the whole time that GOLD would NOT be able to go higher without first breaking below $1000, maybe hitting $800.   That’s how the internet works.  Almost no one would buy this low  until Gold went below $1000. (We did).

USD – The USD actually looks like it wants to extend above 100. Can Gold continue to resist this rally?

 The USD is extended and is due to drop into a DCL, and Tuesday looked like a topping candle.  If Gold and Miners have done well holding up with the USD rallying,  what will they do if the USD drops?  What if it doesn’t keep dropping and bull flags like it did recently, only to continue higher?  This is the conundrum that we have been dealing with so far.

SILVER – Silver has also been building a floor or a mini base as the USD rallied.

GDX – Yesterdays fear and panic was erased in 1 day. GDX tagged the 10 sma Monday and held above the 200sma.  Tuesday was Day 10.

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So to further examine the evidence, we need to do more than just fearfully watch The USD and GOLD.  Lets look for clues in a number of Miners. Do they look weak and ready to roll over?  Are any strong or healthy with the USD running higher and a low due in Golds cycle? And if you ask me, many of them are lining up bullishly.

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XRA – This consolidation has actually held up very well.  Nice 7% pop Tuesday too.  Low risk buy since it is basing out. It is holding up well and can be bought here or buy a break above the 50sma.

BVN – BVN didnt even drop 38% during the Gold collapse in early Oct.  This is a large bull flag / triangle  type consolidation. 

HL – Break out and tag of the 50sma pointed out Monday. Is it OK?

HL –   Tuesday it was fine thank you.

IAG –  Also pointed out yesterday as a strong leader. It hardly dropped in Mondays dip. 

IAG – Strong out of the Oct 7th lows.

GSS – This Miner under $1 will not be under $1 for long if you ask me, after this long consolidation, it looks ready to go. Notice that the lows for GSS are on Sept 1st.

GSS WKLY –  People think that GSS died.  It ran from 14 cents to $1.13, it has only been resting .

BTG – Up 7% and a break out above the 50sma also. Notice that this is a $2.92 stock almost $1 above the Oct lows. That is 35% off of the Oct lows with the USD rising? Bullish.

AAU – This tiny pop is up 8%, and it looks like it has further to go.It is still at the lows so it is a lower risk / reward buy.

AG – Attempted to break out Tuesday. Also still near the lows as a low risk / reward buy.

So many bullish charts in miners and there are more. GPL Looks Great too.

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Seeing is believing and what I am seeing is a line up of Bullish Miners and a Gold chart that is holding string while the USD rallies.  This has me believing that an ICL has been put in place despite the USD rallying.  I expect the USD to drop into a dcl, and if it does, Gold should lose any resistance that may currently be holding it back. I have been adding on the dip, and the risk / reward is good.  Stops are below recent lows and reward could be 2 or 3 Months of higher prices. By now, even if you are rather conservative, you should AT LEAST have started a few positions with all of the evidence that I have been posting. I want to see Gold break above $1275.90 this week to build even more confidence that Gold is strong not weak.  Thanks for being a Chartfreak and keep your eyes on the prize, not the internet. 🙂

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~ALEX

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BULL FLAG –  This consolidation doesn’t usually last long and is a continuation pattern. After a strong run up, a stock needs a rest. If a bull flag forms, you do not sell because we expect another run higher  ( Often equal length of the pole).

So we bought AMRS way back at 30- 45 cents.  Some asked me when I was selling and I said that I wasn’t. IF you still own this with me, this is looking like a bull flag, so try not to sell it on a day like today when it is down 8 cents ( down 7%).  It could break and run another leg higher.