Friday October 28

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Well, you know the story. I don’t usually plan on doing a Friday report. Thursdays report can usually cover what could happen on both Thursday and Friday.  We are specifically focused on Gold  & Miners , so we should discuss that area a bit before the weekend. Let’s start with the $USD.

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USD Oct 26 – Would the dollar drop into its Daily Cycle Low, or would the 10sma act as suppport? It is overdue to dip down.

usd-10-26

USD Oct 27 – It DID use the 10sma as support so far. This Daily cycle rise is longer than normal.

usd-10-27

 

EDIT :  It is now 8:23 a.m.  and I want to release this and haven’t proof read anything.  I will have mistakes and go fix them now, but please excuse the ones that you find 🙂

 

So I pointed out yesterday that this still could be a topping point, and we need to watch the USD.  Gold has resisted breaking through the floor (lows) with the Dollar rising.  If the Dollar dips down, I would expect Gold to at least pop and then drop into a dcl, hopefully a higher low. 

usd-bigger-pic

 

GOLD – Day 14 and Gold is staying alive above the 10sma.  As seen in the Dec 2015 ICL, If the ICL is in place Gold doesn’t always rocket out of the lows. Gold can just go sideways for a month, testing the lows and testing our patience and determination. Yes it can. It also should be noted that it can drop into a lower low as a final dip into an ICL.

gold-10-27

LETS EXAMINE THE GOLD DEC LOWS – This was not easy either, but notice that it finally took off AFTER DAY 19.  It shot higher and then dipped again.  THAT was a buy. 

gold-dec-2015-lows

Could this crawl along the lows be happening now too, as the USD climbs higher?  I think that it could be happening, and I will focus on that in the Weekend report.  I sold 80% of my leveraged positions ( JNUG) , because timing is getting to the average mid point of a daily cycle. Sideways moves are also a bit decay prone. I can sell the rest on either a Pop or a Drop.   Lets take a look at Miners.

 

MINERS

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GDX CHART #1– Day 12 saw GDX drop even though Gold held above its 10sma.

gdx-10-27-a

GDX CHART #2 – It broke a trend line that I was watching, and on day 12 I took this as a sign to remove leverage. I wanted to keep it a winning trade, since it was bought when I announced that I thought the lows were in in Early October.

gdx-10-27-b

GDX CHART #3–  Please read the chart.

gdx-10-27-c

 

GDX CHART #4 – So I changed the trend line and tried to use the first 2 candles out of the lows. Is this dip really breaking a trend line, or setting the trend line at a 1/2 cycle low?

gdx-10-27-d

GDX CHART #5 – Zooming in for a close up, and using the first 2 candles, I see that it did break the current trend line.

gdx-10-27-e

GDX CHART #6 – Using a line chart and the first dip, it looks pretty clear that the trend line is violated, however…

gdx-10-27-f

A trend line is established using 3 touch points, and I didn’t see 3 tags in a straight line on the chart above really.  That is why I still wonder if this drop is setting a trend line from the lows to the day 12 and a 3rd point comes later, as drawn here?

GDX CHART #6 – Since this is just a ‘possibility’ , Leverage still had to be cut on that possible trend line break shown in the other charts.

gdx-trend-line

So we need more time to see exactly what is happening here.  I want to make the point again that some Miners do not look ready to fail. I showed charts of  HL, IAG, NG,ABX, etc.  Others do look “iffy”, so I am a little more defensive.  This is how a trade is managed in a short term set up. 

FOR EXAMPLE:

ABX actually closed up Thursday, and held the 10sma.

abx

NEM –  Looked fine Wednesday on the 10sma, but took an ugly turn yesterday with news of a debt tender offer.

nem

 

 

 

PAAS looks weak with increasing volume on the selling.

paas

 

CONCLUSION:  We caught the lows and they looked like an ICL using sentiment and Cycle timing ( 5 months since the May ICL, and we have seen them 4-6 months apart).  Did we catch a DCL or an ICL? The DCL was confirmed with a close above the 10sma and a downtrend break, the ICL has not been confirmed.  I looked back at the December 2015 ICL, and it was not confirmed for quite a while either, but the lows were never taken out in that long sideways move.

I will discuss this further in the weekend report, but it still leaves us with this conclusion – Gold still may or may not have put in an ICL, but it is not speaking to us clearly. The Miners broke below the 10sma, but I have seen that before and it then recovered it in a sideways consolidation too. As time goes forward in this daily cycle, you HAVE TO become more aware of the fact that Gold could start to look for a daily cycle low at any time.  Yes it could go sideways like we saw in Dec 2015, yes it could drop to a new low and THEN the ICL would come in on the 6th month from Mays ICL.  Gold could also POP & RUN for a few days and then drop into a higher low (Dcl) and we’ll then see that OCT was the ICL.

 

We have to listen to the markets when they speak, but this one, much like Dec 2015, is not speaking clearly yet. Gold is ignoring the USD rise, and is not acting normal. This will change over time and things will become clearer, but until then I have to remind people to honor your stops or maybe even lighten up if you are heavy or leveraged ( Some hedge their positions). I will discuss this further in the weekend report.  Have a good Friday and a great weekend and thanks for being here!

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~ALEX 

 

194 replies
  1. marinho
    marinho says:

    very clear picture that you painted, easy to understand, even though we need to wait for developments the next few days. I am wondering if the FOMC meeting will make things more bullish. I am sure they will not change interest rates ahead of the election, so that could be a bust for pm related items. So my preferred scenario would be a slide into Wednesday and then a vigorous rebound to complete the ICL next week.

    • chartfreak1
      chartfreak1 says:

      Yes Marinho,

      I keep thinking forward too, as well as looking back at that Dec 2015 ICL. It intrigues me how devious that one was, and then that sudden burst higher in January.

      I also do not expect Interest rates to be changed

  3. ray
    ray says:

    Alex, you are so good ! this report is great again even if the news might not be +
    you shoudn’t thank us for being here, we should thank you for letting us here !!!!!!!
    mucho gracias : )

    • chartfreak1
      chartfreak1 says:

      Such a nice guy Ray – Thanks for being here – LOL

      Seriously though, Gold & Miners are acting a bit different with this USD rally, so it does lead to more of a step by step approach until things clear up. We have a definite DCL, but unconfirmed on the possible ICL.

      Nice pop in Gold right now

    • chartfreak1
      chartfreak1 says:

      You’re right Bill, that is pretty big volume and I didnt look at the volume until you said it. Thx

      EDIT – BUT I THINK I SEE GDX STILL DOWN IN PRE-MARKET?

    • Cal Staggers
      Cal Staggers says:

      Additionally, in pre-market, GDX, JNUG & GDXJ was pushed down (GDXJ by a dollar!) to scoop up a bunch of stop-losses before returning to unchanged at the open. I have no idea if that indicates a low has been had or not, but found it note-worthy.

      Great report as always, Alex – as you say in today’s, we have to keep watching and watching!

  6. chartfreak1
    chartfreak1 says:

    Reminder : That $1275.90 is a good number to break, it makes this a RIGHT TRANSLATED DAILY

    SO I Jumped back into JNUG for a quick trade Pre-market ( it was actually down as Gold was taking off).

    NAK looks REALLY good here too

    • Tammie
      Tammie says:

      So IF gold goes above that then you’d say it’s fairly safe to jump back in? Or does it need to close over that…? If it does that, about how many days would we have left in this first cycle?

      • chartfreak1
        chartfreak1 says:

        A break over that on day 15 would be quite bullish in my opinion ( doesnt have to close there). It pretty much makes this a R.T. Daily cycle ( And I would tend to also believe an ICL is in place). it has NOT happened today yet.

        One could confidently buy the first daily cycle low dip if it did, the only problem is…if the dollar dips into a dcl, how high will Gold go before it dips? A new high in this daily cycle at day 18? Day 22?. Or just up 2 days and then dip into a higher low? It is such an odd bottoming period right now, with many Pops and many Drops.

        There is no real way to tell at this point, but Gold has been resisting the USD rise, so it showed strength and may run now .

    • Tammie
      Tammie says:

      This is one of the few I actually held yesterday – woohoo! Thanks for telling us about it. Since you think it’s going to go way up, is it too late to add more or wait for a pullback…or…?

    • nancytheartist
      nancytheartist says:

      Just came in and …WOW…glad I held my NAK! Sorry I sold my NGD and BTE yesterday…but it is always a good feeling to bank some profits. Now I have some $ to play with. Alex, thanks for all your guidance here.

  12. Glmus
    Glmus says:

    If NAK matches its last big run in AUG, its target is $1.44 now. I found that an hourly 9ema is a great place to take some profit and a daily 5ema was a good time to clear out. Of course, this time could be different. 🙂 And this is the first hour.

  15. nancytheartist
    nancytheartist says:

    About NAK news:
    In September 2014, the Pebble Partnership initiated an action in federal district court in Alaska, alleging that EPA violated FACA by its close interactions with, and the undue influence of, Environmental Non-Government Organizations (“ENGOs”) and anti-mine activists in developing the Bristol Bay Watershed Assessment, and its unprecedented, pre-emptive regulatory action under Section 404(c) of the Clean Water Act. In November 2014, a federal court judge granted PLP’s request for a preliminary injunction in the FACA case, prohibiting EPA from taking any further steps toward finalizing its 404(c) regulatory action, and signaling that PLP’s case had a likelihood of succeeding on its merits.

    Selection of a mediator will be undertaken jointly by EPA and the Pebble Partnership, with mediation talks expected to begin in Washington DC this fall.

  17. chartfreak1
    chartfreak1 says:

    What ever happened to KATHLEENCHOW?

    She used to talk to me about buying Nak and holding it as a core too.
    I don’t think that I’ve heard from her since the summer.

    • Johnny
      Johnny says:

      Alex it looks like on Oct. 23 weekend report Kathleen sent you a short message in this forum regarding Hl and NUGT.

    • kathleenchow
      kathleenchow says:

      CF, I’m here! Just a bit silent in these tricky markets and too busy these days:) Yes, holding NAK (on Canadian side and happy). Actually thinking of adding some here (intra-day dip hopefully).

  19. Cal Staggers
    Cal Staggers says:

    God bless your Line In The Sand, Alex! …and thank you to JDST

    I’ve not used JDST, but since I really didn’t want to pare back on the positions that I’ve unfortunately fallen in love with, I decided to hedge with it this morning when the market rose up to a “line in the sand” (a very bold price resistance on my GDXJ chart).

    This is a lesson that I should have already learned between August and now – but I’m a bit slow ya’ know. I’ve heard you speak of it before, Alex, and am only bringing this up here in case it helps someone else who falls in love with their miners too. If you have ideas on how to manage it, I’m all ears – but it seems I should just leave a stop for breakeven, since it’s right on my line in the sand.

    Thanks again for always giving great analysis, Alex!

    • chartfreak1
      chartfreak1 says:

      That is a good idea Cal – Using it as a hedge and especially at the tag of that line in the sand. Perfect entry and if it breaks above that line in the sand, that’s could be your JDST line in the sand too. .

      It is also a good way to manage a core position when you know a little pullback is coming. Those are stocks that you really dont want to sell for over a year for tax reasons, but you reduce the feeling of drawdown if you can time a hedge correctly

  20. MarkM
    MarkM says:

    Just wanted to add. Alex – your work is amazing. It is the most comprehensive and objective that I follow. Thank you for taking such great care of those who follow your analysis and value your perspective.

  21. pankef
    pankef says:

    One of my favorite long term indicators for miners’ direction, is to seek out divergences between any of the popular miner indices and the price of Agnico Eagle Mines (AEM). I don’t know why it works (nor do I care) but i have followed this stock since the mid 1980’s and when a “reasonable” divergence materializes, it pays to listen. I am a position trader so my focus are the weekly charts thus these divergences may take several weeks to play out (it works just as well on the dailies but they don’t fit my investment profile) and extreme patience is required. If one takes the time, it is not hard to develop trading rules around these divergences but again i want to emphasize how patience is a “must”. Currently, the daily chart of AEM is actually holding quite well suggesting that a low may not be too far. Off of the 2015 lows, there were massive divergences on the weeklies and as far as I can tell, AEM has not yet rendered an “end” to the bull market. Of course, this tool is not used by itself as there is no holy grail yet I have found it to be an invaluable tool in my arsenal.

  26. chartfreak1
    chartfreak1 says:

    You could say NGD is still at the lows, but coming off of the lows in a very convincing manner

    So it might be a great buy ( expecting follow through and a low close by for a stop).

    NGD announced significantly higher 3rd quarter cash flow

  29. kathleenchow
    kathleenchow says:

    So in situations like this, do you jump right back into JNUG or you sit and watch a bit first? I’m sitting hah

    • chartfreak1
      chartfreak1 says:

      That really depend s on the trader. Day-traders might , others may wait for the next DCL, but that could come higher if we have our ICL in place..

      Its tricky, so I’ll review,BUT SOME MAY WANT TO RE-READ YESTERDAYS GOLD REPORT AND TODAYS .

      What may be happening today is we have a higher price in Gold on day 15 ( Scroll up in this report and look at the Gold colored Gold chart in this report). That indicates that odds are becoming more favorable to the idea that we may have caught the ICL again, just that it went sideways much like Dec 15.

      So from here even if gold s daily cycle is 30 days long, it would be right translated and that is Bullish, and should put in a higher low that the ICl, but where??

      Like I wrote in the report yesterday – will this run higher to day 17? day 22? day 26? Or top today??? And then it might do like last Dec again, just keep going sideways for a week or 2 into a higher low?

      Sorry if that wasnt an answer, but it gives the trader many things to think about, and if you’re not in front of your computer all day, it could get jumpy

    • SonOfGud
      SonOfGud says:

      i just bought back TRX & AUMN at the price i sold em.
      might just set a tightish stop this time around

      • Johnny
        Johnny says:

        SOG- I cut loose of everything except TRX and TGD both of which I like at this time. TGD just holds up well…knock on wood. I just can’t keep an eye on 5 positions and work my day job without risking a mistake. Once we all see how this is playing out and if its right, I will add. I am only about 30% invested at this time (down from 70%) a few days ago. 🙂

        • SonOfGud
          SonOfGud says:

          i know… its like a plate spinning act, when i got 10 different miners and theyre all tumbling at different rates
          … tryin to prioritize which to jettison is a pain

  31. GOLDSA
    GOLDSA says:

    Hi Alex – I sold all my NUGT, JNUG and GDX positions yesterday since it broke the trendline. Is it safe it buy it back or do we need more confirmation before I go on a buying spree ?

    • chartfreak1
      chartfreak1 says:

      Please read my reply to KATHLEENCHOW below.

      I re bought this morning, and added on the break back higher by Gold ( miners delayed on that follow thru, but Gold was moving quickly towards that $1279).

      Adding this late in a daily cycle is tricky, but if it is an ICL, it plays out fine in the coming weeks. 3xETF is a personal call, much more whippy.

  32. chartfreak1
    chartfreak1 says:

    So GDX tagged the 10sma and dropped so far…. UGH

    P.S. AMRS bull flag. They came out with news that I thought was VERY BULLISH, and it dropped like a rock out of the bull flag down 9 cents. It just went back to even. Crazy.

  35. chartfreak1
    chartfreak1 says:

    Sidenote: Looking at the ( lets call them “legalize “) Marijuana stocks.

    Interesting drop & reversal on TRTC

    Check out the 13sma on CBDS, HEMP, Bull Flag on MJNA, EDXC, CBIS, CVSI, CANN, and many more.

    These things are crazy though ( CVSI , CBIS, CANN, – huge moves)

  36. Aniket
    Aniket says:

    NAK. Looks like this baby is going much higher. There are lots of dollars on stake and sure they will get to resolution. Fingers crossed.

  40. Cason
    Cason says:

    GDX:GOLD chart, don’t like the indicators pointing down again and the under performance relative to gold last 2 days of the week. Alex likely addressing this in the weekend report but wondering if a pop here is a chance to sell b/c we are now so late in the cycle – with another buying opportunity in the near future?? Maybe?? But look back at Alex’s Dec-Jan gold charts, selling the pop after day 19 would have you missing the whole move, which would be a huge fail. So, to sum it all up? Yep, I’m confused. Got in close enough to lows that I’m not really down much, but not excited to take a GDX trip down to 19!!!
    https://uploads.disquscdn.com/images/d67e11eb37c6f8837f6683be7b391f05e8f800a8f25231eecb50e0765c3f0ed8.png

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