Weekend Report – Visibility

Another week that started off a little unclear in some areas, but I think we’re starting to see some clarity now. Lets review the current condition of the markets and then focus on Precious Metals sector. 

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I have been pointing out the potential resistance in the General markets. With the exception of the Nasdaq , which has done a little better, Markets have been rather stagnant. Lets look at the progress over the Month of October. 

SPX –This was SEPTEMBER 30th, and the choppiness was making it unpredictable and untradeable.

SPX NOW – 1 Month later and it is a tad lower with a big rounding top.  On Oct 13th it broke to a new low and I warned that it now looked like it would NOT go upside until it first breaks to new lows again ( Failed daily cycle). 2077 is currently the 200sma and a possible support.

Lets look at the weekly chart

SPX WKLY – For the bigger picture, you could look at this as a weekly bullish break out forming a handle as a back test, but I think that the next real move will come after the elections in the U.S.

DJIA –  The Dow has also been struggling against the 50sma and looks like it really wants to break down to the 200sma. Is this sideways chop waiting for the elections too?

USD – The USD does have a swing high in place and is overdue for a dip into a dcl. This should drop and I would think that that will help Gold continue higher.

USD WKLY– This is often a topping candle, time will tell.

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WTIC – Oil is in the timing for a dcl and is on day 28.  It is at a 38% retrace, but can dip further and Oils timing for daily cycles can be 30-50 days. We’ll see how OIL acts around the 50sma / 50% line , since we always look for clues along the way.

WTIC WKLY-  Trend-line rising

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FOCUSING ON GOLD, SILVER, & MINERS

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Sit back and get a cup of Coffee or Tea, this is going to be a LONG discussion! I have over 35+ charts, but I will not include all of them to avoid confusion. I will just use what needs to be seen at this point in time.

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GOLD has been hiding its intentions for several days.  Like the Lion in the opening theme picture, it is difficult to see clearly. Did it put in the ICL or just another DCL?  Back on Wed Oct 26th, I pointed out that we want Gold to move above $1275.90 to become more bullish and possibly get this to be a right translated daily cycle.

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We got our break of the $1275.90 Friday.

GOLD –  On day 15, Gold broke that level and that increases the chances that we will have a right translated daily cycle, and therefore we caught the exact lows. More follow through upside would be even better. 

 

GOLD – Going forward next week, even just a little higher would be encouraging in this area. That would be a higher high on day 16 or 17, etc.  If this is a 30day cycle, we want the ‘peak’ to be right side of the middle of the daily cycle. This looks very good so far.

 

GOLD –  If the dollar drops for a few more days into its dcl, Gold could actually break above the 50sma and back test at the dcl with a real sign of conviction.

(I’m  just showing the possibilities )

I’ve been looking for a break down in the form of an ICL and then a recovery. Still waiting for a recovery.

GOLD WEEKLY – Making progress. This shows the timing as 4- 5 months  from one ICL to the next of the more recent ICLs ( deep lows).

GOLD –  I pointed this out on OCT 7th, a tag of the 50 wk ma like we saw in 2008 could be in order.

GOLD – Gold tagged the 50 wkly ma. I still hear people on Twitter, Stocktwits, other forums saying that Golds recent weakness is a sign that ‘the bear market is returning’.   They need to look at the Bigger picture. It is absolutely normal so far. I see 3 phases of a bull market so far, and the 3rd gets crazy good over time.

I drew this on Thursday night.  Comparing these sideways lows to 2015 lows, we needed to see a pop soon if this was anything like that long drawn out bottom in Dec 2015.  We might be seeing it starting as of Friday.

Another Bullish Sign –  Encouraging to our thinking that Gold may have put in the ICL, is that Platinum has broken out.  I was watching the stock SWC ( A Platinum stock).  It has been looking Bullish, even on the weekly chart. 

PLATINUM – Platinum is now breaking out, and that is bullish for Gold.

Silver is still trying to hide its intentions, but a higher high was also put in place on Friday (Bullish).

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MINERS actually fell on Friday going into the close. I have SO MUCH to say about the Miners that I actually have 20+ more  charts.  I don’t think that I will use all of them, but trust me , I have been looking at just about everything to try to get some clarity. Remember that I DID get a buy signal on the Miners over a week ago using a system that rarely triggers early.   So now lets take a look and see what could be happening here. 

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GDX WKLY – On a weekly chart, this did not break out like Platinum did. It turned down at the 10ma again and looks somewhat weak.  Could this simply back test and hold above the 20o weekly ma? It did that in June after the ICL was in place. Next week will let us know.

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I need to start off by saying that at times GOLD & MINERS are not exactly in sync. Usually they will get their acts together and then Miners will out perform the Metals by a long shot. Right now, however, Gold made a new high on day 15 and Miners did not even come close to a new high Friday.  Why? I do not know why Miners didn’t follow Gold higher, however, Gold is on day 15 and the GDX is only on day 13.  I went back and looked at prior times when Gold and the Miners were out of harmony and will now share the possibilities going forward.  Like I said though, Miners eventually outperform the Metals so try not to grieve their lingering at the lows, it may be a gift if Gold is set up to move higher.

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OBSERVATIONS

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To start:  Let me remind readers that GOLD bottomed first in October.  Gold made a new high on Day 15 Friday.  On Friday, the Miners were only on day 13 from their lows. One could say that Miners are 2 days behind Gold. Is that significant?  Maybe, maybe not, I’m just pointing it out for now.

GOLD – Day 15 from the OCT 7th lows.

GDX – Day 13 form the Oct 11th lows.  We see that Miners dipped lower again even after Gold bottomed on the 7th.  They then took off higher. The move from $22.50 to $24.99 was good. At this point, this chart is really not ugly .

Notice how at the ICL lows in May,  Miners bottomed 3 days before GOLD did. They danced a different dance around the lows then too. Gold bottomed on May 31.

ALSO PLEASE NOTICE that GOLD WENT HIGHER ON JUNE 8,9,10, & 13,14, & 15! What did Miner do on those days?

GDX bottomed on May 25. PLEASE NOTICE that GDX WENT LOWER ON JUNE 8 & 10, 13, 14!  The same days Gold was Green. Both took off higher later.

Is that Significant?   MINERS WERE DROPPING FOR DAYS when GOLD WAS MOVING HIGHER.  I know many got upset Friday when Gold closed green and GDX dropped into the close, but we’ve seen that before and it was nothing to worry about.

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SO GOLD and THE MINERS are a bit out of sync, but in the past they eventually got together and ran higher, Miners played catch up and outperformed in the long run. Let’s look at more possibilities going forward. 

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GDX  CHART #1 – If this broke the trend line, it usually signals a drop into a daily cycle low, so I wrote that I might be  expecting a drop to a dcl.

GDX –  If that is the case here, maybe they put in a short first daily cycle and find a DCL like this as an example. I don’t care if this is L.T., as long as Gold is R.T.

GDX – Was that dip really a break of the trend line, or was it just a 1/2 cycle dip that ‘sets’ the trend line boundary like I mentioned in a recent report? Time will tell on that one.

GDX –  This would be the bad news, but only due to the amount of fear & foreboding that I know some would feel. This is NOT bearish, it is a shake out.  I’ll tell you why this IS possible, but not to be feared. It has to do with Dec 2015 Golds ICL. 

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THIS IS JUST A LESSON IN RECENT HISTORY

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I find this to be less likely, but if it happened before, it COULD happen again.

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GOLD BOTTOMED and put in its final lows on DEC 3, 2015.  This is my older chart from then trying to get people to buy the dip, so just ignore the writing.  Please do notice that Golds lows were on DEC 3rd, never to be broken again.

DURING THAT TIME,  MINERS BROKE TO NEW LOWS 1 MONTH LATER!  JAN 2016 was The ICL for Miners. It was the ultimate shake out, but we bought it here at chartfreak and many made a small fortune as Miners doubled, tripled, and some went up 700%. Lets take a look.

GDX DEVIOUS 2016 LOWS –  Look at that quick dip & shake out in Jan 2016.  Then it took off like a rocket! Could that happen again as drawn by me here? I never say never, but I do think that it is less likely. I just have to point out another time that Gold & Miners were out of sync.

 

ZOOM IN -This is how it went down almost a year ago, but lets not just focus on the quick shake out dip ( or my typo) 🙂 , lets focus on that moonshot after the shake out, ok?

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I actually drew this on Thursday, and decided not to post it. This shows that all bulls were cleared away with a 2 level stop run.  Could they do it again?  I almost dont know why they wouldn’t, and they’d scoop up all of the stops. 

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I see a ton of emotions when these type of moves happen.  I love these moves, I can make money of off any moves in a bull market, as long as I don’t get too emotional.  GDX remains well off of the Jan Lows, but many are starting to talk about a bear market returning. They hate Miners. ‘Gold will drop below $1000’ talk is starting again.

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If it IS going to happen, and Miners break lows 1 month after Gold bottoms like in Dec & Jan,  you need to see it to be ready.  If you did not see this, there would be a lot of  ” I hate Miners!  Miners rot! This is ugly, I give up!!  I’ll NEVER buy Miners again!!”   And that kind of talk comes up after we just saw some Miners double & triple in 2016.  The memory is short.

 

Conclusion:  There is more , but this is more than enough for now. When things are a bit unclear I tend to go back and research a lot of similar time periods and gather a collection of possibilities to prepare us for whats ahead.  If I post too much of what I find all at once, people tend to get confused at my expectations.  As time moves forward, things will continue to clear up, and I will be ready to continue to navigate the path that seems likely.   Right now, I feel that GOLD is acting correctly, the USD may be dipping into a dcl, and we may see some nice upside in  Gold, Silver, and Miners.  That is my primary leaning at this point, the ICL seems to be in place.      *This is a FED WEEK, so I just had to point out that stop run in January by the Miners after Golds lows were in place, because IF it were to happen again  ( That stop run of 2 levels seems to make sense to me. It would clear the bulls out, but it is also not necessary in a bull market), we all need to accept it for what it is and focus on that stellar run higher that follows shortly after. Emotions are your worst enemy in this business!  Negative emotions do  affect your decision making going forward. I removed leverage this week, but honestly I think that in time, Miners will be a lot higher.  In fact I know that they will if this bull market remains in tact.

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Monday and next week should continue to clear things up.  We have the Fed Mtg, and we expect no rate hike at this time. I’m hoping for follow through Monday to really ensure a R.T. Daily cycle in Gold. And for further clarity, I would love to see Miners follow to the upside.  🙂    We take things one step at a time, and we will be in greener pastures before you know it, with clear skies overhead.  We just need to let the markets do their thing and tell us what our next move is. So far we spotted the lows in October, bought the lows, rode Miners higher, and now some have dipped back down.  Many are still higher. All normal market action around lows.  Try not to get emotional, the lows haven’t even been violated, everything is acting normally.

Enjoy the rest of your weekend and we’ll see what Monday has to offer. As always, Thanks for being a chartfreak!

 

~ALEX

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Sidenote: The ‘comments’ section seems a bit excessively negative at times and that can affect others perceptions. Think about the idea that we were buying around the 1st week of October.  Are those lows broken?  No. I’ve discussed HL, IAG, NG, and others, do they look ‘horrible’?  ‘Ugly’? etc ?  No, we always see ups & downs in bull markets.   If you need a confidence booster, scroll back up to the part of the report that pointed out  Platinum and SWC.  That helps us to lean to the bullish side for gold. Re-read some of last weeks report, or re-read this one, it may help to strengthen your resolve.