WEEKEND REPORT – CONFIDENCE

Welcome to the weekend report. It is another long report with roughly 30 charts, to build up your confidence. So grab your coffee and lets get right to the charts!

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SPX – I have been expecting this dip and my target area shown here has been met. Do we see signs of a bottom?

 

SPX – Yes, this is a gravestone doji sitting on the 200sma. This could be the dcl, because the ‘ cycle-timing’ is right. We wait for a swing low and confirmation before entering, since it can drop below the 200sma as a shake out.  Look at the selling here, 9 straight days of red high volume. THAT will change sentiment from Bullish to ” I dont want to be long”.  We may get  post election rally no matter who wins, and everyone will then say , ” SO & SO won, and that was good news to the markets.”

 

USD CHART #1 – The USD is due for a dcl and will likely break the trend line shown before finding one. I pointed out an A-B-C drop in a prior report, but right now it seems that time is running out for that.  I could picture this bottoming in 2 days  ( the election in the U.S.?).  So Gold may top around then too.

 

USD CHART #2 – The USD has put in a weekly swing high. It is overbought, and signs show that it is starting an intermediate decline.  This is BULLISH for Gold and builds our confidence too.  We still have in place within this 2 year process a series of lower lows and lower highs.

USD CHART #3 – So with the Dollar putting in a dcl, I expect the longer term move will still be a drop into an Intermediate decline  (ICL). This will boost Gold and your confidence over time. Read the chart for January 2016. 🙂

  Conclusion: I have been doing a little extra research on the USD, and even though it does look bullish on the weekly charts, it matches other times when it just rolled over. I may discuss this in future reports but right now it points to a topping dollar and a 3rd stage of the GOLD BULL RUN in play.  We did extremely well in the spring of 2016, and all bull markets consolidate and go sideways for the next run up. We actually continued to make money trading those consolidation periods this summer. The next run may be great, and we may be at the starting point now.  I will discuss that shortly, and I think that we shall continue to make good money in precious metals.

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WTIC DAILY – I warned that Oil wasn’t acting correctly 5 days ago. If it continues down, we have a failed daily cycle. We could get a dcl at any time ( we’re on day 33), which should give Oil a good size bounce. Watch $43.06 and see how the energy stocks react in Oils next daily cycle for clues.

 

WTIC WKLY – Will there be bounces along the way? Yes. The big picture does not support a good rally from here, but we are on day 33 and we could get a dcl within this timing and a ‘Bounce’ from there.  I am seeing something changing in Energy from bullish looking to bearish looking. Oil is still overbought and broke the long term trend line.

NATGAS – NATGAS ( also energy) broke the long term trend line, recovered rapidly, and then lost it again a week later. look at the volume on last weeks sell off.  I sold all of my Energy holdings weeks ago and I am done with energy until I see a change for the better.

 

GOLD, SILVER, & MINERS

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GOLD CHART #1 –  Gold is acting correctly, look at that 10sma climb. Confidence is building, right? We now have a peak on this daily cycle at day 18 of 20.  Right Translation is all but guaranteed.  We had capitulation selling when I called the lows in Early October. We had a dcl, but I felt that it was an ICL.  I still have confidence that we do, but we really need a break of the overhead trend line for further confirmation.

  Lets look at possibilities, because it is important to be prepared for anything and be able to remain calm and able to think clearly without reacting emotionally.  You will read many things this coming week with the US elections on Nov 8th. 

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GOLD CHART #2 – Daily cycles can go 26 days, or even 29 days long or even 32 days long. I dont expect a crash, but we have to expect a pull back in time. This is one possibility of a post election drop. ( Ignore the Daily count, I was off by 1 day in the next 2 charts, we are on day 21 Monday. See the above chart for the correct count).

GOLD CHART #3 – The USD still looks to be dropping into its dcl, so Gold could POP first into the elections and then drop later.

GOLDCHART #4 – THE BIGGER PICTURE –  Do you see what I see here?   We have been ‘trading’ this market very well, but it has actually been rather sideways for several months in the big picture. Most lose money in sideways chop , but we timed our entries well, and exited when a drop was due. You could say this is 8 months of sideways action and yet  we made money from May to July.  The BIG picture could be that we are about to break above a very long consolidation.   Yes, we are expecting a dip into a dcl short term, but please don’t lose focus on our big picture expectations. A break out could become a big move.

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  Look at January and that small dip. Be confident, don’t fear the coming dip if it resembles that one.  Many got left behind back in February, because they read way too many bearish things in the news. I remember the emails I got back then, telling me I was “crazy for being long,  SO & SO is saying Gold is going to $800”.  We rode the wall of worry straight up then. Now looks similar to Jan & February, so far.

 

GOLD  – It looks and feels very familiar to me here too ( 2008-2009), but right now many are very worried about Gold & the election. By the way, what year was Obama first elected? Does anyone remember what the election year was? Late 2008.

GOLD –  This points out Moves out of the ICL.  When people look back on it, everyone says ” I could have easily bought at those Jan or May lows. Next time I will!”  Many are going to miss this one too, because they don’t know where to look for confidence, and they bail out or never buy because…  ” If so & so gets elected, I read it will hurt the Miners”.

 

HUI –  And many many are seeing this as a Head & Shoulders pattern.  Oh wait, You were confident until I pointed this out, right? So know this in advance – what you read is going to affect your trading going forward over the next couple of  weeks. ‘To be forewarned is to be forearmed.’

 

HUI – A break higher and a dip into a dcl would actually make a nice inverse H&S and a dcl at the 2nd shoulder.

 

GDX WKLY –  Miners are leading the way trying to break out of the intermediate trend line.  THIS indicates that an ICL was left behind in Oct and adds confidence that Gold is going to do the same.   If an ICL is what we left behind, those lows should not be broken , even if suddenly Adam Sandler was written in and elected as President of the U.S.!  Gold would rally and the news reports would say ” Gold is rallying as a safe haven play, because Adam in the Oval Office!” The news always ‘fits’ after the fact, because they make it fit.  Beforehand many are just guessing.

2 CHARTS FROM FRIDAYS REPORT AS A REMINDER –  We should at least have start positions to be in it to win it. Use stops, but not too tight.

GDX – Even a drop is expected  ( into a dcl). I was buying the first week of October, we should expect a normal drop by November, right? 

To build confidence

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THESE CHARTS ARE FROM THE PAST AND REMIND US ( and show newer readers) WHAT WE WERE LOOKING FOR WEEKS AGO.  IF IT IS HAPPENING NOW, THEN WE ARE DONG FINE AND THAT CAN BUILD OUR CONFIDENCE TOO. SO FAR, SO GOOD.

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HUI –  Here I was comparing 2008 Lows to 2016 lows.  The stochastics was not oversold when I posted this, so we could drop to the BLUE LINE. Thats HUI 190 – 200 as it was rising.   So far – we did.

GDX– The drop to $22 area was what I had been pointing out, and now we were ‘there or close’ I wrote.  I mentioned ( and showed) That that blue channel was used in 2008 to catch every dip. We were on it. This all also built  confidence.

 

In early September I wrote when Price was near $230-$250 – Look for more of a a drop to the red arrows. Miners were  not a buy before that. I developed this channel years ago as a personal guide for the extreme drops ( or ICLs).  In Oct we were currently where the red arrows pointed to .

Early October –  I said that We are in the BUY area. This was posted from Oct 6th. I admit, this was a scary buy, because it did overshoot a tad bit in the past.

 

Anyone here this summer knows that I was looking for GDX $22  ( I did say $22-$24 was also a possibility if it did more of a ‘sideways dip ‘ than ‘drop’ over time, but $22 was my measured target).  So looking at a 1-2-3-4-5 type move higher being projected at that time, the potential is great.  So …  IF we just completed a large 1-2 move when we hit $22, we are now starting wave 3 , and it should be a big wave.  That’s a Big ‘If‘, but great potential gains could be ahead.  Lets look even deeper.

And also if you have been here for a while, you know that these bases are favorites of mine.  You will recall these charts posted here as Miners moved out of their bases in January. I had several of them.  WE WILL COMPARE THEM to GDX NOW…For confidence 🙂

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ABX -A week earlier I had pointed it out as a buy breaking from this base. Here I was saying that the right side can run as fast as the left side dropped. The constant selling into the base turns to constant buying.

ABX –  A job well done ABX.

NEM – I pointed out the same set up here. Many thought that the 200sma would act as resistance.  I said to ignore that.  A run higher could move up the way the left side dropped down.

 

NEM – And there it went

 

AGAIN, what do we see here? That’s a pretty steep drop on the left side, aye? Is this just one big base? Are you afraid of the election results Tuesday and a dcl? Or are you afraid to miss this move, like me?  Do you see the ‘2’ area . That is the past 3 weeks, it hardly shows up in the Big Picture.

THAT is your weekend confidence builder.  Is anything 100% guaranteed in the stock market? No, but probabilities and likelihoods are often detected in the charts. As always, we use stops and protect funds. Anything can happen, but things are leaning very bullishly right now for the precious metals. I expect a dcl soon, so a pullback is not going to change anything, unless our parameters are broken.  If things go against our analyses,  we will of course discuss it in the following reports.  So far, in 2016, we have been nailing down some great gains by going against the crowd, ignoring the news and chatter, buying when others are afraid and just being the best chartfreaks that we can. Listening to the charts sure does pay off in the long run, regardless of the wiggles.

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  This report was written because you are going to be bombarded with ‘News’ and ‘Election chatter.  I hear some saying that if Hilary wins, it is bad for Gold. I hear others say that if Trump wins , it is bad for Gold, and visa-versa. With a dcl due, you will probably read all sorts of chatter this week. I don’t bother to, I read what the charts are saying. Fear is going to come into play and Gold could get whippy and volatile.  Come back to the weekend report and build up your confidence by looking to see if these charts still apply or are they broken after the elections.  Is it just a lot of noise, or are things breaking down?   If something changes drastically, we will reassess.

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Have a great weekend.

Brought to you by the letter ‘C’.

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~ALEX

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Reminders from Friday.  So far, Earnings reports are more bullish than not, and that too adds confidence.