NOV 14

SPX – After an initial surge out of the lows, the S&P is stalling a bit.  It may just be a pause before continuing higher. 

USD – The USD has been very strong and continued higher today, will it break to new highs? It does look it. Mondays surge was not as bearish for Gold & Miners as one would have expected after last Thursday and Friday. 

WTIC – Oil broke below the Sept DCL today and then recovered. This could be a dcl, but do not be surprised if it just bounces to about $47 and rolls over a fails again.  I have explained why I think this could happen in past reports.  Please also notice that we had what we call a ‘swing low’ in Oil in early Nov.  It only bounced to the 10sma, and failed. It was NOT THE LOW, and I purposely didn’t call it one.  Sometimes we get a swing low like that  and some say “Confirmed swing in place, buy now”.  A confirmed swing low must start by breaking above the 10sma.   False swing lows can occur on the way down.

I mention this because in Gold, we may get a ‘swing low’ in Gold /Miners Tuesday.  This late in timing, it could prove to  be the low, but it is not a ‘confirmed low’ yet and so it could break down 1 more time like OIL just did. It won’t drop too far this late in the daily cycle, but I hear people saying now that they will only buy with a very tight stop.  They will be stopped out if that happens, and frustrated.

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GOLD – We have a small reversal candle. Again, this COULD BE the low, and the parameters have been eased for a swing low to be put in place.  At day 27 tomorrow, we are due.  You may want to look at prior lows to see how they form. At times, we just get a bounce & 1 more drop. It keeps shaking buyers out.  We also may just rocket higher.

GDX – Support targets have been met. GDX is at the lower trend line, the 62% fib, March and April support. The Cycles timing is acceptable to put in a low, so we could be at the lows. I see HUGE divergence in the MACD.

GDXJ – Was that a shake out below the 200sma to get technicians to sell a break down of that support? Day 27 is late enough for a dcl.  A swing low can easily be formed now with a rise above Mondays candle.

GDX – I wanted to show that the MAY ICL was not a rocket launch higher.  We saw the same type of a reversal candle, it delayed and drove buyers crazy waiting for some upside.  You may remember that when I called the MAY ICL, almost every other writer I heard about (from my readers) was saying that it was a bear flag and about to crash. It was too late in the cycle for a big crash.

GDX CHART  noteworthy points–  Do you see the false reversal in May (red arrow)?  3-4 days later the real lows were put in place. So Mondays reversal could do that too, but time is on our side. We are late in the daily cycle an any further downside should be capped.   What if Monday was THE low candle? Well,  I usually recommend that conservative traders wait for confirmation of a swing low. This begins by allowing it to cross the 10sma. The 10 sma is rather high up, so I will take my chances. I added to some positions on Monday.

Reminder – We all want to catch THE lows, but if the thought of selling off any more makes you want to gag, this chart shows that there will be plenty of time to  make money after we do have a confirmed ICL/DCL.  The move out of Januarys ICL and then MAYs ICL were big. This one could be big or even bigger.  Right now for some, it is O.K. to take it slow and be patient.  The choice is yours.  A starter position or just holding current positions until we get confirmation may be prudent.

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LETS LOOK AT SOME MINERS AFTER OUR RECENT BLOODBATH

ARE THERE ANY SIGNS OF LIFE?

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Imagine if some of our Miners actually were able to hold up above the October lows with last weeks Post election sell off?  That would be encouraging.

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AUMN – AUMN did not sell off much during the Thursday /Friday drop.  Monday it swooped down, filled a gap, and shot back up off of the 200sma.  AUMN is acting quite bullishly ( I own it and added). Earnings were already released.  Excuse the typo on the chart.

GPL – GPL didn’t break the October lows, so I never got stopped out of GPL either. I didn’t add, but I might this week.

VGZ –  VGZ also didn’t break the OCT 11th lows. It may have been a final shake out low, we should know this week.

RGLD – So far, this remains strong looking and has remained above the 50sma.

IAG – I was buying at the October lows, and we see that some of the stronger Miners have not taken out the OCT lows, even though we just had a steep sell off after the Election. IAG remains above those lows and the 200sma. Inverse H&S?

ASM – ASM did not take out the Oct lows. It looks like a break out and back test of sorts. It moves quickly.

AG – I sold my AG position, but I still think that it looks fine. In fact, it also has not broken below the Oct lows. It has strong divergence with each dip and is forming a base.

 Monday we saw reversals in the precious metals. That means that we either saw ‘the lows’ or based on cycle timing, we are very near the lows.   A swing low could form at any time, and cycle timing helps me to have confidence that there is not much downside left before we get a nice upside move.  As I have pointed out, a short term false reversal is possible too. Each person has to decide for themselves what their risk tolerance is. I bought miners at the Oct lows and the selling post election was difficult to watch due to its intensity, I gave all of my gains back, and then some.

So I added to some positions Monday, and like I said, if this is an ICL forming, the upside in the following weeks should be very good even if we get another little dip this week. Waiting a few days for a confirmed ICL / DCL will not diminish your profits very much. It could even save you some pain if we dosell down one more time.  Let’s see what the rest of this week has to tell us.

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~ALEX

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SIDENOTE :  Shipping stocks and Marijuana stocks are going berserk.  They are breathtaking on the way up, but enter at the wrong time, and they can take your breath away on the way back down too. To the experienced traders I say,  “Have a good time, just keep your risk low”.  The Shipping charts are going straight up now and look like they may never come back down. This entices people to just jump in.   I wanted to show a how many marijuana stocks ran in a similar manner weeks ago. Many thought that they’d never come back down after the voting legalized it in several states.  Well, the voting has passed in may states…

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When the Marijuana stocks took of,  they went straight up. The “dips” were crushing.  The volatility has been Boom to Bust to Boom to Bust.  This may happen in the shipping stocks too, we often see an extreme run higher eventually drop back to the 50sma, like we see here in MJNA.  Look at these numbers. Just be careful. 26 cents high to 10 cents the next day, almost cut to 1/3rd.  Then 10 cents to 20 cents ( double) in 4 days. Then 20 cents to 7 cents in 3 days.  Then 7 cents to 14 cents. Are you sick yet? 🙂