Dec 7 – GIDDYUP?

Today after  review of the General Markets, $USD, and Oil, we will discuss the slow motion giddyup that we are seeing in the  Precious Metals market. 

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SPX – November 29th  I was expecting a small dip in the SPX, and I pointed out this possibility. It showed a drop t about the 13 sma.

SPX – That dip came and it may be over already. Now if someone was ‘long’ they can watch and see how this unfolds.  In the spring time the markets ran straight up. bouncing off of that 13 sma for a while.  When moving out of the July lows, the SPX ran higher and then went sideways for months.

 

USD – This dip measures roughly the same as the October dip, so if it adheres to symmetry it may be finished. I would expect a bounce and a drop looking at this chart though.  That may help Gold.

WTIC – My Dec 5th chart of Oil showed that We were about to break out to new highs, but I would anticipate some ‘reaction’ at the top before pushing higher.

WTIC WKLY–  This looks like a very bullish set up.  A double shoulder inverse H&S. The measured move over time would be a run to $70+. Plenty of Oil & Energy stocks shot up higher and I’ve been looking for a few good ones that lagged a bit.

NOG – DEC 2.  I pointed out NOG as it dropped to test the 50sma after breaking out as a low risk entry.

NOG –  That trade is working out and I expect  plenty of upside if Oil breaks out and runs. NOG closed at $2.65 today. Add on a dip.

WPX  – This broke out last week and I posted this in the comments section today.  Buying a back test can be a low risk entry with a stop somewhat loosely below the magenta line & 10sma. 

AREX – Some of us bought AREX and enjoyed a nice slow steady ride higher in August. Arex consolidated those gains, and now looks ready to continue higher. It rides the 10sma fairly well and could be bought near that 10sma.

AREX WEEKLY – The upside potential is a double over time, so I wouldnt use a very tight stop.

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GOLD, SILVER, & MINERS

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GOLD – Gold could have found its bottom on Day 40. I know many are discouraged that Gold isn’t just taking off upside, so we will address that here. The problem is that the miners seemed to have bottomed a while ago, but Gold is only on day 1 if these lows hold. Gold will only be on day 2 Today if the lows hold.

GOLD – That was a very long daily cycle, but I pointed out in a report last week that Gold did put in a very long daily cycle in Dec 2015 ( 43 days). These really should be the lows, we are very overdue cycle-wise.

 

SILVER – Silver also bottomed 2 weeks ago. So we have a rounding type bottom forming.

GDX is actually on day 15 –  There is a lot that I can say about this, so I am going to just briefly throw out 2 scenarios. 

1.  We could see Gold have a short 20 day first daily cycle that bottoms at the end of December, since this daily cycle was very long. Then if the Miners bottom at the end of December too, close to the same time as Gold, it would just be a long 33 day daily cycle for Miners.  This would sync up the timing cycle-wise.

2. The 2nd scenario – I hate this one and even hate to mention it due to the anxiety that it may cause some here.  At the Dec lows for Gold, Gold bottomed and never broke the Dec 3 lows. Miners went sideways for 40+ days and just when they looked like they were breaking out? It slammed down to new lows  ( A shake out) and then took off like a rocket upside.  If you rode this or jumped back in, it was extremely rewarding. many missed it, but we caught the lows here and rode many miners up 100-700%.

I HATE to mention the above scenario, because I know that it makes traders nervous or anxious, but it happened last year, so we have to accept that as a possibility if we dont rocket higher in the near future.  As a positive note: We have been discussing several stocks like GPL, PAAS, RGLD, AUMN, etc that are holding up and looking bullish. They would probably not break the lows, but GG, ABX, NEM  ( main components of GDX) are closer to the lows and could pull a shake out move if they don’t get moving soon.  Time will tell.

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 Now look at the bottom in Gold last Dec 2015. Miners could also just be doing what Gold did here. Lingering at the lows.

Gold at the end of 2015 in this chart looks so beautiful really, but think about this …

GOLD Spent what 40 + days at the lows basing out before shooting up higher?  Miners have spent 15 days and people are nervous and uncomfortable, but they may just be doing this.   Just a friendly reminder:  Sometimes bottoming is a ‘process’ and it is frustrating, nerve wracking, boring, etc.  Again, Miners might just be doing this. 

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HOW ABOUT SOME BULLISH IDEAS to end on a high note?

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Good News –  GDX is really just back testing a break out, and bottoming right now. Look at this price projection in a 5 wave move higher.  We do NOT want to miss that because the Miners are lingering at the lows.

GDX – So I was told that GDX is in a downtrend. Yes, it is, but look at how quickly that can change.

BTE –  This looks very much like the chart of GDX above.

BTE – After OIL broke out higher with the OPEC decision last week, BTE surged higher too. Boom!  So couldn’t GDX  easily do this if GOLD broke out higher too?

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Look at GOLD again, focus on

1. The run up into Nov

2. The slam down after the election. The question now is,  “Are we bottoming?”

PLATINUM – Again Focus on

1. The run into November 

2. The election slam down, and Platinum really  looks like a bottom is forming. If Platinum is leading Gold, Gold should be bottoming too. Platinum looks like a shake out and has regained the OCT lows. The drop in Gold was much greater, possibly manipulated that way, but if it follows Platinum, it should be bottoming now too.

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I saved my favorite 2 charts for last.  I actually stumbled on this while just trying to get an overview of various metals. Let’s end this report on a positive note:

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The Metals – We just saw Copper and Palladium take off and rally strongly to the upside.  Before they did that, look at those bases. Those bases look very similar to what you are seeing unfold in Gold & Silver.  Platinum and Silver even seem to have started to break out upside, while Gold is the last hold out at the lows. So…

 

If Palladium and Copper had similar bases and after lingering at the lows, took off higher, my expectations are that Gold & Silver can do the same.

 

CLOSE UP – Do you see similarity in the bases? Gold could do as Palladium did.

 

 

 Right now we’ve been focused on the lows in precious metals, because this should be an ICL (Intermediate Cycle Low)  and a YCL  ( yearly Cycle Low), and  the move out of these lows could be explosive and quite profitable. We saw this when we caught the last YCL and rode the Miners from Jan – April 206.   I’ve also been pointing out a good number of Miners that seem to be resisting any selling when Gold or Silver drop.  That said, waiting at the lows can be frustrating, boring, and even a little nerve-wracking. Patience often pays off in trading,  and the timing is right. Use and Honor stops and let’s see if this week cooperates with our trading plan. Enjoy your Wednesday and thanks for being here!

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~ALEX

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I have some new readers that have joined us this week. I warmly welcome you to Chartfreak and thank you for joining us.

JUST A REVIEW OF A TRADE IDEA

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IPI –  I posted this in the comments section Tuesday  Pre-Market after ANN asked about it, and I received an email from Chuck, also pointing the set up out. 

This would be a good break out and a ‘Buy’.  Well,  it broke out, closing up 22% Tuesday! Nice catch.  Just like TGB, these have plenty of upside, but waiting for a pull back to enter is prudent at this point. Congrats to anyone that caught it yesterday.

TGB –  I posted this in Nov and it broke out strongly, but may start pulling back now and back test that break out. I will follow it and post it if it becomes a low risk entry. Anyone that wanted to enter on a dip can see the upside potential if it returns to 2014 highs.