Was That Progress?

After we review the progress of the general markets, we will then try to determine if we are seeing any real progress taking place in the Precious Metals sector.  Are things improving or is that sector still just drifting around?

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SPX – My thinking was that we would get a Dip in the SPX ( to the 13 sma?) after the break out. We got our dip, and it was very similar to prior pull backs out of an ICL, so Wednesday I wrote that the dip may be over and we would watch the upside from here. Longs could even raise stops to a little below the 50sma.

SPX –  Well that was some strong upside Wednesday. Maybe people were shorting the dip thinking the markets would roll over, and this was partly short covering?  

Well, take a look at this…

 

NASDAQ –  As of last week, the NASDAQ was looking weaker than the SPX, DJIA, and IWM, and I had pointed that out. NAZDAQ broke out , but gave it up.  I didn’t know if the  tech sector would struggle or recover really.  I thought it looked bad for Tech, and here is why…

SOX  – Just last week the Semi sector took a real steep nose dive, and many of the Semi stocks did too. I was hopeful that maybe some money would leave Tech and go into Commodities and Precious Metals.  This drop seemingly came out of nowhere.

NASDAQ – The Tech sector is now recovering  after that 2 day slam down.

NASDAQ WEEKLY –  The big picture simply shows a break out and a back test.

SOX DEC 7th – And the SOX is recovering too. That was such a steep drop last week, but pulling back for the big picture, I see that this has happened before.

MU recovered with a big pop Wednesday too

 

WTIC – So I was looking for a ‘reaction’ at the highs, not an instant break out. I thought maybe a pull back to the $50 area.

WTIC –  Oil lost the $50  price tag, and is pulling back as expected.  I’m watching the 10 and the 50sma for possible support, but we do still have a failed daily cycle when the lows of September were broken in November.  This usually calls for a deeper drop after a daily cycle peaks.  On Day 16, Oil can have 30-50 day cycles.    It’s a mixed bag on the Oil chart, but the Oil / Energy stocks do still look healthy possibly indicating that things are fine in Oil.  Stay Frosty 🙂

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GOLD, SILVER, & MINERS

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GOLD – It looks like day 41 was a DCL, likely the ICL. That means Gold is only on day 3 Thursday.

We really do want to see a sign of strength to give us boost in our confidence, but there are other signs out there that I have been pointing out as bullish.  Signs of progress –  Lets take a look.

 

I pointed out that a stronger  YEN has been Bullish for Gold. This was a little bit of progress.  Please read the chart.

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SILVER – Silver had a sign of strength, possibly leading Gold out of the Lows on Wednesday. Notice that Gold is on day 2, Silver appears to be on day 8.  We have a big difference with Golds lows, Silvers lows, and the Miners lows. I don’t know how that will resolve, but I have several scenarios in my head.    The 50sma area has been trouble recently, so we’ll watch Silver in that area..

CHECK THIS OUT  FOR A LITTLE SIGN OF PROGRESS –

GDX – Notice that GDX struggled at the 50sma too.  Getting later in the daily cycle, it may find resistance there too, if it can even get up there.  I will discuss a few different possible scenarios in the weekend report.

So there we have it.  Wednesday wasn’t bad for the precious metals, but we really didn’t see a great sign of strength, although Silver did a nice pop higher. This is basically the part that I discussed in my reports weeks ago.  We have to establish lows, and then monitor things as they progress to see whether it matches anything that we’ve seen at prior lows. So far, we are in the lackluster zone. 🙁  Let’s see if Thursday and Friday can change our minds on that. Enjoy your Thursday trading!

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~ALEX

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Let’s just take a look at some other areas that we could consider as some type of “progress”

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GPL – On Nov 14th, I mentioned that I bought GPL in Oct near the lows, and I was liking this chart of GPL since it did not break the Oct lows as Gold & Silver broke down. Gold and Silver continued to sell off sharply in November, how did GPL do?

GPL continues to rise. It is slow progress, but this looks like a break out and should continue to move higher.

VGZ – Also on November 14th, we saw a reversal in VGZ. Price went from the lows of 83 cents to close at 90 cents.

VGZ WKLY –  Currently VGZ popped and is looks to also be breaking higher in a rounding bottom base. Price closed Wednesday at $1.05.

 

EARLY EARLY EARLY – I am VERY EARLY on this one.  This is TRX and it has been smoked in the sell off, but it is now pinched into the apex of what looks like a possible descending wedge or triangle.  I added here because the RISK / REWARD is great if we are at an ICL.  The hope is a double or triple in the longer term, but let’s not focus on “hope”.  If you see this break out upside from this downtrend line, you could buy it there too. I do see solid overhead resistance at the 200sma, so it will need a good pop.

TGB – TGB is a copper company that Popped in November when all the other industrial metal stocks popped post-election. I posted this chart as it dropped to fill the gap.  This was a buy in the 50+cents area  ( I regrettably didn’t take it).

TGB WEEKLY –  This was posted to show the upside potential on a break out.  Regrettably, I did not take the trade  🙂

TGB popped and formed a bit of a bull flag before absolutely erupting 30% Monday.  Regrettably….

TGB WKLY – Will it just stair-step higher or 1-2-3-4-5 wave? I don’t know, but I would like to find a low risk entry into the one. Maybe it will pull back and do a back test?  Time will tell. 

SID – I was watching SID  ( along with CLF, X, AKS, CLD, FCX, HBM, etc )  after the post – election pop. It started to break out , and I usually wait for a back test (if there are gaps) to enter, so I posted this as a future possibility.

SID DEC 2 – Gaps filled quickly, and price then bounced off of the 50sma  (Again). This would be the buy, but I didn’t like that it broke out and fell back under the magenta line, so I wanted to watch it. It was at $3.45 last week.

SID TODAY – Today it is only 13 cents higher.  I noticed that the break out may really have been from a peak further back , April & May  highs to July &Aug highs. That means that SID could be bought in this area and place a stop under the 50sma. Actually , this consolidation has been as tiring as MINERS though.  A bit boring, a bit frustrating, but it may finally take off, it remains a low risk entry.

SID WKLY – This chart set up looks like a nice base with a good amount of room to run over time.

PLG DEC 6th  – Platinum looks to be breaking out and PLG does too. I would buy this on a break above the 50sma  ( red line) or…

PLG DEC 7th – RIGHT NOW.  It is pinched between the 10 & the 50sma and I love this set up. That was a nice reversal Wednesday and I think that PLG can easily Pop over that 50sma.

PLG WKLY – Can’t you picture this running from $2 to $4 pretty easily, like it did in February?

IPI –  at $1.49  I pointed this out Monday morning in the comments and regrettably,  I did not take the trade.  IPI was a nice long base set up, these can get explosive as you know if you’ve been here for a while.  I did a couple of reports on these types of bases.

 

IPI – Now $2.49 , IPI has broken out from this base.  I’d like to find a way to get into this stock too, on a pull back or bull flag. The upside potential is very nice.

 

SO let me mention a friendly reminder that these are set ups based mostly on Technical analysis. I trade them all the time and the success rate is very good under bullish conditions.  Due diligence, however,  on the part of someone taking a trade might be to look up when they release their next earnings report, since this can cause a reaction. Maybe reading the last report would be helpful too.  Also, I never put all of my eggs in 1 basket.  Imagine going in 80% on one great chart set up, and then heavy rains in Peru or Mexico cause a flood in their mines, a mud slide, or just a shut down for a few months.   We cannot predict that type of risk, but we can prevent it from killing our portfolio, by building a basket of stocks to avoid company specific risk.

Thanks for being here at Chartfreak.