Tuesday Dec 20th

Nothing has really changed since the long weekend report, so lets just review what has happened on Monday.

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SPX – We are due for a pullback into a dcl soon, but this looks like a bull flag forming, so one more pop higher could be in order first. A pop now could help the DJIA to reach 20,000 ( And then a drop would be expected).

USD – The USD actually has a target of 105 with the recent break higher. With a 105 target, Is Gold just going to continue to miss the 10sma mark?

ALL SHORT TERM USD MEASURED TARGETS FROM NOVEMBER HAVE BEEN OVERTAKEN –

WTIC – Oil remained above the break out level, but did not do anything spectacular on Monday.

WTIC – Since daily cycles in OIL can be 30- 50 days long, and new high above day 19 would almost clinch a right translated daily cycle.  Day 19 high is middle ground. This also looks like a mini H&S, but a move higher negates it.

As I was preparing this report on Monday night, the  BOJ DECISION was released  – Their decision is to keep policy steady.  Gold started to sell down slightly as the USD moved higher.

GOLD – Gold has slowly moved off of the recent lows again. CAN it break above the 10sma this time?  We are looking at $1160 Gold to get above the 10sma.  $1124.30 is the recent low. Gold is very weak when it cannot overtake the 10sma for this long of a period of time.

SILVER CHART #1 – Silver looks weak here.

SILVER CHART #2 – We could be seeing a wedge form with the recent lower high, but as you can see, there is room for silver to drop lower and still be forming this wedge.

GDX – GDX has not reached the lower or the upper trend line at the 50sma, like the last 2 daily cycles did. There is room to the downside 🙁

GDX – With that higher low and lower high, we actually see a possible bullish wedge forming. Gdx could drop slightly lower and still have a wedge forming. The above chart shows that it can drop toward $18 area to tag the downtrend. So far, this is just weak, buyers are rare.

NAK continues to act correctly. Dec 15th we saw it moving in a similar manner that it had during the last consolidation.

The 13 sma area seems to offer support

CHK – I would expect CHK to drop to the $6.50 area before continuing higher, UNLESS it gets above the 10sma on this try.

GV – This stock was mentioned weeks ago as a possible break out that would form a handle.  It is forming a handle now. Volume was rather low on the reversal Monday, so the handle consolidation phase may not be finished, it remains a good set up at this point however.

The next 2 weeks are holiday weeks in the U.S. and combine that with possible tax selling and other things taking place, I have to wonder if we will be bored to tears waiting for some good solid action to present us with trading opportunities.

If you were here last year, then you know that last December was rather similar. January saw the stock market selling off for the entire month, but from mid January to May, many Mining stocks doubled, tripled, and some were up 500-700%. It was an amazing period of trading in Energy and Precious metals and we made boat loads of money hand over first. Low risk set up after low risk set up kept forming week after week.   I am certainly hoping for another Low in the precious Metals like that!  Miners and Energy stocks were setting up perfectly and acting very orderly, so they were very easy to trade.  Entering at the lows and riding long moves higher for days and weeks at a time is when all of this ‘patience’ and ‘perseverance’ near the lows pays off. We were able to just ride trending stocks higher.

Gold, Silver, and Miners have been selling off into a yearly cycle low and when that low finally puts in an ICL / YCL, we should once again have some very nice trade set ups to ride higher.  I dont want people to lose sight of that, because as I mentioned in the weekend report….

Even in Bear market rallies, GOLD & GDX has 2 daily cycles out of an ICL where good money can be made. In Bull markets it is a very profitable time period. Charts below are of simple bear market rallies once the ICL is in place.

If we start a Bull run after the recent sell off , the rally is a steady climb higher. An ICL will present itself in the near future,  and the move off of the lows should be a money maker. Lets remain patient and vigilant. In the meantime, traders can possibly make some money in a few of the other trades pointed out in my reports recently, perhaps in Energy or Industrial Metals. Enjoy your Tuesday trading.

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~ALEX