Looks Inviting

There are areas of the markets that are looking quite inviting, so lets review the first day of trading in 2017 and see what we can find.

 

SPX – From the weekend report, I expected a bit more of a drop.

SPX – Good volume on the reversal, this could continue higher.

 

The USD made a new high today. Though the USD closed up almost $1, Gold and the Miners didn’t drop and close lower. That was encouraging and could indicate that the USD has further to drop. It is becoming due for a dip into an ICL, this should help Gold, Silver, and Miners move higher.

WTIC from the weekend report – Oil has been climbing on light demand.  I expected a dip.

You may recall that over a week ago I said that ” It would be nice to see a higher high than day 19 to lock in the chance for a Right translated daily cycle, before Oil dips into a daily cycle low.”   We got that ‘higher high’ on Tuesday, along with an immediate reversal.  I would think that we will now dip into a dcl.

NATGAS from the weekend report ( I had 3 charts). I knew we were seeing a false break out early last week, and I said that I was expected a dip. On this chart I showed possible targets of the 50sma or the bearish rising wedge.

NATGAS TUESDAY – That was a huge drop on Tuesday. We are near the 50sma already, but this needs monitoring from here in my opinion, this has bearish implications for even a deeper drop than that 50sma.

 

GOLD , SILVER, & MINERS

 

GOLD – GOLD sold off in the first hopur of trading, and that made many nervous, but then it reversed and closed higher. Day 11, we have a new peak and GOLD held up above the 10sma. This is bullish and shows signs that we likely have put in the ICL  ( and YCL). I expect Gold to continue higher.

SILVER – Silver looks like it is breaking out from a bullish descending wedge. The volume is increasing and this is a bullish set up. Silver should move higher.

GDX – MIners didn’t really follow Golds morning sell off. We now see a possible mini bull flag building & pushing on the 50sma, but the more bullish indication is in the chart following GDX.

GDX : GLD – We were buying Miners last week, but this is a clearer indication that Miners are leading Gold, and that is bullish at lows.

 

More Ideas

 

NEM – NEM is a big part of GDX.  I see a difference between the prior daily cycles at the 50sma resistance, and now. NEM is stronger at these lows, this is likely the ICL.

 

GG –  Ditto

This indicates that the lows are likely in place.  The ICL and the YCL are the kind of lows that will not be broken for weeks and should lead to further upside for at least 2 months.  We have been buying miners and I am gaining confidence that the current lows should not be broken. Though we do not have all of the confirmation signs in place that we usually look for to identify an ICL, the above evidence adds to the idea that we should be long the precious metals sector.

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MORE IDEAS

 

THM –  I drew this for one of our readers that was wondering what I thought of THM.  We made some really good gains from THM last spring into summer. It looks to be back on a longer term support. It could have been bought on the lower trend line of the channel or a break of the 50sma for added confidence  ( but waiting does add risk of buying when a normal pull back is due).

Do you see the June-July little pull back in the ABOVE chart of THM?  That is a normal dip into a dcl that comes within a month of the lows. That said, it could happen in any of our miners, at any time, but I don’t worry about that. The 2nd daily cycle was explosive.

 

 

TRX –  I have been posting charts of TRX for weeks. This was Dec 12th, when it was 47 cents. A bullish wedge.   ( Notice that there was no deep dip in June in TRX, so different Miners will act differently).

This chart was posted too in my reports, to show that TRX has potential in a Gold Bull run.

TRX has broken out and is battling the 50sma, now closing at 55 cents.  The RSI is showing strength too. If the Gild market remains in tact, buying at these lows could yield a double or triple in the future, in my opinion.  The same as we saw when we were buying TRX last May. It ran up as more than a triple.

 

IAG – Many Miners like IAG, GORO, EGO, BTG, etc have already regained their 50sma. They may run up further and then pull back to back test this area, or they may just keep going higher. I wouldn’t wait if I was looking to take a position, I’d at least have partial positions and then you can add on a dip if we get one.

GORO is a bullish set up after breaking out and back testing a wedge.  Now it has popped up above the 50sma and could be bought anywhere in this area.  I’d expect that it wants to run back to the Sept highs, a run from $5 to $8.00 at least.

 

VGZ –   From the weekend report, I’d like the way VGX is putting in a round bottom base and held the 50 ma on a wkly basis.  A return to the summer highs is a double and could form a cup  ( eventual cup & handle).

Platinum broke out and PLG double bottomed. In a 16% surge, PLG broke out back above the 50sma Tuesday. It remains oversold and has strong MAVD divergence.  I would expect those lows to hold and for this to run higher by a good %.  You could use a stop below the double bottom if you enter ( Mental or hard stops).

 

ODDLY – We saw NATGAS and OIL drop rapidly Tuesday, and this LGCY WKLY chart looked like it wants to go higher ( It closed at $2.40).  The weekly 10 MA has been acting as a good support point.  I am watching this to see if it pulls back again with OIL & NATGAS acting weak.  You can also check out charts of NADL and PACD since they also held up on support at the 50sma. I am going to continue watching those energy stocks going forward, but I am focused on Miners for now.

FCX from the weekend report –  I couldn’t tell if FCX was done dipping down or not, but the weekly chart looks bullish and landed on a back test area ( Magenta line). The daily chart, not shown,  broke slightly below the 50sma.  Shake out?

FCX –  Regained the 50sma, as though it was a shake out, and the volume was healthy Tuesday too.  This could be bought here if you have been wanting to take a position in it, since the Trump election rally.  This is sort of a cup with high handle / back test.

VALE –  Another shake out? This also looks like a real reversal back above the 50sma and buying here should offer a low risk entry. My stop would be below Fridays lows.

 

STEEL STOCKS –  I had these for the weekend report, but forgot to include them.  These ran higher very fast over the past 3 months, and they looked as though they need more time to consolidate as shown below in AKS and X. Believe it or not, Tuesday they also went higher and ‘MIGHT’ just consolidate sideways before another move higher.  If that happens, that is a super strong move that left me behind, but I’d feel too much like I was chasing if I entered up here.  I’d rather look for Miners that could be preparing to run now.

 

So that is the current market set up after the 1st trading day of 2017, and those are some trade ideas. Many of the Miners looked pretty good Tuesday, after an early morning sell off and recovery.  I have been saying that we are due for  the lows of an ICL and a YCL.  We see more signs of bullishness as time goes on, so  you should be able to buy in this area and have some solid gains in the coming weeks, even months.   I will continue to monitor things and point out clues of bullishness or caution as needed along the way.  I’m thinking that we will see more ‘buy set ups’ forming in the coming days too.  Gold & Miners could put in a quick dip into a dcl in the future, or they may just consolidate sideways around their 50sma before heading higher.  Either way, that would also present a buying opportunity if you still have cash or wanted to trade out of 1 position in return for another.

Enjoy your Wednesday trading day and stay tuned,  things are getting very inviting! As always, thanks for being here!

~ALEX

 

Additional instruction with 5 important charts: Some here are hesitant to buy while price is moving out of the ICL.  Here is what you could do, but let me include a couple of charts showing what could happen.

 

GDX – You could wait for a longer term signal of bullishness, and it may look like this, after a break out in the first daily cycle and the dip into the next dcl in mid January.

 

I HAVE HEARD CONCERNS THAT SOME ARE LEARY OF A REPEAT ‘SHAKE OUT’,  LIKE WE SAW IN JAN of 2016 AFTER A BREAK ABOVE THE 50 SMA, AS SEEN HERE.  “Could we get a shake out in January of 2017, like we did then?”.   My answer is that ‘anything can happen’, however…

 

GDX –  We may have already seen a shake out and now this could be the real strong run higher.

 

So ask yourself,  “If I didn’t have a position after that shake out in 2016, would I have been able to ‘buy the next dip?”

 

And I ask that, because if we just had the shake out in December similar to last January, where would you get in, if we have a strong rally back to highs?  Go back to the X or AKS charts. Those were not easy to buy once they got moving higher, because it felt like we’d be chasing it with no solid pull back?  It is best to have a AT LEAST SOME SORT of position now, if you ask me  ( and some did ask me ) 🙂