JAN 20 – The SET UPS

The weekend report discusses the current set ups in various sectors, with a bit more focus on the precious metals sector.

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SPX WKLY –  I’m not saying that the General markets cannot go higher, this riding along the upper wedge can continue, but this wedge does tell me that I should expect a pull back sooner or later.  We’ll continue to monitor that as it plays out.

Remember that I mentioned this last week too…

THE VIX WEEKLY –  Down near 10- 12 indicates a top is near  ( I’m not saying that it means we get a crash, just a top). See the chart.  THIS IS NOT A TIMING TOOL – I have seen the VIX in the 11 area for weeks, but it is a heads up warning.

Let me zoom in so that your eyes can see the correlation. Up, Down, Up, Down, – What usually comes next after red circles?

DOW 20, 000 –  So elusive so far

THE USD AFFECTS MINERS, SO LETS DIG IN

USD – The dollar was rejected at the 10 & 50sma.  The USD is weaker than in the past few months.  It is due for a dcl however,  and I did not think that we saw one on Dec. 30 or Jan 3rd.  If we did have one on Jan 3rd this would be a day 4 peak, and we’d be on day 10. This would be very bullish for Gold & bearish for the USD, but it is unclear. SO I GO TO TIMING BANDS.

USD TIMING BAND –  This lower timing band often helps me to clear up what was and what was not a dcl. and it looks like we just broke down into our DCL on day 25 ( right on time). This is 1 price projection ( H&S) as the USD will likely roll over ito an ICL.

USD – Back to basics, let’s just make this easy using Tech Analysis. This is a break down in the USD and bullish for Gold & Miners. I have repeatedly pointed out that using T/A, The MACD has been weak.

USD WEEKLY – The USD does remain above the break out and looks like a simple back test, so you will hear many saying that this is very bullish for the USD, and many will probably go long the USD now. They will say that the bounce in GOLD is finished, and They will also say that Gold will drop fast as the USD rises from the back test.  Time will tell.

WTIC – Once Oil popped on the Trump election, I expected Oil to break out and hold up, and I mentioned then that many Oil stocks and the XLE / OIH remained bullish.  I’ve been warned by many about Oils COT Smart Money Short position and how I am wrong. Many went short OIL in early Dec, and this has not been a good trade. It looks like we have a DCL on Jan 9th, now we monitor Oil going forward, it could start to roll over in this daily cycle.

WTIC WKLY –  OIL STILL remains above the break out area, and bounced off of the 10 ma.  What do the XLE & OIH look like at this point?  Showing weakness?

Both the OIH and XLE look like strong recoveries so far. Yes, they could be due for a pull back, but this would lead to a buying opportunity in Oil & Energy this spring. If so, I will make sure that we are ready for that as this plays out.

GOLD, SILVER, and MINERS

GOLD – As mentioned, Gold has been rising in the same manner that is fell. It has fought its way back above the timing band and now sits ON TOP of the timing band. It was pinned under it on the way down.

GOLD – Please read the chart

GOLD – Please read the chart, but we may just go higher

SILVER – Please read the chart, this was bullish.

SILVER WEEKLY – At resistance now, and if the dollar bounces, Silver could pause or dip. It remains very oversold and a break out is always explosive in Silver once it finally happen.

GDX REMINDER BEFORE WE PROCEED-

A REMINDER OF JAN 2016

GDX – The targets of a possible DCL, but what if we do as we did in 2016, where we couldn’t even break & close below the 10sma?

GDX WKLY – We could dip into a dcl and be fine, so expect this in the back of your mind if the USD bounces higher, but can we just climb higher like 2016?  Yes, we could.

GDX – This looks to me to be a Bullish ascending flat top wedge. While a drop to the 50sma has always been expected, these usually squeeze into the apex and POP higher. We are at the apex, so that means we won’t have to wait long to know- this will resolve next week.

GDX –  This is the pattern and the target often matches the flag pole length.

HEMP–  I wanted to show you one that I spotted recently while trading. They rise into the APEX in a tightening squeeze and then pop.

So we can eagerly look forward to next weeks trading. If you are holding Miners and they have been boring you to tears, going sideways for many days, we may see

1. A pop and continuation higher

2. Or we could get that dip into the dcl, where we will add in a safe low risk area if we have cash to deploy.  Exciting  🙂

Enjoy the rest of your weekend!

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~ALEX

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– I am thinking that I will only need a short report on Monday evening (or Tuesday morning). This report covers a lot that could take a few days to change the picture.

So in the next report I will address major changes if any occur and this:   CLF closed below the 50sma, and yes, that concerns me a bit closing at the lows. Is it a shake out/ gap fill?  It might only be a shke out, VALE did that recently.  At this point however,    Stops do need to be honored, because last week we saw nice reversals higher off of the 50sma in X, AKS, STLD , etc and yet they dropped back down a little bit on Thursday and Friday –  and this put AKS below the 50sma now too.  We’ll see what Monday brings, but it is noteworthy and I wanted to mention it now and discuss further in the next report.

It could be a shake out, but in the back of my mind I am wondering about a possible market sell down coming ( VIX) and pulling these down too. We can only know over time, with stops in place. I will discuss this Monday evening and we’ll see what else Monday brings our way.