Weekend Post- Progress Report

This is our weekend wrap up, and I really like what I am seeing. This is a long report with a good amount of discussion and about 30 charts, enjoy.

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SPX – The General Markets broke out as expected, but we have yet to see follow through.

Let me show you something interesting …

 

• I’m taking my wife out tonight, so in order to release this on Saturday night instead of Sunday morning, I will not have time to proof read it.  Please excuse any typos, and most of all, have a great weekend!  🙂

SPX WKLY –  I want to bring up 3 cautionary notes.

1. The weekly wedge

2. The VIX is now at $10.50 ( mkts top there) 

3. The General markets are due for a Yearly Cycle low.

This all makes me wonder if we get a Left Translated daily cyclein the SPX, a false break out drawing everyone in and allowing smart money to sell into the buying, and a drop after the Fed Wednesday meeting. Gold may be hinting at that too. We’ll discus that later.

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The USD was due for a dcl.  We may be seeing one since day 32 is very late for the dollar. I wrote left translated, but it is actually neutral.

A week ago ( This chart) I pointed out that the dollar was on support, so look for a bounce. This week it actually broke below the prior highs for a bit…

Here you see the break below prior highs near 100.7,  we dropped to 99.75 this week.  However I also now see a bullish wedge, so I expect that move higher.

WTIC – Also mentioned in prior reports, I have been warned by readers for maybe 7 weeks now that OILS C.O.T. is showing that smart money is record short.  This may help you to see why I do not use the C.O.T. as a timing tool, just a cautionary measure. So far, Oil has held within a trading range and Oil / Energy stocks have even moved higher. Oil put in a dcl 2 weeks ago and remains trade-able ( Energy stocks are favored, Oil is sideways).

WTIC WKLY- 7 weeks ago people were shorting oil due to the C.O.T.  May this help you to understand the C.O.T. better. We remain above the break out level.

NATGAS –  Natgas looks jittery in the daily chart, it even looks weak with a possible H&S forming, however…

NATGAS WEEKLY –  This is an uptrend in the weekly chart however, and is at the low end of the trend, so NATTY may actually want to go higher.

 

GOLD, SILVER & MINERS

 

I want to start by saying that there are many reasons that I like what I see.

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Gold from Thursdays report. A continued drop to the 50sma  ( I have been saying this possibility since December to prepare us for it).

Is this too good to be true?  With the USD about to bounce, Gold can’t bottom, right? Well this looks perfect, and they actually can move higher together at times.  A reversal  right on the 50sma and on Day 28.  Let’s discuss this further.

 

Could we slam to GOLD 50% on FED Wednesday with a USD bounce and Bottom on day 32 or 33?  Yes, but often Miners do not follow Gold as far down if it does happen. It serves to shake out traders.

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This late in the daily cycle, I always spend my morning checking the charts at all different time frames, looking for ‘ early signs’.  I have been reporting some  “Early signs” in some Miners ( GSV, THM, etc) , and therefore in my mind GOLD could be setting up too.   Friday morning I wrote in the comments section early in the day that I liked what I was seeing and things looked bullish on a 2 hr chart.

This was gold, and it is actually a break from the downtrend on a 2 hr chart. This is short term, but a positive development.

Now zooming back, notice that the MACD dropped well below the zero line and on Friday it crossed higher, on the 2 hr chart. We saw this at the DEC low ( ICL). In a deep sell off, this is a rare occasion and often happens at the lows. Another good sign.

 

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What about the Fed Wednesday? Gold MIGHT drop on Wednesday after the Fed, right? I’m going to give you 2 visuals that are possible.  Yes, there are others like that 50% line in the chart shown earlier, but these are …

” If the lows were just put into place at the 50sma, on day 28, how could this play out going into the Fed Wednesday, especially if we got a drop on that day?” Scenarios.  Shown here, we could move higher last Friday, Monday, and Tuesday, giving room for a Wednesday dip that doesn’t break the 50sma. Friday day 28 could be THE LOW, or WED day 31 Could slightly break it and be THE LOWS.

OR – We drift along Monday & Tuesday and Wed or Thursday blast off.  So the lows could be in. Do we have further evidence to examine?  Yes…

 

SILVER –

Now please take note that  SILVER is looking VERY BULLISH here.  This is an outright buy, a bullish engulfing right off of the 50sma too. Can it fail on Fed Wednesday?  Yes, any trade can fail, but this is a bullish set up back testing the 50sma after a break out. Many are afraid to buy before the FED Wednesday, but this makes me wonder if Smart Money is accumulating before the herd.

More evidence?  While the USD put in a swing low, Miners should have sold off.  Instead…

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GDX –  GDX also put in a possible swing low.  It has been bouncing off of the 13 sma, and recovered it Friday too, saving the MACD from a cross lower.  It is NOT above the 10sma yet to help confirm a swing low, but the evidence is mounting that things are turning Bullish so far.

 

GDX WKLY –  I took a look at the weekly GDX on Friday morning too.  Notice the time stamp on the chart says 10:41 A.M. ( Yes- at times I’m commenting , doing homework, and trading, so if you see a delay in your question & my answer, this is why I am away).  I thought,  “GDX looks to be pushing upward for a break out”. The downtrend line is already bullishly broken  ( Thats why we hang on to some Miners and dont get too cute).

 

GDX WKLY –  AT the end of the day, look at that! GDX IS NOT SELLING OFF. EACH DIP HAS BEEN BOUGHT AND IT IS RISING WEEK BY WEEK.  It is PUSHING on the 50ma.  These often explode to the upside.  I am seeing that the Miners have not really even been selling off since the Dec lows. I think they are being accumulated by smart money and us 🙂  This has Been pushing (coiling) for a break out. Can it do a quick drop to the 10ma on Fed Wednesday?  Yes, as a fake out sell off, but it also could blow right through the top and leave others behind.

 

GDXJ –  GDXJ has been holding above the 50MA

MINERS –  TGD  joined the club Friday.  It is set up to break out higher.

GSV Jan 23rd – I pointed out that this is a break out and we could expect this to move higher

GSV –  A Bullish Miner

REMINDER –  Other Miners are also acting bullishly .  These are likely leaders. Remember when GOLD sold off $15 , and I pointed out several miners that actually closed GREEN?  When does that happen?  in Bullish times, with surprises to the upside.

THM – On Jan 24 I saw this s a bullish set up

THM – And with GOLD down $15 it broke out.  I see others acting this way too, so Miners are set up in a bullish manner Pre-Fed , if you ask me.

 

** I cannot express enough FOR YOU, the need to recognize that we have a jittery Fed Wednesday this week, and a possible Bounce in the USD.  If you cannot be in front of a computer midday, caution may be best and hopefully you took my recommendation and didn’t get too cute and held on to some Miners.  That said,  I am bullish. Read on…

CONCLUSION : I know that we are facing a Fed Wednesday and most have seen MIners take a slam on or 1 day after the Fed Meeting and we could see that again, but right now we could have just put in a daily cycle low Friday in Gold. Silver was a strong bullish engulfing, Miners put in a swing low ( unconfirmed for now). I was ‘commenting’ almost all morning about what I was seeing, but I have made it a point not to recommend an outright  buy until we get a swing low confirmed in place to be safe. Unfortunately, that could happen right before the Fed Meeting and then there seems to be added risk of a slam down for a day or 2.

What can I say?  We have Metals stocks, Some Energy that look good, and Miners that I have mentioned too lately. My analyses is bullish in all directions with precious metals, and I bought throughout last week.  I pointed out GSV, THM, PLG, and a few others that were set up bullishly as a buy. Friday mornings action added to that picture.  The fly in the ointment is the FED MTG & THE USD bounce. You can decide for yourself what you want to do before the Fed Mtg.  Most of us did not get too cute and we may be invested enough for now ( 50%? 70%? ), so we can just sit tight and see what Monday, Tuesday, and then FED WED brings our way to our current investments. Adding at the end of next week if the coast is clear is a valid option and I will be reporting every step of the way anyway, with my daily reports.We could bounce into MON & TUES and get a slam down WED, THURS as a buying opportunity.  You will see this explained  at the very end of the report.

For me? As of today, I am pretty much all in and I will have to pay close attention to the markets over the next few days ( pre-Fed). I have mental stops, I will allow for some downside action without worrying, and the evidence above in this report is there to examine.  IF IT CHANGES, I will be ready to exit, but for now GOLD, SILVER, And MINERS are set up correctly and the timing is also right.  Lets see how next week treats us 🙂  Please read more at the end of this report.

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~ALEX

 

SIDENOTES – NAK WKLY  – Please read the chart, Was it or wasn’t it?  Even if it was, the dip can be relatively shallow.

 

INTEREST RATE HIKES–  I hear people say that if the FED were to raise rates again Wednesday, the USD would rally and Gold would sell off.  Why they say this, I do not know. I did a report on interest rates and their affect on Gold in the past and will do another soon.  Interest rate hikes in the past Gold Bull Run were bullish for Gold. I promise.

Now let me show you something.  We had a Rate Hike last Dec 14th right?  What has Gold been doing since Mid December?  The USD bounced for 2 days and eventually rolled over,  GOLD dropped sharply and that was The bottom on Thursday after the FED MTG (ICL).  Yes, our  ICL came on Thursday after the Fed interest rate hike. Gold has rallied since the interest rate hike, minus that Thursday after.  People seem to always remember what happened initially on that day  ( The USD TOOK OFF, GOLD SLAMMED DOWN) and they think that is the whole story. They say that an interest rate is great for the USD, Kills Gold. Not True.

Check the charts… 1 or 2 days does not make a trend.  

 

So we may get a slam on WED / THURS after the Fed, that may be the next DCL. For now, I am heavily invested, and will likely try to ride this out.