A MIXED BAG

We have a mixed bag in the markets, so let’s get right to the charts.

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SPX – Do you see what I see Gilligan? The markets have been all over the place along with the vix since 2017 began. It looks weak. This is an ISLAND TOP actually, a bearish top if price doesn’t close that gap soon.

USD – This is now a long, extended daily cycle and is also  Left Translated.   A L.T. Daily Cycle in this case means that it is weak and should continue that way. It is due for a daily cycle low now, and we should expect a multi day bounce, but I dont think that it will rally very strongly.  It should roll over into an ICL in this daily cycle, so I am not worrying about the future of the precious metals right now, but SOME Miners could show consolidation or a bit of weakness short term if the USD bounces. I will discuss that in this & the weekend report.

GOLD – Gold failed to hold the break out, and I have Thursday as day 4.  The set up remains bullish. If the USD bounces, Gold may stall, or consolidate a bit and bounce around sideways.  It is possible that it will  just eventually ignore the dollar and move higher next week.   We’ll have to watch it going forward,  I’m expecting the 50sma to hold.

GOLD –  I drew these 2 charts last week, Post Fed possibilities. So a dip here is not exactly a surprise to me (us), I’ve been expecting a USD bounce.

SILVER – Silver has already been stalling after breaking out, but several silver stocks have continued higher.

GDXJ certainly stalled ( or crawled) along the 200sma, but it broke above it Thursday. We’ll see if it can hold above it here.  Volume shrank, not ideal.

I decided to look at  GG and ABX, instead of the GDX. They are major components of the GDX.

GG– GG actually has been climbing quite nicely since the Dec lows. It stalled at the 200sma and broke above it Thursday, but it does look tired after a nice run here. It was a weak pop above that 200sma.

ABX – This also has been steadily climbing from the Dec lows, but it looks like it is time for a rest too. This means that GDX might pause or pull back a little if the USD bounces. It is nothing to worry about at this point.

Conclusion: A drop for GG & ABX would be a dip for GDX most likely, but not all miners have to follow. Let’s discuss that.

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PAAS – A leader and a steady run higher, it pops, consolidates, pops, consolidates. I can see PAAS being ready to fill that gap and start consolidating here.

Some are hitting the 50sma or 200sma and pausing, going somewhat sideways and building up steam to break through. Let’s look at an example first, and then see how others may do the same. This will prepare you, in case you own a Miner that ‘stalls’ next week.

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We saw that  with THM – Here I recommended it as a break out candidate crawling above the 50sma.

THM –  Boom, but there was that 200sma and a possible stall.

The consolidation phase builds strength for the burst higher, it’s not anything to worry about in a bull run, but I have noticed how these moves make people anxious, impatient, or fidgety.

ASM –  So here we see the same situation. ASM ready to break out and in the Jan 27 report.

ASM made a great 5 day run, but I am thinking that it now needs to build a little strength to break through, especially if Gold & Silver pause. This is a doji right at the 200sma. This could pull back or bull flag.

AAU-  This is what I call a bit of a mixed bag. It is definitely a bullish break out, but will it stall at the 200sma? Or can it just break through like GDXJ  did?  If it stalls and flags under the 200sma, it will likely become a buying opportunity too.

XRA–  This hit the 200sma and stalled too, but it has had time to build up some energy in a bull flag, so it actually may break out Friday or early next week.   This is why it is a mixed bag.  Some look extended or a bit toppy, others look bullish.

Stalking PLG – PLG did an offering at $1.46 and price never went there, instead it had a high volume burst higher.  That reminded me of NAK, so I dove in and mentioned it here near Jan 24th.

PLG on Jan 26th – Holding the 50sma is bullish – so we could add to position.

PLG– Just about to break out, so I mentioned it again Yesterday.

And it broke out when the market opened up Thursday.   Yes, this could go sideways or continue higher, so again,  this is where Miners become a bit of a mixed bag.  I think some may ignore the DOLLAR bounce ( or any other circumstances) and just finish their move higher. Others may pause and pull back.

This just shows that in the bigger picture, the down trend is broken  ( break out over the Magenta line).

TRX looked set up to break out and I have mentioned that in the past 2 reports. Watch the Magenta line.

Yesterday TRX did break out above that trend line.  Will it stall and back test the line, or just continue higher? I don’t know short term, but I added to my position because this is a bullish break and it remains quite oversold.   Again- It is a mixed bag when it comes to Miners.  Some may pause and drop, others may continue higher.  I’m taking each set up individually.

Guess what?  The other hated miner  AUMN may be ready to break out from this prolonged consolidation too. Watch AUMN,  and if you see GOLD stall and Miners stall, but you see AUMN gradually move higher? That would be quite bullish and no one would dare buy it. 🙂

So it is a Mixed bag when it comes to Miners here. Some are set up to stall or pull back.  They may just consolidate recent gains while the USD bounces.  Others may run higher on their own merits.  Do you remember the day when GOLD was down $15 a week ago, and I pointed out that stocks like GSV, PAAS, and others were Green.  It can happen. I remain bullish in the longer term, short term we may experience a bit of volatility.  It shouldn’t be anything to worry about. Enjoy your Friday trading and have a great weekend!  The weekend report will be out either Sunday afternoon or Monday morning, this is a very busy weekend for me.

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~ALEX

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3 MORE TRADE IDEAS

X- US STEEL released earnings and dropped sharply on Wednesday, but that is also called a last engulfing .  It gaps open higher and engulfs the entire prior days candle. It looks ugly & bearish, but can be quite bullish. Thursday X then reversed sharply higher and this is a buy signal  (with a stop below the recent lows). A break out of this consolidation is another buy.

This looks ready to break out because with the engulfing candle after earnings, the bears start shorting it and are now forced to cover.

INFI – One of our readers ( Thx Chuck) reminded me about INFI again. Here it had a very long base and a huge gap, so when it popped above that base, I wrote it down as a buy opportunity on Jan 20.  If you have been with me for a while, you know that I love these long base formations. Would it stall at that 200sma? Likely so.

INFI – It has acted correctly or as expected so far, and now looks ready to land back on the 200sma. One could take a position where the 10 & 200 intersect(maybe wait for it to reverse or stall in that area). IF this fills the gap, it will double.  Advice: It is a pharma stock and they are at times risky, so stay frosty if you enter this trade, or at least watch your position size.

TRQ WKLY CHART #1 – On Nov 11th, I mentioned TRQ as it bottomed early in September and Popped higher. This break out was a buy. This is a Miner, but it also Mines other metals and that may be why it bottomed early.

TRQ WKLY #2– That POP has formed a cup & Handle, so this has been a slow recovery with a sideways consolidation forming that handle, it is still in the $3+ area. This could be a BUY for a ‘BUY & HOLD’ candidate – a patient one with a long term view.

TRQ WKLY #3 – The Bigger picture shows that it was pinched between the 50 & 200ma on a weekly basis and just broke out.  It has been a long sideways price action, but it is very worth watching if it starts going vertical now. Again, a BUY & HOLD for those with long term goals. Maybe a stop below $3.50.