March 17th Weekend Report- Thinking Out Loud

Let’s go over the markets and see what may or may not have changed with the Fed Rate Hike this week.  🙂

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This was my MARCH 10th SPX chart– I expected the general markets to drop back a bit more on the pull back, and then to put in another run higher. It would then be in the timing to roll over into an ICL as shown.

 

SPX – We got a bit more of a pull back and last week I mentioned that the dcl is probably in place.  I expect a run higher.  We have had a series of small pullbacks , and that can be very bullish.

NASDAQ BIG  PIC – Yes the markets are running up nicely, but the blue arrows show that normal pullbacks can occur at any time. The markets will soon be due for an ICL after the next run higher, so I wouldn’t MARRY my long positions, use s a ( maybe semi loose) trailing stop.

USD – On MARCH 10 I expected a drop into a dcl from here ( Happening now with the FED reaction) and then a run higher ( should be very soon), and then a drop when Gold puts in its ICL.  We are still on track, believe it or not.

USD MARCH 17 THIS SHOWS THE DROP-  Here we have that drop after the Fed. We are due for a dcl anytime now in the USD actually, this daily cycle has been long ( Like 30 days) .

USD –  Tech analysis hows a wedge could pop the USD out of a dcl soon. DCL IS DUE NOW.

 

NOTE : THIS chart caught my eye as a ‘sign of weakness’ – I usually do not see the USD  CLOSE below this channel this early in the cycle, it is a sign of weakness for me. So now we are due for a dcl, but the next ‘bounce’ may not be spectacular in my opinion, it may form as L.T.   Read the chart.  I’ll discuss more when I discuss Gold.

WTIC – I called for a temporary bottom here last week, but I do NOT think that this is THE LOWS yet. Some of my readers bought it say that they believe it IS THE BOTTOM.  That is fine, but I do not, so may I suggest that one would use stops and then all is good…

I dont know if the ‘bounce’ is finished, but read my chart.  I actually am thinking of trying to short Oil. Is it ready yet though, this early in the daily cycle?…

WTIC – We MIGHT even back test the break down on a strong bounce, since its only day 3.

NATGAS – NATTY has been bullish and I still think this is fine.

A reasonable stop should be in place just in case, but I still like the set up ( physical or mental stop).

 

GOLD & MINERS

 

EDIT:  I just looked at the GOLD COT –  That is a Bullish COT.  The Miners looked ugly in ways that you will see. It continues to be  a confusing time that needs monitoring going forward.

NOTE:  There are still still differences between GOLDs setup  ( And Silver)  and the MINERS  set up. Gold does have a more bullish set up, so will it drag the Miners higher with it?  GOLDS COT looks more BULLISH, and so does the YEN.   I like that for a Bullish Gold set up.  What about the MINERS?  They  do have a weaker set up, are they showing weakness that Gold & Silver will eventually be affected by?  Let’s discuss what is in front of us, and then I will discuss a few ideas of what we could expect.  We need to navigate through the murky waters to get to the BIG PLAY that is coming our way soon.

 

GOLD – Gold is on day 5 of a new daily cycle.  There is a LOT to consider here, and this is why I said that GOLD is more BULLISH.

  GOLD put in 2 right translated daily cycles, so we would expect the 3rd daily cycle to be able to make new highs, And I expected Miners to follow, but they never bounced during that 2nd daily cycle.  They dropped.   Now in Gold, the pull back was deep and I’m wondering if it will just get to the 200sma again in this daily cycle.  IF THE USD puts in a dcl, I have to wonder….will Gold just form a H&S and top here, or can it run to the 200sma and top out there? We’ll see.

 

KLDX –  GOLD was green, down 8%

MUX –  Gold was green, down 7.5%

SAND –  Gold was green

 

GDX – After a deep sell off, we had a strong bounce on Fed Wednesday and no follow through on Thursday and Friday.  Scenario #1 is that miners move higher from here if Gold does, but they will probably still peak L.T. on day 9-12.

GDX SCENARIO #2– A sideways pause of weakness that creates a H&S, and the USD bounce will drop miners.

GDX SCENARIO #3 – More bullish….Since  GOLD did put in 2 R.T. Daily cycles, if they push to new highs, miners COULD also push to new highs ( but NG, SAND, KLDX, MUX, and a few others certainly didn’t show strength on Friday).

Conclusion : We still need to remain alert as this plays out .

 

 

BIG PICTURE  GDX

 

GDX – Do you see the break out & back test on GDX? We see this action often, and in fact, I did call for this back test before it happened last summer.  SO it is an example of the common “break out & back test”.

 

GDX – If we got a rather sudden drop into an ICL now as the USD bounces, we could do another back test of a more recent break out.  I know, that looks like too steep of a drop after the FED reaction was so bullish for Gold & Miners, but it is possible.

REMEMBER THE W – PATTERN  /  DOUBLE BOTTOM OUT OF THE LOWS IN 2001? It would be similar to that.

GDXJ – As seen here. This would be the ICL in April or May, in the form of a double bottom or W-Pattern.

GOLD ICL’s –  This is to show a series of GOLD ICLs.  Usually 6 months apart, also 5 or 4 months at times.   look at this  ***  on the chart.  It was a shot 4 month double bottom after a STEEP run up, and so that matches what we could see next.   It happens, but this also was a bear market.  I just wanted to show how 4 month ICLs would bring us to April & we could double bottom.

USD – If the USD is weakening after the FED RATE HIKE, and it tops in APRIL,  GOLD could BOTTOM in APRIL with an ICL.

GOLD also closed deeper than normal, like the Miners did, even though they put in a R.T. daily cycle.  Gold rolling over soon & bottoming in April would be an EXCELLENT buy point.

So after the Fed Rate Hike, we find ourselves pretty much where it looked like we could be in last weeks reports.  The general markets look like they want to run higher.  WTIC is bouncing, but I’m looking for an opportunity to short it and not go long.  NATTY continues to look good so far. Gold & Miners  responded well, but we’ll have to see if we get strong follow through next week or will the USD bottom, bounce , and put an end to the GOLD / Miners strength. As we watch this play out, we get a better idea of how to continue to trade  it going forward.

 

One thing that I want to say is that an ICL is an extremely profitable trade to take, whether we are in a Bear market or Bull market in Precious Metals. It is coming and you will make some very good gains at that time, but we cannot rush it- it will set itself up in its own due time.  We will find some trades before then, but keeping in mind that an ICL is due in Gold , Silver, and Miners in the near future is helpful.  I keep current trades smaller in size, waiting in Cash for Miners to present a proper set up.  We will continue to monitor things and ready ourselves to take that trade.

I know that some people get bored when we don’t present bullish trade set ups to take each and every day, but we are currently in a period of time when Choppiness and market volatility make trades difficult. The General markets have been pulling back, so many trades are not breaking out higher  ( CLF, X, AKS, TGB, VALE, WRN, etc etc . It happens during consolidation periods. I do understand that feeling of wanting to trade set ups daily, but in such times  of market volatility or consolidation you can find 10 proper looking trade set ups and only 5 out of 10 work, while the rest just continue to chop around.  Currently, trade set ups are taking longer to play out, and that is frustrating, but that may change when the Markets start running higher again. Even so, the biggest % gains will likely be made coming out of the lows of an ICL in Precious Metals.  It will be worth the wait for those that have funds to invest at that time, so lets keep that in mind between now and the time that the ICL presents itself. We want to have funds on hand to ride a nice run higher in the Precious Metals when it comes.

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~ALEX

 

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URRE WEEKLY  –  I mentioned this recently and I do still own it. The weekly chart shows that URRE is finding support on the 50 ma. I like it as a low risk buy, but I cannot say exactly when this base will break out and run.

UUUU WEEKLY  ZOOMED IN-  It does look set up to move higher. On a daily chart it is dancing around the 50sma and it could be considered low risk  if you use a stop around the 50sma  ( with wiggle room).

 

NAK – Back in Feb with NAK at $1.65, I was pointing out that the 200sma may be a good area to keep an eye on as a place to start a position in a 1-2-3-4-5 move down.  I was going to be doing that.

NAK –  The weekly chart found support and a reversal on the 50ma. The 200sma area has been discussed in the weekly reports too. Price was bouncing around that area. Even a small bounce is a pretty big gain. The low last week was $1.06 and it ran up to $1.28. A 38% bounce is $2.00

CGIX – I posted this on Fridays report at $2.50 .  I said that I was probably going to buy it and had owned it before ( You can read about it in Fridays report).  Risky as a Biotech stock, but this base shows great potential if it gets running. I mentioned Friday morning in the comments that I had bought it on a gap open and a gap fill.

 

CGIX –  It took off and ran to $3.15 that day, closing at $2.95.  This weekly chart now looks to be breaking out. We’ll see if we can get the follow through next week.

X –  Some of these set ups like AKS, X, CLF, VALE, TGB  have been stalling and choppy as mentioned above.  They may run when the Markets break out & run higher.

AKS –  This chart is from last week

 

TGB – MARCH 15 and the set up it still looks good.  It is just not breaking higher yet.