April 22 – Things Are Lining Up

The 1st round of the French Elections are being held on Sunday April 23, and  that may temporarily shake up the markets, but so far, things do seem to be lining up as expected in various sectors.  Let’s review …

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SPX – On April 19th we saw the SPX continue to be rejected at the 50sma.  I mentioned watching that 2322.25, because a break out higher or lower is important.

SPX April 21 –  No change yet. The RSI & MACD are improving, but no break out yet.

 

There is a bit of a mixed picture in the General Markets, due to varying degrees of strength or weakness. Let’s review this.

 

On April 19th I pointed out that the DJIA & the XLF dipped below the last daily cycle low, so that is a sign of weakness & failure. It is a red flag really.

 

NASDAQ – The NASDAQ has been stronger and looks set to break out higher after holding up at the 50sma.  This could be an inverse H&S , but the MACD is lagging so far.  We do see some Tech stocks showing bullish signs as follows…

JBL from Fridays report.

TTWO from Fridays report

NYA – Here we see a consolidation similar to past consolidations. In the past it dipped down to the 50sma when the MACD crossed. This chart is basically neutral.

So the General Markets are Mixed at this point as they continue consolidating before a break out or a break down.  They can offer SHORT TERM trade set ups that are pretty low risk, as shown in past reports, since the lines in the sand are well defined.  It is now getting late in the 3rd daily cycle and even if these markets break out higher,  they should roll over and begin seeking out the next ICL.   The DOW actually looks like a failed daily cycle and indicates that it is already weak enough to do that.

 

 

USD –  The USD may have a bear flag (Continuation) here, or it may have even put in an early  DCL, since we do have a swing low in place and a break of the trend line.  We haven’t taken out the 10sma upside yet, but it is close.  The last few daily cycles were unusually long, so could this be a shortened one for balance?  It has happened in the past.   I have been thinking that we saw an ICL in March, so this would be the higher low that we need. A break of the lows means that we do not have the ICL in place yet.  We will know soon enough.

USD WKLY –

 

WTIC REVIEW –  Over 1 month ago, I expected a nice rally to back test the break down (B), and then I wanted to short OIL.

WTIC –  SO far we are getting what I thought would happen, but I didn’t play it on the short side like I originally wanted to, since many Oil stocks looked like they were recovering their 50sma, etc.  So where are we now?    OIL can have 30- 50 day daily cycles and that gives Oil a lot of time here.   I originally was calling for OIL to drop  to the $43 area or lower.   It may or it also might bounce around and try to hold the recent lows or break them just slightly.  The Weekly explains why…

WTIC WKLY–  You can see that a drop to that blue line could find support, and that is not as deep as the $43 area.  If ‘everyone’ is looking at this blue line for support, usually it will be broken on the downside to get people to go short, and then it puts in a quick ICL & recovers. The markets are devious like that.

 

NATGAS APRIL 19th – I was watching this downtrend line & Support

NATGAS – I’ve expected a possible tag of the 2 supports as a possible buy entry (The  50 & 200sma), but so far NATGAS held up and even broke out temporarily above a small downtrend line shown in the above chart.  It closed below the break out, but that could be a swing low above the 10sma too. NATGAS has become oversold.

NATGAS WEEKLY – Then you look at the weekly chart and you can see that  NATGAS is at the weekly 200ma.  This is NOT a H&S at this point, but it is the potential start of a H&S unless it moves higher.  I would be cautious if NATGAS  breaks and closes below $3.

 

 

NOTICE THAT GOLD IS WELL ABOVE THE FEBRUARY HIGHS

 

 

IMPORTANT GOLD CHART – On the left side of the chart, I am pointing out a fake break out to new highs in late April 2016.  Gold then dropped to an ICL for the entire month. SO Gold looked really strong in April 2016, but the ICL still came in late May.  I expect the same this time, even though Gold looks so strong in April again.  ICL in May or June.

GOLD WEEKLY #1 – A measured move continues higher, but it may not fulfill with an ICL due.

 

GOLD WKLY #2 – This shows 1 idea –  a dip into a shallow DCL soon, then a push higher in the 4th daily cycle for the measured move, which would roll over L.T. and drop into an intermediate decline. I expect Golds decline to be deeper than this actually, so…

GOLD WEEKLY #3 –  This shows the measured move never fulfills. We drop into a 3rd DCL now, Then we see a sideways bounce in the 4th daily cycle & roll into the ICL. The current break out would suck in the bulls for the slaughter.

 

SILVERS COT remained at record levels as of Tuesdays reading. THIS IS BEARISH FOR SILVER the same way Oils record short level was for Oil.

 

SILVER did NOT follow Gold higher any more last week, it remains BELOW Feb highs. It joined Miners with a weaker week, and we know that we are due for an intermediate drop too.

 

SILVER WEEKLY –  IN the past SILVER  has a history of dropping at least 2 weeks in a row, I decided to show that here.

 

GDX – GDX was stronger than GDXJ lately, but it did not follow Golds break out higher last week either.  That is usually the only warning that Gold longs get.  GDX never broke above Feb highs. This has been my expectation, and we are due for a DCL / ICL.

GDXJ – NOT EVEN CLOSE TO THE FEB HIGHS, right?  I have drawn in possible support, but when seeking out an ICL, I have seen that supports do not usually hold up. They are broken and recover later.   When dropping to the DEC ICL, did the red or blue line hold up? No.

This summary goes along nicely with everything that we have already been discussing over the past few weeks. It does seem like things are lining up.  When we eventually have an ICL in the precious metals sector, we will be making great money trading the Miners again.  This is the time of the year that I seem to make my biggest gains.  Stay tuned!  Enjoy your weekend!

 

~ALEX

 

NOTEWORTHY NOTE:  Noteworthy, but not extremely important, read at your leisure.

For the sake of my readers I want to make something clear,  I am an analyst and I am not known as one of those  “GOLD BULLS” in every sense of the word. I think that I probably did make most of my best trades going long Miners in the precious metals markets, but I do not fight the markets.  I analyze and trade accordingly.   I say this because I had someone kindly write to me ( They honestly were very warm and kind) and say  “I’m buying Miners all the way down and I will be happy years from now. That is all that matters and it saves the headache of timing the trade. Why don’t you just do the same- buy miners on each & every dip?  A year from now you’ll be happy. “

 

I’m not here to tell anyone what to do, or what is right & wrong, but I am here to show my way of making the most of my trading in markets that can get tricky.  Maybe I can show how I learned the hard way?  And Maybe I can use a couple of charts to simply give some gentle persuasion. At the very least, We will see that I choose to trade based on analysis to help us to try to buy low and try to sell higher.  Lets take a look..

 

Well, for starters, I enjoy trading!  It isn’t a headache to me at all, it is a challenge and I enjoy trying to Buy low, sell higher and eve re-entering lower.   Sadly, I know friends of mine that bought and held Miners in  2012 rip Roaring Gold Bull Market and they held on for dear life, instructed to do so by other letter writers.   Those Miners may still at this point be cut in half or even worse, they’re still down 70%.  My friends are not happy about that now.    Even if it goes back to break even 8 yrs later,  they are wishing they could have sold higher and bought maybe 5000 – 10,000 more shares at current prices with the same money.    Gold was a MASSIVE bull run, but the Markets are unpredictable and good money management is a responsibility of every trader.  Some have learned that the hard way,  and I consider myself to be one that had to learn that the hard way too.   Please learn from me back in 2000 with the TECH BUBBLE.  I was newer to investing.   Everything that I read was saying,   “Tech companies are changing the world and have been running higher for years. Funds are accumulating for the years to come.”  I though, ” No one would ever sell those for long, right?  Buy these dips!”.   Especially after  Y2K passed!!   Do you remember Y2K?  The world was going to have a Tech melt down, so after that was all clear,  buy buy buy tech stocks in 2000!!     I had watched many run higher, split, run higher, split, etc. etc.   I vividly remember buying stocks like CSCO, EMC, NTAP, JDSU  near the 2000 highs right after Y2K fears dissolved,  then I kept adding at the  bargain prices of each sell off with no stops.  This was CSCO, and I bought this one among others.

Eventually I found myself  then selling after eventually getting cut in half.   🙁   I traded without money management because I trusted the markets were Bulls.    I said Quote , ” I trusted the bull markets”.   Big mistake.

 

 

The MEGA GOLD BULL MARKET was running form 2000 – 2012.   I have a friend that bought EXK  after it broke above $10 and they still hold it now, after buying more on each bounce on  the way down. There are TONS of Miners like this, and there are TONS of holders from the 2012 time period that bought that  ‘Guaranteed BULL MARKET’ and it was a  ‘BUY & HOLD’ with no stops adventure.  Don’t let go, dont sell them or you’ll lose position in the Bull run.  Those buyers that are still holding didn’t know  that Bulls can end and return.  You cant blame them, but sadly many are still waiting to break even.   EXK went from $13 to $1 in 2016.   Please be careful, and I always say  “Please use and honor stops”.  N-O-T-H-I-N-G is guaranteed in these markets.

 

DO I think Gold is going higher, eventually back toward $2000 and more?  Yes, I really do, but how it gets there is still undetermined. And please remember that even after even The Great Miners Run in last year in 2016, where the Bull returned and many Miners doubled, tripled, quadrupled, there was a strong selling period into the DEC ICL at the of 2016.   The lessons are valuable and should be fresh in mind.  As a result of my Tech Bubble losses,  I have found a better way to make money and keep some of it.  I dont sell the exact highs and keep every nickle that I’ve ever gained, but I buy low and sell high to make money.   Adding all the way down into an ICL can be painful for weeks, even months, and who knows  exactly what the future brings.  Notice this chart from the EXCELLENT 2016 run in Miners…

AU dropped from $22 to under $10 last Aug to Dec ( in 4 months).  It can happen quickly and Miners can have added risk with earthquakes or floods or other factors inhibiting earnings & profit.

 

Just a painful lesson that I learned the hard way, and just a noteworthy note for the readers.