May 25th – Observations

Wednesday had the release of the Fed Minutes in the afternoon, and that put a reversal into the Miners sell off.  Thursday has the NATGAS inventory report and we also  have the OPEC meeting that could Move OIL one way or the other.  These things are not unexpected, so let’s discuss some observations from the current charts.

SPX –  I was expecting this run to roll over after the recent slam, but it will take some time to see how this plays out.

SPX – So far the General Markets continued higher.

 

This is something that is important to me in the bigger picture…

 

XLF – I have been pointing out how the financials have been unable to recover from their recent break down.  In the long run, I  do not think that the markets will continue to remain bullish if the Financials remain weak. We are still waiting to see if they can regain the 50sma and Void the H&S.

 

USD –  We did put an Unconfirmed Swing low in place.  The USD dropped in the afternoon and when the FED minutes were released.

WTIC –  I expected this rally and I have also expected OIL to roll over in another push lower.  There is an OPEC MEETING today, and that could top Oil here.  We have a DOJI Candle at the highs.

OIL & ENERGY STOCKS did not rally along with Oil, and this has added weight to the idea that OILS ICL is still ahead.

NATGAS is basically neutral here now, since the COT shows smart money short ( See the weekend report), yet the set up looks semi-bullish.  I have been trading it on a day to day basis using intraday charts, but I do not recommend that.  NATGAS inventories come out today.  Maybe THAT will help it to find a more sustained direction.

GOLD – This actually looks like an unfinished BULL FLAG, so we’ll see if it breaks higher Thursday.  Gold peaked on day 7 so far, and this may still pop & then drop later into a larger sell off as expected.  If Gold were to break above April highs, that would put in a higher low and a higher high, so that would signal something else.   SILVER & MINERS sold off sharply in April & May to new lower lows, while Gold held up better. Gold has been stronger than Silver & Miners.

 

 

SILVER sold of sharply and broke down below the March lows and almost reached the DEC lows. Yesterday Silver tried to reverse higher but it left us with more of a doji candle and remains under resistance of the 50 & 200sma.

YESTERDAY I pointed out that the sell off in Miners may not be straight down. We had a sharp drop on Tuesday,  so I wanted to point out that many went Heavily short and needed to know that we could get a bounce.  In March in that blue box, we also has a down day like that.  After that, GDXJ rallied slowly for weeks. I was saying that we might see that here.

GDX –  And now we got a strong looking reversal with the release of the Fed Minutes.  I am watching that dotted blue line and the 200sma for GDX.  I have been expecting a tag of the 200sma and maybe we will see that now. A strong break out higher would signal something else, and anyone short should cover. This is unlikely.

GDXJ –  We saw a stronger reversal in March, so they do happen and fail.

GDXJ – Again, there is time to meander around if this would be a 30 day daily cycle.

 

GDXJ – And notice that the Fed Mtg on day 3 caused a 2 day sell off.  Now the same minutes of that meeting caused a reversal rally.  It may not last either.

 

GDXJ –

 

GDXJ – This was the last daily cycle of 2016.  It also reversed higher on a few occasions, but ‘Follow-through’ buyers could not beat the bearish selling.

 

 

Further Observations – Minor differences

 

I have mentioned in the past that I am seeing a host of different types of set ups in Miners at this point. Some are at the Dec lows, others look to be strengthening, and still others look down right bullish, even now.  Let’s just take a look at a few examples of that observation.

 

FSM – Several former strong Silver stocks are breaking down, even finding themselves below the last ICL.

HMY – This looks to be building a bullish consolidation, making higher lows, but it was threatening to break down before yesterdays reversal too.

 

EXK – Below Dec lows.

AUY –  AUY put in a solid reversal and  looks like a bullish set up. We may see a small move higher that regains the 50sma.

 

GFI –  Notice that GFI is actually a bullish chart. It is still making higher lows and is up near the recent highs.

 

GOLD – RANDGOLD is a consolidation at the highs and broke out to new 2017 highs. THAT is impressive at this point in the intermediate cycle.

 

RGLD –  The most impressive big Miner is Royal Gold. This really looked weak to me in March, returning to the Dec lows, but while we are supposed to be selling down into an ICL,  RGLD broke out to new 2017 highs.

 

CDE –  CDE was also having  a weaker move in the 2017 time frame after an extremely strong run in 2016.  It is at the DEC lows, but it may be actually firming up in this basing process.

 

S0 what I am trying to point out here is that we have within the Precious Metals Sector, a large mix of activity,  some very Bullish looking, and others rather bearish. My expectations as stated in prior reports have not changed, but I’m trying to keep my eyes on everything.  We know that Gold has held up as rather strong in this intermediate cycle, while Silver & The Miners actually resemble deep sell offs into Intermediate Cycle Lows.  I do still expect Gold to sell off further into more of an  ICL looking drop on a weekly chart, and if you have ever been caught positioned ‘long’ during one of those, it is a tough time to endure.  I constantly keep that in mind as I continue to expect Gold to get pulled down into one of those deeper sell offs, but we do have to admit,  there are many different characteristics to the various Miners involved in this  intermediate cycle.   Just an Observation.

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Keep an eye on Oil & Natgas today, and Enjoy your Thursday trading!

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~ALEX

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Other observations

 

I pointed out the odd pattern on NAK, and said that we ought to be prepared for a possible drop if this pattern repeats.

Can you really believe this? It may tag the 50sma, but the other drops tagged the 200sma.

TTWO – This break out was a buy recommendation in April , and I know of 1 reader that took this.  Notice the long consolidation sloping downward before the break out?

TTWO –  Excellent follow through.  Congrats!

I also posted JBL that day. It Popped and then dropped again.  Notice how that consolidation was NOT as long as TTWO.  Maybe it just wasnt quite ready yet?

JBL– This is JBL now, with a much longer consolidation and a shake out slam down move similar to what we saw in the SPX.  It may or may not be ready to run higher now, so I’m watching for another break out. This looks like a ‘shake out’ below the 50sma