A Little Off The Top

This is yet another very large report, designed to help you to see the many things taking place in various sectors.

 

Recently using the QQQ I pointed out that prior drop into ICLs did reach the 50sma

NASDAQ –  The Nasdaq didn’t drop that much after the Fed announcement,  but it is possible that it will seek out an ICL now, since we are late in the intermediate cycle length.  That would mean that we are currently seeing a Bear Flag.

 

 

I normally show the XLF ( Financials) or the BKX  (banks) ETFs.   Well, after this break out & Follow through shown earlier on this   XLF June 9th chart, I stated that “Banks are a buy”.  So let’s look at a couple of Bank Stock after the Fed.

BAC –  Bank Of America ran higher in Jan, Feb, March after the Dec interest rate hike.   Yesterday it dropped, tagged the 50sma, and then ran higher. It looks like a back test and reversal higher.

 

JPM was the twin reaction of BAC, a back test of the break out & 50sma. Banks look bullish.

 

The USD –  Printed a new low, so a move above yesterdays high will put a swing low in place.

 

USD – I thought that we had a day 20 low ( And Gold Peaked) , and now on day 6, but it seems that we are really on day 26? The USD has been weak and just keeps breaking to new lows.  Let’s see if it can show some strength now.

 

 

WTIC –  I was pointing out that OIL cannot get above the 10 sma on these bounces. Inventory report was being released on Wednesday,  watch this area.

WTIC –  And it failed again and dropped 4%, that is a lot for Oil.   This is likely still seeking out the ICL.

 

 

NATGAS –  On June 13 I pointed out that NATGAS back tested the 200sma and dropped, it was not a long candidate at this time.

NATGAS – Natgas broke to a new low again.  NATGAS inventories are released on Thursdays.

 

GOLD –   This PEAK is when I thought that the USD bottomed in early June.  On WEDNESDAY MORNING June 14th Gold was up pretty good in pre-market,  and I posted these charts to show that GOLD reversed off of the 50sma on the 13th,  BUT IT MAY  just jump up and back test a break down on Wednesday morning.

 

SO I drew that it might end up looking like this if it drops at the Fed Release.

GOLD AFTER THE FED RELEASE – Gold did back test that break down and sold off after the Fed release. This would indicate that Gold should drop further…

… So this would indicate that GOLD is going to drop further, either into the higher low DCL, or into an ICL.  IF that was an ICL in May,  this drop will not break the May lows, it will reverse and put in a higher low.  After examining all things, it does look like this sector is going to sell off again. Let’s continue…

 

 

SLV –  Silver gapped up to resistance Wednesday morning and stayed strong until the final hour, and then sold off too.  This also looks like it really wants to continue lower.

 

GDX / GDXJ –  MINERS SCENARIOS

 

 

GDX –  The Miners rallied right after the FED release…and then sold off sharply. If you were watching this ‘real time’, it was a big tug of war between the Bulls and the Bears.  It was VERY confusing, and you would have been happy that you were not in either JDST or JNUG.  Eventually the selling took over and GDX ended up like this.  #1. Notice that after a 1 day slam, it CAN bounce before resuming its sell off.

#2 – After a 1 day slam, selling can exhaust temporarily and bounce, as seen in the NASDAQ.

 

#3 – This may just sell off the way it did in February.

 

GG for clues –   GG slammed down to the bottom of a tight wedge.  Watch GG on Thursday. It is ready to break out higher or lower and may give you a clue as to what will happen to GDX.   I think we will drop further over time.

 

GG – Like this

 

MINERS AGAIN

 

 

ABX –  I used this chart in yesterdays report and said that whether we break out higher or lower, ABX will become a good buy.  I showed a possible target lower, and I do expect this to now drop lower…

 

ABX –  Maybe Like this. The Dec ICL drop was short and sharp.

 

NG – On June 13 I posted this and I said that I usually buy these types of set up, but I wouldn’t do it pre-Fed.

NG – And NG broke out from a downtrend and the 50sma, and Miners were looking bullish. Again,  I wouldn’t buy this before the FED WED with all of the mixed signals that this time period had.  Patience would pay off.

 

NG – Wow, after gapping higher, it got the FED SLAM back below the 50sma. Now this threatens to drop back to the bottom of that channel if the selling continues.

 

GORO –  I bought GORO last week and sold it “Just in case” the FED drop comes.  I thought that it would be best to lock in gains.  Goro took a sharp sell off on Wednesday and is now closer to overbought than oversold.  This can drop a lot further.

 

In Fact, On June 12th I said that a big picture drop pointed to me selling GORO above $4 and buying it back at $2.50-$2.75.  We’ll see how this plays out.

 

ALO – What are my thoughts on ALO?  After the FED , my thoughts are “buy the pullback”. That was a heavy slam on Wednesday, we’ll see if the 10sma holds price.

 

GSV –  I sold GSV  “just in case the Fed slams it down”.  It did, but it held the 50sma and then recovered.   THAT is interesting.

 

LETS EXAMINE BIG PICTURE  VS  CLOSE UP ON A FEW MINERS

 

AG – That was a serious drop in First Majestic. It was only down 6%, but the entire days drop was $8.73 to $7.83.  Is it exhausted or is there more selling to come? I would say we could get a small bounce and then more to come.

AG BIG PICTURE – A drop to $6, $5?, or  $4? Wow, but it looks normal on the big picture chart.

AG – Just a big giant base. I DO NOT like that the 200sma is curling down now. Price needs to get back above that 200sma sooner than later.

 

AG MONTHLY – I posted this chart recently just to show that a drop from here on the Monthly would be fine.

 

CDE – CDE gapped open to suck in the bulls on Wednesday.  Many Miners looked very bullish in the morning.  Thankfully we didn’t just jump in thinking that they were running away with out us.  CDE lost the 50sma after the FED and this has room to run on the down side.

 

So we drop further back and look how CDE fell in February. If that happens agin, CDE goes on sale big time.  Again, I do not like the 200sma curling down now.

 

CDE MONTHLY – CDE on a monthly chart does look bullish, like a break out from a bear market and a 61.8% pullback.

 

Yes, a 61.8 % Pullback  🙂   If CDE drops, you can buy it on deep discount.  If it breaks out higher, it should run to the former highs  ( And beyond eventually).

 

This is another very large report, and the reason for that was to show you a larger piece of the picture. Review the Precious Metals section again, and you get the idea that Gold & Silver will drop further, and the Miners  ( GDX & GDXJ, and individual Miners listed) also look like they have more downside ahead of them.  I DO HAVE ONE GLARING PROBLEM WITH THIS OUTLOOK, I WILL MENTION IT MOMENTARILY.    That said , what am I recommending?

I recommend patience for the majority here.  It is the safest trade to wait for a low risk entry on the long side of these miners, either after the Miners put in a Swing low at a lower low ( ICL),  or a swing at a higher low  (DCL if the ICL was really in May).  I know that many want to short this ( and may even already be short) and that is fine, if you wish to do this on your own analysis. Sometimes these drops just get going and are straight down for a few days in a row, other times they are down Monday, up Tuesday, down Wednesday , up Thursday, etc etc until the lows are hit.  I do not wish to recommend a short position under those conditions.  The following chart shows what I mean and why it is hard to short that  ( I shorted this one, I know how hard it is to hold shorts here).

GDXJ –  I SHORTED THIS ONE – Every sideways day or reversal higher feels like a swing low is in place. This took place over many trading days and day after day, many get nervous short  thinking that the lows are coming .

NOTE: The GLARING CONCERN that I have with the chart above is that now we have the Junior Miners ‘Peaking’ on day 28 on GDXJ??  Isn’t that what they do coming out of an ICL, and not a 3rd or 4th daily cycle?  GDXJ just peaked yesterday.

 

GOLD –  And Gold peaked on day 19? That doesn’t seem like a weak final daily cycle either, unless this drops into day 38. This looked like a strong move out of the May lows. A drop to a higher low from here would indicate that an ICL actually took place in May.

SO all of those charts of the individual Miners do look like they want to drop further, but is it just a drop into a 1st daily cycle low out of a MAY ICL?   The Cycle count & peak showed strength, not weakness. I would like to recommend patience for the majority, and wait for the next Long buying opportunity in Miners.  I will be monitoring this sector along the way, day after day.  If you decide that as a trader, you want to go short with a 3x leveraged ETF ( JDST / DUST), please have a trading plan in place and know where your short upside will be.  I would keep positions small. Today we will see if there is further follow through to the downside. We are currently only 2 trading hours after the FED release, so the next day of trading may offer more clues at how that Rate Hike will affect things.  Past rate hikes were bullish for Gold, so what kind of a drop are we going to get here remains to be seen.

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~ALEX

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GDXJ Note- Look at the lows at the DCLs and you see a drop and then a sideways type move at the lows for days. We are already on day 28 (GDX peaked on day 22), so a DCL / ICL could come at any time over the next few days.  They often come from day 28-33.

 

Or again, you could see this if the ICL is ahead.