Weekend Report June 25 – Perking Up

We  have seen an increase in trade set  ups and patterns following through the past couple of weeks, and it actually looks like this may continue for a while.  Let’s review the markets and then we can discuss that…

SPX – Fridays report – We could dip down and back test the break out.

 

SPX – We do have a swing high in place, but that has happened a lot lately. We closed below the 10sma, but then recovered it.  The bears take control and the Bulls buy it back.

SPX WEEKLY – The weekly chart bullishly climbs along the 10ma.

 

I pointed out on this chart last week that the NASDAQ is in a steep channel and does not seem to show that a deeper sell off into an  ICL has occurred lately.  We are due, but the Bulls keep stepping in.

 

NASDAQ  dropped to the 10 weekly ma and turned back up too.

 

On a very large Big Picture, this looks similar to the run higher that took place in 2013 – 2014, but it did eventually put in a big consolidation, so we should expect that can come at anytime.

 

This is the weekly chart of 2013-2014 .  Eventually the markets went sideways for months to give it a rest, and we are due for an ICL. Trailing stops have worked best. I have also mentioned that parabolic blow off top scenario as a possibility in the making.

 

IBB –  This sector is perking up and had a nice run recently. It could be short term peaking, but…

 

IBB WEEKLY –  For my readers I do NOT recommend trying to short this.  It is a bullish set up  in my opinion and could just continue higher  ( The weekly chart is not overbought), or it might just back test the recent break out.

 

USD – A weekly swing low is in place. If we had solid follow through higher, I would expect the Precious Metals to drop,  but oddly, the Precious Metals look short term bullish, I’ll discuss that below.

 

WTIC – I feel like Oil wants to bottom, with 2 ‘inside days’ in a row, this could be pointing to a reversal.  That said,  it could also be a bear flag until it POPS higher,  and Oils daily cycle can continue down time wise, so Patience will reveal the answer.

 

WTIC WEEKLY  – Support zone if it can hold up.

 

NATGAS –

The last time I discussed NATGAS, I pointed out a bullish falling wedge possibility.  SO far it remains in tact.  A break higher is at least short term bullish.

 

GOLD, SILVER, & MINERS

 

TODAY I WANT TO START WITH SILVER, just to once again show that SILVER does look like it had a drop into an ICL,  and it had a  L.T. Daily cycle, it broke prior daily cycle lows, and look at that huge drop.  That looks like an ICL.  Gold did NOT have these characteristics,  and this gives us most of the mixed signals.

Now we see a  swing low formed after day 30.  A break out here indicates a new daily cycle and it is very oversold.  That is short term Bullish to me.

 

 

DID YOU NOTICE that SILVER just put in a nice run and a R.T. daily cycle if this is a swing low dcl?  That shouldn’t happen on a 4th daily cycle, but it does happen on a first daily cycle.  THIS looked like a 1st daily cycle after an ICL, to be honest.  If so, a 2nd daily cycle could really be a big run and you didn’t miss anything because Silver is back at May lows and silver stocks are too for the most part.

 

Now to GOLD –  Another Higher low? A swing low at the 200sma after 4 daily cycles?  Another R.T. Daily cycles?   THIS IS ABNORMAL, since SILVER had such a large sell off in May.   Normally we would expect this to be a L.T. Daily cycle and a drop into an ICL maybe below $1200,  but was May a stealth ICL?  This is what I have been debating, putting in my reports for a couple of weeks, and searching for clues.  As time moves forward, it just seems that this could be a bullish consolidation. We are now quite oversold. I expect a break out here above the blue dotted line & that is also short term bullish.

 

I took a smaller than normal position in Miners last week, and want to watch it play out as a cautious entry.  2 scenarios are shown on this chart again in purple or green arrows.

 

GOLD AND A TRIANGLE – A story worth noting at this time.

 

GOLD IN 2012 WAS IN A TRIANGLE AND IT WAS PERPLEXING MANY ANALYSTS, MYSELF INCLUDED.  GOLD DID NOT MATCH SILVER THEN EITHER,  SO LETS DISCUSS THIS.

-GOLD SOLD OFF SHARPLY INTO WHAT LOOKED LIKE AN ICL IN MAY IN 2012.

-IT HAD NO UPSIDE FOLLOW THROUGH IN THE FIRST DAILY CYCLE, LIKE WE JUST HAD IN MINERS.

-VERY VERY HARD TO RIDE CONFIDENTLY, BUT I SAW IT AS AN ICL. AND MORE PERPLEXING THAN ANY OF THAT?  Read the chart and we’ll continue …

 

WHILE GOLD FORMED A TRIANGLE ,  MINERS WENT HIGHER AND THEN ALL THE WAY BACK TO THE LOWS, THREATENING TO BREAK TO NEW LOWS. THAT 1st DAILY CYCLE WAS A WASTE OF TIME.

 

SILVER HAD THE SAME ICL LOOK IN MAY, BUT IT BROKE TO A NEW LOW 1 MONTH LATER?  DID THAT MEAN GOLD & MINERS WOULD FOLLOW SILVER? WE FEARED THAT TIME. WE HAD TO BE CAUTIOUS. LOOK AT THE CHARTS, ALL 3  EVENTUALLY SHOT STRAIGHT UP IN AUGUST.

 

SO BASICALLY MY POINT IS THAT IT WAS VERY UNCLEAR WHETHER GOLD PUT IN AN ICL IN MAY 2012, SINCE SILVER SEEMED TO NEGATE THAT WITH NEW LOWS & MINERS DROPPED BACK TO THE LOWS TOO.  MIXED SIGNALS JUST LIKE WE HAVE NOW.  I EXPECTED THINGS TO POSSIBLY BREAK DOWN WHEN SILVER DID, BUT GOLDS TRIANGLE EVENTUALLY BURST HIGHER AND EVERYTHING WENT HIGHER WITH IT. I JUMPED IN ON THAT BREAK OUT & THE RUN WAS EXCEPTIONAL.  I DIDNT MISS A THING DURING THE MORE CAUTIOUS TIMES, EXCEPT FOR MAYBE SLEEPLESS NIGHTS. 🙂

AT TIMES,  THINGS ARE NOT IN SYNC, AND THEREFORE A MIXED PICTURE DEVELOPS.  WE HAVE THAT NOW, BUT WE HAVE NOT MISSED A HUGE RUN IN MINERS. EVENTUALLY THE  BULLISHNESS OR BEARISHNESS SYNCS THEM ALL TOGETHER IN A DIRECTIONAL MOVE.  A BULLISH BREAK OF A TRIANGLE CAN LEAD TO A LOW RISK ENTRY & GREAT GAINS. I AM HERE TO CONTINUE TO INVESTIGATE, DO RESEARCH, SHARE MY FINDINGS AND IDEAS, MY EXPERIENCES AND TRY TO GUIDE US THROUGH THIS WITHOUT GETTING EMOTIONALLY HIGH OR LOW.  EMOTIONS WILL MESS UP YOUR TRADING ABILITY.   SO FAR, EVERYTHING IS FINE, BECAUSE WE ARE BEING PATIENT,  SO …

MORE ANALYSES TO ADD TO THINGS

 

GDX _ Miners have formed their own little triangle right now, and this is what I said GOLD did in 2012.  Marched to its own beat. .  IF this breaks out, the MAY lows seem to be The Lows, despite Gold acting differently from Silver.  Notice that Miners are still quite oversold. We may break out & be in Daily Cycle #2 & run higher here.  Stay tuned, I took a small position to front run a possible break out.  Many miners are still at lows, and could have plenty of upside for you to capture if it breaks.  GDX DAILY IS OVERSOLD.

 

GDX :GOLD –  This actually formed its own triangle too,   but this one broke out already.  This seems to say that Miners are a buy & leading Gold. I took a position last week, but I’m not comfortable being very heavy under these circumstances yet.

 

GDX CURRENTLY–  So basically,  similar to Miners ICL in May 2012,  they ran up & came all the way back after an ICL type sell off in MAY.   Remember that I noted that it is odd that after L.T. Daily cycles, we now have a R.T. Daily Cycle.  I questioned that and had to do research to see what I could find.  SO after Day 30,  Miners put in a swing low, as mentioned in Fridays report, and remain oversold.

 

Miners are in a long sideways consolidation that formed a triangle. We are  6 months from the last ICL.  Gold has been so strong that it has put in a series of R.T. daily cycles with higher highs and higher lows for 6 months.  Silver & Miners slammed down into MAY in what seemed like an ICL move, breaking the prior lows. Stealth ICL in Gold in MAY?  Possible.

 

GDX WKLY –  The set up is one that we should find out soon enough whether we are going to break higher or lower in this daily cycle.  If it is daily cycle # 2 , it should break out higher above $24 & run, we will be loading up.  If it is a final daily cycle that drops into a deeper low, an ICL, it should roll over within this framework and break recent lows.

Conclusion:  We still have 2 valid scenarios due to the mixed set ups in Gold, Silver, & Miners, but it should resolve soon, with all of them joining in on a directional move.  As I have been saying for a little while now,  we didn’t see a textbook ICL low in Gold, but Silver & Miners did have the hallmarks of an ICL.

A) I can see a  Bullish set up , where a break out here by the Miners may be the start of the 2nd daily cycle in a new Intermediate Cycle,  and a break out from the above triangle could make a nice run after such a long consolidation.

B) If GOLD wants to put in a L.T. Daily cycle and drop into an ICL soon, the Miners won’t escape that drop.  This is why for now, I took a small position, and some caution is warranted before the break out .

 

In the mean time, we have had some very good trading over the last 2 weeks, and especially last week.  I like what I am seeing in the variety of set ups.  The sell offs and bottoming processes seem to be producing good trade set ups in Metals like Steel Copper, & Aluminum, , Biotechs have been popping for a while, Solars are active, maybe Uraniums now, and possibly even the Miners could join in.  I will continue to discuss these going forward. See the last few reports for some ideas if necessary,  we looked at Commodities, Solar stocks, Biotecks, now Uranium, even TWTR, AMD, CY, and now possibly Miners and more. Let the trading begin 🙂

 

Enjoy the rest of your weekend, see you on Monday!

 

~ALEX

 

SAMPLE TRADE: On JUNE 8 I had this chart of UEC in a report.  It looked to be about ready to break out & run as an inverse H&S.

 

 

You can see that it actually fell back & consolidated further, but I  posted in the comments section Friday that UEC looked ready to go, it had a very nice double shoulder inverse H&S pattern and moved back above the 50 sma. I bought it and drew up this chart.  Other Uraniums look to be setting up too.

 

By the end of the day it was up about 16% and it still has further to go in my opinion.

 

 

‘BOUNCE’ – a subscriber here – mentioned  RNVA & RLOG in the comments Friday.  I looked at the charts and I do like those set ups,  but I haven’t had time this weekend to look up what type of  companies they are and do a little research on them yet, so no charts yet.   Since they may appear in future reports for ‘traders’, you could have a look at the charts and see what you think too.