Thursday August 9

We saw some interesting moves in the markets on Wednesday, so let’s take a look…

 

SPX – We see a reversal, but I do not expect a major run higher.

NASDAQ #1– I read head;lines saying ” Even the threats of North Korea cannot hold down this bull market”.

However…

 

NASDAQ #2 –   I pointed out in yesterdays chart that in the past we had a slam down, gradual choppy run higher, and drop to the 50sma.

NASDAQ #3 – And in the past we had several reversals that also did not really move higher until the dcl was in place, so I am not really expecting a strong push higher here on day 29, but it can pop and then drop.

 

 

USD – Yesterday I pointed out that even though we are overdue for an ICL, the last few bounces at the blue arrows were just that – bounces. Could this be another?  I Still suspect that it is an ICL, but we need a solid move higher for  confirmation.

USD – And Wednesday did not show a solid sign of strength yet either.

WTIC –  WTIC is trading around the 200sma and does look like a bull flag. The daily cycle os getting late, so a dip is not out of the question, but this looks like it wants to push through the resistance.  Time will tell.

NATGAS – Inventory is Thursday mornings, so we’ll see if this POP gets any follow through.  The last few POPS were 1 day events.

 

GOLD, SILVER, MINERS, & THE USD –

 

Just a side point: This was interesting. The USD spiked intraday, and Gold did not really spike down at that time.  The USD then sold off, as Gold, Silver, and the Miners stayed near the highs. These charts were after hours, and that is why they show a negative number.

 

GOLD–  SO here we see that Gold either put in an early dcl on day 21, or it made new highs on day 22.  It dropped and held at the 50sma and that is bullish.  I actually called for the possibility last week of a day 25 peak and then a drop, but this looks very bullish and has me wondering if that was a dcl.   When Gold dropped & broke below the 10sma, I thought that we were heading into a dcl.   We didn’t break the trend line as drawn, BUT I WILL ADDRESS THIS IN A MINUTE.  So this might be a continuation of the same daily cycle on Day 22, but it is safe enough to buy with a stp under the 50sma.   Silver  seem to be calling this a dcl.

 

GOLD –  If I draw a trend line like this instead of drawing it as I did above, it would look like Gold dropped, broke the 10sma & trendline & is recovering .  THAT would make this a DCL and day 1.  I am looking at GOLD as though it may have a day 21 DCL and I will add to my Miners today with a tighter stop. Some may buy UGLD ( A 3x ETF for Gold) with a stop under Tuesdays lows.

GOLD –  Here I am showing how we did a similar POP in the last daily cycle.   Gold did have a real solid pop higher and then a trend line break later , dropping into the dcl.  This is the second scenario, and we would stop out when Gold dips below the 50sma  ( Or our Miners do not act bullishly).   I will say this however… The MACD & RSI did hold up well on that dip.  The chart at a glance looks more bullish here.

GOLD – I posted this in the comments section to show that each daily cycle had 2 legs higher. This may be a 2nd leg that peaks and then drops. The move lasted for a couple of days, so scalpers that Trade the metal  ( or GLD  or  UGLD) may try to scalp for gains and then even raise stops.

 

SILVER –  Now this looks quite different from the last daily cycle, and this looks pretty bullish.

1. Silver broke the 10sma on the way down, and it did break its trend line on the selling.

2. It then recovered the 50sma on Wednesday.

3. Silvers MACD  did the tag and turned up, and Silvers small sell off brough it back to the oversold area.

4. Silver actually looks like an inverse H&S and also it looks like it wants to break right through the 200sma.  I have a hard time denying the bullish set up here in Silver.

SILVER – We did see 2 strong legs higher out of the last ICL in December. Could we see that here?  Why not? Silver could be on day 2 here.

BUYING SLV or USLV with a stop under this weeks lows works. Please read the chart however.

GDX–  GDX also did break its down trend line and 10sma and now has put in a swing low at the day 20 area.   That day 20 timing has put in a dcl in the past, so I’m watching this closely too.  GDX & GDXJ are also in the oversold area, but responded rather weakly to Gold & Silvers strong push higher.  The triangle for GDX & GDXJ has hindered the clarity of cycles in miners.

Could North Korea cause investors to flock to a safe haven like Precious Metals, shortening this daily cycle?  I guess that it could speed up the process of precious Metals finding their natural  dcl, and cause a day 22 dcl.    Well, we have had early day 20 s daily cycles in the past and Silver really has a bullish look to it.  The Miners were rather unimpressive, so we’ll see how they act , since they should break out of that triangle if this day 2 of a new daily cycle.  Iwant to keep in the back of my mind that this could be a POP that rolls over into a day 30 + dcl.    Maybe todays action can help to clarify.  As of right now it looks like …

1. Choppy General Markets seeking a DCL

2. USD Bottoming?

3.  OIL bull flag pushing on the 200sma

4. NATGAS needs watching with the inventory report.  It had a good bounce yesterday, but it has been very choppy and difficult to trade long or short.

5. Gold & Silver are late enough in their timing for a dcl.  Gold just made new highs on this run out of the ICL, either on day 2 of a new Daily Cycle,  or day 22.  This means that yesterday  MIGHT Have been a 2nd daily cycle starting .  I dont want to go “All in”and get caught in a serious sell off to a deeper dcl, but I am still holding a couple of Miners as I watch this unfold and will likely add to my precious metals position ( and I see some other Miners setting up nicely as well as some at their recent lowest lows). I think that going long with a stop under that dip this week is safe.

No worries if this is a new daily cycle starting,  IT IS ONLY DAY 2.

 

GOLD AT A GLANCE–  If I glanced at these 2 charts below , I would have bought that dip to the 50sma and this could move above $1300.  A break over Junes highs would really begin to look Bullish!

GOLD–  This would be the swing low yesterday, and day 1 of a DCL.   THAT MAKES TODAY DAY 2, a normal buying point.  If that is  or is not the case, it is still safe enough to buy in this sector with a tighter stop under Tuesdays lows.  ( 50 sma)

 

It is 7:30 a.m. and I want to release this report early, not after 8 a.m.,  without a proof read, so I will do that after I release it and fix anything that needs fixing.

I will have MINERS ‘set ups’ for tomorrows report,  if things remain Bullish in this sector. I am still seeing Many Miners at or near recent lows,  and GDX & GDXJ did not react very strongly yesterday.  Look at HMY, AUY, EGO, GG and so on and you will not feel like you are missing the move.   GG is  at the recent lows.  ABX is above the 50sma near recent lows ,  NEM looks like we missed the move  🙂    RGLD, IAG , and a few others are the leaders, others are still lagging.  THAT is what makes this call a tough one,  are we starting a 2nd daily cycle while so many Miners lagging near the lows?   Is Gold just on day 22 running to a peak and then a drop to a dcl?  It is not crytal clear, but it is a low risk entry with stops in place.      If these Miners near their lows finally play catch up after we break from the triangle and the earnings are behind us, it is going to be a party trading these in the coming months!

 

ABX – ABX is a  good part of GDX and looks bullish above the 50sma.  Even at this point, you can see that we have not missed the move. GDX & GDXJ remain in triangle consolidations.  This is a nice base.

 

~ALEX

 

 

ADDITIONAL THOUGHTS

 

GOLD – This was my original thought.  I did say that we could get a possible day 25 peak out of the ICL, then a drop to the dcl, back testing the 50sma. This still could be happening, and prior daily cycles have had 2 legs higher, but…

GOLD –  If that was a mild day 21 dcl at the 50sma and Gold is moving strongly out of an ICL,  it could just take off and pull miners out of that triangle.  Wave 3 🙂  , so I will buy some miners and take my chances.  It would only be day 2, so it is hard to call it a dcl with conviction yet.

GDX –  IF THAT WAS A DCL, you have NOT missed the coming strong move, and this should break out.  IF this is a continuation of the first daily cycle, this may not break out

MUX –  ROB  pointed out in the comments section that MUX  ( getting slammed down recently), could be at the 200MA on a weekly basis as support.  I drew this chart when I read his comment and MUX was at $2.18 –  right on that 200ma.

 

MUX – MUX reversed higher and closed at $2.25.  WAS THAT THE LOWS?  Well, it is oversold and could at least bounce back and test that break down.  It is not my favorite buy right now, but I have to admit that tagging that 200ma on a weekly basis and turning higher after earnings could be the lows.

 

GV – Earnings pre-market today,  but I will give this one warning…

CVRS –  Earnings were released and this Popped higher, and sold off.  I thought that I would take a position with the 50sma as my stop.  I entered this at  $1.81 & $1.82 with a stop as shown on the chart

 

CVTS – Wow, by the end of the day, it was on the 50sma.   I saw the same thing happen with PXLW.  I am pointing this out because  GV has earnings premarket, and a POP may or may not have follow through to the close.  I will need to stop out 1/2 position under the 50sma, the other 1/2 under this trend line.