Tuesday – September 26

Let’s take a look at Mondays action, and basically things are still playing out as expected in the past couple of weeks reports.

 

NASDAQ – From the weekend report, I started seeing weakness in the Nasdaqs internals, so I mentioned this in the weekend report with this chart…

“I have to wonder if the NASDAQ upside is limited here too. I would use a tight trailing stop now, if I was long.”

 

NASDAQ – The Nasdaq dropped 83 points at one point on Monday.

HMMM–  Read the chart

 

SPX – Using this chart for the SPX,  I posted that it tends to move sideways near this time in the daily count, and it also basically did that on Monday. As I mentioned in the weekend report, I think that the upside is limited in the short term for the General markets.

In the weekend report I mentioned how the NAZ looked weak, SPX looked like it could go sideways, the RUT was showing strength,  and now Biotech has a bullish set up,  HOWEVER, the chart shows hints of  weakness too, so I would be a bit cautious and use a trailing stop if I was still riding this one.

WTIC –  I mentioned that we still have time for upside in Oil and we got a nice 3% pop on Monday. It is possible to get a couple more weeks of trade before Oil peaks, so lagging Energy stocks could play catch up.  When I say a couple of weeks before it peaks, that does NOT mean up every day.  It could go sideways for 3, up 2, sideways for 4 and up 1 ( peak) and then drop into a dcl, similar to last week.

NOTICE IN THE CHART ABOVE THAT OIL basically WENT SIDEWAYS ALL 5 DAYS LAST WEEK, BUT MANY OIL STOCKS RIPPED HIGHER. THAT IS WHY I SAY THAT WE MAY SEE ENERGY STOCKS IN BASES PLAY CATCH UP, AS OIL WORKS ITS WAY TO A PEAK.

 

XLE – I pointed out Energy stocks in recent reports, and some are leading, others are starting to move higher now, moving out of their bases, and could play catch up.  The sector looks to have FINALLY bottomed, but the XLE itself  is getting quite extended here.  It may follow through something like this.  (Note: XLE did not go sideways for 5 days last week).

 

GOLD , SILVER, & MINERS

 

UUP – The USD , represented by the UUP here, gapped open and stayed up. That gave it a day 11 peak so far, but that did NOT bother the Precious Metals sector.

EDIT:  This morning the USD is bullishly breaking higher

GOLD – Gold has put in place a swing low, and it has broken a down trned line.  These are bullish developments. We like to see the 10sma broken too, but with the current cycle count, this is likleyt the Daily Cycle Low 1 day after the Fed.

EDIT: Gold is still above $1300 this morning, even with the USD surging higher, just about landing on this trend line. That said, I am watching the lows on Thursday  ( for the count) and we watch that 50sma. A shake out is possible, but it still seems to me that the lows are in place. Let’s see if Gold & Miners can hold up against the surging USD.

This chart that I shared last week was to show the short term volatility of the FOMC, but then you see that the LOWS often came if they were due. The Lows are due now. I have been buying, and have mentioned that.

GOLD – So we have the GOLD weekly chart almost looking too perfect, because this is what I actually expected. A back test of the yellow area and now with Monday on the chart, we have a reversal  (so far).  Gold can break the 2016 highs on this next run if it plays out as expected.

SILVER FROM THE WEEKEND REPORT – Silver bottomed on day 32 and at the 38% retrace level at the 50sma.  Again, this is almost too perfect, but it is acting like a bull market should really.

That low from last Thursday was not broken,  but Silver did drop & then successfully (so far) attempted to get back above the 50 & 200sma.   This could be ‘day 2’ for Silver, and Silver is oversold.

GDX – We have a swing low that hasn’t broken above the 10sma to give us more confirmation, but I was buying today due to the timing and small shake out / recovery at the 50sma, etc.  It is a low risk entry with a stop under the 200sma for me.

GDX Weekly – Break out and back test of a long triangle consolidation.  This is exactly what we have been expecting as a possibility for weeks. I can picture this set up eventually returning to the 2016 highs and forming a large cup over time.

GDXJ Weekend report –

1. I pointed out that GDXJ does have an unconfirmed swing in place here.

2. Also recall the Gravestone doji discussion Thursday as a possible reversal candle,

3. And then back test of this triangle Friday.

So this is a low risk entry, because ‘timing’ is due for a dcl and the stop could be under these support areas if it fails.

 

GDXJ was up on Monday, and broke a trend line with a slight close above the 10sma.  This looks like a confirmed dcl for the juniors.

 

 

Let me show you something important before we discuss buying Miners further

 

AG –  We see a nice Silver stock that broke down in August and recovered as a ‘shake out’.  It has gone sideways under the 50sma and on Monday it broke higher, probably ready to run to that 200sma.  Is that all we have here?

 

AG – No it isn’t.  Try to keep the BIG PICTURE in mind here. This type of long weekly consolidation can really do well, once it is ready to go.

 

CDE –  I have used a number of charts showing that CDE was riding along the 200sma during this sell off. Monday it reversed higher & looks ready to break out & run from this consolidation to $11 or more.  is this all that we see here?

 

CDE – Again, the big Picture shows a weekly support along the 200ma. after breaking upward, it pur in place a 4 weeks tight pattern- this is a bullish tight consolidation.

 

SO we will look at the smaller time frame set ups, but these could have nice longer term potential too.

 

EGO – This looks to have formed a small bull flag. It has been riding the 10sma. If this runs to the 200sma, it is a 30% gain from the 10sma that it has been riding.

 

KGC–  KGC put the lows in back in Dec 2016.  This is not an easy BUY & HOLD by any means, but it is putting in higher lows. Currently we seem to have a shake out at the 50sma. This is an easy buy with a stop under last weeks lows.  A run for New highs would be $4.20 to above $5

DRD from the weekend report –  I have been pointing out this gap that DRD refused to fill on the sell off.  I own DRD and added.

DRD – This sideways consolidation can build energy for a break out above that 200sma.   I recommended this and bought this down at the lows ( around the 50sma), so a gap fill still wouldn’t stop me out, but I think this is ready to move higher. A 3-4 month base can build good energy for a run higher.

HMY – Support & Resistance acting like you’d expect in a bull run. This is a buy with an easy stop ( I’d use a loose one until it gets going, and then I’d raise it as it runs).  I actually usually use mental stops.

Reminder –  These charts were in the weekend report.

 

 

 

 

SO the Energy & Precious Metals sectors look bullish to me. We have been discussing this for weeks now, so I think that the evidence of what we have been expecting to take place is playing out now. Miners are a buy to me, and the low risk part is that many have reversed near support levels that a stop can be placed under.  Many of the Miners charts are oversold now too.  I am heavy Miners now, and will probably finish buying today.  With Leverage,  you should get nervous around day 8 – 12, I have daily reports to cover the day to day action.  Enjoy your Tuesday trading!

 

~ALEX

.

EDIT Tuesday A.M. With the USD breaking higher this morning, I will be watching to see if Miners resist the selling today or are they affected.  They could initially sell down and recover into the close or they may resist the USD all together.

 

One more Miner

 

SSRM –  This looks like it was a mess all summer , right?  And now it may finally be breaking out with a good push Monday off of the 50 & 200sma area.  Bullish support zones.  However…

 

SSRM WKLY –  That “messy summer consolidation” is actually a very bullish looking ‘constructive consolidation’.  In Dec 2016 SSRM ran from under $8 to over $12 ( over 50%) and then consolidated. This is the type of set up that can put in another nice %-Gain. Especially if someone bought it in August at the lows and didnt sell during this dip  ( it only went sideways).

Lesson :  Just another example of what I often try to teach here.  We look at the short term low risk entries, but at times, we can buy & hold and do very well.

 

IPI – I recommended IPI quite a while ago, because of the Big Picture Potential too. Here it was moving off of support at the 200sma at $1.50 (buy) after a shake out & back test.  Then IPI was breaking out around $2.00 from a down trend ( add).

 

IPI – The LONG BASES had nice upside potential over time, so I kept posting the big picture view too.

IPI –  Again pointing out this potential, saying that I was not selling my IPI.  I liked the earnings and insider buying was picking up. This base is very promising,  maybe I’ll sell at $10  🙂  .

IPI –  IPI keeps climbing and was up again Monday.  It is now up over 100% from May & June.  Not always an easy smooth ride, but a bull ride for sure.

Miners could easily do this type of climb,  DCLs included.  We have some long bases after the strong run up in 2016, so I will be looking for opportunities along the way.