Nov 14 – Something Precious On The Horizon

/135 Comments/in /by

Yeah, that little guy on the left is rather precious to it’s dad there, but I’m talking about Precious Metals here.  Let’s discuss what I mentioned in the weekend report about the coming sell off that I expect in Gold, Silver, and Miners, and discuss what we might see …

 

I started with these 2 charts,  one of GOLD

And the other of GDX

 

But I also included this chart and it raised questions in the minds of some of our readers, so let me discuss this a bit further…

If you look closely, and some readers did catch it, this chart showed GDXJ on a weekly basis dropping down below both the July Icl and close to the DEC 2016 ICL.

 

I was asked , “Is that really even possible? And doesn’t it mean that we are no longer in a Bull market if the last ICLs are broken?”   Let’s walk through this explanation chart by chart.

 

GOLD – First I just want to start by saying that on this chart, all I did was COPY/PAST the drop last year from NOV to DEC, and all that shows us is that… “IT CAN DROP THAT MUCH.”  Not that it WILL, but yes it could go below Julys ICL. Seeing is believing.

 

GDX – I posted this in the weekend report.   This showed Steep sell offs into ICLs, and also Mild ones  ( like last July, that was very mild inside of that triangle).

 

TRYING TO THINK LIKE A MARKET MAKER

 

A BIG MARKET MAKER that wants to get positioned before a strong rally will often try to run the stops. This allows them to scoop up the selling, so they can accumulate without driving price up on themselves.On this chart I am pointing out ( purple arrows) 2 targets that I would be looking at where I KNOW longs would give up their positions.  Read the chart.

 

This would be running the JULY LOWS, and it runs all of the lows in line with the JULY lows, like May & March.  THAT kind of selling would escalate…

 

THAT kind of selling would escalate, and could drop it even below the Dec 2018 lows , where they would likely Load up and put in a reversal. If you have ever been run down & stopped out like that, what were your feelings?  Often it is, “I hate these stupid Miners”  “This can’t be a Bull Market- I give up”  “I’m not getting fooled again”  and off it runs higher & higher  ( Like 2016 Jan – July, leaving everyone behind).   Look at that 2016 Jan – July run-  My Chartfreak readers bought THAT LOW and stayed on board, because I prepared them to expect the unexpected.  I’m trying to do that here too.

 

Yes, It could be a bit milder than this, but if you see this type of STOP RUN action, breaking the JULY ICL, and then the DEC ICL,  I will be here to keep reminding you that ,

“YES, we said this could happen, and Yes, it can still be a BULL.”  On this chart, look at the Magenta Box- it can happen quickly.

 

FINALLY – If you have been with me for a while, then you should remember this chart.  I have used it and many like it .  I traded Gold stocks back then, and it was Definitely a BULL MARKET, but this was a Double Bottom.

The above was a sell off right down to the ICL of the prior year, almost exactly a year apart.  Never forget that, and you will not be shaken out of your boots and afraid to buy if we sell off down to the Dec 2016 lows. The rally out of double bottom lows is NOT one that you want to miss.

You will see this chart again if the selling picks up in the coming weeks 🙂

 

~ALEX

 

 

NVAX – Recovering the 50sma and moving higher with increased buying, this looks ready to run, and I am told that it has a huge short position.  If they cover, this should run.

WTI – I like the reversal today

NAK – I wanted to show the big Pic of NAK, because I am frequently asked where I am selling, or what is my target.  This is a buy & hold for me as long as it acts correctly  ( higher lows, higher highs). I loaded up near $1.20ish and at $2.27 now, I have no reason at this point to sell. I do eventually expect former highs to be tested.

SPRWF – This was a buy as it started to break higher in a sector that is absolutely on fire.

SPRWF – So is it ‘extended’ now?   NO. It hasn’t even broken out yet.

SPRWF – I look at it this way, and think that it could easily double over time.  Why do I think that?

Because this whole sector is just running like crazy.

 

MEDFF – On October 30 ,  This broke out and probably looked extended too, right?

 

Look where it was on OCT 30 with that break out. Buyers are flooding into these stocks .  It wont last forever, but the farmer has to harvest the crops before the seasons pass.

MYMMF NOV 7 – I pointed this out as it was breaking out near 42 cents and here at 48 cents. I dont usually like to chase, but this set up & sector called for chasing it. This is a solid consolidation and big volume breaking out…

 

MYMMF NOV 9 – I mentioned that this could possibly just burst higher or form a handle, but bullish either way.

MYMMF NOV13 – WHOA! It moved higher for a couple more days and then BOOM, almost 100% yesterday.

 

So again,  SPRWF –  Is this over extended?  No. I sold some of my MYMMF & Bought more in case this decides to join the race,  and the set up is a bullish set up.

 

Yes, I am still holding OGRMF and APHQF

135 replies
  1. Ralph Wiederzane
    Ralph Wiederzane says:

    I don´t make trade decisions off the COT reports, but post this for those that are interested. To sum up, look out below for both silver and energy.
    https://kingworldnews.com/major-alert-remarkable-commercial-trading-moves-in-silver-crude-oil/

    I didn´t do any buying yesterday, but while I am waiting for the big smash in miners, I am still inclined to add to my 25% invested positions even in this area. I am not so convinced miners get smoked even as everything is pointing that way, seems like we should already be much lower if that is where they are going and everybody is thinking the same thing. So I will probably sit tight or nibble ever so slightly until next week, but if miners don´t start getting smashed soon I will be buying regardless as November comes to an end.

    I would also note that the COT back in 2016 was not at all a good indicator of not only miners, but metals themselves. Miners screamed high with metals and the pros kept selling short and losing for 8 months until August!

  2. RAY
    RAY says:

    hi Alex

    you re mentioning about
    that kind of selling would escalate and could drop it even below the dec 2018 lows ???
    thought we were still in 2017 : ) do you mean dec 2016 ?
    ray
    THAT kind of selling would escalate, and could
    drop it even below the Dec 2018 lows ,

  3. RonB
    RonB says:

    Alex do you see similarities with all the miners? I’m behaving with PMs and staying clear and ready, but I do have a small lithium position in ALB. Probably a completely dumb question, but does it likely has a lot of risk to it?

    • chartfreak1
      chartfreak1 says:

      I dont know how the Lithium stocks will react, but ALB has been climbing, most miners havent.

      so far so good- it does show weakness right now in the MACD – so a drop tot he 50sma may be coming

  4. Crawdaddy
    Crawdaddy says:

    Alex. Hope you don’t get a belly full of the thank you’s, as I`ve a coulple more for you. First is thanks for your detailed reply regaurding NAK.. Well explained. Next yesterdays headsup on the MJ stocks was well recieved. The separate tweet was especially appreaciated.as I am not glued to the comments all day. Most of us find high value in your opinion and act accordingly when you have confidence in a trade. I took the SPRWF trade and am happy to be in it homer or boner.
    It’s our turn. THANK YOU FOR BEING HERE AT CHARTFREAK !

  5. Geurt.
    Geurt. says:

    THANKS A LOT ALEX well said, very encouraged.
    Is it wise ALEX to buy for some weeks DUST or JDST ????
    What your thoughts.
    Thank-you-so-much for your kind response.

    • chartfreak1
      chartfreak1 says:

      Thx Geurt – Hope you are well 🙂

      Personal choice, I am not buying any now, but if we get a big drop, they would do well.

      Also, anyone holding Miners for Tax reasons or whatever could use that as a hedge

    • chartfreak1
      chartfreak1 says:

      I wouldn’t mind taking a seat on a rocket ship if it was down there on the launch pad : )

      Time will really tell what kind of selling we get, but it needed to be pointed out so that if we do get that kind of seling, we all saw it coming & can plan accordingly

    • chartfreak1
      chartfreak1 says:

      Ralph – stop reading all that stuff- you are going to regret it 🙂

      People read this bullish and this bearish and that bullish and get all confused.

      ZEROHEDGE is about as confusing as it gets if you ask me

        • chartfreak1
          chartfreak1 says:

          Yes, I don’t mean to sound rude, but I often get people that read ‘this bullish article on zerohedge’ or they read ‘ that bearish article’ and they want me to explain how I feel about it-
          and I dont like to read all of that, but I skim it to answer their questions.

          It just confuses people when they read bullish articles during a time that I call for a pull back, or bearish articles when I am buying. and the articles are 80% from Zerohedge, both bull & bear 🙂

          • Ralph Wiederzane
            Ralph Wiederzane says:

            I won´t post ´em anymore if you don´t like, I can read without getting talked into a trade or out of one, just sharing what others are thinking and doing. I would hardly buy bc Dalio bought, or sell bc the COT. It´s not like cycles are the only thing that works, or dosen´t!

            But if you think it confuses subscribers, I´ll keep them to myself.

          • chartfreak1
            chartfreak1 says:

            I dont believe that cycles are the only thing that work, but if you post a bullish article & then a bearish one, that confuses someone, can I send you the emails and you can help them out? lol

            if you can post the articles you want, I can post My opinion on it if I want. Fair?

          • Ralph Wiederzane
            Ralph Wiederzane says:

            I will end my side by saying you didn´t comment on anything I posted, you only said to not read that stuff, as if everything is irrelevant except what you do. I understand if that is how you feel and nobody likes getting juked out of or into positions, I only thought it was interesting and others might think so too, regardless of where the news came from. If Dalio is on record as a big buyer of the gold etfs, then that is fact, not important where it came from. Don´t let ZeroHedge scare you CF, facts are facts no matter who reports them!

            I won´t say more on this, you can have the last word if you like but don´t sweat it bc I won´t post them anymore as they are not reason enough to take action in miners.

          • Ralph Wiederzane
            Ralph Wiederzane says:

            I hear you, and I didn´t know your email overflows with questions on things posted, I apologize for that. Seems to me these people would post their questions on the thread, for others to benefit from the answer as well. LOL, now they won´t get other observations posted here!

          • chartfreak1
            chartfreak1 says:

            True – and That’s what I advised too, so that everyone can get an explanation at once, ask in the comments – but some have told me that they cannot post in ‘on line forums’ from their work place in real time. Their company computer blocks them somehow or something.

  14. Dave
    Dave says:

    Hi Alex. Does today’s action in XLE change anything in your eyes, or are you still seeing a likelihood of another leg higher? It was almost looking like we could have been flagging, but today’s selling seems decently sharp.

    • chartfreak1
      chartfreak1 says:

      Hi Dave,

      The selling is unfortunate, and it could lead to something bad, but at this point, it hasn’t violated anything, so it is a hard call to make until it breaks an important boundary.

      refresh

      a drop to the 50sma is always normal, and a back test of a break out is also pretty common. The hard part is that if it picks up speed and breaks down, the trade then becomes problematic or basically ‘ stopped out’. So one could sell if they want and wait to see how it plays out since the next expected leg higher is stalling, or ride positions and use stops.

      It could also be the normal 1-2 of a 1-2-3-4-5

      https://uploads.disquscdn.com/images/dd132be0d86f129648cd069cf788b51ed00542977b6218e9aca2b76d8b1f160d.jpg

    • Cason
      Cason says:

      Yeah, that sure went south in a hurry, up against all my energy stops right now. Inventory reports out tomorrow.

      • Dave
        Dave says:

        Thanks! Yeah, it just seems very early in the daily cycle for XLE to be rolling over. I was expecting a back-test, but was drawing my breakout line a little more horizontal than you did. In fact, mine was perfectly horizontal. Seeing another perspective makes me think that it’s not quite as bad as it might seem (right now at least).

        • chartfreak1
          chartfreak1 says:

          I would normally draw the horizontal one too, but the 50sma is down there, so it could have 2 targets this way. Cason made a good point about inventory though. So far those reports have not hurt oils climb each week, but they are usually involved or respected by traders, so due or die?

          • RonB
            RonB says:

            The last thrust up in oil last week was pretty much 100% political as a reaction to MBS – the defacto ruler of Saudi Arabia – when he put all his cousins in jail at the Ritz Carlton. Has there even been a knee jerk political reaction in the stock market that is not fully retraced?

  15. chartfreak1
    chartfreak1 says:

    FOR OIL – Refresh 2 charts It could remain bullish, but a pull back / back test may take some time .

    I believe it is day 27 on Oil. So a DCL CAN come early in the 30’s (or later).

    Chart # 2 is an older one here OIL broke out, and we kind of expected a back test, so we may get that here

    https://uploads.disquscdn.com/images/0e41d15dc5cfa4e232ee40ee7ef98e210e26f7842b7e9da312d7056b6362fd7a.jpg

    https://uploads.disquscdn.com/images/96c5226b887127b33a94edfe7293044ab308649435e1b8dfb5034e79770167b9.jpg

  16. chartfreak1
    chartfreak1 says:

    If you look at a chart of NAK, it has been climbing slowly recently, but it just cant seem to put back to back days of gains together.
    Come on NAK, get it together

  18. chartfreak1
    chartfreak1 says:

    SO I still own PDS, LGCY, etc – and with this chart , I dont even feel like I need to draw on it my line in the sane.

    It does make me wish that I sold as it approached the 200sma, because I thought that price may crawl along and pause, but it is what it is in the world of trading. I caught this very low, I will still have gains, but reduced gains if I sell at the 50sma- and if they shake me out? ARGH.

    This still looks like a bottoming process and bottoms do form with this type of action, but in ‘real time’ – riding it out is difficult.

    https://uploads.disquscdn.com/images/9df75ebb77116fe975ed3e33f379c012de7f18f337488561d7b94d60912a0eee.jpg

  19. Peter
    Peter says:

    Alex, what is your prediction on the general markets in this cycle? Are we likely to dip into a DCL (or ICL) at this point? I noticed the Dow Jones transports are holding the multi-year trend line (but barely).

    Note, I have read your posts saying a dip is possible, but you also comment that we are in a bull and could keep going up from here. So, I’m more looking for an update giving today and yesterday’s action. Thanks.

    • chartfreak1
      chartfreak1 says:

      I have been waiting for a real dip for months, and the dips just keep getting bought up.
      To me, SPX, DJIA, near the highs, do look like they are running out of steam short term.
      I’ll prob cover in the next report…

      For observation: Look at QQQ, still at highs, DJIA &SPX reversing right now up near highs, so it is a tough call.
      I know what the ‘timing’ would say, and that is that we are due for a drop.
      I have watched the TRAN, IWM, BKX dropping much quicker, so for now it remains a very bullish market,

      I have, however, pointed out a bearish rising wedge and divergences too, that usually call for a dip.

      • Peter
        Peter says:

        Thanks. I appreciate the insight. The “it can go both ways” guidance seems to still hold at the moment. I took my leverage off the table yesterday and today until the waters are clearer.

  20. SonOfGud
    SonOfGud says:

    looks like the rot has stopped, or at least paused, in nrgs now.
    I’ve been meaning to buy back the ones i sold at the 200sma,, but its tricky isnt it, once its in your head they could continue much lower? 🙂

  21. Ombibulous
    Ombibulous says:

    Looks like your concerns about XBI were well founded, Alex. Instead of challenging the 10- and 50-day sma, it broke down and took out October’s low. Looks to be headed for a test of the 200sma. I’m out.

  22. RonB
    RonB says:

    Alex I’m trying to get my head around the count for bio’s. I have the last ICL at May 31 2017 and the one before that at Nov 3 2016. Do those dates jive with you way of thinking.

    It would seem a bit early for an ICL but that drop today has a pretty big head of steam.

  23. chartfreak1
    chartfreak1 says:

    Just an interesting development, nothing broken or changed at this point, but

    $USD dropping to dcl most likely.

    EURO actually popped pretty strong – see FCX- THAT was a tad unexpected

    But at this point GDXJ still RED, GDX teetering on Green with a reversal higher, GLD is green with reversal higher.

    I would say that when the USD puts in a dcl, Gold drops then, but that EURO pop was more convincing than I expected ( FXE)

  24. Crystal
    Crystal says:

    Remember BREW? It posted decent ER numbers, yesterday I think. If it can push above $20, no overhead resistance ….

  26. chartfreak1
    chartfreak1 says:

    – APHQF, OGRMF & SPRWF sold off pretty good this a.m., taking back yesterdays gains,
    now ( especially on a 15 minute 3 day chart) making an attempt at a come back? Or just a mid day bounce.

    OGRMF is now only down 3 cents, was down 26 cents this a.m.

    P.S. What makes BLOZF so special?

    • Tammie
      Tammie says:

      BLOZF qualified for being listed on the Canadian Securities Exchange 25 Index….plus listed in a magazine as one of the top 50 innovations to watch…must be giving them a bump….

        • Tammie
          Tammie says:

          Yeah, I’ve been watching it also and didn’t jump in….can hardly jump in where it’s at now…..:P What do you think of GLDFF and SGMD?

          • chartfreak1
            chartfreak1 says:

            Making progress, but hard to buy ( hard to name a good entry point) if they seem at all short term extended a bit and not at support levels-

            SGMD may drop to the 10sma, seems to be climbing it.

            GLDFF nice double bottom low, kind of popped and stopped at the 200sma, may bull flag and try to break it later, could drop back tot he 50sma.

  27. chartfreak1
    chartfreak1 says:

    THAT POP in the EURO & Drop in the USD that I mentioned below really looks bullish,

    but then GDX GDXJ arent really moving strongly higher, so that seems to tell the underlying story too

    • BayTrader
      BayTrader says:

      Cant make that prediction yet. It still has plenty of room to drop. However, I am biased as Im short from the 19s lmfao

      • Ombibulous
        Ombibulous says:

        “These levels” means it’s current price and anywhere below. Nothing is certain, but it would be very surprising if it wasn’t a double or more from the current price in the next couple years.

      • Peter
        Peter says:

        I hear that, Alex. A little more sell guidance would be appreciated…in general. Even if it’s after the fact (end of day or in your report). Especially when you say it’s a buy, I think it’s helpful for us to eventually know you sold something that you recommended as a buy. Doesn’t have to be immediately after, but at some point. Thanks.

        • chartfreak1
          chartfreak1 says:

          Yeah, I think I’ve covered selling a bit more in the past, using & honoring stops, not just following me in without your own idea of where you want to sell, put a stop, what can you afford to lose, etc
          ,,,and I think that you started with us recently & missed those types of things

          Another factor, for example, is entry. People keep asking me if I am nervous about NAK, but I bought most of it at $1.20ish, they bought some at $1.60 $1.80 and $2.00. SO I see why they may be nervous about losing gains, and it makes total sense to me- while I am not worried if it drops to $1.80 – they would lose all gains. I’m watching for higher lows / higher highs- SO – I think everyone needs to have a plan based on thier entry and trading plan.

          I also try to mention that I lock in gains on the way up ( others dont want to ) so if I locked in 1/2 my position on the way up, I can ride it down a bit more too, because I am still up on my cashed out trades. Others may get drawdown on the pull back. I did that a lot with the POPS in Biotech. I sold 1/3 or 1/2 on Big pops and rode some down, other traders may have rode them up & down to break even. Lots of factors I guess.

          Another factor : keep in mind that I may recommend 10 bullish buy set ups in Monday report , 10 more Tuesday, 10 more bullish set ups Wed…. my traders here want me to post set ups each and every day 🙂 They are BUYS, However, I AM NOT buying 30 stocks, and I am also not watching those 30 stocks going forward, they are bullish set ups on support, they are low risk buys- but from there it is “lock in gains’ let it ride ‘ cut losses kind of thing. Most here are experienced traders trading for yrs

          Anyway, I am still in APHQF, OGRMF, SPRWF, NAK, WTI, PDS, LGCY , MBOT and I own EDXC & NWGFF from way back.

          And as I’ve been writing, PDS is finally RIGHT ON THE 50sma. I will not own it below the 50sma.
          I think that LGCY is going to the 50sma eventually too, but pinched between the 50 & 200 is ok for now. 🙂

    • chartfreak1
      chartfreak1 says:

      Ouch – I didnt even see that. I’m sorry, I already sold that. I didnt even see that sell off until you mentioned it.

      I sold it simply because ( I have said this a lot in the past) I do not want to hold more than 5-8 , maybe 10 max stocks in my
      account at one time, I find it too hard to manage. I will often just weed some out to enter new ones, and there may not be any ‘bad’ reason why I sell it, so I wouldn’t necessarily say “Sell it” if it was still acting ok. As a trader, I just rotate a lot. . So I rotated out of some Energy when energy paused to entered APHQF, MYYMF,
      OGRMF, SPRWF more recently.

      I’m thinking that I cut it loose to buy SPRWF and was going to re-enter later, but it reversed on the 50sma and looked good actually.

      And again, sometimes I sell, but not for any bad reason, so I wouldn’t say ” I am selling XXXX & you should too”– I may just be selling to enter another trade – or to take profit & buy something else, orcut losses, or I am bored, etc – and I may do this when I am away from the screens, ( I can trade on my phone, and I take lunch with a group of friends- we take a business lunch and work together, etc) When I sold, I dont think that there was a real reason to sell.
      I do remember coming on recently and saying recently that ” I sold something to buy MJ stocks- and I said There is NO reason to sell, I am just buying other stocks.” I cant remember what it was that I was discussing at that time.

      Since I cant always post real time, I really want to show people low risk entries and have them learn when to sell a stock that goes against them, when to hold, what to look for- and I do try to teach these things, but they vary in so many situation, I know that. Stop runs lately can be real selling or a fake out, and that adds trickiness to the trades.

      Now that I look at FCEL, it may be dropping to the 200sma, but that is a big drop & the break of the 50sma would have stopped me out too, I would imagine. Sorry about that. I own PDS, LGCY, WTI in energy

    • chartfreak1
      chartfreak1 says:

      Well, it does have a bit of a reversal here, but IBB broke the 200sma and is still under it. I’d wait for that to recover.
      XBI, LABU, IBB have heavy volume today and it seems to early to be capitulation type lows, so I am cautious in that area right now.

      • BayTrader
        BayTrader says:

        CF, I know you dont short or do it often but I took a short position in BBG again today, was wondering your thoughts on it.. Not a long hold type of move, but perhaps a day or two?

        • chartfreak1
          chartfreak1 says:

          I do think a day or two might get you to the 50sma / 200sma and that is quite a drop.
          And yes, I dont short often, unless I use an inverse ETF. Its not in my DNA :0

  35. RonB
    RonB says:

    Alex I’m having an eyeball to eyeball with the bios right now. Man they look weak. Could this be a YCL we are heading into?

Comments are closed.