August 8th – Hmmmm? Wait A Minute!

That was what we wanted to see in Miners, so we’ll discuss that in detail shortly, right now let’s start with  a market review…

 

 

 

 

SPY  – Yes, it’s a bull market, but even bull markets pull back into a DCL, and we are on day 27.  I think we are reaching the time that we will get that pull back, since we are also at the upper trend line.  This COULD just run up slowly toward the apex, but let’s look at the other sectors…

NASDAQ  – The NASDAQ is not at new highs yet, but it also put in a doji candle.

IWM – The Russell 2000 is going sideways.  That alone isn’t bearish, it can actually  be very bullish, but the MACD & RSI do look rather weak.

IWM DIVERGENCE –  Look at the first 2 higher lows & their MACD, compared to now. That is why I would expect a dip rather than a strong market bursting higher.

 

WTIC – Wednesday is the Inventory report. I am not expecting a break to new highs from here, but it could jump on the inventory report. We have a Peak on day 11, day 21 is considered a 1/2 cycle low by me, and I expect a drop in Oil over time at this point. .

 

USD  –  I hate that the USD still looks bullish to my eyes.  We do now have a swing high in the USD  ( but it is unconfirmed).

 

So with a short term bullish looking USD,  let me review:  Timing for a Gold ICL is late. COT for the USD is BEARISH, COT for Gold is BULLISH.  Commercials have closed their ‘short’ positions in Gold,  Specs are close to or at Record short Gold positions.  Sentiment is in the trash for Gold.  Everyone, including this writer ,  is starting to hate Miners.  Let’s look at Gold  🙂

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A Gravestone Doji –  I have pointed these out in past reports. These can be found at the bottom of a sell off and they often happen right before a reversal  ( or at the lows)  so this is often considered a bottoming candle.  Look at the candle on the far right.

GOLD   –  We have a gravestone doji here on Gold.  This can end a sell off, but Miners did break down & often lead gold, so we’ll see if these Golden lows  ( or dont).

Look at the candle on the far right.

 

BY THE WAY –  GOLD WAS GREEN ALL DAY, AND MINERS STARTED TO JUST SELL OFF INTO THE LOWS AT THE END OF THE DAY.   I STARTED THINKING AFTER HRS, 

1. “DID MINERS JUST TANK, WHILE GOLD WAS UP AS A SHAKE OUT?”   WAS THAT A MANUFACTURED SHAKE OUT, TO GET PEOPLE TO BAIL OUT OF MINERS AS GOLD IS REALLY BOTTOMING?”  or

2. ” ARE MINERS LEADING THE WAY, AND WILL GOLD FOLLOW ON WEDNESDAY?”  

TIME WILL TELL –  LET’S EXAMINE MINERS.

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GDX   – On AUG 2,  I used this chart to show how past drops has a ‘Spike Down’.   I hoped we’d see one as part of a final drop.

 

 

GDX   – We did get a spike down Tuesday, and  this is actually what I was hoping would happen, to speed things up.  A spike down  did not last long on all of these occasions, maybe this one won’t?  We’ll see how long this lasts.  NOTE:  IT IS STILL SAFER TO WAIT FOR A REVERSAL AND EVEN A CLOSE OVER THE 10 SMA BEFORE BUYING.

 

GDX  SHAKE OUT –  My AUG 1 chart showed how ‘shake outs’  occurred at the 200 weekly MA too.  I wrote on the chart,  “ I can’t think of a good reason why this won’t plunge & recover“

GDX   SHAKE OUT–  We now have that plunge, the Shake out spike down.  It is a weekly chart, so will it reverse this week like the other DCL ( ICLs)?  The timing is good for that, so time will tell.

 

FROM YESTERDAYS & LAST WEEKS REPORT  –  Watch those Blue Numbers for a stop run.  $20.72  was  THE LOWEST.

 

GDX   15 Minute – WE BROKE $20.72 , so  I was looking to see if heavy volume would come in as stops were run near $20.70+.  I did see ‘some’ heavier volume bars on a 15 minute chart, you can see 2 larger bars as price broke the $20.70 area.  It wasn’t as much volume as I expected to see as a 2 year period of lows were broken, but maybe those price points already stopped out or sold their positions, so the volume spikes are bigger but not massive?  OR Maybe those lows get hit again, below $20.50 this time?

 

GDX   –  I do see what is known as ‘an engulfing candle’ at the sell off lows.  This can end a sell off.  I do not find this to be 100% reliable, but (  For a day trader – maybe not the readers here)  a ‘trader’ will buy the day after a last engulfing low  like this if this turns up and the next day & closes higher than 1/2 of this candle or more…

 

GDX   –  It looks like this, and this is what a Day Trader looks for as a possible reversal.   He / She  uses a real tight stop under the low, but know that  it can fail.  That said:  It is ‘safer’ to buy a move above the 10sma with a swing low.

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I wanted to look at one last thing.  We started more of a flush down type sell off yesterday.   Expected, but odd when you consider that GOLD WAS GREEN & MINERS just started tanking. So let’s examine this drop…

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GDXJ Flush Out –  You can see that this Bigger 1 day drop , if compared to the final drop in December,  would last for more than just 1 day if it played out the same way.  Compare the red arrows Tuesdays price drop with Dec 2017s ICL red arrow.

 

GDXJ   Sell off Dec 2017 ICL –  Now I’ll zoom in, and the blue arrow could represent Tuesday, so we MIGHT see a couple more days down?  So Next is another thing that I wanted to mention …

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I want to also mention JNUG at that time, but I do HATE to mention this.  Why?  I  know that this may play out differently this time & I’d hate for people to just jump in now.  Let me just say –  “It is best to Play it safe Guys & Girls!”  That said  🙂 I was going to mention that …

 

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JNUG Sell Off Dec 2017  ICL – That sell off from the bigger drop day ( arrow) simply saw JNUG  drop to $12 from here down, and that was it.  THEN it rallied to $20.  Some that have lost some money in Miners will no doubt  take a small position in JNUG  at the swing lows and still do rather well   (In My Opinion),  but I DO NOT recommend JNUG / NUGT   for inexperienced traders.  It moves FAST.

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CONCLUSION:  SO GOLD WAS GREEN ALL DAY, AND MINERS JUST STARTED TO SELL OFF INTO THE LOWS AT THE END OF THE DAY.   1.   WAS THAT JUST A ‘SHAKE OUT’ FOR MINERS,  A ‘SPIKE DOWN’ TO GET PEOPLE TO BAIL OUT OR  ‘SHAKE OUT’  OF MINERS, WHILE GOLD IS REALLY BOTTOMING?  OR   2. WILL GOLD FOLLOW?

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 Those questions are reflected in the opening Theme pic of  (  ?   ! )

GOLD IS UP & MINERS PLUNGE ??    

WAIT!  IS THAT JUST A ‘MINER’  SHAKE OUT!!  

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Time will tell if the Gold lows hold and Miners just dove down into a shake out move alone, or are Miners leading the way and Gold may follow?   So much to look for today and over the next few days really.  This is finally getting exciting and not that boring 10 cent drop in GDX each day.  This may be the flush we expected.  Stay Frosty my friends!

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~ ALEX  

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EDIT LIVE GOLD 7 a.m. – A triangle can form as a consolidation that then becomes a ‘continuation’ of the move down.  This would mean that yesterdays sell off out of nowhere for Miners was leading the way for what Gold is about to do.  This may keep us from jumping in ahead of time.  We’ll see if this triangle breaks down or upward,   Stay Frosty indeed.