Wednesday – Moment Of Truth
After a brief market review, allow me to explain why we might actually be at the ‘Moment Of Truth’ for the precious metals sector
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SPX – The SPX is on day 22 and price inside of this short term bearish wedge is heading into the APEX. I would expect a drop into the dcl soon. The 200sma may act as support.
TRAN – The TRAN has a swing high. Will support hold up and give us a sideways consolidation? Or will the TRAN & RUT become the weaker ones again? That will be something to watch for as the dip into that dcl begins.
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The Moment Of Truth?
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Similar to when the FOMC meets to discuss rate hikes in the U.S., the ECB is meeting on April 10th (today). Will they speak dovishly and avoid a rate hike too? That could affect the Euro, USD, GOLD, etc. Why did I say that this could be the ‘Moment of Truth”? It may be the catalyst to start the real move out of the sideways chop for Precious Metals – Higher or lower. Let me explain…
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GOLD – I see Gold at the apex of a triangle on day 23- THIS could be the Moment of truth. When the true direction of the precious metals takes hold. Anything can happen, but this kind of looks ready to break out higher, even though I am expecting a deeper drop into an ICL. We’ll see, because the weekly chart looks like it should move lower…
GOLD WEEKLY – One of our readers mentioned that The weekly stochastics is not yet oversold the way we have seen at prior ICLs (Thanks Rob!), so I gathered this chart to look at the situation and noticed how the ICL in December 2017 formed (Green box). Notice that it was similar to the current chop & sideways crawl that looked to be holding up bullishly, and then it was a quick 2 week slam down to the ICL. MAYBE we get that here, as drawn? What a buy that would be.
SILVER – Silver also looks to be at the moment of truth, the time when the true direction will be revealed. This looks Bullish though too. These are actually called bullish descending wedges. Maybe it is not finished yet, without a 1 week slam down.
GDX – GDX looks rather neutral here. It has chopped sideways at this price level since January . A break above day 16 would be viewed as bullish, and break down is obviously short term bearish, a drop toward an ICL. We do have a gap at the 200sma, and filling that would be a great buy opportunity.
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So Trump apparently mentioned the possibility of new Tarriffs on Europe. That can cause the General Markets to pull back into a dcl. Along with the ECB Meeting taking place today , The Fed Minutes are to be released at 2 p.m. , so we should have a busy day. Wednesdays are the Oil Inventory report.
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I HAVE A BUSY DAY ANYWAY- I just want to let the readers in the live trading area below each report know that ‘weather permitting’, I will be going down to my parents house later in the morning and may not be in that live trading area for a while after the market opens. After a solid New England winter, Spring clean up is in order. Yards need cleaning up, decks need mending & staining, and many other small tasks come to mind. Little by little, I’ve been taking some mornings or afternoons out of my trading to help out. I usually bring my Surface Pro and check in here and there, but I just wanted to mention that from time to time this spring, I will be missing for a few hours during the trading day.
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Today is the Oil inventory report, The ECB Meeting, and the release of the FED MINUTES. I plan on being around for the market open, and I do hope to be back in front of the screen by 2 p.m. Eastern Time. I have a little more info on Gold and a Bitcoin update below.
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Enjoy your Wednesday trading!
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~ALEX
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GOLD – That ICL drop. Most ICLs are pull backs that measure 50% or more of a drop from ICL to Peak and down to the next ICL. The current drop is only 38%. You can see why I still feel that we need more of a drop. I will not fight the market if we don’t get it, but MOST ICLs are 50% or more drops. One more drop would help.
GOLD 2016 – HOWEVER, the sideways chop that took us into the MAY 2016 ICL only gave us a 38% drop. THAT IS RARE, and only in a strong Bull move, but I just wanted to show that it has happened. You see it on this chart. I’m waiting for the Moment of truth from this sideways chop.
Just wanted to again mention a stock that I own, LODE. This was my March 26 BIG PICTURE chart, and this is why I bought it. These bases are aces in my book. Look at the weekly RSI. I pointed out that this is the first time in years climbing steadily above the 50%. Read the chart.
After crawling the 50sma, it ran higher and broke the 200sma.
I thought that LODE could just chop sideways, I said that I may add if it does. I drew it chopping sideways.
LODE 9:55 a.m. –
It flagged in a nice tight sideways crawl and then popped above that trend line yesterday, so I added to my position. SOME stocks have been bullish even with a pull back in Gold coming due. It is still possible to drop to the 50sma again.
LODE – It closed up 10%. If the ECB & Fed Minutes help Gold, this could do well from here. If the ECB move is bearish for Gold, the NEW position that I added has a stop at the 200sma. The first position I will likely just hold “Buy & hold” and add again later. I love that long base shown in that first chart.
SBGL FROM APRIL 8 – I mentioned that this has new highs, but it looks more like it’ll pull back. Read what I wrote in yesterdays report here…
SBGL – Another example of why chasing a stock breaking out often doesn’t pay off. That MACD was a warning, but this will be a good buy later, and I’ll show you why, but please look at this chart first…..
This was also in yesterdays report. A buy the pull back idea…
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SBGL – What do you think of the Bigger Picture if SBGL pulls back? I’d like to Buy the next reversal. This has broken from a base and bounced off of the 40sma area a couple of times. If you see that again on the next pull back, this is a good long term candidate.
BITCOIN MOMENT OF TRUTH TOO?
Is this Bullish or Bearish? It needs a little more time, but either way I still expect $6000 over time.
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– This would be a short term bearish rising wedge at resistance, or…
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– This is a Bullish flat topped wedge. I tend to think that this is what we are seeing form here.
