June 6th – Pullbacks And Resistance
Pull backs are normal and healthy action in a Bull Market, so I am going to discuss that when I get to the Precious Metals section of the report. The General Markets are experiencing quite a pull back too, so lets take a look at our markets…
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SPX – The SPX bounce is as big as the last one so far. It recovered the 200sma, but notice how it did that with the bounces before the crash in November & December, so thats fine. The 50sma was where it failed then, so I am watching the 50sma . The Friday Jobs report will be released by the time the SPX gets to the 50sma.
VIX – There is a chance that this VIX tags the 50sma, when the SPX tags its 50sma, then we’ll see if they reverse or break through (Jobs report Friday).
QQQ – I looking for strength vs weakness on the bounce. Regaining the 10sma would be a sign of strength. You CAN be long the markets here, but need a stop. Friday is the JOBS REPORT, and any surprise could cause a sell off.
WTIC – Oil did not bounce with the markets. OIL IS ON DAY 21, and that is EARLY for a dcl, so…
WTIC – This sell off could be ready to match the one on the left, and the Markets have been following OIL ( or visa versa). If Oil keeps selling off…
WTIC – This was my weekly Oil chart on May 31, and this could play out . This second leg down would match the first drop. Will the Markets follow after the Jobs report?
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USD – The USD peaked on day 8 and broke the recent dcl lows. I see a reversal, BUT…
USD – Reversals aren’t always the start of a rally. Look at the nice reversal in May 1 (FOMC). The USD has gone sideways for over a month. This is helping Gold, which bottomed at the FOMC & has now rallied.
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Just remember:
The Big Picture USD Chart is Bullish for GOLD. This is a bearish rising wedge.
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GOLD #1 – A short USD bounce could put pressure on Gold, which does have a topping looking candle. A SHORT TERM pull back could follow, some traders chose to sell when a candle like this shows up expecting a dip, but longer term buyers ride it out. The ICL is in place.
GOLD #2 – GOLD could drop. Read this chart.
GOLD #3 – This ‘ Cup & Handle’ or pan & handle would be a normal bullish pull back for a dcl.
EDIT: 7 am Thursday , Gold is still rising? I really expected that reversal candle to be a stall point or top.
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SILVER – Silver really hasn’t been keeping up, and yes that bothers me a little, but it is not a major concern. We’ll keep an eye on it.
GDX – I drew this midday, because as Miners start to sell off, traders want to sell. If we are coming due for a dcl, we could see something like this, so I just wanted to give a visual of a 50sma back test & gap fill.
GDX – Then GDX actually closed the day GREEN. 🙂 So far, this is not letting the ‘Buy the dip’ crowd in.
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If we do see some selling, let me just draw for you a few ideas of how things could play out. That way those that still have cash on hand can be mentally prepared to buy a reversal.
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GDXJ #1 – How about a tag of the 50 or 200 sma & reverse?
GDXJ #2 – Inverse H& S formation, where it gets a bit choppy again?
GDXJ #3 – We could see a repeat of that small flag ( this time to the 50sma), one similar to the Feb dip.
GDXJ #4 – But a ‘lock out’ runaway move is not out of the question, and that is why I have been saying that you should own a few Miners at least, and buy the dips when possible.
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lock out’ runaway move
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GDXJ 2016 – Another look at our 2016 run shows sort of a runaway move that locked out buyers. Notice that it often had a sell off day big enough to wipe out the prior days gains. Those were big 1 day drops ( possibly scaring people out ), but within 1 or 2 days, it was at new highs again. THAT is why that move left people behind. A Big down day scared people out, but then the dip was too quick to buy. So we need to try not to let a big down day or 2 affect our Big Picture view.
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So there are many different ways that this can play out in the Precious Metals sector, but I am talking about Bullish ways. I feel that the ICL is in place and GOLD has been strong. Let’s just see how things continue to play out, and any 2-3 day dips may just be a good place to add or buy that dip 🙂
Enjoy your Thursday trading!
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~ALEX
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IDEAS:
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GFI – This one I would have sold , to buy again later.
AG – AG broke above the 50sma and could do a back test soon. A reversal there is a buy, because I think that this is a great silver Miner.
CDE – CDE may be temporarily peaking, so you can buy the dip if it drops. It also may just crawl sideways along the 50sma, because the volume has been double & triple average volume.
USAS – On June 3rd, I posted this base as a nice set up for a Silver stock.
USAS – It is at the top of that base now (Progress).
AEM JUNE 1 recommendation – This inverse H&S was about to break out, and the upside potential looked great.
AEM – So far it is continuing on its way. Buy a dip or bull flag if we get one, this looks like the big Boys may be buying it ( Funds, etc).
RUN – I just want to return to RUN, the Solar stock. It is still Bullish too.
FSLR – FSLR broke out and is above the 50 sma.
ON THE WATCH LIST:
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HOS – Most of you know how I feel when I find a nice long tight base. This is an energy stock, but if it POPS or when Energy starts rising, this may make some fast gains. Place it on a watch list or a ‘ Break out ‘ alert (Maria). 🙂
FR – This is a bullish set up & break out. It ignored the sell off and instead consolidated with a triangle flag.
