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Yesterday, the theme of my report was  “No major Surprises yet”, but it looks like  I may have spoken too soon.  This was GOLD at the close Tuesday.  After selling off sharply $24 & breaking below the 10sma on Monday, it put in another sharp reversal and closed back above it.  We’ll discuss this after  taking a look at a few other charts…

 

 

The TRAN & RUT dropped Tuesday, but SPX & QQQ moved a bit higher.  That’s a bit odd, but with only a 1/2 day of trading in the US Wednesday, and Markets closed on Thursday,  I am just going to discuss bigger changes of OIL & Precious Metals.

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WTIC – Oil had been crawling at this multiple resistance area, and there certainly was a chance that it could break out.  Well, it crashed down 4% on day 19, and Oils daily cycles can be very long,  so this may get ugly.

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In Mid May, notice how it  it rolled over below the 50sma and dropped like Tuesday too.  The next 3 days stalled, but then it fell again.  So if oil stalls, it still may fall.  Oil does not look healthy anymore.   It has been choppy, so…

 

   It has been choppy, so look at the RED ICL, the blue dip, and then the GREEN ICL in 2016, comparing it to now.  If something similar to that played out again, we’d see MONTHS of sideways chop & indecision (Blue box). It lasted a year back then.

 

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Click on the charts to enlarge if necessary

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Now back to GOLD, and it had a strong reversal day back above that 10sma.  This could be a high dcl…

 

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GOLD – Yesterday this was in my report, looking at the 38% dip . I mentioned that this drop is close enough to being complete, but what about no trend line break?

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On Tuesday GOLD landed right on the trend line & reversed.  That is quite bullish, so when I use these measurements, moving averages, fib numbers, etc., they are often used as a reliable ‘guide’, but in extreme bullish or bearish conditions?  They are a guide, not a rule for me.  This can be a Bullish exception to the rule.

 

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And of course the BIG PICTURE is always in focus.  Now that Gold is moving above that base, there is less resistance straight to $1600. This intermediate cycle may get us there.

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MINERS

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This reversal started out slow, and I drew this 2 hrs into trading on Tuesday.  JNUG was up 9% and GDX & GDXJ were slowly climbing up to that trendline.  And then as the day pressed on…

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SURPRISE TO THE UPSIDE!!…

GDX WAS BULLISHLY BREAKING THAT TREND LINE.

When I see this,  it is a BUY with  a stop under the Monday low.  Why?  Read the chart  1,2,3. There is a good chance that we have a dcl, and that low should not be broken.  The Gap becomes a continuation gap and many don’t fill.

 

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Recall that my morning report pointed out that GOLD DROPPED $24, and yet MANY MINERS dropped a penny or where even Green.  THAT IS NOT NORMAL, but it is for a BULL MARKET with Miners being accumulated.  I posted these charts and others to show how Miners acted with Gold down $24.

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 And then as the morning trading took place,  many miners started reaching for recent highs, and that was a good sign of what was happening.  I posted this chart of EGO , up 100% in 1 month and was at new recent highs  (After GOLD dropped $24?).    Other Miners were also discussed, and now…

 

EXK – Reversals & Bullish set ups are forming everywhere and  offering a low risk entry.  I say ‘Low risk’, because your stop can be at Mondays lows, and downside risk is small if it fails compared to possible upside reward.

VGZ –  VGZ sold off for 7 days, but actually it was just slowly dropping sideways. Now in 1 day, most of those losses are erased.

 

CDE–   Imagine selling ‘all’ of your CDE at $4, hoping to buy the Gap fill?  This could be $4.50 in a day.

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GOLD dropped $24 Monday and many Miners are just moving higher. Read this chart for RGLD.

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CONCLUSION:  Nothing changed.  The ‘Pullback’ for many miners was simply to go sideways at the 10sma & form a bull flag.   A stock like EXK  (seen above)  is a buy.  I have said that if you sell all of you positions worrying about a Pull back,  it is possible to get left behind waiting for that pull back, instead being ‘surprised to the upside’.

  Sure,  if you want to sell ‘some’ stocks to lock in some gains for peace of mind, by all means do so. That is a winning trade,  but riding the Bull when it runs out of a Big Base can be the best money that you make in years, so I WOULD NOT RECOMMEND SELLING EVERYTHING to buy the dip later.  And if you were looking for the dip,  that tiny blip in Miners as Gold plunged $24 may be all we see, because during the ‘after hours trading’ on Tuesday, Gold finished recouping all $24 of that plunge and may just continue higher.

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Usually I like a good day off when a holiday comes around,  but I HATE the fact that U.S. Markets are closed 1/2 day Wednesday and all day Thursday.  Our Miners will be frozen as Gold possibly continues higher on those days, but since this could be day 3 of a new daily cycle, there should still be a good run higher ahead of us regardless of the missed holiday trading.

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Enjoy your 1/2 day of trading Wednesday.

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~ALEX

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GOLD LIVE 7 am Eastern Time –  As I proof read the report, Gold has pulled back.  I am thinking that the 10sma should hold, or at least the recent lows.  We may form a handle over the US holiday time period, but that is just a reasonable  ‘Guess”.

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GOLD BIG PICTURE –  The $24 drop isn’t even noticeable