Thursday July11
I’m thinking that you can probably guess by now what round 2 is, but I’ll discuss what Round Two means as we get into our market review. I also have a special little ‘lesson’ in this report that I know you will enjoy, when we apply it to the Miners…
EVERYONE LIKED WHAT THE FED SAID:
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SPX – The markets moved higher & pulled back. Day 26 could mean that we have a right translated daily cycle unfolding. It also may be near topping too, but just keep a raised stop if you are long or you could take some profits just to lock in gains. You could now raise your stop to under the 10sma, and if you get knocked out, it is late enough in the daily cycle that it is probably for the best.
QQQ – The NASDAQ is breaking to new highs.
TRAN – These Transports are still not pretty here. New highs on the SPX, SOX, QQQ, and weakness in the RUT, Tran, and choppiness in the BKX (banks). It is a mixed bag for now.
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WTIC FROM YESTERDAYS REPORT – Oil has been nearing resistance and the inventory report was due…
WTIC – We saw Oil break out. and some may want to trade UCO, USO, OILU (Leverage) etc- or wait and see if Oil back tests later. With OIL on day 24 though, it could run to say day 40, and then begin to dip. That could be a double top by the time this slows down, so this is really a buy if you like trading Oil.
I GUESS it could be considered round 2 for oil, as it puts in a 2nd leg higher too, but I was really referring to the Precious Metals
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USD – Thanks Chairman Powell, for giving us the reversal at the 50 that we hoped for. That is a swing high and may be the top of that daily cycle on day 9. A drop from here will help Gold.
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GLD – No longer overbought, GLD looks bullishly set up to continue higher out of a flag consolidation.
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GOLD FROM YESTERDAY – We have a choppy box consolidation, our TREND LINE finally broke, and Gold reversed. You can read what I wrote…
GOLD – With the Fed Testimony and fed minutes released, GOLD Broke higher back above the 10sma. That was a BIG first leg higher from May to June, and we may be ready for Round Two! The green arrow is pointing to what looks like a DCL., this would only be day 7.
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Think about that. We got an ICL on the May 3 Fed Mtg. The Fed Minutes launched miners higher at the end of May, and now another fed Day pushed Gold higher. I could get used to this, but I wouldn’t be surprised if the “Sell the news” is the actual day of the Rate Cut. That would be a nice trap, right? We will just Stay Frosty, and I will remind everyone of that as that day approaches.
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GLD – I have been discussing ‘Break away gaps‘, ‘continuation or runaway gaps‘, and the possible ‘exhaustion gap‘ near the top where I cut leverage . This would be a reasonable expectation. Don’t read into this chart too much right now, I am going to discuss it further later.
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RECAP THE DAY
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If you had to work all day and missed this Fed Day,
1. We saw Gold POP in the morning as the FED SAT DOWN to testify. It broke the down trend and looked good. In fact…
2. I posted this in the live trading area, because it had the looks of a mysterious monster move possibly coming our way. It needed more time though. As fed Chairman Powell testified…
3. Gold had surged up nearly $13 by Midday. I captured GOLD here near $1410.
4. Gold closed up $21 at $1418 ! In after hrs it has added another $4.80 and is reading $1423.20 as I write this report, so the follow through is looking good so far.
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SILVER – This set up actually looks potentially very Bullish for Silver. It looks poised to break out after back testing the 50sma. Can we finally get a decent Silver run? We’ll see.
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GDX FROM YESTERDAYS REPORT – GDX looked to be breaking out, I have been saying that this ‘Continuation gap’ does NOT usually fill. I added to leverage Tuesday with a stop under the apex. Read what I wrote in yesterdays report.
GDX – Miners Popped higher right at the open and put in an attempt to close the Wednesday gap, but selling did not overcome the ‘Buy the dip’ push, and Miners closed the day with some decent gains. GDX is back above the 10sma, this looks like Day 6, it looks ready to run again.
I wonder what happened to all the traders that missed the first leg higher and decided to wait and ‘Buy that gap fill” ? Hopefully they chase this tomorrow and for the next few days, pushing it even higher.
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GDX 2016 gaps – OUT OF CURIOSITY- THIS MAY OR MAY NOT HAPPEN AGAIN, but I did go back and look at Gaps in 2016. Break away gaps didn’t fill, but Most of the other ones did fill a few days later, maybe on a 1/2 cycle low or another mild dip, but the trend was higher. (MAY was an ICL).
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GDX BIG PICTURE HOPEFULLY – I have had a target of roughly $28, but it can extend a little to build the cup or pan near $30. This does not look unreasonable.
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MINERS
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AAU FROM YESTERDAYs REPORT –
AAU WEDNESDAY – It looks like the Train is leaving the station, with good volume coming in. This is still a buy.
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SBGL – SBGL is trying to break to new 2019 highs, and has formed an inverse H&S. Very bullish looking, but to me, it looks like many of these may Break out & then drop back & consolidate for a day or so. Why? The RSI & MACD are not quite right for new highs. It may break out & back test, We’ll see. I hope that I am wrong, but that is how I see it. This is a great set up other than that.
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I pointed out the BIG PICTURE here, and you can see that SBGL has great potential.
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CDE PAST REPORTS – July 3 , I loved this bull flag crawling under the 200sma.
CDE PAST REPORTS – July 8 , I still loved this bull flag crawling under the 200sma.
CDE POPPED OVER THE 200sma – MACD kiss and a breaking out, I added in the morning on the 200sma & grabbed this chart midday as it progressed.
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CDE CLOSE –It closed up over 7%. To be honest, I’d like a lot more volume, so maybe it’ll come in Thursday. I don’t like less buying on the run higher.
In the past,I’ve seen Stocks breaking on light volume come back and back test that break out on the next day or 2 before running away. We’ll see what happens, hopefully volume just comes in strong Thursday.
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CDE –
1. It may do this, like at the 50sma, and that is not a big deal.
2. It also may just have double the volume Thursday and keep going.
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CDE PAST REPORTS – I posted this June 28. When CDE broke above the 200sma in 2016, it really found its freedom. I’d be thrilled with something even 1/2 as good.
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HL is now oversold and is also set up very nicely – I think we are going to see HL take off (as long as there is no bad news or public offering , etc). This is a bullish set up.
USAS – USAS also looks ready to break out and run, and these may be indicating that Silver is ready to go.
PAAS – This may be ready to push through the 200sma, but it is already a buy because it broke a small down trend on that consolidation.
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SA – I liked the surge of volume on Seabridge Wednesday, and if it breaks higher, it looks set up to run.
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EXK – EXK had an earnings pre-market and it wasn’t all that bad, but a miss is a miss in this game. It may be a shake out , it may test the lows, but I owned some and I dumped 1/2 & added it to CDE when CDE was at the 200sma. Then I sold the rest when it didn’t bounce , simply because I think Miners are going to run soon, and I want to get into a runner. I can always return to EXK if it shapes up later. THERE IS ALWAYS ANOTHER TRADE.
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SIDE NOTE: CDE CLOSE – When I see high volume at the prior peak, and then we break it with 1/2 the volume, I don’t usually buy it. I was taught, and I have seen MANY TIMES, that that prior peak will be ‘tested’ if volume is light when price passes it. If volume doesn’t grow tomorrow, dont be surprised to see this test the 200sma & then run.
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Another FED DAY has come & Gone, and another bullish reaction from the Precious Metals. The set ups look ready to go, and it seems that we are on day 6 of a new daily cycle. We have been holding our basket of miners or ETFs since the lows, and now we will hopefully see another 2nd leg higher over the next few days or weeks.
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Enjoy your Thursday trading!
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~ALEX
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GLD #1 – This is what I drew for GLD, and I have been discussing these 3 different types of ‘Gaps’. I mentioned not to sell and wait for a gap fill, these continuation gaps do not always fill. Tghose waiting for the gap fill can get left behind. Also, from what I have seen in the past, we may see an exhaustion gap in the future. THAT is where I pull stops up tighter and close leverage or watch it like a hawk…
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GLD #2, same chart – I found an old folder of ‘charts with Gaps ‘ and I found a chart that looks almost EXACTLY like the GLD set up, so I labelled it exactly the same way. It is going to give you a great visual of how these often play out. Notice how the next chart is almost a twin of GLD
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GAPS –
1. Break away gaps never filled
2. Continuation gap never filled
3. Then came an exhaustion gap, an 8 day top where the MACD crossed (sell) & drop . AND…
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GAP – The 1st run to the continuation gap was equal to the 2nd leg higher. So we may be 1/2 way to the top, and…
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That matches my expectations all along of a cup or ‘Pan’ that may build a handle. IT WILL NOT BE EXACT, it can extend or fall short, but we’ll take it step by step. We caught The Lows in May, so we are already quite profitable if you followed me into the trades. Raise stops under the continuation gap and we should be able to just let it ride again. 🙂
