Tuesday – The Pre-Fed Line Up

 

 

NAZ – As I continue to watch the General Markets chug along higher, The MACD went flat (Diverging ) as price reaches new highs and this really looks like a bearish rising wedge,  so that leads me to think a couple of things.

1.  We may not have that dcl  yet, stops need to be under that recent swing low, and

2.  That DCL could come near the 50sma like I originally thought. Therefore,

3.  These markets may drop after the Fed. The MACD died.

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WTIC – Oil remains choppy, but it may try to break out higher again.  I am not short or long and haven’t felt like recommending either in this choppy trading.

 

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USD – The USD was climbing Monday and so were the precious metals. By the end of the day the USD dropped a bit, giving a possible topping candle while Precious Metals closed at the highs.  This could now be a (at least short term ) topping candle as we approach the Fed Mtg Tuesday & Wednesday.

 

 

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GOLD  – Gold was up slightly all day, even though the USD was up too.  Suddenly at the end of the day, GOLD POPPED higher as the USD dripped down.  This is a pretty bullish looking chart heading into the Fed Mtg (Which actually takes place Tuesday and Wednesday).

 

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GDX – I have mentioned several times in the comments,  and I also think that I’ve put it in my reports, that I’m using the 13 sma GDX & GDXJ loosely as a stop for JNUG or NUGT ( Leverage).  Price reversed right on the 13 sma Monday and volume increased as it pushed higher.

So I have been saying that this could be a 1/2 cycle dip, followed by  another run to GDX $30-$31 ish peak for the daily cycle.

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GDXJ  –  This may be a 1/2 cycle low on day 18, with yesterdays reversal being day 19.  This looks hopeful heading into the Fed.   Now let me tell you how I view this at this time…

 

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GDXJ  -There are always concerns heading into the Fed.  Will we break higher, but then fake out & drop?  Will we break below the 13 sma as a shake out, then take off higher? We cannot know the answer for sure, but here is what we do know for this set up…

1.  The reversal yesterday is a low risk buy, with a stop a bit below Mondays $38 (or even $37).

2. I’ve been thinking that we’d see a 1/2 cycle low, and this may have been that  1/2 C. L.

3. This is very encouraging, and next I will show you something that I don’t think many realize and it is encouraging…

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GDX –  Think about this:

1. We got a GDX ICL on May 3 which was a  Fed DAY.

2. The Rally started at the end of May with the FED Minutes release.

3. Do you know when that ‘continuation gap’ showed up? It was on The Thursday after the Fed. That is the one that I think many overlooked.

4. And do you remember what I am waiting for, that may cause me to sell my leverage within a few days? I mentioned that if we see an exhaustion Gap, a top could be close for this daily cycle. We may get an exhaustion gap after the fed Wed cut.

5.  Again, this could be the 1/2 cycle low, …

 

Still don’t see it?  How about this comparison with the first 1/2 cycle low? They are almost twins.  🙂

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 The Fed Meeting is Tuesday and Wednesday of this week. The above chart shows you that on the Tuesday and Wednesday prior to the June Fed Mtg, GDX & GDXJ were actually rising into that Fed decision, followed by that continuation gap that came on Thursday. There is No Guarantee that this will play out as I am laying it out here, but so far this has played out very much as expected, right out of the ICL.

 We look for possibilities & probabilities in the markets various set ups, and this is how things look leading into this Fed Mtg.   This reversal at the 13 sma is a buy and a tight stop can be placed under Mondays lows if you want.  Also, if you see any Miners that look like this set up— this would also be a good place to add or buy looking for maybe 1 more pop higher in this daily cycle.  I will also discuss a few miners below acting Bullishly.

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Enjoy your Tuesday trading!

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~ALEX

 

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GORO  – I pointed out GORO as a lagger  recently, and Monday morning I saw a good amount of volume coming into GORO as it crawls along and pushes on the 200sma, soI posted this in the live trading area as one that  may be ready to break out.

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GORO  – Monday Price closed slightly under the 200sma, but this is a constructive consolidation with good volume. I added to my position.

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MAG – MAG popped 4% and this Cup and Handle looks excellent too. Volume also popped Monday. Someone wrote and said that they bought MAG in May and wondered why it was not doing well.  Why is Mag so weak?   2 things here:

1.  This is a nice cup & handle and could really get going when it breaks out and

2. Mag is actually up a bit more than  30% since the may lows .  The consolidation is fooling people into believing that “Mag  isn’t in  ‘straight up rally mode, so it seems weak’.

 

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OBSERVATION MIDDAY – I was away from my screens for parts of Monday. This is what I liked Midday as I checked in. And SBGL seemed to be forming a bull flag.

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SBGL  – By the close it Popped higher by almost 6%.   This has been a good Buy & Hold and was discussed by me as one that I bought from the May lows near $3.40 and I’ve mentioned it a few times since then.  Last week I mentioned that SBGL is also a good platinum play, since they bought SWC in May of 2017,  and …

 

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SBGL  –  The Big picture has been highlighted over the past 2 months too, in these 2 July charts below  along with several others over time.  I like and still own SBGL .

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HMY #1  – Last week I discussed that HMY  seemed weak to some. It would Pop  & just go sideways, so some asked, “Should I dump it?”.  I said that it is not really weak…

 

HMY #2  – I used this chart to show that it is actually acting very Bullish, climbing nicely higher over time. I like ( & own ) HMY.

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HMY #3  – Midday on Monday, this was HMY forming a Bull Flag, so I posted this in the live trading area.

HMY #4 – And by the close it looked to be breaking out.  HMY looks good  Pre-Fed.

HMY  – And on July 19, I showed you this as a big picture chart with a lot of potential over time.

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KL  – KL reversed today too, as volume increased.

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PLG  – PLG looks like it is acting correctly too. It broke out above the 50sma in early July, & then back tested it last week. Monday it gapped above the 10sma.  This may fill the gap and continue to churn here above the 50sma, or it may just continue higher.  Since it is acting correctly,   it could go on a Watch list or if you own it you could add on a gap fill with a stop at the 50sma.

 

 

 

 

SA Monday 1 hr into trading – I thought that SA might break down & tag that 50 & 200 sma.  That would be fine, it would still be Bullish, and someone could have even bought that back test, however…

 

SA by the Close –  By the end of the day SA  pulled a reversal and regained the 20sma.  Buyers may be stepping in on weakness and adding before that Fed Cut.

 

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On a separate idea:

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I have been asked a lot about MJ Stocks, but they just seem to need more time.  This sector has been drifting lower for the most part.  I’ve been asked to look at CGC, ACB, HEXO, CRON, CTST, TLRY, etc etc.  Many are just stuck under simple moving averages and need more time.     I did like the TLRY set up at the lows after earnings, but so far it lacks follow through.  It regained the 50sma, but is crawling along underneath it now as a possible higher low.  I’m keeping an eye on it, it does still look fine.  Some of the smaller MJ Stocks are Popping too, but as for the bigger companies?    I am looking for a strong sign of strength, Strong reversals, etc. Just when they start to look o.k.,  they fail.

Well,  HEXO looked like a very bullish reversal Monday, so Tuesday may see additional buying…

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HEXO  – After relentlessly being trapped under the 10 sma and becoming quite oversold, it had a strong reversal with twice the recent volume.  This is a buy with a tight stop at Mondays lows. This type of reversal almost always finds follow through, so it’ll be interesting to see if it FINALLY gets back above that 10sma.

 

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As mentioned, I liked the TLRY set up at the lows in June.  After an earnings release,  TLRY  popped above the 10sma & back tested it, even climbing above the 50sma, and it looked ready to run.   Since then it lost both moving averages.   The sector wasn’t ready and TLRY  has not rallied on its own.  Is it still ok?  So far,  it is simply “O.K.”, but not all that great yet.  It has good points though…

– It is very oversold, so it should bounce eventually.

– It is pushing on those moving averages, so a bounce should push it above them.

– It does have MACD divergence. possibly forming a higher low,  but it also needs a follow up sign of strength.

– It has been crawling along the underside of  the 50sma as a possible higher low.

– It does lack follow through at this point, which is a negative (not enough buyers) , so if this doesn’t start moving higher, it may even drift lower to form a double bottom low at $35.