August 7th – Still Setting Up Nicely
SPX – We see a reversal and this may be the dcl instead of any of the other mild dips. With a reversal you get a bounce, but how much will this bounce? I feel that the markets may be continuing to tell us something bad here, and…
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DJIA – I want you to take a good look at the drop of Oct 2018, and compare it to the drop that we just saw AFTER THE FED CUT RATES. That OCT bounce was not strong & the sell off was only a matter of time. I’m watching this bounce for clues, but not touching it personally for a trade. Anyone that wants to risk it & go long, this is a buy with a tight stop & raise it as the bounce unfolds. It could fail quickly though, or back test that 200sma. .
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VIX – last Oct the VIX had a strong spike as the General markets sold off, also similar to what we see now .
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WTIC – Oil keeps taking out prior lows. Wednesday is Oil inventory, but Oil looks weak and really struggles at the 50 & 200sma, now sloping down.
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USD – The USD bounced at the 50sma, but GOLD , SILVER, and the MINERS ignored it. That is BULLISH. I’ll elaborate shortly, but this USD bounce may not last & Precious Metals can continue higher.
GOLD – This was a break out, the MACD crossed, we see Solid Volume, etc… and I would expect it to continue to work its way higher. Some were concerned that “Miners are not keeping up, and not leading. Is that a warning?” It CAN BE A WARNING, but this only happened for 1 day, so I don’t draw conclusions from that yet. ALSO —- I will show you something that weakens that idea later in the report.
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SILVER – This is a bullish set up. A break above the red line can cause a fast move to $17+, similar to the break of the Magenta Line.
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SILVER EDIT AT ROUGHLY 11 P.M. EASTERN TIME: SILVER BROKE OUT OVERNIGHT AND HAS WORKED THROUGH THAT RESISTANCE THAT I’VE BEEN POINTING OUT. A RUN TO $17+ CAN HAPPEN QUICKLY.
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GDX – That FED drop and recovery would fit the idea that we have a dcl in place, and this is only day 3. It isn’t rallying sharply higher, is that ok? Next chart…
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GDX – It looks fine so far. Look at the wedge of June/July. We gapped out & went sideways before running higher. We can do that here too, we’ll see.
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I like the way things are setting up. The Precious Metals are still a BUY & HOLD from Mays ICL, and below I am going to show you something very interesting in that regard ( Quite Bullish). The General Markets, on the other hand, maybe topping. It will take time to play out, but at this point I have just been very focused on the ICL of Precious Metals- It has been an EXCELLENT trade! Many Miners have moved up 50%, 70%, some are even up 100% or more ( JNUG Has tripled from my buy point in May). Below I have more Bullish info on this sector, so let’s enjoy the ride!
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Enjoy your Wednesday trading!
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~ALEX
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So again, I was asked if I am ‘worried that the Miners were not running with GOLD today’. That can become a sign of weakness, but I don’t usually become concerned over 1 or 2 days. Now Let me show you what some Miners were doing, and then you’ll see that GDX & GDXJ may be an illusion…
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VGZ – Midday I pointed out that I like what VGZ is doing (it was recommended again as a place to buy or add last week).
VGZ – VGZ ended up at the highs of the day, up almost 7%. It kept up with Gold.
AU – Look at AU. Not all Miners are lagging Gold this week, right? This is 20% in 4 days.
HMY – HMY is still climbing, and you should see charts of DRD, NG, AUY, and a few others, they also look great. Many Miners ARE keeping up with Gold.
CDE – I also recommended this last week, and I’d say get on board before Silver pops that top. Silver stocks look like a buy before Silver Breaks and runs.
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BTG – Slow & steady and volume is flowing nicely. Some Miners are just gradually tacking on the gains, but they could play catch up later. HMY was that way at first.
NEM – And you’ll find a ‘Lagger’ here and there, but if it is on ‘support’, it could be bought if you are under-invested. It also may play catch up and be better than buying an extended stock.
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YESTERDAY I SHOWED THIS CHART AND SAID THAT I WOULD DISCUSS THIS FURTHER.
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HUI – So many people ask me if I think this Intermediate Cycle is topping soon, so I want to show you something very encouraging. THIS RALLY out of the ICL in a Bull run from the lows lasted 6 Months ICL to ‘Peak‘. We just started month 3 for Silver & GDXJ.
HUI – Now look at our last ICL below. August to the ‘Peak’ in late February was also 6 months from ICL to ‘peak too‘. It was choppy, but steady over time. This rally from the May ICL is more of a rocket move higher, but we are only on Month 3 or 4. So could this peak on month 6 too? It could, but we have to just wait and see. Read this chart.
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HUI – JUST Throwing out an idea here, THIS IS NOT EXACTLY HOW I THINK THIS WILL PLAY OUT. If this ran for 6 months ICL to ‘Peak’, it may get a bit choppier , but still make a higher high from here. I’ve expected $30-$31 – but I’ll take more if they want to give it to us. See the chart…
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How would you like to see more of a ramp higher & Less chop over that 6 month period??
HUI -This was a real run, and it was exceptional. Notice that it
1. Ran higher for 2 months out of the ICL,
2. Then it went sideways ( like GDX is now) and then just took off straight up for month 4,5, & 6!
3. If we saw this kind of run now, $31 would be that April run higher, we’d see a small dip & then it just keep going!
4. Look at this run! ICL to ‘Peak’ was…. 6 Months.
5. I’ve been saying that you do not want to lose position on your basket of Miners in a Bull Market.
