If you were watching the ‘Futures’ on Sunday night, then you know what kind of price action & volatility the markets experienced.  If, on the other hand,  you simply look at the charts after the close on Monday,  you wouldn’t really notice anything out of the ordinary.  Let’s take a look at what is happening with our various Market Sectors…

 

SPX – No real change from Price being trapped inside of this trading range. The weekend report discussed longer term possibilties.

 

WTIC – Oil moved higher, but dropped again into the close.

 

XOP  –  I took a GUSH trade twice & sold it, and now I see XOP  ( For GUSH) bottoming with strong divergence. Somebody please hold me back, because this looks kind of good again, and it would be REALLY EASY to use a very tight stop to minimize losses.   It is a low risk set up, so I might try it again, but at this point I’m not completely sure  🙂   AND…

 

NATGAS  – Bill mentioned NATGAS in the live area,  so I looked at a few charts and it does have a Bullish set up.  UGAZ is a leveraged representation in the U.S., and a break (  & close) above the 50sma seems pretty bullish.

Note:  At times,  NATGAS can be quite choppy, volatile, and difficult to trade.

 

 

GOLD  – Sunday night at the open, Gold Shot up $30 and tagged my $1550 target ( $1555). It sold off and didn’t really allow us to enjoy that during US Market hrs for our Miners. I have been waiting for $1550-$1600,  so that MIGHT be the ‘peak’, but later I will discuss this a bit further.

 

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SILVER – Silver has been climbing through resistance points slowly and step by step.   It was strong to push through that tight choppy area just below current price.

 

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GDX – A doji appeared on GDX, and that is a sad for a time when Gold shot up $100 points in 2 days! I have pointed out the MACD divergence that makes this look like it could chop sideways further or pull back.   We still didn’t tag my $31 target. 🙁

 

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So nothing really changed during the regular hours of trading,  but the movement of the Futures Sunday night does show us the potential.  With Gold up $100 points Friday & Sunday night alone, GDX closed even and GDXJ closed Red.   What does that mean to you?  It seems that the signs that I’ve been discussing are there,  and may indicate  that this run is getting a bit tired.  It either needs a pullback to kick down sentiment and draw in more buyers lower,   or it needs more time to churn sideways and draw in more Buyers that way.  For now, I have admonished readers to raise stops if they wish, Stay Frosty,  Lighten up if you are more comfortable with that idea,  or hang on and hope for another push higher.

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I will have a 2 part discussion below after signing off.  I will also discuss Gold one more time.  We’ll see what Tuesday brings our way, enjoy your Tuesday trading!

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~ALEX

 

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GOLD  – This is usually a topping candle,  so is this a ‘Peak’ for Gold?

 

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GOLD  –  Notice that The first Intermediate Cycle out of Aug 2018 Lows ran and didn’t peak for 6 months,  but it was also longer & a bit more gradual.  This run has been steeper and sharply higher.  If that doesn’t matter,  this COULD c hop sideways into the Sep fomc ( dcl)  and then make another run higher to a ‘peak on 6 months too. Only time will tell.

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PART 1

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I was asked about the Intermediate Cycle, and my expressing ‘caution’ in the weekend report.  I was asked :  ‘Can’t it stretch further,  peaking later and not now?’  My answer in short is  “Yes, it can,  but as we approach Month 4, it is time to at least view things cautiously”,  so below is an explanation that I gave in the Comments / Live Trading area this weekend –  just in case you did not have a chance to read it.  I AM ALSO ADDING A PART 2 TO THIS SECTION.

     The GOLD ICL is May 3rd, and GDX bottomed in early May too, so that puts us at just about month 4 ( Next week is Month 4)., and that is when I start becoming cautious. I am obviously not on the sidelines, and I have re-entered positions as mentioned in the reports last week- but cautious that we need to ‘Stay frosty”- be alert that this COULD be starting to find a peak here at resistance ( and I mentioned targets along the way, so next is watch Gold $`550-$1600 , and GDX $31 is the next area to watch for).

I do agree that this intermediate cycle can have more upside, it can honestly Peak on month 5 or even 6,  but the way these cycles work is a bit tricky, since some peak on month 2 or 3,or 4.  As someone reporting on them, I simply have to mention that we CAN be near a peak.
The report turns into “Use caution”, rather than “Go all in with leverage & we’ll see what happens”.

  This chart contains ICL to Peak to ICL  since 2016.

RED NUMBERS are how many months until the ‘peak’ came along, and we have seen 3 & 4 month peaks in a bull market too.

The last ‘Peak’  from the AUG 2018 was great, 6 months ICL to ‘peak’.
ICL to ‘peak in 2016  was 5-6 months too,

but we see others  1 month , 2 months, 4 months , etc .
A 2 month peak means that it happened after  only 2 daily cycles only.

 

So for the weekend  report, I saw us…

1. Entering the resistance zone.

2. Price targets are being met

3. indicators are a bit weaker

4. COT is high- so I can’t ignore that for the report. 

  It is a balancing act as time goes on for sure.  I want to stay bullish, with surprises to the upside, but I don’t want us to fall asleep at the wheel where a sudden curve in the road may throw us off .

 

PART 2

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So along with the above chart, I thought that comparing todays Intermediate Cycles  to a the 2008 ‘Gold Bull Run’ would be helpful too.  It was a Bull for years, so what happened then?

Did we ever see ICL to Peak in 4 months?  Yes, we did see it peak in 4 months twice, 5 months once, and even 7 months once and then we also had the parabolic run and that  hardly showed an ICL for a whole year.  There was one, but it was very mild.   

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Conclusion:  So from past experience, I become cautious (but Not bearish) at month 4, and start to think in terms of a possible ‘peak’ forming and  a dip down eventually to the next ICL.  That thinking is mostly about protecting what we have gained,  but by still remaining invested, we can catch any ‘surprises to the upside’.

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  As seen above, I have seen 4 Month ICL to Peak Intermediate Cycles, and also 5 & 6 Month ICL to ‘Peak Runs too.  So that is how I play it going forward,  bullishly cautious. I do a LOT less trading in that first 3-4 months,  just riding leverage & positions week after week, etc,   but at this point I want to raise stops and keep my gains in case we do pull back.

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 Also noteworthy is the fact that some Individual Stocks can also ignore a dip seen in GDX & GDXJ,  as seen when GDX sold off for 8 days recently,  but HMY, NG, AU, etc simply went sideways and higher.