Wednesday – The Starting Gun
I am going to review all of the normal sectors that we usually cover, but I think that it is really important to focus on Precious Metals and Miners right now. Fed Chairman Powell spoke Tuesday, and he speaks again on Wednesday along with the release of the fed minutes. There have been subtle changes that need to be pointed out again and monitored. Throwing aside the cycle expectations for a moment, the set ups in many Miners is turning bullish, so I will cover what to look for…
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SPX – As mentioned yesterday, we do not have confirmation of a dcl yet. With that drop Tuesday and no confirmation of a dcl, we could be extending to the 200 sma with day 45 Tuesday. This may bounce around similar to the choppiness that we saw at day 8 & Day 14, or it may plunge through the 200 sma.
NASDAQ – We are within the timing for, and therefore expecting a dcl. Notice that the NASDAQ is already near the lows of the prior DCL in August, so this is weak, choppy, sideways action. If the markets break down from here and drop below the 200 sma, selling could pick up quickly. We would have a lower high and lower low.
The General Markets have a lot of indecision to digest, and they do not like indecision, so it has been very choppy over the past 2 months. We have the Fed saying that the economy is fine, while cutting rates and expanding the balance sheets, etc . The markets may be feeling the pressure of the China Talks, and so on. We’ll see if the recent low holds as a dcl or not soon enough.
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WTIC – Oil has not confirmed a dcl either.
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Precious Metals : We have been expecting a drop into an ICL, and Gold has been chopping sideways for 2 months. We saw a quick drop & recovery last week, but that doesn’t really qualify as an ICL. If Gold breaks out higher through the down trend line, It has to be considered a Buy, and I’ll explain why…
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GOLD – We should see Gold rejected here, and it should start dropping into a dcl. That siad though, I have been pointing out lately that Some Miners are starting to look Bullish (DRD, SBGL, HMY, RGLD, etc) , so if Gold breaks out higher, we need to pay attention to that as a Bullish sign in my opinion. Breaking above a downtrend line of a triangle is Bullish in Technical Analysis.
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SILVER – Silver closed above the 10 & 50 sma with a volume Pop. Seems bullish too.
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SILVER – Silver is not at the trend line yet though.
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GDX OCT 4th – I have been pointing out that GDX can possibly run up to the down trend & 50sma.
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GDX ran to the down trend line & 50sma. This was a Doji midday until Powell started speaking, then it closed at the highs. Powell speaks Wednesday too, and even though we would expect this to drop into a dcl timing-wise, if this breaks out higher? I would have to go long. This chart is looking bullish and I want to show you something else…
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GDX – The sell off into the MAY 2018 Low was also just a choppy a -b – c type drop to the 50sma almost 5 months out of the ICL, and then it took off higher. So…
GDX – We are about 5 months forward from the May ICL. Is this just a choppy a-b-c type drop under the 50sma & recovering? Volume increased, the MACD curled up – so Stay Frosty. This might POP & RUN, because some Miners are still at the Highs. It is hard to ignore that. Also…
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GDX – A while back I posted this chart where I copied & pasted the May 2016 drop onto our current set up. The run looks very similar.
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I want to close by saying that we have seen a few Miners that resisted the recent selling, and while they did this, others dropped down and then started to recover recently. THAT is what I want to point out below, and the conclusion that I draw is that I want to go into this unbiased. The Fed spoke yesterday and Precious metals popped. Now he speaks again Wednesday and the Fed minutes are to be released. The set ups in several Miners makes it possible that this could now go either way. Below I’ll show you why I say this…
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Enjoy your Wednesday trading!
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~ALEX
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RGLD – Last week I said that using Technical Analysis, this set up is a buy. This is similar to what we are looking at with Gold & GDX now, and…
RGLD – You can see that RGLD has remained bullish, and so has DRD, SBGL, etc.
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HMY – HMY was mentioned by me as pushing on the 50sma, similar to RGLD, and Tuesday it Popped above that 50sma. Again, using technical analysis, this is a buy with a tight stop.
AU – I also got a Buy with AU on Tuesday, and if I was only seeing this on 1 or 2 Miners, that would be less influential on my thinking, but I am starting to get more of a gut feel that this sector wants to flip bullish sooner than later. WE’LL SEE, POWELL SPEAKS WEDNESDAY & FED MINUTES ARE RELEASED.
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NG – NG was pointed out Midday by me in the live area as looing bullish pushing on the 50sma. It closed above the 50sma by the close.
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BTG – BTG is pushing on a trend line after chopping more sideways than down. Notice that BTG actually made a higher low on the last drop, and the MACD matched it. Looks Bullish.
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CDE – This also looks Bullish after a 2 month sideways chop.
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HL – If HL Breaks above the 200 sma, It has to be considered a buy with a stop.
So these are just a few of the charts that are giving me a ‘Gut Feel‘ that this can simply be a 2 month sideways consolidation that breaks out higher. You can see why I want to move forward without a strong Bias, and just see what the markets offer us from here on Wednesday.
Stay Frosty indeed!
