Another Fed Wednesday
SPX – The SPX just reached the area that I have pointed out as a probable first target. Now we’ll see if the FED can cause a break out or a sell off at this resistance area. A drop from here at day 18 could cause this to become L.T. if the cycle is longer than 36 days.
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DJIA – The DJIA has 2 reversal candles, so we are seeing selling on each push higher before the Fed.
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OIL – oil dropped Tuesday morning, but the XOP did not. As the day moved on, OIl reversed and pushed higher. OIL INVENTORY REPORTS COME OUT ON WEDNESDAY.
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XOP – And the XOP ( or GUSH ) Trade is still moving higher, but it is at the 50sma , a possible resistance area.
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GOLD – Gold did a false break out & then broke back down inside of the wedge. It then also bounced, and that bounce may have just been a back test. I would have expected a drop back to the bottom green line, but with a Rate Cut, the Fed could push this back above the red line ( BUY). We’ll see if that happens after the Fed.
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GOLD – It is possible that this is an inverse H&S, and Gold breaking higher from here on a Fed reaction could run nicely. It just seems to be a mixed picture at this point as to which way it will go.
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GDXJ MIDDAY – This was GDXJ Midday. It was rejected at the 50 sma last week, but now it looks like a simple back test of the break out, because it reversed higher Tuesday on the upper trend line. It really is going to probably be the Fed Decision that moves this in a more directional path.
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SUMMARY OF GDX – This is the count, going by what I had for a dcl back in September.
– We had a Red arrow DCL & a day 7 peak (L.T.) and we dropped from there.
– After the drop I suggested that we would see a bounce & rejection at the 50sma. We saw that too.
– Then a day 22 low does not look like a dcl, and we moved higher again, but many individual Miners slowly started to get more & more bullish looking, and GOLD, SILVER, & GDX formed a triangle. .
– Since GDX formed a triangle, that often will obscure cycle counts. Last Friday we got another rejection at the 50sma on day 30.
– Now we wait & see which way this wants to go, but as mentioned, recently I have been pointing out individual miners that have Bullish set ups. GDX SITS ON TOP OF THE TRIANGLE HERE TOO.
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So it is Fed Day and I want to review some of those Miners that were starting to set up in a bullish manner. It is possible that the idea of the next rate cut is causing enough buying ahead of time that the patterns are setting up Bullishly in advance. I will review some Miners below, and then we’ll see what happens at the 2 p.m. decision.
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Enjoy your Wednesday trading!
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~ALEX
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NG – I posted this in the live area Tuesday, because normally this is Bullish buy signal. The MACD is climbing with price & NG looks like it wants to finish building a cup consolidation.
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HL – HL broke above that 200sma recently and is still above it. I drew this Tuesday morning to show that this could now be a support area, so HL remained bullish.
HL – And by the final hour of the day it had dropped down & reversed off of the 10sma.
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EQX – I have accumulated a position at the 50 sma in EQX and it formed a flat topped wedge. I pointed it out a few times above the 50 sma.
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GORO – GORO already released earnings and had a strong reaction higher. It is also holding up well so far.
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USAS – USAS broke above the 50 sma, and has still held up above that area too.
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HMY – HMY dropped on Tuesday below the 50sma, but it started to reverse midday, so I posted this. It closed at $3.28.
AEM – Over the past week AEM has pushed bullishly higher. So we do have many set ups that are bullish in this sector
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So we do have many set ups that are bullish in this sector, and it may be the result of smart money accumulating while we all wait for the fed. Hopefully it is a sign of good things to come, but use stops just in case.
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DAVE asked about LODE as a “Lottery Ticket”. Maybe risky, but isn’t it improving? I’ll just Copy / Paste what I wrote below…
Hey Dave,
I hadn’t looked at LODE in a while, and your point that it is probably equivalent to a lottery ticket is prudent, but that DOES have pretty strong divergence with the MACD, and it does look like it may be improving ( That could change with earnings, so still could be risky). .
Not only that, but look at NSRPF. That Miner & a few others really didn’t run swiftly in the last run from May to Sept, but they look like they may run & play catch up on a future run, so it is possible that the old dogs could do better this time.
So now back to LODE, the chart has improved after the sell off. I think a buy here, or especially above the 50 sma could be RELATIVELY safe. It is oversold & a break above that 50sma could be a buy. Beware of earnings though ( & FED?).
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THOMAS mentioned COG as a natgas play and I looked up the chart and liked it. Notice how it is running ABOVE the 50 sma and slowly curling up. This and a few others in the Oil / Gas sector look good, I may cover this sector more after the Oil inventory / Fed Wednesday volatility calms down.
