Thursday November 14th – Bring On The Treats!
SPX 5 MINUTE – There was a sudden drop midday in the General markets…
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SPX 15 MINUTE – That drop recovered. When I looked at a 5 day chart after the close, I realized that we had a similar sudden drop on Tuesday too, and now it actually looks like an inverse H&S consolidation. If this breaks higher, the markets should actually continue higher…
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SPX – So we see on the daily that we got another reversal at the 10sma. We have a day 28 peak, making this most likely a R.T. daily cycle.
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DJIA – The DOW JONES actually made a higher high on Wednesday after reversing off of the 10 sma, so I have recommended a stop under that 10 sma, and this has worked out well. I’m expecting a back test of the break out for a dcl, but the markets seem to be melting up.
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WTIC – Oil is trying to break above that 200sma, but so far it is trapped under it. It closed higher, but…
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XOP – The Oil / Energy Stocks were down and the XOP broke & closed below the 50 sma, so these may be leading the way lower. Oil has been choppy around that 200 sma for weeks.
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Precious Metals – We have entered the time to watch this sector a little bit closer. We may be forming a swing low here, but we need to watch and see if this is a final low ( ICL) or possibly just another dcl in this long choppy consolidation.
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GOLD – So we have a swing low, but it is not a confirmed swing low. The low forming at day 30 could be a dcl. We have seen daily cycles last 34 days or even a bit more though, so there is a chance that this could do a quick shake out too – Let me show you a visual of that…
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GOLD – picture Gold tagging that 10sma on day 32, and then just flushing down. That would shake out bulls right before a real DCL or ICL comes. I drew it as a 34 day cycle. NOT A PREDICTION, I just like to prepare my readers for possibilities.
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2 REMINDER From Yesterdays report:
#1 reminder : GOLD – After we get a Swing Low / Reversal, it will be a buy with the hope that it may also be an ICL. There is a chance that it will form as Left Translated, and roll over by day 5 or so into a final daily cycle- so we have to keep that in the back of our minds. THAT is what the last daily cycle did.
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#2 Reminder : GOLD – Sometimes the bottoms form with multiple reversal candles. Gold may be forming a low now or over the next couple of days. This kind of choppiness at a low also serves to shake off some Bulls.
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SILVER – Is Silver back testing a break out? Possibly, and we have an unconfirmed swing low on day 30 here too.
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GDX – Was this a break out & back test? It looks it, but so far GDX was rejected at the 10 sma & buying volume was light. I am long, but I really need to see a break above the 10 & 50 sma to get comfortable with long positions.
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GDXJ 15 minute – The short term down trend for the last 10 days was broken, so that is encouraging for now.
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GDXJ – Again, it is not out of the question that we could get a real quick false break down to shake out the Bulls, and then reverse & run higher. I have seen that in the past and on this chart I am pointing out a similar slam down/reversal in 2018. We could tag the 200sma & take off. This is why the more CONSERVATIVE BUYERS wait for a move above the 10sma.
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So for the precious metals sector, this is the time that we have been waiting for. We have moved past day 30 for the GOLD & SILVER Daily Cycle, and that is when it becomes time to pay attention and see if…
1. This multi-week consolidation is going to end as a milder ICL at the end of this daily cycle? Or
2. Will we just bounce & then roll over and get another 30 days of chop & selling?
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We honestly cannot tell whether this consolidation is over or not, but the time is right. Why?
– We are 6 months from the May ICL, and that is the average length of an intermediate Cycle.
– Thursday is either day 32 or day 2 for the daily cycle.
As a daily cycle low forms after day 30, it becomes a low risk entry to buy with a stop in place. You can start small with starter positions and add later, or start heavier with a stop. The choice is yours based on your trading style. If, as you ride it higher, it becomes obviously more bullish you can add to positions. Soon enough we would know if that ICL is in place. If price bounces & chops around, you then stand ready to exit if it rolls over into another 30 day daily cycle.
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As we have been discussing however, MANY MINERS look as though they want to remain bullish and head higher. I have pointed out HL, CDE, SVM and even GORO as leaders breaking to recent highs. That is obviously Bullish. Then we have cup patterns forming pushing stocks higher ( PAAS, SVM, etc), and Box Consolidations ( IAG, AUY, etc), and more. This consolidation has been a sideways bullish one for many Miners and it may be time for the next run to take place.
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Like the dog in the opening theme Picture: We are patiently waiting for our treats. Enjoy your Thursday trading!
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~ALEX
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EXK – The potential in some of these Miners is really something to behold. In 2016, EXK ran from $1 to $6, and those are GREAT GAINS. Since then it actually has been forming a round bottom base that can turn higher and break above that 200sma. When it does, it can run to 2016 highs, but look at the Run from 2008 to 2011. That was under $1 to $13. Read the chart and imagine what 10,000 shares under $1 would have given you. The potential going forward is great.
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From Yesterdays Report to give us perspective:
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THE BIGGER PICTURE FOR PERSPECTIVE: Waiting for that 10 sma does not cause anyone to ‘Miss the move’. In fact, it might even cause one to miss any shake out type action if we Pop & drop one more time.
At the last low in May, we even had a run higher above the 10sma, and then it dropped down to a higher low below the 10sma , but stops under the May 3 low were not hit. Then the strong rally took place. We are expecting a similar run here, so if you are more conservative & wait for the 10sma to be regained, you still have great gains ahead if this runs like I expect it to.
