April 11th Weekend Report – The Road Ahead
SPX – We have discussed our long term breakdown & Recovery ( Shake out), and …
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Now it has been determined that we have an ICL in place. The trend line that I pointed out last weekend was broken this week. We bought at the reversal lows. Is this a recovery in progress or just a bounce?…
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SPX – Now we watch it step by step, to see what kind of an ICL is in place. One that is a recovery going forward ( Less likely) or just a bounce that gives us several weeks of bullish looking action before it rolls over. There should be more time in the bounce / rally…
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As we moved out of the lows in March, I drew this chart as a reasonable expectation of at least 2 daily cycles higher. IT IS NOT EXACTLY A PREDICTION, but it’s an example of 2 bullish daily cycles, and then a possible resumption of the selling down. At that point, we will look for signs of weakness, and I will remind everyone that as bullish as it may look …
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The rally out of the 1928 sell off looked very convincing too. It lasted for 3 daily cycles & then sold off to a bear market.
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WTIC – Oil was due to put in the DCL / ICL too, and at this point, we at least have a dcl. Oil is just starting to bounce, it is Very Oversold on a weekly basis.
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XOP – The Energy stocks are making incredible gains. Even the XOP made a 20% gain last week, and some of the beaten down Oil stocks are up 100% off their lows. I have been covering them in the daily reports.
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XOP – This is a trend line that, if it gets broken, will help us to gain more conviction in the idea that these lows will last for months ( ICL). This sector remains VERY oversold.
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GOLD crashed into an ICL and has now returned right back to the highs. This is very encouraging, because some Miners are now returning to their prior highs and others are beginning to play catch up. We can make GREAT %-Gains in this area .
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SILVER was lagging behind Golds recovery, but it can and does often play catch up Very Quickly. This is bullish and shows that an ICL is in place too. This is also very good news for you, because many Silver stocks that were lagging now gained 10-20% Friday alone, but they still have a lot of upside potential. I’ll discuss that later.
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For example, I posted this in Fridays live trading area. These are EXCELLENT one day gains, and this can continue.
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SILVER -This is Silvers recovery process and it made good gains last week. Notice that Silver is still near oversold on a weekly basis. Silver has room to move much higher, so the stocks can really add to their recent gains.
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GDX -Talk about a bullish recovery. We had Rail Road tracks and then I started to point out and recommend Miners in the reports over the past couple of weeks. Some are ahead of the others, but now they are pretty much ALL making great gains. GDX is also still not overbought on a weekly basis. I want you to know…
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I want you to know that this can get VERY rewarding over time.
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As an example: CDE gained 33% last week, but on this chart it looks like it hardly moved, compared to where it is likely heading. Can you imagine owning a $3 stock now and then having it trading in the $20’s down the road? Your investment doubles, triples, etc. $20 CDE almost happened in 2016, and it can happen with the current double bottom low set up.
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AG – A Silver company like First Majestic could snap right back when a flood of value buying comes in, or it may just chop higher, but either way the potential is very good. The weekly chart is still at oversold levels after gaining 17% last week.
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This past week was great for traders and investors alike. We saw DCL’s turn into confirmed ICLs, so we know that we should be able to expect those lows to hold up for weeks. We often see at least 2 daily cycles higher, even in bear markets. I always take it step by step in the reports, but at this point I feel that it is safe to say that Miners are set up for higher price and it looks like it could be in more of a sustained manner.
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NEM was already back at recent highs as a leader friday morning, and after gaining 13%, it was now well above the recent highs. Many smaller Miners made even better %-Gains Friday than the leaders this week, as they moves off of the lows. There should be some good gains ahead as these play ‘recovery & catch up’ from a sell off that now seems to just be a Massive shake out. NEM hit $34 in March, it is now $57. As mentioned, we can ride others higher too, as they play catch up.
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I held on to my Miners and Energy stocks over the weekend, and since I do not have a report coming out until Tuesday morning , I will discuss a bit more about Miners for your Monday trading too. Miners confirmed an ICL.
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Enjoy your weekend and thanks for being here at Chartfreak!
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~ALEX
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THIS WAS IN FRIDAYS REPORT:
GDX has been stalling at the 50sma, and this crawl was a possibility. We have seen price crawl along resistance in the past, and with GOLD at the highs, we would hope that this PUSHES THROUGH before the end of this daily cycle. I have drawn out a bullish possibility ( just a guess on the count, not an exact prediction. Also day 9 should be 8).
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So GDX broke out on Friday, after only a 3 day crawl at the 50sma. This leaves Plenty of time to move higher before a dcl comes due. I was adding to Miners Friday and will also add Monday. This is THE FIRST Daily Cycle out of an ICL, the second should push it even higher. Let’s take a look…
THIS IS NOT AN EXACT PREDICTION, but it’s an idea of how this could easily play out with 15 or so trading days left. People have said, “Its too late to buy now, I’ll wait for the dcl.” I disagree, since that DCL could come higher than current price, especially in individual Miners. I NEVER Let cycle count near day 20 scare me from buying a bullish break out. Let’s review this set up, please read the chart …
1. The R.R. Tracks gave us a Buy Joe Granville style. Usually those extreme tracks will not allow the lows to be broken.
2. The Bullish crawl under the 50sma is also a buy, or ‘waiting for that break out’ becomes a buy too,
3. The DOWNTREND LINE Was breaking as seen here, that is Bullish in Tech Analysis.
4. Friday was a break out buy above resistance of the 50 & 200sma with increased volume.
Friday saw lagging Miners start to move higher too, and Monday will still have some other individual lagger Miners just ready to play catch up too. I have mentioned in prior reports at ICLs- I always ignore cycle counts when we get Bullish technical break outs. Cycles can stretch. The down trend Line was broken, so the down trend is over for now. This is an easy ‘Buy with a stop’. Those buying anywhere after the R.R Track can raise stops too, and it is an ‘Add to positions’ too.
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BY REQUEST : I was asked to take a look at Homestake Mining . I was asked by email, “Do you have a chart of Homestake mining and didn’t it rocket 800% higher right after the market crashed in 1929?” Also, “Can you look at it and see if it looks like Gold or Newmont now?” I have heard similar reports, that Homestake ran up 800% right after the crash of 1929, so I took a look. Well…
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The answer is, “No, not exactly”. I’ll explain…
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I found this chart on Twitter showing the DOW crash and Homestake at that 1929 time period, see my RED ARROWS. YES, Homestake ran up over 600% from there ( actually 800% in 10 years , from 1925 to 1935), but you’ll notice that like every parabolic run, the brunt of that ramp up actually came years later. It really started ramping up 3 yrs after the crash took place. There was certainly an excellent 3 year run from the end of 1932 onward. At the 1929 crash, however, there was a lot of sideways chop. Homestake did double in 2 years, it looks like $70 to $140, but my 3 Blue boxes show you the sideways chop that was included in that initial time period. SO WHAT DO I CONCLUDE?…
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SO WHAT DO I CONCLUDE?…
Homestake was an EXCELLENT investment even with the chop, but times are different now, and I think todays set ups may even be better. Why? They do look ready to run now…
Back then the Gold price was pegged, yet now we are seeing gold run up toward $2000/oz currently. That is a lot of additional profit for mining companies, and they have been beaten down again recently. Miners should be worth a lot more than they are currently priced at. Add to that the idea that we already saw Silver Miners in 2016 ( CDE & AG for example) run up 500- 700% in just 6 months, not 10 years like Homestake. The current set up certainly has the potential to see Miners do that again.
Yes, Homestake was great in 1925 to 1935, no doubt about it. Homestake ran up 800% in those 10 years, but you have seen quicker gains in your day, with 700% gains in just 7 months in a few silver miners, and something a little closer to that may very well be what lies ahead. We are still at the lows in many of these, as seen here with AG. 😉
