Wednesday April 22 – Time Again
Yesterday report discussed ‘timing’ and I mentioned that with regard to cycles, ” As time goes on, however, you do need to start being more aware of the timing. I get just a little more cautious, because we will be entering the ‘time’ for a dip into a dcl.” I then pointed out the Semiconductors being at support…
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In yesterdays report I wrote: The SOX sold off Monday, but it does have multiple support below price, so this is an area that I am watching too. AMAT and TSEM are pushing on their 50 sma resistance, so this is what I am watching for clues or signs of weakness or strength going forward.
SOX – The Semiconductors broke through support. I can see where this MIGHT be forming a channel and a 1/2 cycle dip, but basically right now this is a break down and I would have closed any leverage like TQQQ or SOXL.
On April 2 I pointed out the Fib Number that the ‘C’ could end at ( 2940) and we are in that area now, so things need to be monitored closely after such a sharp sell off in Feb-March.
SPX reached that 2900 area and the 50 sma, and then rolled over. Now we see a break below the current lower trend line, so we have to at least be cautious under these conditions. So let me throw a few ideas out there…
SPX -We may have finished that a-b-c up, and now we could drop a-b-c down or 1-2-3-4-5 like this. IF WE DROP LIKE THIS, that is just a choppy sloppy frustrating move. It would be a deep ‘test’ of the lows, and you do NOT want to be in leverage long here.
Maybe the SPX just continues to crawl or chop along the 50 sma? Sure, that is possible, but it still is difficult to make money in this kind of market, unless you grab the right stocks. Also…
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I mentioned that the VIX broke out and that is volatility for the markets. Tuesday it pushed higher and then sold off a bit, so I’ll keep my eye on it. THIS does add weight to the idea that the markets may be topping here for this daily cycle.
WTIC -Oil has problems with an over supply above ground. Wednesday is OIL INVENTORY REPORT DAY. Oh Boy, what will THAT do? I will say this: At any moment the Russian and Saudi Oil talks could come up with an agreement on cutting Oil supplies. The news alone would probably cause a big reaction low…
And again I point to the OIL stocks MRO, VLO, XOM, etc all holding up well, and the XOP & XLE closed Green again. It is a strange time in OIL land, so I decided to just close my open positions until we get just a little more clarity. These are honestly BULLISH set ups and I was doing well, therefore I hate to exit the trade, but I see other trades that are popping up to take advantage of too.
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WE NEED TO DISCUSS WHAT I AM SEEING IN THE PRECIOUS METALS, IT LOOKS VERY BULLISH: I want to cover this section just a little differently than I normally do. I want to put it in ‘story form’, so just follow along with the story…
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GOLD has dropped $122 after peaking on day 20. Notice that Gold was down 4 out of the last 5 days. What does THAT usually do to Miners?
SILVER tagged the 50sma and was rejected. Silver dropped $2 from $16.50 to $14.50. Silver is also dropping 4 out of the last 5 days and broke support 3 days ago. Tuesday crashed 5%, What would that normally do to Miners?
Now look at the last 4 out of 5 days for GDX. This is Bullish price action, especially with Gold down $122 and Silver down $2. Silver was down almost 5% Tuesday alone, GDX was only down 18 cents. So…
WE DO NOT KNOW EXACTLY WHAT GOLD WILL DO, HOWEVER: If GOLD is on day 25 and our daily cycles often run 33 or so days ( More or less), Gold may dance around like this, eventually tagging that 50sma, but Miners may just continue to hold up & show relative strength.
SILVER dropped fairly sharply Tuesday, but some Silver stocks were Green? So even if Silver drops down further, we still may see accumulation of Miners.
The point of the story is that Gold has dropped quite a bit and Silver has broken down too, but Miners are in a Bull Flag so far. Next I am going to show you a good number of Miners, and as you view these, keep that above story in mind. Gold has dropped $122 on 4 out of the last 5 days, and Silver has dropped 4 out of the last 5 days too. Now we’ll see how the Miners individually are handling this sell down.
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KGC – So Gold dropped $122 on 4 out of 5 days and KGC is a bull flag, still holding up above the 10sma.
PAAS is a Silver Miner that is still trading over the 50 & 200 sma.
SAND has been trading sideways while Gold & Silver sell off.
SILV is also holding up and was up 5% Tuesday while Silver was down 5%.
SSRM gapped lower and then broke back above that 50sma. It looks like the gap down is being accumulated.
EXK is another Silver Miner that gapped down quite a bit, but it set the trend line & closed higher.
GPL ( Great Panther Mining) released their earnings at the end of March. Then they discussed production results and it took off higher gaining 100% in 3 days with high volume. It has now pulled back to the 50 sma and may find support here at the 10 & 50 sma . After doubling in early April and resting, it may be ready to buy with a stop.
IAG is coiling under the 200sma, and many Miners are currently coiling , flagging, and consolidating recent gains, preparing to make another run higher when we get out dcl ( Daily Cycle Low ) in Gold.
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I wanted to focus on 2 things here in this report.
1. We may be starting to see the rally in the General Markets tire out and roll over, and
2. We are definitely seeing many Miners ignore the recent drop in Gold and Silver.
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This means that money may even begin to roll out of the General Markets and into the Miners when their bullish recovery starts to get noticed. That may be happening now, since we have seen Gold drop $122 for the past 5 days, and the Miners are mainly coiling sideways and creating Bull Flags. They may completely ignore a dip into a dcl by the main metals, or…
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We could even see something like this. The point is that these Miners may not have much down side. Even if they start to follow Gold down, as seen here, the dip may be to support and the recovery could be very sharp once the lows are in place.
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So holding on to your current positions and not ‘Over Trading’ at this point may be the best idea going forward. With so many bullish set ups forming, any dip will be a buying opportunity. Also, if there is a Miner that you have been wanting to enter and you see that it has a similar set up to the ones mentioned in today and yesterdays report? Buying at least a starter position with these Bull Flags is also recommended, and you can just add if it dips later or breaks out higher. The downside risk diminishes a bit more each day, since the time for a dcl approaches and Miners are resisting the sell off.
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Enjoy your Wednesday trading!
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~ALEX
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Yesterdays report had many MIners, Uranium stocks , tech stocks, etc. One of the Miners was a bullish set up called NUPMF ( New Pacific Metals)…
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NUPMF actually shot up 16% after dropping to a low and this reversal looks very Bullish. Will it break out of Gold starts topping? I don’t know, but this is a good looking set up to keep an eye on.
NUPMF continued higher and again, this is with Gold down $122 for 4 of 5 days. This has held the 50 & 200sma. It is another reason that I mentioned if you had a Miner that you wanted to start a position in, and it is bullishly set up, starting a position now may be fine.
