September 3rd – Not Always Easy
We are at a ‘time’ in the markets that things can get choppy and tough. We are coming due for DCLs in many areas, so selling may start to take over at any time. Let’s discuss this further…
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NASDAQ – The NASDAQ sold off on Wednesday by 100 Points and I thought, “Well, we finally get a pull back”. By the close we were up over 100 Points. I have been mentioning that the NASDAQ is steep & looks to be running away.
SPX -Now the SPX is starting to look steeper too. It never even sold to red yesterday when the NASDAQ was down 100 points. We are quite overdue for a dcl.
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WTIC – Yesterdays report discussed that Oil Inventory Report is released on Wednesday. Oil started to roll over after that. It landed right on the 200 sma & 50 sma, but volume increased. I DO NOT Think that this support will hold with that volume spike & RSI breaking the 50% line, but we’ll see. A sell off from here could go deep, since we are early in Oils long daily cycle.
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XOP -I mentioned last week that I expected a drop to a dcl, so I exited any Oil stocks that I owned. This drop can continue & I do not ride them down.
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A good reminder for the Miners: I do not hold into a drop to a dcl, and this is a good example for Miners. XOP tried to regain the 34 sma , but lost it quickly. THat was a warning. Things may look strong 1/2 way through a daily cycle, but when the TIME for a dcl arrives, the drop can increase & cause losses to pile up ( or prior gains to evaporate).
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DRIP (Short Oil & Gas) broke out.
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USD – I pointed out the divergence in the USD as an area to watch when it comes to Gold. Well, The USD popped and Gold dipped lower. If the USD continues higher, Gold & Silver may continue lower.
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GOLD #1 – The USD popped and GOLD dropped. The price chart isn’t ugly, it looks like a bullish triangle and a back test, However…
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GOLD #2 – That MACD is showing weakness. If this starts selling off on day 16, 17, 18? It can drop for 2 – 3 more weeks. YES, it may just get choppy, but the warning of that MACD is that this could sell off.
SILVER looks stronger than Gold, but it dropped with the USD, so it can sell off too.
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GDX – So we look at the Miners and they reversed off of the 50 sma. This looks bullish and we’ll see if there is any follow though, but if Gold & Silver continue to sell off due to a USD bounce- I honestly think that GDX will NOT just ignore it. This may have drawn in Bulls on day 16 – in time for a drop.
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Gold & Silver down, Miners up? At the end of the report, I will discuss MINERS again. I think that you will like that section to help us to possibly see what lies ahead.
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So the General Markets continue to run away, but they are really overdue for a dip. Be careful / Stay Frosty.
– Oil reversed to support at the 50 & 200sma, but looks to be breaking down. STAY FROSTY here too. Since Oil can have 50 day daily cycle, the sell off can get serious if it continues from here. Volume was highs, so that 50 & 200sma may give way.
– The XOP looks to be seeking out a dcl.
– The USD bottomed and is due for a dcl. As it rises, it does look like…
– Gold & Silver will lose their shine for a bit. STAY FROSTY HERE TOO. We are only on day 16 of a possible 30+ day daily cycle.
– Miners reversed off of support, but will that hold if Gold keeps selling down. We are in choppy waters, Stay Frosty.
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– Enjoy your Thursday Trading, but Stay Frosty my friends!
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~ALEX
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I WANT TO COMPARE THE XOP TO OUR CURRENT GDX SET UP – We could be at a similar point to where the XOP tried to regain that 50sma, but was due for a dcl.
– So far The GDX is holding up, but we are only 1/2 way through a daily cycle. A drop to a dcl could still be a rough to ride.
– If we fall to an ICL, the drop can become really choppy and difficult.
– The later the daily cycle gets, the weaker it should get. If you see any strength here on day 15 or 18 or even 20, it can quickly fade.
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Now with that reminder above, I want to show you an actual drop into a dcl / ICL. It always helps to take a little guess work out of the way. People ask, “Will Miners resist the selling? “. “Could it be different now that Buffet started buying?” Well, These dcl / icl drops come during raging bull markets. Buffet buys DIPS, he waits patiently for things to go on sale. When we hear that he bought Barrick, did he buy the top of the rally? I would venture to guess that most likely he bought near the March crash / recovery.
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Lets look at GDX as it dipped to an ICL. I will point out what I think is important when comparing this to where we are now and what we are seeing now.
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GDX ICL to ICL ( Blue arrows)
1. We saw a peak after 4 month, even though the rally was very strong.
2. We then saw a quick drop to a dcl.
3. We had a day 7 peak (we have a 5 now) from there…
4. GDX remained choppy choppy choppy into day 40. We are on day 16, that was not a fun ride.
GDX – I wanted to highlight the ‘timing’ similarities too.
1.This peaked slightly after Month 4, and put in a dcl.
2. Then it dropped in choppy fashion for 2 months under the 50 sma.
3. trading would have been very choppy and very difficult ‘real time’, day after day after day after day .
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GDX currently with similarity.
1. We just peaked slightly after month 4, and put in a dcl.
2. Choppy trading for 2 months?
3. Trading could be choppy and difficult in ‘real time’.
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EVFM – This trade was mentioned a couple of days ago and the volume is still better on the upside than on the pullbacks. I like that when I am expecting a break out and it pushed up to the break out area on volume Wednesday.
WRN aslo had an increase in volume as it pushed higher.
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