Friday September 15 – Did You See What I Saw?
What I saw yesterday was VERY encouraging for the Precious Metals markets. We had the CPI Wednesday, PPI & Jobless Claims on Thursday and the reaction was very different than we usually get. What was that reaction? On Wednesday the Metals sold off and on Thursday Gold dropped, Silver was Slammed down, yet GDX, GDXJ, and SILJ totally ignored it and ran higher! THAT change in character is exactly what we look for, we want the Miners to lead the way higher. Yesterday we saw then completely ignore the selloff in the Metals and they did their own thing. This was also with the USD much higher. Very good news, if you ask me. That is great news and you’ll see why, but first a market review…
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In the first hour of trading after The Jobless Claims and PPI numbers were released, I pointed out that The SPX was now pushing back above the 50sma. I also noted the bullish RSI & MACD set up. I had mentioned in the report that this is the bullish action that we would like to see. Did it hold through the close?
On day 17 The SPX recovered that 15 sma and this is a bullish 1/2 cycle dip out of a dcl (now likely to prove itself as the ICL with an overhead trend line break ahead).
WTIC – Oil remains bullish. Oil did ‘pause’ and move sideways for a week recently, so that gives it a little more energy to go higher. Also, we are only roughly halfway through this daily cycle, so we should still have room to move higher. Oil has moved from near $70 to $90 since the ‘buy’ in July.
The XOP triggered a buy before Oil did, and oil stocks have been running strong too.
THE USD actually had a strong push higher with the PPI Numbers. With that, Gold and Silver dropped rather sharply, but they did reverse higher as the day went on. With this, Miners were bullish all day long, and THAT is important to take note of. Let’s look at Gold, Silver, and The Miners…
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GOLD dropped and sold off in the morning, losing about $10 at the lows, but it did start to come back at the end of Thursday, and…
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This is GOLD as of FRIDAY 5 a.m. : Gold now has a swing low and is showing strength. A point that I made earlier was that with the USD racing to new daily cycle highs day after day, Gold is NOT at new daily cycle lows, and that is a sign of strength that many would miss. We now appear to have a 1/2 cycle dip on day 18 above the prior lows.
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Same Chart: Gold lost the 50 & 200sma and I think that this is going to be a major shake out. When Gold recovers the tightly pinched 50 & 200sma, it could cause a surge of buying and give us a right translated daily cycle running above day 9.
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SILVER -After the release of the CPI & PPI Numbers, Silver actually crashed pretty hard and was down all morning. As this happened, I saw many Silver stocks up 2% and THAT was a change in character too, so midday…
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I posted that Silver miners, as represented by The SILJ ETF ( junior silver etf) were looking bullish. Silver had crashed down, but take a look at the SILJ ETF. This is a Bullish sign and many silver miners sold off last week and are at the lows.
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SILVER Friday 5 a.m. : Now we see that as I write this report, Silver has a strong move higher so far pre-market. Take a look at the move out of the lows in August. That little sell off can recover in 1 week, so buying a silver miner or 2 may be a good idea. Many popped and sold down at the end of the day, but I would expect them to gap open high if Silver stays like this.
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So let’s review what we just saw.
1. The USD rallied strongly after the PPI Numbers came out.
2. Gold sold off over $10 and
3. Silver crashed down and stayed there all morning. With that…
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The GDX opened and rallied. There was a little ‘profit taking’ or ‘selling’ into the last couple of hours of trading, but that may be a gift. Why? Well, when the markets open today, we could see Miners gap open, but there will be no gap visible with the wick at the highs.
GDX – It is clear to see that the Miners have now put in a 1/2 cycle low. It is important to take note of the fact that this took place with the strong rally of the USD (almost straight up to new daily cycle highs). That USD rally to new highs did NOT bring Gold or the Miners to new lows. GDX IS A BULLISH CHART.
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Again, Gold and Silver crashed down after the PPI Numbers, and 1 hr into trading I wanted to show that I was seeing strength in the miners. I posted this chart of BARRACK. It Gapped open Higher(?) and was pushing up toward the 50sma. This is bullish action with Gold & Silver down so much.
BARRACK continued higher and tagged the 50sma, but when the end of the day selling took place, it pulled back too. This is a bullish set up that wants to break out.
I posted this before the end of the first hour of trading to point out the bullish circumstances taking place in this sector.
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HMY – On September 11th I pointed out a bullish break out with HMY. It broke the downtrend and was above the 50sma. I have good news for you…
HMY -Harmony Gold is still waiting for you at the 50sma, but I don’t know how much longer it will be down here. 🙂 Think about this. The above chart was from 3 days ago and HMY is just chopping sideways above the 50sma while Gold sold off for 3 straight days. This is very Bullish price action during a gold sell off, as it rides above a pinched 50 & 200sma. It did a 4 day Island bottom shake out and I think that the lows are in place.
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Let me show you something else. Silver has been crashing down and the silver stocks at the lows, like HL, EXK, CDE, FSM, etc have turned bullish.
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Think about this: Silver crashed Wednesday and Thursday…
FSM did not crash with Silver at all this week. Instead it looks to have bottomed 3 days ago as Silver crashed. FSM also looks ready to break a downtrend line and even if it only runs back to August highs, I’ll gladly take a trade $2.90 to $3.90! Or…
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FSM ran from $1 to almost $10 in that 2020 run. If we are about to get that big rally of Gold to all-time highs and Silver breaking the large consolidation too, then I would say that the big picture for FSM, EXK, HL, etc remains very bright.
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EXK – Many of the silver stocks have been beaten down, but what a bargain if we are about to run higher with a bigger longer term metals rally. The rallies in this sector can start out slow and suddenly just rip higher quickly, so keep that in mind too. I think that the price action that we have been seeing this week (Silver 3 days down, Miners bottom and up) does encourage a little buy and hold again.
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I’ve got the feeling that after todays trading, next weeks reports will be showing many Miners moving above their 10 sma and setting up as ‘buy opportunities’, but you may wish to add to your miners ahead of that. Why? Well, I’ve already discussed this weeks bullish price action with Miners ignoring Gold and Silvers selloff. That is bullish action at the lows. You can do some adding with a fairly tight stop too, like HMY above the 50sma or some Miners regaining their 10sma near the lows, for example. Also if you trade the General Markets we have discussed trades using TQQQ, SOXL, or UPRO. Stocks like GRPN, CRM, AMZN, FUBO, CVNA, and others mentioned in past reports. The set ups on many of those after a 1/2 cycle dip is bullish too. MJ Stocks are consolidating in choppy sideways fashion, and should make another run higher, but it is hard to tell if they will run with the markets or need a little more time. They do remain bullishly set up though.
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Today is Friday, the last trading day of the week. “Got Miners?” Enjoy your Friday trading and have a great weekend!
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~ALEX
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As mentioned, I think that after todays trading, next week the reports will consist of more ‘Buy’ set ups in various sectors, but probably the Miners will be a major focus. And next Wednesday is the Feds Interest rate decision.
Oh Boy 🙂
