You Have 1/2 Day To Decide
11/28/2014
GOLD! Meltdown? Blast Off? Non-Event? The question on many investors in the metals markets this weekend points towards the SWISS REFERENDUM. And as far as holding your current positions or selling them, you now have 1/2 day to decide whether you should HOLD or you should SELL. Let me just say, I’ve laid out the BULLISH case here for the past 3 weeks and so far, we have seen matters play out exactly as I thought it would. However, The event Sunday can cause a knee-jerk reaction and so I want to mention that there is no shame in selling if one is unsure or nervous. Todays 1/2 day of trading is your last chance to do so. I am here to again review why “Nothing has changed” so far, because I did get a good number of emails asking me about that.
GOLD – Yes it has sold off again. In many prior reports I mentioned that Fridays have been pretty predictable that way lately, so that you’d be prepared. Take a look, does it look absolutely broken to you?
That $1179 has been an important number,on Nov 18 I shared this chart below on FED day to prepare us for that…
GOLD Nov 18 (watching $1179 on Fed Minutes release )
So we sold off into that $1179 area , that I viewed as a key area. I would LOVE to see Gold rise to $1210 today and then SLAM DOWN Monday $20. Wouldnt that be a little too perfect? Yes, it could look like a 1/2 cycle low and then blast off higher , shaking out the last weak hands—so I guess we wont see that. Too perfect.
SOME have mentioned that $SILVER was broken . They said that even though GOLD held the $1179, SILVER may be leading the way down and Gold will follow. Let me address that… Did we break below $15.75? I drew this Wed Night after receiving an email about Silver concerns
I obviously CAN NOT KNOW exactly what will happen SUNDAY night and MONDAY in Gold after the SWISS VOTE , but If you think that the signs are there that the Metals have put in some sort of a bottom and you keep your positions small, you can ride out the waves. The markets are COLD and there are SHARKS out there that want to scare you out of the waters at lows…. Again there is No Shame stepping aside until after Monday to avoid any possible shark bites. You STILL have 1/2 day to decide.
I like to look at all of the angles when I’m faced with certain situations, so what about the $USD? I HAVE seen Gold run up along with the $USD at times (And pointed that out in charts in a prior report recently) , but what if they dont now? The DOLLAR looks very Bullish, how can GOLD rally at this point with everyone reporting how strong the $USD is.
Well I see that the $USD has been very bullish and longer term it still looks good as is. That doesnt mean that it will remain strong (THINGS can change that), but lets just look at a few possibilities that would allow GOLD to rally even with the Dollar looking like it does.
The DOLLAR has been strong & broke out above $85 – $86 resistance areas. You know that those areas “Usually” get tested. This is a 10 Yr chart of the Dollar (Click to enlarge)
The USD monthly shows me how strong the dollar has been, Many think that this means it cant pause or pullback. SO MANY BULLISH investors piled into one long trade usually leads to what? The opposite. It would also be normal to drop back & test the break outs. WILL IT? I dont know, but can it? Should it? The overly bullish crowd has me thinking yes. (NOTE: I do have a higher target near 91-92, but they dont always get met).
HOW could the DOLLAR pull back to 85? Here is one idea ( Just an idea to make it plausible to those who are Uber Dollar Bullish and think that it cant pullback). Its more of a sideways move & can go Up higher than I drew here . Click to enlarge
I DO NOT want to confuse anyone, but readers here that follow cycles know that there are various ways that this could play out and still be bullish for Miners/ Metals . I am going to show 2 ways and #1 shows that we dip then go higher into say Day 18 or 19, then drop. The other shows…”What if we start a drop here?” Could it remain bullish? It could so I will show that.
REVIEW : Lets just say that cycles from LOWS to the Next LOW can be roughly 1 month ( 25 trading days). They can be a little shorter or longer…so you may get 23 days , you may get 30…but you can identify them when you get there. We are currently on day 15 and day 14 has been the Highs so far. Let me explain what COULD happen if we go higher or sell off ( to remain bullish in miners )
1. SO if we drop today and then dip down further after the Swiss vote next , but DO NOT break prior lows…we may have a shortish daily cycle.
2. It would be a normal test of the trend-line break
3. this happened if you look at JUNE 2013 lows. THEN IT BLASTED OFF HIGHER.
4. This would scare everyone & look bearish..it’d be bullish with HIGHER LOWS
IF we rally after that vote..Miners could just take off
1. Dip down to the trend line today
2. RALLY Monday to (lets say ) A day 18 high
3. THIS would break above the 50sma
4. Days later the Daily cycle low would come , break the trend line & shake out some while likely testing the 50sma
The above charts are drawn with much in mind..overhead resistance areas, the 50sma, the lower trend line and DCycle counts. I look forward to seeing how this plays out.
THAT SAID…honor your stops if you remain invested. If you sell today and want to wait and see how the VOTE goes…there is NO SHAME in that! Its obviously “SAFER” to be in cash and though some of the move may be missed upside (Some miners may just run up if that Swiss Vote is bullish) opportunities will present themselves as the picture gets clearer.
The end of today (If gold recovers) could look like this, the green arrow could be after the SWISS vote. WHO KNOWS? I tend to think Smart Money might, and they’ve already apparently done some shopping. Time will tell if they want to add more positions lower, or just take things higher – right ? (Click pic)
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Yes I am still Bullish with the current set ups.
I will have a report Monday morning after the Swiss Vote dust settles, and try to make sense of things then too. Best wishes today and have a great weekend.
~ ALEX
Lastly I want to mention the countdown clock on this site. My partner and I have been working on a new website as most of you know. We’ve taken into consideration some requests by readers (like having a gallery of past charts that they are easily referenced, Charts that may have remained good set ups , a sidebar& additional tabs to navigate the site better, etc ) . After posting for free here since March, we have decided to provide a service that we feel will help guide people through these often tricky markets.
Starting Tuesday morning and for 3 days, there will be a “Founding Member launch”. We priced the Founding Membership at an attractive and well discounted level, to honor our current following and to encourage you to help support the launch of this site. As a bonus, that rate will be grand-fathered in as long as the member remains an active member. Then starting next Friday, that sale will end, and people will have the option to sign up for a REGULAR Monthly, Quarterly, or Yearly Membership, still at reasonably low rates.
I have enjoyed meeting many of you here, answering some of your questions, and sharing a variety of trade ideas too. I have also appreciated constructive input from some of you to help me to understand your needs better. It has been a privilege having you come to Chartfreak and observe some of my ideas and my ways of looking at the markets. Thank You.
AS I CLOSE THIS REPORT_ Please scroll back up & review my last 2 GDX chart scenarios
Emotions aside = Normal. Emotionally..its tough, I know… but SO FAR- Normal.
Thanks again Alex for all the great charts and reports! Look forward to your Monday report…btw, Happy Thanksgiving!
Deshy, Thanks and as a follow up type comment….I watch what GOLD & MINERS are doing here, I have to wonder if we did just have the DCycle top at day 14 or 15, then we’ll drop to “Test” that trendline break next week (as I drew in my 1st GDX scenarios charts in the report. . I do believe we have an ICL in place, so a higher low in Miners should come about, but …
The Volume in Miners is rather high (1/2 day holiday trading?) I’d like to see some buying into the close.
Reminder that chart looked like this …
What a great time to shake the tree further for the third time when almost everyone is restlessly uncertain. If the coiling is not enough, they can always spring up and recoil in the next DCL but for now, we shall be seeing Alex’s chart seeing fruition. I am bias yes but that’s because its time for cycles change.
Boy- its never easy , huh? : ) We’ll have to see how this 1/2 day closes.
Excruciating to say the least. Reminds me of slipping off my bicycle saddle and hitting the bar, something almost broke and its not the bar, Ouch!
Too late for me to eject before Swiss vote. I had planned on trimming GDX knowing risk was there. Didn’t get price wanted on Wed, today gapped Well, well below my (mental) stops. I appreciate the two charts of how this could play out. I used that to develop a hedging strategy that will give me flexibility – biased short in the near-term and ready to take advantage at DCL if that comes to fruition. Swiss vote makes me very nervous though. Binary event that you can’t predict or effect and gold futures could go bonkers while actual market closed. That’s why we need someone to help navigate these shark-infested waters!
“A hedging strategy ” – Smart Cason.
I wouldnt have thought that the GDX lows would get down there, with the strong buying in GG, FNV, ABX, NEM, etc last week — until I drew that chart and saw the down trend channel breakout & remembered that they often get tested.
So maybe we have our first DCycle high at day 14? Or just a 1/2 cycle low and we’ll move higher into day 18,then drop? And the 2nd dcycle would still be higher if it remains right translated.
See JUNE 2013 below as an example
And I got stopped out in June 2013 also! Inclined to follow what Gary posted above. Unless the black swan of a ‘yes’ Swiss vote news pops on Sunday, I don’t see much keeping gold from testing the lows again here – chart-breaker today for the metal; especially silver.
Good and bad news with the using options – bad, didn’t even get a chance to stop out with the beating we took today; good – I can’t lose anymore if this spirals down out of control!
Alex, can you give us a feel for the price of the new site?
We are still working on it, we want it to be reasonable.
FWIW I have the high occurring on day 10. So there is still the possibility of a left translated cycle.
I tend to think this will boil down to the vote on Sunday.
A yes and this turns out to be a HCL. A no and we have to weather one more failed daily cycle before a final intermediate & yearly cycle low.
Maybe a final bear market low also as it sure looks like the CRB is in the process of forming it’s 3 year cycle low somewhere in here.
Yes, I was discussing the Miners (GDX) when saying that they were on Day 14 or 15, because they bottomed first. Thanks
Thanks Alex!
Stink bids second tranche today with a mix.
next week’s shake and bake will be interesting
Hey Beek…
Wow, that was crazy selling . absolutely monstrous volume for a 1/2 day in GDX/GDXJ. it “Seems” like capitulation intraday before the vote , but theres no way to know until Monday . (GDX on a 5 minute chart had a huge volume reversal candle, but could just be short covering into the close & Thats only a 5 minute candle.) I bought quite low in early Nov , so my positions are ok, but many must have been stopped out today if they bought last week.
Yes it will be interesting. Today we almost touched that GDX down channel line already. Best to all!