Jobs Report
Today we get the Friday Jobs Report. Yes…FRIDAY! If you’ve followed my reports for the past 4 Fridays, it has been a day for GOLD shake outs. This is GOLD as I start writing, we might as well expect some shaking . Looking at this chart , however, You can see that a drop below the bottom trend line (& later a recovery) would just be more noise.
We are also anticipating a Daily Cycle Low, so a drop in GOLD and Miners is possible, but should lead to a higher low. REMEMBER – Daily Cycles can last 20 + days …
I keep getting emails saying that readers are worried about GDX / GDXJ. ” They look weak with the dollar down” and also someone noted that Gold is up $50 and ‘GDXJ is near lows’. Let me address those concerns here for everyone. So far, everything is as expected.
Note: I POINTED OUT weeks ago that GDX Could drop to the trend-line like this – you can see it could drop to $17 area
This is how GDX has already tagged the trend line (But still may dip further)
GDXJ – It can blast off from here or it could possibly dip further , but I expect a higher low (DCL)
FINALLY- Many are nervous here, so you need to see (again) how Lows are formed. BOTTOMING is often a process. Sometimes its a V-Bottom and shoots straight up , other times they form bottom bases. Remember “Not all bottoms look the same?” The run up out of 2008 lows were HUGE %-Gains, but it took a while for the bottom to play out. THAT could be where we are now. Look again at SILVER 2008. IMAGINE RIDING THIS DAY – BY – DAY.
1. See the SURGE UP at the Green Arrow. What you see after that is 8 trading days. Thats 2 weeks watching that.
2. We just had our STRONG reversal /surge higher Monday. Cant you Imagine that 8 days later we are at lows?
3. IF that happened it could be the DCL, and then look what happened in the following weeks/ Months . UP 65%
So nothing has changed as we wait for things to play out here. The JOBS report may affect everything and I want to get this out before 8:30 Jobs release so that everyone knows what to expect (FRIDAYS have been tricky, but we’re still making higher lows since the Nov 7 Friday lows).
So with that reported, you see that nothing has changed , all is still going as expected.
I also have been asked “Will you show trades or interesting set ups outside of the Metals markets?” Yes I will. I admit I am focused more on the Miners, because I feel we have the ICL in place and they look to be setting up for a run higher in a 2nd daily cycle.
For those interested in a few trade ideas, let me just post a couple of “Set ups” here and get this out before the 8:30 report .
MON is a buy for a run to the Target
Use stops : If it breaks below #4, it might put in a second shoulder like you see 2 on the left. Less likely.
EXPE Breaking out / target is $100. (these are Medium term holds & May take days/weeks to get there, just like the first leg up out of lows)
Watching AKS Higher low in place? Buy with a stop under Oct lows. (But admittedly – commodities have been tricky)
HIMX popped the other day . Its a nice set up , but may drift for a bit and tag its 10sma? Could be bought there.
ISNS had a screaming run up ( I was watching RADA too, but that explosion happened).
This is tough because it “COULD” drop to the lower triangle line & still be ok, but thats a drop from $3.06 to $2.50! If this moves higher though, it will move fast and could double. SEE RADA BELOW
RADA. (Similar in ways to the above ISNS set up, but the POP in ISNS could be days/ weeks away or now )
So nothing has changed in the metals mkts. I know many are worried about “Things”, but every Friday we get shake outs, this can be part of the bottoming process. IF it is too hard to stomach , one should be on the sidelines and buy the break out that comes with the 2dcl.
I want to get this out in time for you to read it. I was going to do audio, but for the sake of time, I will just post this now. I will capture the 8:00 A.M. Gold picture & post it below. Its JOBS REPORT at 8:30…LET THE GAMES BEGIN !
~ALEX
Interesting: Gold Dropped and Popped while I wrote. Freaky Friday already?
Well, that was not it. Maybe the early drop was somebody jumping the gun? Gold dropped to 1187 and is now bouncing but I wonder if it can fully recover if USD holds even some of its rise to 89.35? Alex, maybe you can comment on how you see USD going from here? I imagine the market sees the very strong jobs report as advancing the start of rate hikes, bullish for USD. And there is unlikely to be any other news on this ahead of the next FOMC. Unless the Fed takes fright at the strong USD (not good for exports) and starts talking it down beforehand.
Hi Castelmere – For me , Nothing has changed. I have been looking for the Dollar to drop son, it keeps popping to new highs, but As I covered in my other reports, I see the Dollar moving down soon. It is strong so no one thinks that it can drop. It can, and still remain healthy too.
I also do not think that the dollar is affecting Gold much here. Why not? Each day for the past 4 days , The USD is popping up and making a new high then reversing. With each new high, Gold is not making a new low each day. I think its more about whats happening inside the moves. And as I write, this is my 9:20 snapshot of GOLD. I expected a Jobs report shake out , but Not able to break it down. A job report # over 300,000 could’ve Killed Gold as the $USD burst higher. We got a shake out so far. See my 2 current charts below. Thanks for writing
Thanks, Alex. Overall I agree that USD and PMs have diverged a bit recently.
Yes, just a bit. I’m thinking that its the small beginnings that will help Gold go higher when the Dollar does pullback a bit. Thx again
what is your take on oil (wtic)? Are we going lower? building a base? short covering rally?
Hi Alex.
happy to join you here,… in the nick of time!.
are we targetting a potential GDXJ bounce off the lower BB line (same as August 2013) @sub24?
HI S.O.Gud
Thats a reasonable place to look and that is exactly what happened in Aug 2013. It was also just a quick flash down and reversal in Aug.
The lower B.B. right now is actually rising up & I’d like to see price here drop today on really light volume, then bounce higher Monday and THEN, the lower B.B. could be where we are now and support price there. I will draw it on a chart here, but its JUST A POSSIBILITY to show that price may hold here at this level too. We could just drop to the B.B.
Good eye on that observation !
Hi Alex…… is it still good to buy today some SLW?
Hope to hear soon from you.
And…. when you find a chart with an ICL then a first DCL and then a 2nd DCL, please let me know Alex. I really like to understand this subject.
Many thanks, and…. a healthy weekend to you and the yours.
SLW surprised me today with a nice reversal (So far) and the weekly chart actually look really good. There is a gap below and that COULD get filled next week, depending on what the metals do, but SLW looks good today.
Let me find you a chart for that dcycles – Geurt
This is JUNE 2013 ICL. first daily cycle rises and dipped deep then , Came close to the lows, then 2nd daily cycle ran higher than the first one did. (Click to open chart)
THANKS A LOT ALEX !!!
Now I see what you mean, I printed of.
I have to learn a lot from you teaching.
Again an excellent weekend.
Kind greetings.
posted in wrong place. what is your take on oil (wtic)? Are we going lower? building a base? short covering rally?
hi Spike,
Oil does look to be putting in a low if you look on a weekly chart. Its selling off today again, but it seems to be exhausting to the downside after that OPEC SLAM. I would say there could be a short covering rally coming …that has been one tough one to call. I should cover it in the weekend report. ( SOme OIL stocks look to have higher lows and signs of a bounce back, others look rough). XOM not bad looking for ex.
Alex- some of the majors like abx have very weak charts here don’t you think. It feels like we have lower to go before we rally. Do you think this 2nd daily cycle could produce a summer 2013/08 into 09 type rally?
Actually RM, If you look at all the past DCL’s…ABX is doing what they normally do so far. SO at this point, I think its normal. It usually looks weak, but then they rocket up if the ICL is in, then the 2nd daily cycle goes higher. I can cover more on the weekend report.
Also , look at the chart below that I posted for Geurt. That first dcl looked like it was falling apart fast. Deep selling for day after day, but it recovered & made a new high in about 3 days. I think so far we are ok.
Ty Alex for the detailed response
Alex, you already repaid my membership with ISNS and HIMX positions. Well done!!! As far as the pm, I think we are real close to a DCL. Given the dollar strength we have been real strong only a couple percent down.
CONGRATS TO YOU! I was wondering if anyone caught that ISNS – It was up over 30% today . I missed the HIMX move because I wasnt able to watch positions closely, I had a lot to do : ( You made my day!
I think we’re close to a DCL too.
Alex, let us know (of you will!) when you see the DCL. Today was the first dip I didn’t add GSXJ. Can’t risk any more capital until we see it move up and show strength. Thought it might come off lows mid day until gold dumped again. Monday will be important to reverse up for the complex. Shorts are coming on strong. Need a big move up and encourage new shorts to cover. Move up will catch a lot off guard.
I have been calling $$ toppy in a bearish rising wedge but news keeping it afloat one day after another.
Thats good , It is best not to add until we get the reversal (DCL) . It usually does move up fast once its in, but its a move that lasts for a while and you wont miss anything (Esp since you cant tell exactly where it’ll turn).
OK, sounds like best to be patient right now! Trying to hedge or trade around core but Friday price action was mostly flat from the gap down, didn’t leave a lot if trading room. But that’s just one day.
Alex, have you looked at natural gas? There were some great trades there last winter and this seems to be setting up the same. Looks like a reversal from steep correction happened on Friday. Might want to take a look at UNG/BOIL/UGAZ!
Alex- to confirm a new daily cycle in Gdx we need to see a move above 20.18? Just checking to see if I am looking at this correct. The chart you posted a few times shows us potentially breaking 18 before rocketing higher. Is that your favored scenario at this point? Thx
Hey RM
I’m writing a wkend report now. To ‘confirm’ a DCycle low is in..I’d like to see a break above the 50sma, an overhead trend-line break, etc and yes, we could drop below $18. It’ll look like a higher low (If the Nov lows were broken an ICL is either failed or off the table.
I DO think the ICL is in, an we will get a higher low – but if you think about timing wise, they can last 20 – 30 days. We still could have a number of days left to drift around or drop down. ALSO we could just take off higher, but lately the markets are dropping people off. (More in the wkend report)