Exercising Patience

    In some situations, patience just doesn’t just come naturally.  We need to train ourselves to be patient.  Here at Chartfreak, while looking at a few nice trade set ups here and there,  we’ve really been waiting patiently for…

AUDIO HERE   http://www.screencast.com/t/Jj452kB3

a nice directional move in Miners to take positions in.   As traders and investors , it can be difficult to wait patently for an ideal low risk  set up,  “Lets see some action!” is how we feel.   You can see from the above picture, however,  that patience CAN be learned and I must say that the readers here have done a good job of it.   Question is : “Is there going to just be  more waiting or are we closer to a move that may actually be a sustained move in one direction?”     Lets look at a few “interesting” charts and see what we might find …

  When I awoke this morning ,  The Shanghai was down 5%  , Hang Seng down 500 pts. Futures here aren’t too bad, but Lets look at our markets quickly.

QQQ  Did you notice that the Q’s broke their 10sma for the first time since the Oct Lows? We are due for a pullback, even a healthy one to the 50sma.

 The MACD & RSI showed signs of weakening too. While this can always recover, take notice of this ….

  $SPX – The RSI had a lower high & the MACD was breaking down too , while price was making new highs. These are starting to look toppy again. Maybe just a healthy pullback, but why is this interesting to us?

As the Dollar rises, so have the markets and GOLD / MINERS have dropped. Recently I pointed out that while The Dollar was consolidating and climbing, GOLD was not selling off.  This chart highlighted that.

  Yesterday the Dollar dropped , $SPX & the QQQ dropped, and Gold POPPED along with The Miners. If the $USD and the markets are going to pullback for a bit  (QQQ & SPX to the 50sma for example?) , Metals could have a nice run higher, and that is what I have expected anyways.  Miners tend to be great as %-Gainers, so we want to be prepared for a reversal.   Yesterday was a nice reversal intra-day, but that doesn’t necessarily mean it is a meaningful reversal that I am waiting for. Lets examine things a little closer.

  KEEPING IN MIND that the safer entry will be above the 50sma,  thats not so far away. When I look at the charts using Technical Analysis  (Ignoring cycle counts which may be a little hazy right now)  it appears that GOLD & MINERS are coiling around the 50sma and they usually do this before a drop or a Pop over it.  The set up looks more like we are preparing for  a POP Over the 50sma , and if the Dollar & general markets pullback, we may just see that happen.

 GOLD is holding up very well internally and was coiling under that 50sma, but POPPED back over it with yesterdays reversal .  Notice the difference between the recent sideways to down  consolidation vs  the last sideways to down consolidation in the RSI & MACD. Signs of strength.

Cycle counts seem unclear to me, because I know some of the cycle experts are Not counting the Swiss  Referendum Vote as a possible New Daily Cycle.  I am thinking that it could be. Why? For SILVER it was an ICL type move (Those meaningful Lows that are left behind as the lows. Look at SILVER. It hasnt broken  above the 50sma since June 2014, but looks ready to after a slam down low.  Sure, it can drift down , but if thats THE LOWS then we are only on day 4 or 5 for Silver and it is pushing that 50sma too.

My Mid Day report yesterday was written because I was getting emails from a few that were nervous about GDX/GDXJ getting too close to prior lows and I was asked…” Doesnt that weakness make you nervous?”   My answer was NO and I tried to show 2008 vs now as being similar.  While I was writing Miners reversed higher. Here is

GDXJ mid day .

GDX tagged that downtrend line a couple of times

Doesnt  the recent dip  look very much like the 2008 lows?  Short too- Almost exactly 1 month long from ICL to DCL.

SO here is another reason why I think we clould be close to a reversal that will move higher.

1.  We have been selling off

2. People are nervous

3. Yet look at these Miners  (Keeping in mind that SILVER just put in a slam Reversal )

SSRI  (Silver stock) Looks strong , like a bull flag – re-gained  the 50sma so far too

  by the way –   BULL FLAGS are bought on a break out, stop below the flags low .

HL  another Silver stock that’s currently;y above the 50sma , RSI above 50%

If GDX & GDXJ was making you nervous with recent selling,  IAG  could’ve given you confidence.

A safer BUY is above 50sma as I stated before,  so Why did I say that I was buying yesterday if a confirmed reversal wasnt in?  For my own trading, It is  years of experience , I am in front of a screen and I can sell if the trade goes against me for example,and confidence that the lows are pretty close.    IN ADDITION:   Lets look at things another way. Consolidations at lows (  risk : reward wise) .   I have been confident in the ICL (meaningful Lows) being in since Nov 7 in Gold, so I LOOK for opportunities.

Take PAAS for example:  Many see it like this.

If  that meaningful low is in, it could be viewed with prior ICL/ meaningful Lows in mind. You see consolidations and then a launch higher for weeks. So buying the consolidation area near its lows can be done with a stop below that area.  You begin accumulating IF the ICL is in.

SO I currently see many stocks like PAAS this way. SO I dont wait to get above the 50sma at all times. It is more risky, but experience has had me in this situation before.

So some of these stocks have  shown nice resistance to the selling. Possibly being accumulated for the next run up. I still feel that the lows are in from Early November, we saw our initial run up and then it takes a rest.  As it dips down we look for signs of life, we look for signs of accumulation, signs of strength.  I am seeing that now.  The above stocks look ready to buy from a purely technical analysis view  and you would put your stops below the flag .  Cycles analysts wait for a strong reversal and often follow through,  even a break above the 50sma.  It is safer to wait for GDX to get above the 50sma , because it hasnt been above there since after the last Meaningful lows (ICL). I  mentioned that I started buying yesterday again  (Adding to positions) .

I just checked GOLD.  It is trying to break free here, so if it does break out near $1220 it is above this downtrend line.  I would start buying either the miners above or your favorites .  The stronger ones still prove to be RIC, RGLD, FNV, etc,  but if you know this sector, you know that when MINERS run, they run fast after a sell off.  Good %-Gainers.  ( Even the dogs like ANV went up 100% off its lows in Early Nov after selling off steeply) –   I still recommend sticking to the more stable/ better known companies.

This is GOLD as of 7:30 A.M.  Eastern time.