Ready For The Fed?

If you look at the volatility in the stock market  lately , it would seem reasonable to believe that this Fed Mtg Day could be a shaky one. Yesterday TWTR  ironically got rocked from an untimely tweet on their earnings.  As mentioned in a prior report, Housing stocks MTH, PHM, TOL, LEN , DHI all got rocked, while MSFT, NFLX, GOOGL shot up higher with their results.   After the bell,  SSYS, WYNN, AKAM and a few others joined TWTR in the selling off , so we’re getting a mixed picture with the weeks earnings reports.  And then there was this chart…

IBB – Yes, it has recovered it’s 50sma before, but it has work to do. Thats some pretty high volume selling lately.

With the IBB 2 day drop, something interesting happened with the SPX…

The SPX put in a quick recovery yesterday. So we get a bit of a mixed picture.  No Doubt The FED 2 P.M. Eastern discussion will be watched closely by many.

I have been talking about the ‘possibility’ of  Commodities rising while the markets stagger a bit.   OIL, the CRB, DAG, and now GOLD/SILVER/Miners since March have been moving higher. 

Currently We see the VIX has dropped back to an area where markets have corrected in the recent past. Stay Frosty to that.

Since the Vix indicates a market correction could be close  (Small or large remains unknown), lets review a couple of our commodities of interest.

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DAG-  Agriculture POP

OIL

NATGAS–  Still waiting on NATGAS, but appears to be bottoming as expected

We have seen nice moves in FCX, VALE, CLF, AKS, X, etc,  While AKS did well after its earnings release, X is down 5% with its earnings results last night,  so please keep an eye on individual stocks if you own them in any sector.

   GOLD/SILVER/MINERS 

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This could be a big deal in many ways.  GOLD put in a higher ICL in March than it did in November.  That is the start of a bullish looking chart, and I want to discuss this for a bit.   SILVER has barely done the same, but still, a higher low is a higher low and that is necessary for an uptrend to begin.

Notice Higher lows in SILVER first for Nov, March, and April.  We were waiting for a break out of a BULLISH DESCENDING WEDGE

We had the break out 4/27/2015

Now the WEEKLY SILVER .  Notice how Silver really POPS when the 2nd daily cycle  begins. We should be starting the 2nd Dcycle now.

GOLD WKLY – Also has strong moves higher in the 2nd daily cycle, see the red boxes, which should be starting now.

SO lets have a look at some Miners and see if they look like bullish set ups.

GDX Breaking out finally above $20. Never sold off when GOLD/SILVER did last week.

I pointed out in yesterdays report that it was time for the aggressive to buy, knowing that FED WED could get rough.  How many times have we seen 2 p.m. roll around and GOLD either drops $10, then recovers into the close, or GOLD surges and it looks like we were left behind, only to see GOLD drop Thursday ?  There is NO WAY to know exactly what will happen this time, but the charts are bullish in Commodities and GOLD/SILVER/MINERS now.   

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Bullish Charts for you…

There are many more that look to have bottomed short term, but I want to show you a different perspective. The set up in many of these Miners is actually better than the set up in many of the OIL stocks that we invested in.   Really, how so?   Remember that OIL sold off from  AUG to Jan. Energy stocks built bases that I was pointing out as constructive. 3-5 month bases in OIL stocks gave us 100% gains in some of those moves off of the lows .

MINERS have been basing for a LONG TIME.   “The longer the base,  the higher the space!”  That means the bigger the base is,  the more fuel it has to move higher, much higher.

  LESSON #1 on that one….A stock has to be worthy of recovery , not bankruptcy , for this to apply. 

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I spent a period of my studies studying about bases yrs ago, and if you could see what I saw…AMAZING.  I shared some of that in past reports, and as a review , I will try to share some of that it in a future wkend report.  For now,  lets look at constructive looking bases in miners.

AUY CLOSE UP , LOOKS GOOD RIGHT NOW

CHECK OUT THAT BASE

NG – Close up looks nice.   My thinking is this: If this didnt pullback with last Fridays sell off in Gold/Silver,  maybe some wont sell off no matter what the FED reaction is in metals.

NG– Excellent base, about to break out? Future 10 Bagger off of the lows?

HL – Close up has been strong

HL– Excellent base

Even MANY of the tiny junior stocks under $1  (IF THEY DONT GO BANKRUPT)  look like they have huge potential.  XRA, VGZ, AUMN, MGH, MDW, etc etc etc   Look at PZG from Nov to now.  yes, I know about the CDE deal, but thats what I am talking about, recovery periods.

1 example is XRA

So there you have it. Many of the Miners have HUGE bases that could lead to very large % gains .  I traded METALS and MINERS after the 2000 lows and 2008 lows. When these get going,  you can enjoy some very big rewards for your patience. Is this the time for commodities to start moving up in a more sustained manner?   Are  GOLD/SILVER / MINERS finally bottoming with these bases ? It would appear that we are very close or already there.  If Gold were to drop to $1000 after this next run,  I think Miners could remain in their bases and then just explode to the upside.  IF Gold & Silver have bottomed with these higher lows?  Then these miners may be starting that move.  That is why I added the close up views of NG & HL above. On a 2 yr chart the moves are muted, but you can see that some nice gains have been made already too.

SO ITS A FED DAY and usually that means volatilty in some form or another.  You may want to wait until tomorrow to see how this day shakes out in various sectors, but I wanted to point out that I am seeing bottoming processes playing out in OIL, NATGAS, Metals ,DAG, etc .   These bottoms can be whippy and volatile, but also very rewarding with patience.     Might You  want to look at these charts and find a couple of small positions to enter in Miners , just in case this run keeps moving higher?  That all depends on your risk management. Please see yesterdays report for a review of  risk management approaching metals today. Thanks for being here and  get ready for some 2 p.m. to market close  ‘Rock & Roll’.   I think we will see it in 1 form or another.

~ALEX