Shaken, Not Stirred

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Thursday saw Gold sell off a bit, but Miners were really shaken.   Both GDX and GDXJ were down almost 6% .  We were buyers last Friday and  Monday, so should we be stirred by this selling?  I do not think so. We will honer our stops if necessary, but lets check the charts for confirmation.

$GOLD – a pullback to the 10 & 20 sma as support is normal.

GOLD 8-13

 

In 2013 at the lows, Gold had a one day slam down, and any who were shaken out missed out on a nice rally.

GOLD 2013

 

SILVER remained strong , that’s encouraging.

SILVER 8-13

 

But what about those Miners , down almost 6%?

.

GDX –  We saw similar high volume , 1 day drops in Nov above the lows. They amounted to noise.   A deeper drop to the 10 & 20 Sma would still be normal.

GDX 8-13 1

 

GDXJ – hit the 50sma . Pullbacks  like this were buying opportunities in the past .

GDXJ

 

When I see that people are getting concerned about a drop in the  price  of GDX or GDXJ, I like to check the underlying mining stocks and see if their charts look healthy or sickly.   Lets do that here.

 

GG –  This is a healthy looking run up, and a normal pullback.

GG 8-13

 

ABX – You can almost picture how this stock may move higher around those moving averages.  This is just an idea of how ABX can progress.  The true path higher remains to be seen, but I do think it will be higher.

ABX 8-13

 

SO I am comfortable with the lows being in place.   I am still holding my positions, even adding on the dips.  Even if I see further selling on Friday , in my opinion , the best is yet to come. 

 

~ALEX

P.S.  No report Friday,  enjoy your day and have a great weekend!

79 replies
  2. WISHFULLTHINKIN
    WISHFULLTHINKIN says:

    Great news. Glad there’s no change in your expectation and will look forward to having a position in GLD, NUGT very soon. Enjoy your time off. 🙂

  3. Geurt.
    Geurt. says:

    Excellent done Alex, this comfort us if we more understand how the market thinks.
    Have a good evening and Friday. Greetings.

    • chartfreak1
      chartfreak1 says:

      Hi Mark,

      Its not a major concern, it doesnt change the big picture, it just changes how it plays out.

      An Island reversal moves upside nicely with shorts covering, and you feel better seeing that gap moving further & further below you, with confidence that it is an Island Bottom reversal.

      I have seen them do this in the past ( fill the gap) and it still works out fine, as long as we dont break lows.

  6. Cason
    Cason says:

    Appreciate the time you took to post this. I was looking for a pullback today and thought GLD pullback was fairly normal. I did NOT like GDX & J pulling back this much, that fast – maybe over two days but not all at once. Wish I had pulled a little more off of the table. BUT, I didn’t let it deter me. I sold GLD calls (stopped near open) I had b/c they expire next week and had a profit cushion so just cashed out ITM. I did get stopped out of PPP by accident (breakeven, no loss). I didn’t think it would hit today – was right at the lows. It happens. Still holding GDX (monthly calls) and AUY. Looking to add but didn’t want to do much with such a strong down day in case it bleeds over into tomorrow. Would be nice/interesting if gold were still down a bit but miners rebounded into the weekend.

  7. Cason
    Cason says:

    Really thought oil and gas were ready – time for energy to move up, but they got rocked pretty good today. Will watch tomorrow, not going to take a position unsure into the weekend. Wonder if instead of the ‘V’ bottom we get in March oil does what gold just did and take its sweet time before it pushes higher. That scenario likely merits watching.

      • Cason
        Cason says:

        I took my one shot at oil bottom and missed. I’ll wait for it to really start to move up and accept missing the bottom. Not interested in the 1000 paper cuts if we do a hang out at the bottom pattern like gold just did.

  8. Cason
    Cason says:

    Does Bio Tech have it’s mojo back? ONCS, she is a quite volatile and not for the faint of heart. But can provide decent scalping opportunities. I wouldn’t hold too long. Too late to chart now, will try to post updated chart this weekend.

      • Cason
        Cason says:

        Bill,I her you, been tough trading for a few. But I can’t have an entirely commodity laden portfolio, that’s just begging for trouble. On a day like Thurs or Fri, ouch!!!
        I wa tradin g a lot of bio-tech

  9. Mike
    Mike says:

    I’m holding on but have not made up my mind to add Friday if a decline persists. I feel good about it, but have learned long ago not to put much stock in feelin’ it. If we slip Friday and resume the climb Monday, I am going to start to think of you as
    Alexander The Great, well that might be overdoing it. Thanks Alex

    • chartfreak1
      chartfreak1 says:

      LOL- Thanks Mike.

      The set up is still good, but it is hard to trust a falling Precious Metal going into the weekend , right? There is plenty of time to add to positions if we are at the lows, because there should be weeks of upside.

      I liked what I saw in GG, ABX and NEM today ( the main holdings of GDX) . They look very normal.

  10. Cason
    Cason says:

    Entirely possible we did all of the damage in 1 day similar to smackdowns Alex showed above? I had expected probably 2 days of selling but was intensive enough to get it all out at once? Looking good so far this morning! Now, imagine if we ever get one of those really big $25-$30 days up in gold…GL to all today.

  11. Bill
    Bill says:

    Alex, thanks for the Friday report. I’m right with you. I mentioned before that I expected a bull flag to form. I think thats what we are seeing a start of. See the attached for my thoughts (blue candles), which is just an overlay of the November rally. I expect similar here. GL all.

  12. Bill
    Bill says:

    Alex, all, I’m interested in your opinions on Energy here. Nice beat down and reversal in WTI overnight. I’ve been expecting $42, double bottom, I think we just hit bottom. See attached…..

  14. chartfreak1
    chartfreak1 says:

    The first GOLD chart in this report has the 10 & 20sma at the $1100 area ( I didnt have the lines on the chart, but that is where they are). Our sell off this a.m. is still well above that area, so it still could be a bumpy ride going forward.

    The past 3 Fridays were reversals / sell offs that closed higher. This may be the opposite , the shake out before the weekend.
    We’ll see.

  15. Maria
    Maria says:

    gdxj is also (so far) following along in the pattern very nicely… right?

    … wave 4 pullback – which we are painting now.. should NOT fall into the price territory of wave 1…. (red line) or the pattern is invalidated… ie. good stop or great add… ;o)

    https://www.tradingview.com/x/nIVmh5JS/

  16. Cal Staggers
    Cal Staggers says:

    Nobody cares what the new guy does! But fwiw, just bought back all GDX & GDXJ calls sold on Wednesday – had to pay 60% of what I sold them for (it would’ve been better to wait til’ near end of day, but I have to travel). Also entered low-ball orders to increase positions by 2/3 – will re-evaluate on Monday and hopefully raise those prices if charts warrant it.

    Thanks, Maria, for the EW chart! I enjoyed reviewing it while setting my lowball orders. I’m going thru a 12-step program to get away from EW, but I still like to just look. Really. …I can quit anytime

    • chartfreak1
      chartfreak1 says:

      SSHHH, dont tell her this , But for a Good 12 step E.W. withdrawal program, Step one would be avoid Maria : -) Enjoy your travels and nice trading!

      p.s. I dont call it the New Guy, I appreciate all “fresh input” 🙂

    • Maria
      Maria says:

      thanks Cal .. yeahhh .. obviously- i have that problem as well… i do thoroughly enjoy watching …. (the waves paint) ;o)

    • Cason
      Cason says:

      Nice work. I sold half of my calls on Wed and really regretted not selling all. Revamped my plan this weekend for the next few weeks.

          • SonOfGud
            SonOfGud says:

            Can’t remember exactly where i read it (probably Steve Saville,… he goes on about COTs a lot)…but… the article seemed to be saying, that the commercials aren’t actually that ‘smart’ in a clairvoyant sense of knowing where the market is heading.
            They are indifferent as to whether the market goes up or down… coz they always make money from transaction charges anyway.
            So they merely take up the other side of the speculators bet, in a zero-sum game,… and once the herd is all on one side, the market just takes over and moves the other way.
            ie .. its the speculators that are dim, en-masse, rather than the commercials being smart.

    • chartfreak1
      chartfreak1 says:

      That says he loaded up in the 2nd quarter. That was above $1200

      Hey- You are getting a deal being a chart freak follower and being a bit more patient. We bought below $1100 🙂

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