Author Archive for: Alex - Chart Freak
Entries by Alex - Chart Freak
Public Post – A Precious Metals Review
In a recent weekend report I discussed what I thought about the USD going forward, also using the recent action in the XJY as a historical guide. It could affect Gold in a big way. This is important, since The Big Picture of the USD has paused and may be preparing to choose a direction […]
Weighing The Evidence
Bull? Bear? Bias? We caught The Lows in Miners a few weeks ago, and the rally has surely gone beyond my expectations. I now see many are calling THE END to the 4+ year bear market and calling the start to another phase of the Bull market in Gold. So was the action of the past couple of weeks a guarantee of the Bear Market lows being in? It's best to weigh the evidence and try to allow the facts to speak for themselves. Lets continue to look at all of the markets and weigh the evidence.
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SPX BIG PICTURE - My readers know that I have been calling for the bear market drop in the markets since early last summer. We just landed in a very interesting place this week. Notice the dance around the 200 ma on a wkly basis since the 1980's.
Zooming in...
Whats A Melt Up?
What is a 'Melt Up'? Most of us are familiar with a 'melt down' in the market, so basically it is the opposite. Either a stock or an entire sector can just sell off or get bought up into extreme levels, and then it still keeps going, not allowing the cautious investor an entry. It may not be straight up everyday, it may run, pause, run again and again until the move exhausts itself. This is what we will discuss in the weekend report, because it is possible that we could be seeing a 'Melt Up' in Gold and precious metals. They can last for weeks, with minor pauses.
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This is an example of a small melt up. I used this chart to show the danger of trying to guess the top by buying DUST or Shorting Miners last week. You can ignore the writing, just look at the melt up.
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Safety First
Each trade that you take has some risk to it. Some trades are low risk set ups with higher probability of success and others are just plain risky, depending on the set up. We will discuss that a bit later in the report.
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SPX- The Fed didn't change this chart very much. I still see similarities between the double bottom in Aug & Sept, but it is weak. Notice the candle for Wednesday rallied on the Fed and gave it up. The buy the dip crowd is weak. We are not oversold yet, but getting there.
Moving Forward On A Fed Wednesday
Today is sort of a Fed Wednesday. It doesn't mean that there will be some big surprises, and in fact I do not expect anything like that, but I didn't want us to go into this blind folded. Certain areas of the market are due for reversals in my opinion, and a Fed testimony before congress can act as a catalyst, even if nothing new is said. Lets just Look at the charts.
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Tuesday the NIKKEI was down 900 points, and it is currently down another 400 this morning, but...
They couldn't get the sell off in the U.S. going. THAT should have sold off the U.S. markets if they are going to drop In My Opinion. I've been expecting a bounce, no change.
I have mentioned that when I look at the Banking index, it broke down and is struggling at lows...
I’m Starting To Sell, Not Chase
What a rocket ship ride Miners have been on. Buying the lows has brought about some huge gains for some, and I had encouraged not selling too early with this type of set up. Now it is time to start thinking about locking in gains, and not chasing these moves. A pull back will come and that may lead to a buying opportunity.
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GDX - And we have a shooting star/reversal candle in GDX and many of the Miners. A pull back usually follows.
NEM - I was looking at that large base and encouraging those holding a Miner like this that it may not be time to sell yet, just because the 200sma usually acts as resistance. This could keep running.
NEM - But now one has to start seeing this straight up move as a time to at least start locking in partial profits, and using a trailing stop on the rest.
PUBLIC REPORT- Time For GOLD?
If you are new here, please feel free to read my last 3 public reports under this blog tab. They are Gold & Precious Metals reports, and I alerted my premium readers to those lows as they happened. That was for short term trading, and I was expecting possibly a 2 month rally. I have also been analyzing many details at these lows to see whetherit is possible that THE BEAR MARKET LOWS in Gold could be in place at this time. I am not a constant Gold Bull, but I did do very well from 2000 to 2012 in that sector and have been looking forward to another possible leg higher after this 4+ yr bear market correction.
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To review - We just saw a classic shake out in Miners that had many going short expecting a crash. This was running the stops on 6 Months of trading at the lows.
Next ...
GOLD PART 2 – IN Search Of A Bottom
This is part 2 of the special weekend report discussing how we Search for a possible bottom in Gold. This half of the report will include many more charts with just the facts of what is happening in many areas. Again, these facts keep both Bull and Bears unbiased. They also indicate that GOLD may already be hammering in a bottom. Miners especially have the hallmarks of a longer term low in place.
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This chart adds to out last discussion in part 1 and my Big Picture view that I have been pointing out for months now. I pointed this out in this DEC 11 chart . It shows that with the SPX bull market , and the bear market in Gold, we have repeatedly seen Gold ICL'S ( deep trade-able lows) and also Golds Bear Market Rally Peaks moving inverse to The SPX . I drew this to make that clear.
T= a TOP & ICL = A LOW
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I also said that I would be looking for a break down in this area ( A change). Here is my updated chart
So...
GOLD PART 1 – In Search Of A Bottom
I believe that Gold is in a 3 phase bull market, with 2 phases already behind us. After a 4+ yr bear market, there are finally solid signs of a bottom , in many different areas. There is no gain in clinging to a bias, that is how one loses money in the markets, but by gathering important relevant facts you can develop a check list and watch as necessary things begin falling into place ( or not). JUST THE FACTS. Currently I see things falling into place, indicating that THE bottom is either already in place, or very close. This bear market may be coming to an end, and catching the recent lows has already been very profitable. Riding a renewed Bull will be very rewarding. We will look at " Just the facts" here in our extended weekend report. To the charts...
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First a review of recent bullish expectation in Miners:
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REVIEW- In the last 2 weekend reports we watched the HUI & GDX in the bigger time frame. This is a monthly chart of HUI, on the edge of an important break out. It has spent 6 MONTHS at the lows, a solid base on prior support. Today the HUI is near $150. A break out.
GDX reversed from below $12.50 and also looked ready to break out above from a 7 month base. Above $15-$16 is important. It is now at $17 as of Feb 5. 🙂
We need to look at a lot more than just the Miners and Precious Metals, however. Currencies come into play, along with a variety of other influences, so we'll examine the Metals now, historically , and other factors that can indicate where we are in the process of a 3 phase bull market...
