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Precious metals and especially individual miners keep climbing higher. Wave after wave, the dust buyers and shorts are getting hammered. This wasn't entirely unexpected, that is why I mentioned taking some profits and letting partial positions ride. This runaway , melting upward type of move can be rewarding, but cycle wise, it is will pause or pull back soon. We'll discuss that. The markets were moving up off of their lows too, but they stalled on Thursday. Oil turned back down too. To the charts...
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It's Friday, so there isnt much to say with only 1 trading day left, but lets take a look and see what we can learn.
This was 1 of my 2 Gold charts from Thursday mornings report. Gold actually hit $1240 as the day went on, so it looks like that flag pattern could form. While it does look like that Flag pattern could form, I actually think we may see something else too.
Let me show you what I think is happening now...
Read MoreEven in the toughest of environments, we see seedlings take root and blossoms shoot up. We also see the same thing happen in the toughest environment in the markets. At the time it may seem quite contrary, but this is also how bear markets can turn into Bulls. Are we seeing that now? lets look at some charts...
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Starting with the SPX. We have expected this rally , but will it lead to new highs, or will it roll over?
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I think that this move is just starting and it can last for a couple of weeks. Notice how the Rally in October didn't lead to new highs and broke down to lower lows. We have lower highs and lower lows in the markets now. I have drawn in several resistance points and we will see how the markets react as time goes on. This is NOT near a point that I would short it. I would remain long, maybe lighten up in a week or so. The BLUE BOX is an idea of what we may see.
We will obviously discuss what's unfolding as time goes on, but take a look at this...
Read MoreYes, Gold and Miners got a little stretched in their recent run higher. We now see a bounce in the markets (Expected) and a pull back in the precious metals area. Lets take a look at the charts...
Read MoreBull? 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...
Read MoreWhat 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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Read MoreEach 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.
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Read MoreToday 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...
Read MoreThis 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...
Read More 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...
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