July 26 Weekend thoughts Well, after the final day of the week, I would say that the reversal in the Metals Mkts Friday into the close grew a tiny bit more like a Bull. A baby bull. It APPEARS to be a bullish reversal, but there are still some cautionary notes and things to watch for….lets have a look.
GOLD – At this point it looks like it is playing out exactly as I mentioned in my last 3 write ups. A Bullhorn formed, a run of the stops below $1292, bounced off of the 200sma…a reversal.
Perfect right? Well…caution remains because there are other factors to consider…
When you look at Gold from a bearish view, their is still more work to do. Since we had a similar Reversal just last week that failed – “Follow Through” is needed here.
Many have pointed out to me that the $USD has been strengthening. It has, here is the weekly chart .
So if it continues up and breaks out of this base, Will it put pressure on Metals. It definitely could and has many times in the past. I did want to point out , however, that 1 yr after the lows in 2008 – Gold & The Dollar ran upward together. See the chart below. The Dollar ( top box) actually ran from 78 to 88!! Gold wasnt hindered…
The Dollar actually made LARGE gains, but so did Gold. Its not the Norm, but it did happen a yr after the 2008 lows (We also may be currently 1 yr after the June 2013 lows, IF those were in fact THE lows. Only Time will tell on that one).
Now Lets just quickly look at some charts that show why I see a little of the bullish side, and then a quick lesson.
This was in the Morning on Friday, it actually closed higher, thus so far it has broken out, tested the break out, and stayed above the 10WMA. Bullish (So far)
GDX DAILY – BULLISH (And I drew this Friday Morning, GDX closed almost 20 cents higher than this)
Some individual Miners actually look VERY BULLISH. You wouldnt even know we had a sell off this week. See RGLD, GG, AEM, GOLD, PPP, and more. Let me show you a couple, and you can see that they did NOT just experience a “Sell off” - its a good thing people didnt short these ones.
No wonder GDX was so much stronger than GDXJ , but GDXJ isnt “Broken” at this point either.
See how it has actually Broken out (above the Blue Line) and “tested that break. Then Broke out again (Red dotted line) and has now “tested that on a weekly. So far GDXJ actually ran up strongly and is just taking care of business on the technical side.
Now that we’re all BULLISH again, I will throw out a caution in the form of a lesson. Lets take a look at the current view of $SILVER Quite Bullish, right?
This definitely looks bullish, right ? It had a stop run, a reversal, RSI turning up. Held ABOVE the 50sma, so its showing strength! BULLISH. Cant fail- right? Well, we can gain confidence in certain trade set ups, but we never want to get so “Biased” on a trade set up and think that It HAS TO do XXXX. It hurts (and I’ve done it) when we enter a trade thinking its going to do XXXX, and when it doesnt , we hold on “HOPING” that it still will.
Now look at this current chart of SILVER too. (I just noticed that I wrote GOLD…sorry, its late) . Its SILVER. I’m also sorry that its a bit cluttered, but for the sake of showing you something , I wanted to mark it up. The LEFT side of this silver chart from FEB-MARCH of this spring had the Exact set up in Silver as we see now.
Notice it: Do you see how similar the set ups are?
1. Looked like a BULL FLAG
2. Did a “Stop run”, and ‘reversal’ like we just did
3. Turned up ABOVE the 50sma, looking strong
4. RSI turned up
5. THE MACD DID NOT TURN UP
I will be watching $SILVER VERY CLOSELY. We look to have a bullish set up across the board, GOLD, SILVER, MINERS, and some like GG, RGLD, AEM, etc that are really looking strong, but anything can happen. I am watching the MACD & a few other indicators on Silver as we move forward.
Lastly-I keep getting asked, “How do you know where to sell” “When to get out” “Where to set stops” “When to get back in” “Take profits” “Enter longs” A lot of it is experience and I did it a lot differently when I worked full time too. I am in front of a screen intra-day, so I watch multiple time frames and supports and resistance as they are manufactured by price movement.
I will leave you with 3 charts that I have follow intra-day for example. I have posted these in the past, they are ongoing and they “MORPH” as time moves along. I dont have time to explain them in detail, but just have a look at them if you want….and see if you can see possible “Entries” , “Exits” , where its safe to put a stop, etc . “CLICK ON THEM” to enlarge them.
So we are a little more bullish on the reversals, but as we’ve seen in SILVER this spring…”ANYTHING CAN HAPPEN” – so have a plan, a back up plan, and Stay Frosty my friends!!
Good weekend! ~Alex
For Those that trade Futures or ETF’s exclusively – I’ve decided to add one more thing – Grains look to be bottoming and I wanted to show a couple of charts that you can keep your eyes on going forward. Remember that sometimes “Bottoming” is a process with a few false starts, but once they break above the 10sma (And 20sma for more assurance) they can stair-step north.
JJG Grains -
CORN WEEKLY -
WEAT DAILY -
DBA weekly (Agriculture) -
DBA daily chart is a H&S & may need to prove itself further to see if the selling is really over. I’d like to see it drop one more time & show some strength (Divergence) on the next ride down, but it MAY just gain buying volume & power up. Needs further watching .