Update

Just A Short Review

AUG 5  12 Eastern time –     I just wanted to quickly review my expectations. Things look normal in the Metals and Miners at first glance, but are they really just Normal? Or are there other things to consider?  I’ll show you what I expect short term, but I am also seeing something else in the bigger picture.   To the charts!

 

GLD  looks like a normal re-trace & Gap fill.

 

GLD AUG 5

 

As mentioned in Yesterdays report – With the descending wedge and oversold conditions, I would expect a break higher soon.

What about Silver?  It looks like its selling off harder than Gold today, so Lets look at a few more charts …

 

 

SLV also could be considered to be experiencing a normal pullback.

 

SLV AUG 5

 

SLV has a 61.8% pull back, Gap fill, getting oversold.  Still one would be Expecting a bounce .

 

GDXJ looks like a sell off, but also it has reached normal levels of 50%

 

GDXJ AUG 5

 

And intra-day, I tend to look at these charts for areas that I am likely to find a low risk entry. Somewhere where I can place a stop closely below…and then what if I get stopped out of it?  It obviously isnt doing what I expected, so I would re-examine whats going on.  CLICK ON the charts below to enlarge,  these are intraday charts that I use for ideas of a POSSIBLE entry.  Looking at GDX & GDXJ , once can get an idea for JNUG or NUGT / JDST or DUST.  They dont track exactly, but I’m looking for a place to enter that isnt guess work and isnt risky.  LOOK FOR SUPPORT.

 

GDXJ ROB

GDX ROB

 

So it seems like not much has changed from yesterdays report?  Weekly charts posted there (I will re post below)  havent  been violated  either .

 

GDX WKLY AUG 1

GDXJ Weekly Aug 1

 

But something has changed, and it has me thinking.  I posted a chart yesterday showing that on the weekly charts, we had a TSI cross down.  I pointed out that when I have seen that, we usually get a couple (or more) weeks of selling.  Its a weekly chart, so was that indicating that  …  “Yes, we could get a bounce daily, but Weekly we are likely to drop if the rally is weak”?  If so…  It would be a false rally , suck in some “longs”  and then drop again .  It could possibly be a  “Play the bounce & Short the rally”  type move , if so.

 

Well, I decided to dig a little deeper and see if I could get a little clarity.  Here is what I found.  IN THE BULL MKTS and the BEAR MKTS in Gold since 2008 lows,  when the TSI crossed down on the weekly, we never rallied more than a bounce on the daily and they hardly showed up on the weekly charts.  Never is a lot, isnt it.  Its the same as saying ….“Statistically, we have 100% chance of dropping further in the next few weeks after a TSI cross down.”  Now I will say that in 2011, we had 2 occurrences that were more like sideways bouncing around periods.  This can just be frustrating for traders too.  SO I am just going to post 3 charts of what I was looking at and let the reader decide how they will interpret this.  I see it as “We may be due for a bounce, but a significant rally is unlikely at this point”, unless something big changes.  Like a TSI cross back up on a weekly basis.  Charts …

 

Coming out of the 2008 lows into 2011 (Red dotted lines = TSI crossed down, then see price of $Gold)

 

TSI $GOLD 2008

 

TSI 2011 to 2013

 

TSI 2011 - 2013

 

TSI   3 year wkly to date

 

TSI 3 yr weekly

 

Then again remember that I have 2 friends that are currently using Elliott Wave and pointing to a wave 5 down soon.  Testing former lows? Breaking former lows? This is their view (Same chart as yesterdays report)

 

ELLIOTT WAVE

ALSO _  did you notice that  GDXJ, SLV, GLD  broke below their 50sma ?   That is not healthy if they dont recover soon.  KEEP YOUR EYES ON THAT on the daily charts.      The question now is this,  TSI on a weekly crossed down about 2 weeks ago.  Has it sold off enough, and will it RALLY and cross back up, or should the rally be shorted.  Time will tell, its up to us to pay attention and keep an eye on the charts going forward.   Watch the 50sma on the daily too.  I wanted to bring this to your attention so we can proceed with caution, because with that track record – Caution is warranted  I.M.O.

 

As a side note ,  COAL CHARTS , which I mentioned a few weeks ago a little early, still appear to be bottoming and are showing some signs of life today.  Here are a few charts.

 

WLT is breaking out from a base, and is above the 50sma. This chart is at 1/2 day, so you can see volume is already at daily average volume.  You could buy and put a stop in the base, below the base, below the 50sma..depends on your risk style.

I bought WLT today. 

 

wlt

 

ANR looks similar to ACI, BTU to me …they are just getting started, but show positive signs

 

ANR

 

 

 

Look at the weekly chart of COAL stocks and you will see that they tend to come to life in mid summer . Here is an example and they have been beaten down and “Basing”. If they break from their Bases, they are a ‘buy’.  If they move from the low side of their base to high side, they can be a ‘trade’. Here is the possible base forming in ANR

 

ANR wkly

 

I’m NOT saying run right out and buy a multitude of COAL stocks.  No. I am saying that they have been beaten down, have been basing in a pretty wide range, and can be setting up at this time of the year to be good long trades.  Some are at lows and have fairly low risk entries .   I think WLT is leading the way now, breaking out  today with decent volume.  ANR is at a downtrend line and the MACD is showing positive divergence, so it may break out soon? (Actually, it just broke above the 50sma as I was writing  .  The Coal ETF  is KOL.

 

So I just wanted to update some thoughts from yesterdays post and throw a few ideas out there , thanks for stopping by.

 

~Alex