MIXED SIGNALS

AUG 1 2014 –  First off , There has been a lot going daily this week in my personal life, my friends son was in a severe accident and a few other things have kept me busy, so I have not been in front of the screen as much as usual this week.   That said,  I haven’t Tweeted & Posted as often as usual so I wanted to  Quickly just throw out some brief Charts & Thoughts  since it got a little CRAZY after the Fed Mtg.

 

SPX – It was DUE for a pullback using cycles and Technical analysis, but you can never tell how much or how fast.  This COULD get serious – but as I mentioned, there were signs that it was coming.  The VIX, $CPCE, Internals , and of course PRICE PATTERNS  showed we were due.  See the daily & weekly below.

 

SPX WEELY – Overbought RSI WEEKLY & it hit the Top of the channel

$SPX weekly

 

The SPX DAILY also showed that it was ready for a pullback (Note the Rising Wedge – MACD , RSI, and Orange arrow) …

 

 

 

DAILY SPX

 

THIS could get ugly, and time will tell. It is already due for a bounce , closing under the B.B.  so you may see a reversal soon, but will it last? OR will the sell off continue?  It has work to do before the charts can be repaired I.M.O.

 

Yesterday almost everything got hit.  They call that Throwing the Baby out with the Bath Water (I have been looking at NATGAS, URANIUM, AND GOLD/MINERS for LONG set ups, and only NATGAS remained Green).  URRE & UEC actually looked really good, but the Uranium ETF  ( URA) got hit, so I didnt take position in URRE  Or  UEC.  Was it just  END OF THE MONTH SELLING IN GOLD / MIners ? Or is something bigger coming to the downside? Lets review a few charts.

 

I drew this $USD & posted in my last report, and it is being fulfilled and is at the BLUE LINE now.  This  puts pressure on Metals

 

$USD

 

 

GOLD – Using Technical Analysis, Gold remains fine to MIxed  (So Far).  Using Cycles,  its called a “FAILED” daily cycle and points to further weakness. I’m pressed for time so I will allow the Charts can explain.

 

GOLD WEEKLY –  WEAK using the 10WMA , Needs to close above $1297 to regain a healthier WEEKLY look.

 

$gold weekly

 

GOLD DAILY – Technical Analysis wise , the Daily isnt damaged. Normal 61.8% pullback, “Testing”  a break out Candle, and getting oversold is all considered normal  (So Far).  We keep an eye on things , however, because it is starting to lose steam & starting to trend downward. 

 

GOLD DAILY

 

GOLD CYCLE-WISEBecause of the lower low, this chart using cycles indicates further weakness & lower prices.  We look due for a bounce, and then another drop? This  can remain bullish, however,  if it follow this path. This is a “ROUGH” idea simply pointing out a path if we continue weak for another daily cycle.   OF COURSE ANYTHING CAN HAPPEN and some believe we will now sell off to $1000, since GOLD didnt act as a “Safe haven” when the MKTS sold off yesterday. THAT – IS – POSSIBLE .  I’m just taking it one step at a time . YOU DO NOT have to be invested at all turning points!! Sometimes we get stopped out or take our leave to watch how things unfold.  THAT is prudent – It offers a clearer path later.

 

$GOLD CYCLES

 

 GOLD DAILY AGAIN- There are still signs of lower prices on this chart too, so again, I am showing what could play out if GOLD just bounces along until it gets oversold. This would be a Descending Wedge Pattern & is Bullish when resolved upward.  If you read my last report – You saw my BULLHORN pattern too – its still possible too.

 

 

$GOLD WEDGE

 

Miners –  They actually held up well for a blood bath of a day.  I read a lot of Panic & “CRASH” talk,  but that is usually associated with Leveraged positions and JNUG, NUGT holdings where losses feel more painful .  Why do I say that? Because the GDX & GDXJ charts didnt even break to new lows yesterday in a large sell off day.   Please take one second and stop here….Look at  3 month charts of GG, RGLD, NEM ….  Very strong for a sell off day and GG & NEM both had earnings releases Tuesday Night.  The perfect excuse to wash it out.

 

GDX DAILY – Bullish side would be that  since cycles call for more weakness, that GAP could get filled as it works into oversold positions

 

GDX DAILY

 

Another Bullish view. This pullback is normal & quite mild for Miners so far. Remember when the toilet would flush if the Markets or Gold sneezed??

 

GDX BULLISH

 

SO FAR volume is lightening as it sells off.  Since we do need a little more downside , and It does look like it could go either way,  we keep in mind that if the selling starts to pick up…. ANYTHING CAN HAPPEN THOUGH!

 

Bearish side could look like this.

 

GDX BEARISH

 

What can I say? The Markets took a good WHACK.  It was due, but it was a big one too. We are now due for a bounce . $SPX closed outside the B.B.’s $RUT & IWM closed on theirs, but this MAY just bounce to the 20sma and then start selling off again.   LOOK AT YOUR WEEKLY & MONTHLY CHARTS TONIGHT.  The Month of JULY ended, the WEEK closes tonight.  THIS tells you whether the bigger picture looks healthy or weaker.  There are many other things to look for and look at as time goes forward and can be discussed in future reports.  For now I will just leave you with advice similar to what I have mentioned before…  Learning lessons.

 

When markets get whippy,  seesaw- like , jumpy & Bumpy…You DO NOT Have to be invested all the time.   Especially if you want to ‘test the waters’ on something that looks like a good set up  (Maybe $NATGAS now for ex) –  smaller %’s  are what you should test it out with.  You can add to gains on mild pullbacks if you find a trending move, but jumping in 100% to try to  “Make that money back that I lost!”   can often cause emotional trading,  bigger losses and frustration.   So we Honor our stops and take the smaller losses as “lessons paid for”.   We WILL have good entries soon enough, whether its  short after a weak bounce & unfulfilled downside targets or we stabilize after some selling to balance the scales of fair value.  THAT is what you really want though,  PATIENCE for a “GOOD SET UP” and a “Low Risk Entry” .   By Keeping losses small and managed, and waiting for proper set ups to enter can really increase your confidence and ability to make money in the stock market. Its STILL not always just that easy, but you need to have a solid plan and stick to it.

 

Best wishes to all for a good weekend and thanks for stopping by!

 

~Alex

AEM – I mentioned how  GG & NEM  could have gotten hammered after earnings, but held up nicely in  yesterdays sell off.

 

Well, AEM had earnings too, but as I posted in my last report – this needed a pullback badly. 

 

AEM

 

  See their chart now and you’ll see why we dont fight the charts when they need a pullback

 

 

 

 

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  • harry

    Huge BoW numbers for GLD yesterday…..what are your thoughts on BoW or SoS numbers?

    • http://www.chartfreak.com chartfreak1

      Thats a tough question, because I think they used to be a little more reliable than they are now. They seem to occur weekly now, whereas they used to be less frequent, maybe due to recent extremes? When those numbers are extremely hoigh , however, I take notice. You at least get a bounce reasonably soon from B.O.W. numbers & and dip on S.O.S.

      • OOG

        Testing to see if I’m on site

  • harry

    Huge BoW numbers for GLD yesterday…..what are your thoughts on BoW or SoS numbers?

    • http://www.chartfreak.com chartfreak1

      Thats a tough question, because I think they used to be a little more reliable than they are now. They seem to occur weekly now, whereas they used to be less frequent, maybe due to recent extremes? When those numbers are extremely hoigh , however, I take notice. You at least get a bounce reasonably soon from B.O.W. numbers & and dip on S.O.S.

      • OOG

        Testing to see if I’m on site

  • Rube

    Thanks for taking the time your busy schedule for these updates

    • http://www.chartfreak.com chartfreak1

      Your welcome Ruby, thanks for taking the time to read the reports too.

  • Rube

    Thanks for taking the time your busy schedule for these updates

    • http://www.chartfreak.com chartfreak1

      Your welcome Rube- thanks for taking the time to read the reports too.

  • http://www.chartfreak.com chartfreak1

    I just received an email stating that the reader couldn’t tell if i was Bullish or Bearish Gold. My answer is this :

    Yes- Thus the title of the report. “MIXED SIGNALS”. It is neither boldly bullish nor bearish longerterm at this point.

    One
    can be bullish short term (A bounce) Bearish medium term (Expect
    these lows to be tested or broken) and Bullish longer term, expecting a
    rally and break out from the 1 yr base. All of these depend on how long
    you want to buy & Hold , How the current weekly charts end, and so
    on- that is why I also noted that —You dont always have to be in the
    trade, sometime s patience & waiting to see how things unfold is
    best.

    If
    one wants to be’ in the trade each day’, and many do, they likely have
    to play the sell offs, the bounces , and so on and be quick to change
    their view, since GOLD & MINERS have been range bound & in a
    downward sloping sideways move. I wont be there daily to help readers
    with those daily swings tho, so I posted a bullish & bearish
    expectation to give the reader an idea of what I would watch moving
    forward. I posted that I expected a bounce from here, but GOLD may
    just bounce to the 50sma and sell off again. So basically – the bounce
    needs to be watched closely to see if it can re-gain & move above
    the 50sma and the 20sma. short term.

    I hope that helps??

    • Heidi Marie

      thanks for all your hard work Alan..sure do appreciate all the time u take out of your busy schedule… great info!

      • http://www.chartfreak.com chartfreak1

        Oh HOLLY – Thanks …will you ever get my name right though?

    • Heidi Marie

      particularly appreciate your paragraphs on ‘lessons learned’… great insight

    • Ron

      Spot on Alex, back to bullish on bounce and bought nugt yesterday, then down again after bounce, LT agree gold will break out, definitely choppy and lot of traders getting chopped up.. GL

      • http://www.chartfreak.com chartfreak1

        Best wishes to you too Ron, thx for checking in here!

  • http://www.chartfreak.com chartfreak1

    I just received an email stating that the reader couldn’t tell if i was Bullish or Bearish Gold. My answer is this :

    Yes- Thus the title of the report. “MIXED SIGNALS”. It is neither boldly bullish nor bearish longerterm at this point.

    One
    can be bullish short term (A bounce) Bearish medium term (Expect
    these lows to be tested or broken) and Bullish longer term, expecting a
    rally and break out from the 1 yr base. All of these depend on how long
    you want to buy & Hold , How the current weekly charts end, and so
    on- that is why I also noted that —You dont always have to be in the
    trade, sometime s patience & waiting to see how things unfold is
    best.

    If
    one wants to be’ in the trade each day’, and many do, they likely have
    to play the sell offs, the bounces , and so on and be quick to change
    their view, since GOLD & MINERS have been range bound & in a
    downward sloping sideways move. I wont be there daily to help readers
    with those daily swings tho, so I posted a bullish & bearish
    expectation to give the reader an idea of what I would watch moving
    forward. I posted that I expected a bounce from here, but GOLD may
    just bounce to the 50sma and sell off again. So basically – the bounce
    needs to be watched closely to see if it can re-gain & move above
    the 50sma and the 20sma. short term.

    I hope that helps??

    • Heidi Marie

      thanks for all your hard work Alan..sure do appreciate all the time u take out of your busy schedule… great info!

      • http://www.chartfreak.com chartfreak1

        Oh HOLLY – Thanks …will you ever get my name right though?

    • Heidi Marie

      particularly appreciate your paragraphs on ‘lessons learned’… great insight

    • Ron

      Spot on Alex, back to bullish on bounce and bought nugt yesterday, then down again after bounce, LT agree gold will break out, definitely choppy and lot of traders getting chopped up.. GL

      • http://www.chartfreak.com chartfreak1

        Best wishes to you too Ron, thx for checking in here!

  • Pat Zambri

    Alex, thanks for the great insights as always. I hope that your friend’s son recovers OK.

    Pat

    • http://www.chartfreak.com chartfreak1

      Thank You Pat, for the compliment & the well wishes for him.

      It looks like a long road to recovery so far, but hopefully its a thorough one. Thx again!

  • Pat Zambri

    Alex, thanks for the great insights as always. I hope that your friend’s son recovers OK.

    Pat

    • http://www.chartfreak.com chartfreak1

      Thank You Pat, for the compliment & the well wishes for him.

      It looks like a long road to recovery so far, but hopefully its a thorough one. Thx again!

  • Cason

    Alex, thanks for the update and sorry to hear about your friend’s son. I am also bullish long term but the action this week was not what I would have liked to have seen. But I appreciate your ability to look at all sides/possibilities. If one is playing leveraged ETFs or options, they will have to be nimble with the recent chop back and forth – could be a long time still until a clean break out. I’m going to have to be extra careful next week; I have absolutely no interest in riding GDX back down to 24. Again. I loved the part about ‘trying to make it all up in one larger trade.’ That’s me to a “T” and need to get that under control! Have a good weekend.

    • http://www.chartfreak.com chartfreak1

      Cason – Welcome back – starting to recognize some names here : ) The part about “Trying to make it all back” is a natural part of human nature. Its that natural “Losses must be re-couped” mode . lol I wrote that from experience… Its best to resist that urge because often with that thinking – we will “swing for the fences” whenever we lose money, without waiting for the best pitch. Just trading to get the money back in an unfavorable environment often causes more losses.

      I dont think Gold / Miners will go sideways for much longer. Direction just isn’t really clear and false break outs or break downs dont make it any easier. I’m going to try to look for clues this weekend in the weekly charts.

      You have a good weekend too ~ Alex

      • Cason

        Thanks, Alex. Yeah, I had a period where I was only trying to hit home runs back in the spring. And the way the market was chopping around? Yeah, it went about as well as it sounds. Figured out that I need to just get in, hit a single, and sit back down until time to bat again – and that worked for awhile. So, not sure why I went back to my bad habits recently. I’ll be looking for updates this week if you have time so I can continue to control position size and risk correctly. Thanks again.

  • Cason

    Alex, thanks for the update and sorry to hear about your friend’s son. I am also bullish long term but the action this week was not what I would have liked to have seen. But I appreciate your ability to look at all sides/possibilities. If one is playing leveraged ETFs or options, they will have to be nimble with the recent chop back and forth – could be a long time still until a clean break out. I’m going to have to be extra careful next week; I have absolutely no interest in riding GDX back down to 24. Again. I loved the part about ‘trying to make it all up in one larger trade.’ That’s me to a “T” and need to get that under control! Have a good weekend.

    • http://www.chartfreak.com chartfreak1

      Cason – Welcome back – starting to recognize some names here : ) The part about “Trying to make it all back” is a natural part of human nature. Its that natural “Losses must be re-couped” mode . lol I wrote that from experience… Its best to resist that urge because often with that thinking – we will “swing for the fences” whenever we lose money, without waiting for the best pitch. Just trading to get the money back in an unfavorable environment often causes more losses.

      I dont think Gold / Miners will go sideways for much longer. Direction just isn’t really clear and false break outs or break downs dont make it any easier. I’m going to try to look for clues this weekend in the weekly charts.

      You have a good weekend too ~ Alex

      • Cason

        Thanks, Alex. Yeah, I had a period where I was only trying to hit home runs back in the spring. And the way the market was chopping around? Yeah, it went about as well as it sounds. Figured out that I need to just get in, hit a single, and sit back down until time to bat again – and that worked for awhile. So, not sure why I went back to my bad habits recently. I’ll be looking for updates this week if you have time so I can continue to control position size and risk correctly. Thanks again.

  • oog

    My primary interest has been intermediate cycling in the miners, Without real value in $GOLD, they’ll lag. Out of bottoms, such as the one inversely demonstrated this last year (actually over last 5 yrs) come the most extraordinary multiples ($GOLD:$HUI) This is true back for several decades. All the explosive Miner moves have taken place in 1 to 11/2 year spurts, 3 since y2k..

    No real secret here, investors are getting positioned. So the upwardly divergent GDX, may not just be an anticipation of this, but a reflection of their improving financials, as well. Miners are making more money so it becomes a lower risk entry at present, considering some upside potential in $GOLD. So the miners may have seemed to lead out, as if beckoning (insisting) for $Gold to facilitate.

    Just curious what ‘fundamental drivers people on chartfreaks may feel are still in place, at this point, for $Gold, as so many former keys, such as real inflation, $oil, fed balance sheet, geo politics, and/or my personally insistant attitude, no longer seem to encourage $Gold??.

    For quite awhile I’d been musing a tie between the miners and the Gold paper contract market. Many shares might just be getting scooped up, for cheap, among insiders to the contract play? My $1 mil. question, in this light is; has there been a full enough capitulation in the Bug population, despite a possible lesson pending for the newbies in this game, for my musing to take place in spades?

    A primary indicator is that volume has been blowing me away, play sure has heated up in mining.

    • http://www.chartfreak.com chartfreak1

      I’ve been watching the volume too, and many of the miners did seem to have that capitulation puke out in the past , but now the volume has expanded both up & down so much that its a blurr. Could it now be accumulation ? On a weekly chart the accum/dist line has been rising in many Miners- encouraging. What has FUNDAMENTALLY changed? Has anything fundamentally changed? One thing is for certain…when things do change, the markets or smart money seem to know 6 months to a yr before the crowd do. THATS why I use charts to just try to get a read on what may be happening. When markets begin transitioning – it often shows in the charts. If the price of Gold could rise from here…If it could get above even $1400 & stay there, I think the Miners “Expectations” of better earnings could add to the attraction in Buying. Look at a 3yr weekly, and we have a good BASE forming now in GDX/GDXJ. If it doesn’t completely break down (& seems to have broken out upside)…I’ll still be taking it one step at a time. It does look promising though. SOME Elliotwave followers see the base as a 5 wave sideways formation calling for more downside. It’ll take time to see how things play out.

      Back to your question: Has there been a full enough capitulation? I couldnt get anyone to buy last December. It was a little easier in May, but still many way afraid to hold more than a few days. Right now many jump in and out fast trading, afraid that the bottom will fall out. People have been conditioned to sell positions and not hold Miners over the weekend, or over night. So I do still see fear , but “Could there be” another flush out. I’m sure there could – for now I’m also looking for clues. thx for reading.

      • OOG

        “smart money seem to know 6 months to a yr before the crowd do. THATS why I use charts to just try to get a read on what may be happening. When markets begin transitioning – it often shows in the charts.”

        thx Alex.
        So what underlies $GOLD at this point? Might have expected 1080 or less, by now. Has the internet added $200 by more graphically presenting what’s been going on for decades in the ME as well as our general foreign policy?

  • oog

    My primary interest has been intermediate cycling in the miners, Without real value in $GOLD, they’ll lag. Out of bottoms, such as the one inversely demonstrated this last year (actually over last 5 yrs) come the most extraordinary multiples ($GOLD:$HUI) This is true back for several decades. All the explosive Miner moves have taken place in 1 to 11/2 year spurts, 3 since y2k..

    No real secret here, investors are getting positioned. So the upwardly divergent GDX, may not just be an anticipation of this, but a reflection of their improving financials, as well. Miners are making more money so it becomes a lower risk entry at present, considering some upside potential in $GOLD. So the miners may have seemed to lead out, as if beckoning (insisting) for $Gold to facilitate.

    Just curious what ‘fundamental drivers people on chartfreaks may feel are still in place, at this point, for $Gold, as so many former keys, such as real inflation, $oil, fed balance sheet, geo politics, and/or my personally insistant attitude, no longer seem to encourage $Gold??.

    For quite awhile I’d been musing a tie between the miners and the Gold paper contract market. Many shares might just be getting scooped up, for cheap, among insiders to the contract play? My $1 mil. question, in this light is; has there been a full enough capitulation in the Bug population, despite a possible lesson pending for the newbies in this game, for my musing to take place in spades?

    A primary indicator is that volume has been blowing me away, play sure has heated up in mining.

    • http://www.chartfreak.com chartfreak1

      I’ve been watching the volume too, and many of the miners did seem to have that capitulation puke out in the past , but now the volume has expanded both up & down so much that its a blurr. Could it now be accumulation ? On a weekly chart the accum/dist line has been rising in many Miners- encouraging. What has FUNDAMENTALLY changed? Has anything fundamentally changed? One thing is for certain…when things do change, the markets or smart money seem to know 6 months to a yr before the crowd do. THATS why I use charts to just try to get a read on what may be happening. When markets begin transitioning – it often shows in the charts. If the price of Gold could rise from here…If it could get above even $1400 & stay there, I think the Miners “Expectations” of better earnings could add to the attraction in Buying. Look at a 3yr weekly, and we have a good BASE forming now in GDX/GDXJ. If it doesn’t completely break down (& seems to have broken out upside)…I’ll still be taking it one step at a time. It does look promising though. SOME Elliotwave followers see the base as a 5 wave sideways formation calling for more downside. It’ll take time to see how things play out.

      Back to your question: Has there been a full enough capitulation? I couldnt get anyone to buy last December. It was a little easier in May, but still many way afraid to hold more than a few days. Right now many jump in and out fast trading, afraid that the bottom will fall out. People have been conditioned to sell positions and not hold Miners over the weekend, or over night. So I do still see fear , but “Could there be” another flush out. I’m sure there could – for now I’m also looking for clues. thx for reading.

      • OOG

        “smart money seem to know 6 months to a yr before the crowd do. THATS why I use charts to just try to get a read on what may be happening. When markets begin transitioning – it often shows in the charts.”

        thx Alex.
        So what underlies $GOLD at this point? Might have expected 1080 or less, by now. Has the internet added $200 by more graphically presenting what’s been going on for decades in the ME as well as our general foreign policy?