OCT 14, 2014 Since pointing out a few of the things that I look for to “Indicate” a possible trade-able bottom is near, we have had some improvement and I wanted to point those things out. I also have received concerns (Interesting) that some feel they may be missing the move if they havent taken a position, others who have are feeling anxious a bit too ,that ‘it’s not working’ . That seems to lead to questions like ,
1. “Are things O.K., feels like we are just going sideways?”
2. Doesnt this look like a possible bear flag?
3. “Do you think it’s too late?”
4. “Should I just jump in now?”
When being asked the above questions, I ALWAYS look back at past similar occurrences to determine what might be happening.
First 2 questions were are we ok? We are going sideways, looks like a bear flag? Answer: Yes, it COULD turn into a bear flag. Thats why you have stops in place, but is it LIKELY a bear flag based on my last report?
Lets the charts answer those questions, and of course since charts change, the answers can too. To The Charts…
In my last report:
We were looking at GDX like this, notice the 2 indicators in the bottom boxes, we’ll see if that has improved any.
GDX TODAY VS GDX MAY LOWS. Description below the chart
During a sideways move in MAY, which looked like a possible “Bear Flag”, Indicators turned up BEFORE the real run.
Today , in our current sideways move , One of those 2 important indicators crossed up today.
Now the last 2 questions above were based on Not being in a position. ( That is how perspective works…being in a position and we worry “What if its a bear flag? Why arent we running up faster?” Being out of position and we worry, “Am I missing the bottom?” or “Is it too late”. Funny huh?
Look at GDX DEC lows and MAY lows. When BOTH bottom indicators triggered, see the magenta line, the REAL move began. So there was some sideways action, especially in DEC which was deeply oversold. We were deeply oversold now too, so we might drop tomorrow and still be fine. Looking back on the chart , however, we are still fine if we are “OUT” of positions. BOTH indicators have not triggered and as a guide…LIKELY they will when the RSI 10 crosses above 50%
Zooming in on MAY 2014 lows, this looked like a bear flag, so staying out may have been prudent. When price broke above the 8sma, it still went sideways, but when those 2 indicators triggered, it Ran up nicely. WHEN THEY TRIGGERED, the RSI 10 moved above the 50% . Keep that in mind . You would have caught GDX $23 to $26.5 (JNUG/NUGT Score)
Finally – a close up of now and a summary.
Volume is light, looks like a bear flag…could it be? YES.
Should I get in now , or wait? Am I missing the move? Use the charts to decide.
You “Might” miss “THE BOTTOM”, but you will catch the meat of the move IF IF IF , we are at the type of Meaningful lows, (ICL) that I feel me might be and you wait for both indicators to trigger.
So be safe, if you’re in…you have to use and Honor stops. HOWEVER, if You are in Be Aware that – as we go sideways like DEC, you may get stopped out. WHAT?? WHY do I say THAT?
Well, we went sideways at what looked like the ICL for Many DAYS in Dec…then a quick slam shook out those nervous holders, stopped them out RIGHT BEFORE THE REAL RUN. Really? Yes see below…
That DEC chart shows that my indicators worked perfectly to enter at a relatively safe area. If you like to look at them BEFORE they trigger and get in early at what could be THE LOWS – then you MIGHT be nervous about the lack of upside, you might get nervous that a bear flag looking move is taking place, and you MIGHT Give up your shares at the very bottom similar to when we dropped after Dec 9 .
THAT is how the markets work my friends. We never know 100%,and they like us shaken AND stirred. I like to allow the charts to tell me a story, be it ‘a good history lesson’ , or ‘history in the making’. I try to stay unbiased and I know that markets move fast so I need to —STAY FROSTY!
Best wishes to all …