PUBLIC REPORT : GOLD BULLS AND GOLD BEARS
We saw GOLD break to new yearly lows Tuesday and I read in several different places that people were going short for the drop below $1000 (Again). From what I was seeing, it was not time to be going short. I discussed that in my Tuesday night report and will post some of that discussion here in the public report.
GOLD SILVER & MINERS
This is the big story. With Yesterdays break down in Gold ( breaking the July lows and breaking to new yearly lows), many have gone short expecting their crash to $1000 to finally come in capitulation fashion. I believe that this will not crescendo into a crash mode at this point, so I would not recommend going short here.
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2 possible ideas on my mind – we should quickly review both since we cannot tell at this point which one will occur.
I have mentioned both of these ideas already in recent reports, this is a review.
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1. Gold will either find a dcl (Daily cycle low) soon and bounce. If we get a 4th daily cycle, that bounce will roll over, followed by another dip lower into final and much deeper lows
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2. We will put in that deep trade-able low (ICL) and rapidly move higher from here very soon.
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( 1. From above ) Timing-wise I wouldn’t be shorting because a daily cycle low in GOLD & MINERS is due. IF we only get that 4th daily cycle… That would produce a “Bounce” and my chart from the weekend report would play out like this. You could then short that bounce.
( 2. From above ) I drew this in my Nov 4th report. An ICL in mid November would match what we have seen recently. ICL’s have been arriving faster at 4 month intervals in very steep drops. You can see that we are now at the time that I pointed out as a time to watch for signs of a low.
Yesterday GOLD broke to new fresh lows. You can see that we are in the timing that a low is due to be put in place at day 32. It could be that ICL and we could then move higher for weeks. Now that many are shorting and the COT has been improving, this could be the case ( Wednesday afternoon is the release of Fed Minutes). We wont really know until the move starts unfolding. A 4th daily cycle would become weak and roll over as left translated by day 5-8 most likely.
GOLD CURRENTLY – We saw GOLD undercut last night and reverse higher. That could be the “test of the lows”. Lets see if it holds.
As GOLD broke down to new yrly lows, it is good to note that both SILVER & THE MINERS did NOT break to new lows (yet) . Silver & Miners usually lead moves down and up. Is this a sign of strength in the lead sectors, or will they play catch up in a final drop? We’ll know after we bounce.
On the Nov 16 chart of GDX , I mentioned how we had a swing low in place in July, and then it got undercut (Shake out). I pointed that out so that if it happens again, we have expected that possibility and it doesn’t surprise us . We did undercut lows yesterday too. Lets review.
The chart from the Monday night report – read what was written on the left side about that low being undercut. Price was rejected at the 9 EMA Nov 16.
Another chart of GDX showed these wedges. I wrote in my report that these can drop and test the break out too.
GDX yesterday – GDX can drop further, but on day 33 I personally would not be shorting Miners now. They are due to move higher.
In conclusion – You may want to try to catch the lows for a trade , but remember that if this is a 4th daily cycle, it will roll over soon ( And DUST may be the trade at that point).
What would GDX look like if it just bounces and rolls over? Does it fit the big picture view? Yes. A bounce & Tag would lead to the Dec Fed Mtg.
Today the FED minutes are to be released. On that Fed Wednesday Gold reversed lower quickly and started its sell off. We had volatility. Wouldn’t it seem odd that the release of the minutes would now cause a reversal and a run higher? We are due for a low though, and odd things do happen in these markets.
So at this point I am advising patience to see what happens after the Fed Minutes are released. Some traders will buy the reversal with a stop below the lows. For conservative traders, even with an ICL you do not need to catch the lows the minute that they happen. I will discuss other options in the Thursday report. Experienced traders can use the above report and the weekend report as a guide of possibilities to enhance their own trading style. As you can see from this report, there are still a number of possibilities that lie immediately ahead. Best wishes!
~ALEX
EDIT: We are currently experiencing the move higher in Gold & Miners that I was expecting. The above report is only part of the daily report for Fed Wednesday. I also covered the SPX, USD, WTIC, XLE, NATGAS, etc. A second set of eyes is often helpful in understanding the markets. If you think this type of analysis can improve your view of the markets, help you trade better, etc., I invite you to sign up for the premium reports. For only $37.95/ month you get 4 or 5 reports per week. When lower risk trade opportunities present themselves, I do point out ideas such as the below chart that was in this mornings report. The 2 arrows point out the idea of a possible bounce into a 4th daily cycle or a nice run similar to the one out of the summer lows ( With an ICL in place). Thanks for being here and best wishes in your trading!
