Monday 5/8 6:58 am EST. Miners did better than stocks Monday, and they did better than the metals prices, too. But, not uniformly. Many were up, but others were down.
I’ll look at the charts and note if there’s anything there worth reporting. I suspect not. Prices are down a bit overseas. This is beginning to confirm my earlier suspicion that short-covering was at work Friday. But, again, asap, I’ll read the charts and get right back here.
9:51 am EST. Checking the charts from Monday… (and yes, they are down some more this morning, since the 9:30 open)… as I reported, they were all over. But, what is the ‘tone’ set by each, and by an average of them all? Where is price ‘at’? And, what is volume ‘saying’?
Gold, via GLD, peaked most recently on 4/18, with an upside volume spike on 4/21. It has been in decline ever since, which, actually, is just what we want, as we are looking for a place of price support, market bottoming, and that launching place from which the next rally will commence. Since the nearest-term support I had identified earlier had, in fact, failed; just as I had said that I thought it would… I said that it was far more important that the March and December lows hold. These have, so far, and this is truly a bullish development, giving rise to a hope for a great rally yet to come!
As similar patterns come into view with the miners, funds and royalty firms; a case for a bullish rally builds! This case exists for: RGLD, CDE, HL, SLW, SGDM, GDX, ABX, PAAS,
But, NOT for: Silver in the form of SLV, SSRI, PVG, SILJ, AG and NUGT. But, with each of these; though March has been broken, December is still in place. That is very important.
It’s truly not the case for FSM. It has broken down and utterly failed. It may be necessary to consider tossing it away altogether.
Finally, with an average chart, of all 16 issues, we have a perfect picture of March lows providing wonderful support. I had thought that Friday was short-covering; which appears to have been correct, so far… and Monday was actually a day of “marking time;” a day of serious indecision, and of going nowhere, accomplishing nothing… along with volume drying up, big time. I’ll update the timer, and get back again later, but my present take would be this:
This market is now pondering the fate of the March support level, and where to go next. To all appearances, it’s looking to hold. The longer it does so, the more serious this level of support becomes. And, the longer it does so, the greater the likelihood it will become the launching point of the next great rally in metals and miners. Don’t think it can’t, or won’t happen, as the very simple fact of the matter is this… the more people think just like that… the greater the likelihood it will happen! We want to be there when it does. Be hopeful and optimistic, but do not commit assets until it actually shows itself; unless you are the really risk-taking type, willing to keep very tight stops under the March support level. I won’t be doing that.