Throwing This Out There…

Thursday, August 10, 10:35 pm EST. Looking at this report. Is really interesting. I know the Big One is coming, if this launch isn’t it yet.

“If you’re among those who have been waiting to buy, we have some good news… We now have our first good chance to buy gold stocks in months.

Gold-stock investors are a stubborn bunch. Gold stocks started falling last August, and gold-stock investors kept buying all the way down. It took until April for them to finally give up on gold stocks and start selling.

The chart below tells the story. It shows the shares outstanding for the VanEck Vectors Gold Miners Fund (GDX)…

When the shares outstanding are rising, it typically means investor demand exceeds supply – in short, investors love gold stocks. And when this number is falling, it typically means investors are throwing in the towel.

In short, gold stocks are now “cheap” and “hated” again – two of three of our favorite investment criteria – for the first time since this bull market began. We’re waiting for a clear uptrend before making an official recommendation. Those who don’t want to wait around can take advantage of a low-risk opportunity today…

If you are determined to make a trade in gold stocks, I can suggest a low-risk, high-return trade for you to put on today. Take a look at this chart. It tells the story…

You can see GDX’s big fall in late 2016. But this year, something unusual has happened: Every time GDX has fallen to $21, it has recovered and bounced higher.

So your good trade “setup” today is to buy GDX, and use a hard stop of $21. If GDX CLOSES any day below $21, sell it the next day.

Your downside risk is about 5% from today’s levels. But your upside potential is many times that.

More North Korea…

Thursday, August 10, 9:45 am EST. Metals are playing their safe-haven role while this whole North Korea mess heats up. NK has done stuff like this many times in the past. Whenever they did so, the West would cave to them, and hand over billions of dollars in aid to make them just go away. The Prez isn’t playing their game this time. Bill Clinton, back in the 90’s did. Russia and China have roles here, but, so far, we don’t hear in the media that they are doing much, or enough, to defuse this situation. We have every right to pre-empt the NK threat, and I’ve no doubt that when the generals say they are ready, this tinpot dictator will go the way of Saddam Hussein of Iraq in the early 90’s. There will be more shock and awe, the likes of which this world has never seen.

To be frank, I believe that both Russia and China would love for that very thing to happen, to learn what we’ve got, and just how effective we are with it. The Soviet Union armed the Mid-East Arabic peoples around US armed Israel, and then provoked them to attack Israel for that very reason. How is this NK situation really any different. With satellite stealth, we have already identified every detectible target, maybe all; and their GPS co-ordinates are already punched in, and the latest Google earth pictures already loaded, for the before then after study. The appropriate conventional weapons are even now being dispatched and arrayed in their respective battle-ready positions, and before whatever hard red line gets crossed, our generals will let the Prez know that they are at full readiness. We might even get to watch it all live on TV, like we did in January of ’91! Unless some form of diplomacy actually succeeds. Don’t bet on that. Only if China and Russia step in to also seek to muzzle NK, will any diplomatic victory be achieved.

So, between now, and some resolution, the metals are likely to rise. As this situation might further escalate, even if only in the media; the metals will rise. I kept some. I always have some. As technical triggers might trip, I might put on some speculative positions more, but I’m not needing to. I’ll do so as I see technicals improve, and volume swells sufficiently. It may do all of those today!

The other matter is: Should prices commence to go vertical, hyperbolic, that would make for a good time to take some off the table, book some profits, with the intent of buying right back in at lower prices that will surely follow as these tensions begin to die down.

_______________

10:26 am EST. As I look in on the metals and miners, the gains are BIG! Go for it, if you feel so inclined, but, by all means, don’t take your eye off the ball, and keep your stop tight. It’ll likely come off, as fast, or faster, than it is coming on, once any word of resolution goes out. I just don’t play that way myself.

Harold

North Korea: Good for Gold?

Wed., Aug.9, 7:04 am EST. Well, the whole N. Korea mess is giving us a ‘raise,’ but I’d gladly give it back, if it would just go away! Looks like stocks will continue to take a hit, and the metals are being their typical safe-haven. And, what are we going to get? A nuclear exchange? Nah. Our capability is so much greater, more vast. We’ve no doubt been working on co-ordinates and establishing targets for a very long time, and allocating the appropriate conventional weaponry towards each one. I remember when we unleashed on Saddam one Wednesday night in January of ’91 on live TV! If it comes to a strike, it will be just as the Prez described yesterday… and they’ll never know what hit them!

If anything like this should unfold, we’re going to get a tremendous increase in the metals, but it’ll likely be brief. I would sell a lot into that, and buy back as things were settling down, and a price collapse was taking place.

China and Russia would love to watch… just to see what we’ve got, and how effectively we could use it.

Harold

Don’t Go to Sleep!

Tuesday, August 8, 8:31 pm EST. My wife’s mother may be close to passing at 90. Lots of family has been coming in from around the country.

Gold actually had a decent day today, but not so many of the miners. Do the charts tell us anything. Gold bounced off of its own 50-day moving avg, which is bullish, and on at least average volume, too, which hasn’t been common lately. Silver also had a good day, and its volume was a little better than its 50-day avg, and both formed a bullish hammer type of candlestick. Where the miners, in the main, didn’t follow suit, we will want to see if the metals follow through over night, and the miners might find any encouragement from them Wednesday.

Despite what’s going on here, I need to update the timer… there may be some indication within it that might give me an idea as to how close we may start to be getting, as well as to what price, and how long we might need before a signal might be generated. I’ll try to update it Wednesday.

A look in on metals prices overseas as of 8:44 pm EST, they are up some more. Gold by $3, and silver by $.05. Not insignificant, but nothing huge either… the start of something?

Harold

And, Lower…….

Monday, August 7, 6:4 am EST. The metals are off some more overnight overseas. We’ll be updating the timer and looking for a reset of the technical indicators of market risk. Let this downside trend continue, and may support hold!

Harold

It Wasn’t Pretty!

Saturday, August 5, 11:10 am EST. Friday was ugly. It was ugly, and rather painful.

Let’s chart everything, and take a look. Everything declined. All of ’em. There’s a line of support I had long ago drawn on each chart. How many were challenged? How many held? How many were broken? How many weren’t even challenged or threatened?

Support not challenged: RGLD, SGDM, ABX, GLD, GDX, SLV, WPM, PAAS, SILJ, PVG, and NUGT.

Support challenged, but held: SSRI, HL, FSM and CDE.

Support broken, we’ve got a problem: AG.

My impression now, is that the situation is not as bad as I had first thought or feared. So, what of volume? Volume expanded to be some 22% above the average. That is not insignificant, as it has often been running well below average for a long time now. There was a lot of selling, but it was not a rout or panic.

What of the average chart for all 16 symbols. Easy call. I made it earlier. Price had come right up and bumped its head on the declining-sloped resistance line I’d drawn from the 11/9, 2/8, 4/13, and 6/6 tops. The latest was on 8/1. The 7/26 pop in price, that gave me the reason to commence a “rally count,” meaning, will it take off an advance within the subsequent 4 to 7 trading days, is now officially dead, and off our radar. This market needs to reset.

It is time for me to catch the timer up with all the recent data, and interpret the technical measures of market risk that it generates. If we are blessed, it may, once again, signal a lo-risk market entry opportunity. If it does, and I should learn of outside confirmation from others watching this same market. I’ll call that opportunity, and get on board with small position at first, to be followed by a bigger commitment, should I see it confirm.

Here’s to your accumulation of real wealth!
Harold F Crowell

Headed Down?

Friday, August 4, 8:41 am EST. no doubt the jobs report at 8:30 raised concerns of further future rate hikes, and the metals have taken it kind of hard. Nothing big, mind you, but they didn’t go up. We’ll check back in later, perhaps over the weekend.

Rally? What rally? I didn’t see any rally!

Harold

This JUST In!

Thursday, August 3, 11:37 am EST. I wasn’t looking for anything… Just checking my email. Didn’t expect this, but it sure is interesting! Especially since they’re seeing and saying the very same things I have been from my own chart analysis. And, we’re arriving at the very same conclusion, too. It’s serious watch and wait time, as the opportunity may be shaping up right about now! See below:

The Tide Turns Bullish for Gold

Thursday, August 3, 2017

If you’re holding gold or gold stocks, it has been a good – but slightly frustrating – year…

Both gold and gold stocks are up… But every time it looks like they’re about to make big moves higher, they’ve turned lower instead.

We’re at another critical turning point today…

This time, though, gold bulls may not be disappointed. The tide might finally be turning for gold.

Today, I’ll show you the gold and gold-stock charts that I’m looking at… And I’ll show you how to know when it’s time to buy. It may be sooner than you think.

Let’s start by looking at the long-term trend in gold…

Regular DailyWealth Trader (DWT) readers are familiar with the “200-day moving average” (or “200-DMA”). It works by collecting an asset’s closing prices from the past 200 days, then taking the average of those prices. This produces a chart line that “smoothes out” market volatility.

A lot of professionals like to use the 200-DMA to size up an asset’s long-term trend.

You need to consider two main things when looking at the 200-DMA…

The first is that during bull markets, assets tends to spend most of their time above the 200-DMA. During bear markets, they spend most of their time below it.

The second thing to consider is that the 200-DMA itself is the long-term trend. And it acts like a magnet. Whether it’s moving higher or lower, assets tend to have a hard time going in the opposite direction for long.

So unless you’re looking at a short-term trade, you rarely want to bet that an asset will move higher when its 200-DMA is moving lower, and vice versa.

In the two-year chart below, you can see that gold is trading above its 200-DMA… and that after falling for eight months, the 200-DMA just flattened out.


Gold’s long-term trend line isn’t rising just yet… But it can’t rise without flattening out first. That – along with the fact that gold has traded above its 200-DMA for most of the past four months – is a bullish sign.

Next, let’s revisit an indicator we first looked at last month – the gold-to-S&P 500 ratio. As the line rises, gold increases in value relative to stocks. (Gold is outperforming stocks.) As the line falls, gold loses value relative to stocks. (Gold is underperforming stocks.)

As I noted last month, the ratio traded near a nine-year low… and was on the verge of breaking down. A breakdown would be a sign that investors are going all-in on stocks and mostly ignoring gold. (It wouldn’t mean that gold couldn’t rise also… only that stocks would likely continue to rise faster.)

In the chart below, you can see that the ratio did break down… But just barely. Then it rebounded. The rug hasn’t been pulled out from beneath gold owners’ feet just yet…


This chart still suggests that investors favor stocks over gold. But a bigger, continuous breakdown would have been far worse. For now, this indicator is neutral.

Plus, sentiment toward gold stocks is improving… Regular readers know that the bullish percent index (or “BPI”) tracks the percentage of stocks in a sector that are trading in a bullish pattern. It ranges from zero to 100.

The BPI flashes a “sell” signal when it reaches 80 or higher (overbought territory) and then turns lower. And it flashes a “buy” signal when it reaches 30 or lower (oversold territory) and then turns higher.

In the chart below, you can see that the gold-stocks BPI dropped into oversold territory at the start of July… And shortly after, it started to climb back out. It was a buy signal…


Despite the buy signal, we didn’t want to bet on gold stocks just yet…

You see, gold stocks – represented by the VanEck Vectors Gold Miners Fund (GDX) – have put in a series of declining peaks. It’s not a downtrend because the fund has bounced before breaking through previous lows.

But the declining peaks act like a slanted ceiling. They create a “resistance level” that gold stocks need to break through before they can make a significant move higher.

As you can see in the chart below, GDX is hitting its head on that ceiling once again…


This resistance is one reason I don’t recommend getting too bullish on gold stocks yet. The other reason is a chart we’ve tracked for more than a year in DWT – the long-term chart of gold…

In the 10-year chart below, you can see that the gold price has put in a long series of lower highs and higher lows. The lower highs act as resistance… And the higher lows act as “support.” Together, they form a “wedge” (also called a “triangle”)…


Just as in the short-term chart of gold stocks, gold is bumping its head on declining resistance in this chart. When an asset breaks out of a wedge, it often makes a powerful move in that direction. (Our recent gains in Chinese Internet giant Baidu are a great example.)

So… on the bullish side, gold is trading above its 200-DMA. The gold-to-stocks ratio didn’t break down (a relatively positive sign). And the gold-stocks BPI recently turned higher.

On the bearish side, we don’t have much. Gold and gold stocks may be testing your patience… But July was a good month for gold bulls.

Gold and gold stocks are bumping up against resistance right now. And we don’t want to bet on them making sustained moves higher until they break out. But overall, the picture is bullish.

When gold starts to rise, the gains in gold stocks can be huge. If gold breaks out of its long-term wedge, I expect to see triple-digit gains in gold stocks within the next one to two years.

We’re getting close… And the signs point to higher prices. Make sure to have some cash on hand for upcoming opportunities. They could come as soon as next week.

– Ben Morris

More of the Same

Tuesday, August 1, 8:56 pm EST. It’s more of the same. Metals and miners are not making any significant moves. It commenced to ‘rally,’ back on July 12, but that’s run out of steam, not that it ever had much, and has been moving sideways since the recent pop last Wednesday, the 26th. That’s fine! If that move was ‘real,’ then the market needs some 4 to 7 trading days to digest it, and we are now entering that time period, 4 to 7 days later, when we would want to see another similar pop in price, and on expanding volume again, as a way of confirming that this ‘rally’ actually is real.

It just hasn’t given evidence that it can be trusted yet, and only a truly good price move on volume could convince the jaded skeptics, like myself, that it’s worth playing at all… for now, I just have no faith in it.

Oh, and I almost failed to mention… charted price for an average of all 16 symbols is bumping right up against the line of overhead resistance that I draw connecting all the recent 5 past tops since early November. It will help should it push through that, as well!

Harold

Same old, same old…

Tuesday, August 1, 7:34 am EST. Well, Monday did nothing for us, and the metals are off a bit overnight overseas. As before, there would appear to be nothing to see here, folks. I’ll keep my eye on things, but there’s no reason to take any action yet.

I’ll flip thru the charts, and if there’s anything of interest, I’ll add it to this post later.

Harold