We Will Know Soon…

Thursday, January 4, 3:10 pm EST. We will know soon, but it is sure beginning to look like the metals are about to give it a real run! They’re up a good bit on the day… and the miners, which were off earlier today, have turned positive, and starting to add some decent gains.

Let’s see if this is truly going to be it! I put a trading position on Friday, and it’s giving me goodly gains! More later…

Harold

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A Bit of Awesome Analysis

Thursday, January 4, 1:32 pm EST. In the Northeast and getting blasted by a snow storm!

This bit of analysis showed up in my inbox today. Since some of it looked like my own, I was very interested in the other. I had already noted the wedge pattern below, and also recognized the previous lows had held, and that the previous highs weren’t far away, and needed to be challenged and broken. As this scenario unfolds, as it likely will, this market is going to give us some big gains!

 

Gold Will Likely Enter a New Bull Market… If It Can Do This

Thursday, January 4, 2018

Gold is on the right track…

It fell to a low of $1,242 on December 11, then rallied 5% to end the year.

It posted a 14% gain in 2017. And it started 2018 with a couple of “up” days, too.

The action has a lot of gold watchers excited. After all, gold now has a short history of rallies starting in mid-December…

In mid-December 2015, gold bottomed at $1,051 per ounce, then soared 30% over the next seven months.

And in mid-December 2016, it bottomed at $1,128 per ounce, then climbed 20% over the next nine months.

Gold stocks – as measured by the $8 billion VanEck Vectors Gold Miners Fund (GDX) – soared 129% and 34%, respectively, during those last two gold rallies.

So a lot of folks think we’re in for another great performance.

In DailyWealth Trader (DWT), we’re bullish on gold over the long term. We know that every paper money of the past 1,000 years has disappeared, except the new ones we use today – like the dollar, euro, and yen. And this round of paper money is creeping its way to worthlessness, too.

Only gold and silver have stood the test of time. And at some point, people will again value them much, much more than they do today.

Our advice with physical gold and silver has always been, “Buy a lot when it’s out of favor. And when you can, buy more.” Today, it’s out of favor.

Gold stocks, though, are a different story. They are extremely volatile. And they’re trading vehicles… not investments. If we want to trade them profitably, we need to look at gold with a shorter time frame in mind.

That’s what we’re doing today. We’ll start by looking at the big picture in gold… Then we’ll zoom in to a shorter time frame. We’ll wrap up with our current recommendation on how to think about trading gold stocks today.

Let’s get started…

For the past decade, gold has traded in a narrowing range called a “wedge.” But in August it broke out above $1,300 per ounce. That’s when we told readers that it was “Game On“…

As you can see below, gold pulled back to its support (the top line) after its breakout… And in mid-December, it turned higher…


Assets often pull back to their support after breaking out of a big pattern. So gold’s action isn’t surprising. Better still, its sharp rally these past few weeks – following the pullback – is a bullish sign.

From this perspective, it looks like gold is ready for a big move higher.

But before we’ll be convinced, we need to see one more thing…

As we noted above, gold bottomed in December 2015 at $1,051 per ounce. After a 30% rally, it turned lower… but held above its previous low. Regular DWT readers may recognize this as the first requirement in a new uptrend – a “higher low.”

To be convinced gold is ready to run higher, we need to see gold break out above its July 2016 high of about $1,370 per ounce. This will be a “higher high,” and a very strong sign that gold is in a new uptrend…


A breakout above $1,370 per ounce could mark the start of a new bull market in gold. And that would likely mean fantastic returns in gold stocks.

We hold gold-mining giants Goldcorp (GG) and Newmont Mining (NEM) in the DWT portfolio. But we’re not interested in opening new gold-stock positions today…

Look at an 18-month chart of gold stocks. GDX ended 2016 with a severe drop. It rallied from the second half of December through early February 2017. And it has traded in a sideways range between about $21 and $25.50 per share since then…


If gold (the metal) can manage to break above $1,370 per ounce, we’ll also likely see GDX break out of its sideways range (above $25.50).

That will be our green light. A big new uptrend for gold… and a new one-year high for gold stocks.

Until then, buy gold… buy silver… and wait to see how price action in the precious metals space develops.

How Far Will This Run?

Tuesday, January 2, 8:18 pm EST. I’m being asked to project where this run might go. I’ll take a stab at it.

On the price chart for GLD, the last 1 yr high was September 7 and 8. It did a 5 wave down trip from there to the December 12 and 13 bottom. It has since risen thru all 3 lines of resistance I had identified. Those being its own 50-day and 200-day moving averages, and the one line connecting the tops since 9/7. Right where it is now, is where there is a gap to be filled back on 9/18. Once that gap is filled, it could commence to retrace. There’s another gap, right after the 9/7+8 topping dates. Between that gap and those two trading days comprising the 1-year top… that place would surely be a place of resistance, and new highs are often difficult to achieve, but once done so, can offer some pretty clear sailing.

My own guess, before I even go anywhere else, to conduct some further study, is that being the eternal optimist that I am, I think this is actually going to be a very good year for the metals, and that the closest resistance I just mentioned might be broached as early as tomorrow; which if it is, the September top will be left, and that is only just 2.28% away. I don’t believe that will prove to be a strong resistance. I believe that this rally is only just now beginning to get some legs under it.

If that is so, Katie bar the door, because the 1-year high will have been taken out, and that was the first top of this fledgling Bull Market that only just bottomed and reversed, to become a Bull in December of 2016. It’s barely more than 1 year old, and it is just now finishing a 4-month correction that did not violate the lows previously established by this 12.5 month old Bull Market. I strongly suspect new Bull market highs will happen, and within just the next couple or three months, if not sooner! Did I say I was an optimist? Haha! More later, as I consult other charts in my program, my timer, and at stockcharts.com.


8:38 pm. I tried to learn the why of this, but there is a HUGE one-day spike in volume for the one special gold miner ETF whose symbol is SGDM. That spike was right after this move got under way, and can be seen on 12/19. I happen to know that Eric Sprott, the founder of this fund, likes to buy chunks of it for himself at opportune times, but my insider buy site has no data for that fund. Average volume at the time was 46,000 shares, but on the 19th, it exploded to more than 750,000 shares, or more than 16 times the average volume. I don’t know, but you tell me… whoever did that buying was prescient!

Harold

It Would Appear the Surf IS Up!

Tuesday, January 2, 7:02 pm EST. Well, I was half right. I thought stocks would decline, and metals would lift. The metals rose… and, so did stocks!

So, what are we looking at now? I thought it reasonable around the holidays, to let the lift of Wednesday 12/13 have more time to confirm. And, with today’s rise in the metals and miners, it would be reasonably fair to say this day was that confirmation day!

Prices rose a goodly amount, among my 16 symbols, 2.62%… but, I have NUGT among those. Take that out, and it was still a 2.19% day! That’s a big deal!!! The other thing we want to see, of course, and I jump on this all the time, is for volume to rise. And, it did!!! It was, again for the average of the 16 symbols I track, 30% greater than its 50-day average, and second only to the initial 12/13 lift-off. So, yes, this qualifies as a confirmation, and it may be the start of something significantly greater.

We’ll know soon enough! But, it’s looking like Surf’s Up, everyone! I got my trade on Friday, and it’s ahead by 8.2%. But, remember, it’s not how much you make that counts… It’s how much you get to keep!

Harold

Surf’s Up?

Tuesday, January 2, 7:17 am EST. Well, the metals are doing quite well overseas. Let’s see how this will translate here at home, when the metals market opens at 8:00. If it stays strong, or gets even stronger, the miners should do very well, when stocks open at 9:30!

I did put a NUGT trade on, as I reported earlier, and it will respond at a rate approximately 3 times each day’s move in the miners. If the miners should have a big day today, NUGT will have a most excellent day!

Harold

Further Apology….

Friday, December 29, 11:17 am EST. I put a NUGT trade on little more than an hour ago, and it’s doing just fine… just as I had hoped. Let’s see where it ultimately goes.

But, my reason for this posting this is straight-forward. You’ll recall a few posts back that I apologized for missing the clear call of my timer to say that gold was at a lo-risk market entry place back on 12/12… and it most certainly was, as the indicators within the program, but one, had all signaled, and the one lone holdout was very close.

Now, however, after having taken a trading position in NUGT at 10:07, I thought I’d look in on NUGT in my stockcharts.com default setting, and I could have just kicked myself again.

My default set-up has RSI above the price chart, and RSI was under 30 on 12/12 and signaling. Under the price chart, I have a slow stochastic. It was under 20 on 12/12 and signaling. Beneath the stochastic, I have PPO and ADX, from which I look for the squeeze pattern… and while it was not as clearly defined as I would generally like to see it, the PPO was declining while the ADX was rising, and was in the process of creating the tell-tale signal of the P3 Squeeze back on 12/12 that so often proves to be so faithfully profitable. Or, in other words, I had so many things telling me after the close on Tuesday, December 12 to be a buyer of NUGT shares, I blew the opportunity even worse than I had originally apologized to you all for!!! So, again, I’m incredibly sorry about that failure on my part. We could have bought in around $24.50 on Wednesday morning the 13th, and it is at $32.10 as I type… that’d be a 31% gain, folks!

O, well, I got in at 31.52, and have a near 2% gain for the first hour and a half into it… I’m really awaiting next week with this, to see if my ‘thesis’ about what mining share prices have been doing plays out as I have ‘guessed’. Hey, it could work!

Harold

Check It Out!!!

Friday morning, December 29, 10:02 am EST. Just as I previously wrote, get this now… the metals are both up on the morning, and not by a little amount either. But, like, by better than 1/2 of 1%! Go see that, if you can.

But, this is also the case… I’m looking at how my miners are trading, and they are nearly all getting sold! This must be tax loss selling or harvesting going on, I would think… as they are nearly all down.

I’m going to do it! I’m going to take that chance. I’m going to take a speculative trading position in NUGT. Something is telling me, whether rightly or wrongly, that it should work out real well very, very soon. And, if I’m wrong, I’m wrong, and will pull the plug quickly, as any smart trader will tell you to do.

There! at 10:07, I dipped a toe. I bought at the market and got filled for $31.52. Let’s see what comes of it! Hey, it could work!

Harold

End of the Year Strategy?

Friday, December 29, 8:48 am EST. I am really intrigued. The metals had two good outings Wed and Thurs, but the miners did not. That’s not typical, at all!

So, I’m wondering… the metals are looking good again this morning. Will the miners have another less than stellar day today??? I have a family get-together at 2:00 EST, and it’s a 40 minute drive there. What if… say about 1:00 pm, or so, if I were to remember to look in, and I saw that the metals were doing well still, and the miners were not… that if I were to play my idea that it is tax-loss selling, or something of that nature, and bought in for a trade on NUGT, with the idea that it would pop very well next week, to start 2018?

I’d love to hear what any of you might have to say about that. If the metals have another, a third good day, without mining share participation, there would have to be some upside gain to be had going into the new year, wouldn’t you think?!?!?!

I’d look like a genius, if it were so. I’m game. If, after noon, and I remember to check in, and I find the very conditions existing as I have just described above, I’m going to venture a speculative trade on it. It just sounds too compelling for me not to… does anyone know of any reason why the idea doesn’t make sense, and would likely be a mistake? I’m listenin’!

Harold

 

Weirdness!

Thursday, December 28, 5:22 pm EST. I’m just going to come right out and say it: These past couple of trading days have just been downright weird! The metals, gold and silver, have each had 2 good outings Wednesday and Thursday, but the miners have not… not at all! They were all off Wednesday, and they were about half up and half down Thursday, as though the metals had not moved. Like I said, weird!

I don’t know what to make of it. Perhaps it is some end-of-the-year tax-loss selling? That’s the first thought that comes to mind. Volume was once again abysmal and pitiful, too. The volume for all 16 symbols was off an average of 23% from its own 50-day avg of volume.

Friday is the last trading day of the year 2017. If it should trade the same, with the metals doing fairly well, and the miners not… I’m going to guess it has to do with tax-loss-selling, and if that should be the case, then look out Tuesday the 2nd of January, 2018, because I would think a lot of catching up might happen then.

I’m already out on a limb as thinking and saying that I believe stocks are going to correct, going into the new year, as many traders and investors might want to take a profit, but defer the cap gains tax paying until April of ’19, after having had such a great 2017. Also, the precious metals miners have had just about the worst year, relatively speaking, in relation to nearly all other industry groups, and so, they may be getting sold for their cap loss harvesting, so as to be put against gains reaped throughout ’17… and, if that’s so, I’ll just go further out on that limb, and say that I think they’ll start ’18 well. That’s my position… for now… until the market proves me wrong again, and I have to eat still more crow! LOL

Harold

And, They Just Keep Rising!

Thursday, December 28, 9:17 am EST. It is happening. The quiet riot I wrote of is going on. Prices just keep gently rising, without attracting anyone’s attention, or so it would seem, because volume remains so light!

Now, for what it’s worth, the metals did little to nothing Wednesday, and the miners nearly all sold off just a bit, but this morning, the metals look to be catching a bid once again, and I would expect mining shares to open higher in just a few minutes.

I’ll report on my chart reading in just a few more minutes…

9:39 am EST. So, gold and silver rose some, but all the miners sold down a bit. That’s unusual. But, there is nothing in any chart that spells anything like trouble. Especially since the selling volume Wednesday was lower than any of the previous up-days’ volume. And, now, here after the open, nearly everything is up, as I expected they would be… though RGLD is off a good bit. I suspect they likely just paid out a large year-end dividend to shareholders?

Let’s see how things look at the end of trading today.

Harold