Plunger Checking in

Knights, its been a bit of a frenzy. Yesterday Tokyo today Vancouver. Just arrived for the Sprott conference. Try to put out a recap over the weekend. But for now , I am grasping at straws and talking my book. Was that a super pop and drop? A phase III immediate decent into hell? Maybe, but I wouldn’t bet on it….well maybe with your money.

Personally, I bought major at the bottom Friday, so I am still in the money, but not by much. Although the Franco position was a port in the storm today.

I find myself haunted by my previous writings. Recall my characterization of the psychology of Phase III. No one gets out alive… It’s no longer about hope its about liquidation. Embarrassment is no longer an issue, its now about survival…. people who saved for a rainy day now sell, because its raining. So after being the author of these words, how can I be long expecting a bounce. I don’t know, maybe for the same reasons that people get married for the third time, the suspension of reality for hope.

I am not delusional, as I refer to the charts. No doubt we go lower here, I am just saying we are entitled a bounce from these extended levels. I think the final washout of phase III will entail comical selling. The type of selling we would likely have if we break Fridays lows. I just don’t think now is the time. Maybe today was just the test of Fridays lows. That’s my bet at this point. That is what today was all about. If we violate it, I am outa here.

So lets look at a few charts.

Volume: Is this what you call chopped liver?

sc-696

This level of volume simply has to mean something very significant. You have all heard of a selling climax no doubt. Well this is what one looks like….yeah textbook. These just don’t come around every month or so. Golly gee if I wasn’t such a bear I might even try to make the argument that this was the end of the bear market. This chart is the definition of capitulation.

That was a weekly chart, now lets look at the daily. Since the fireworks began in this bear market (post POR) the two highest volume days came in this bear market last week. The highest down volume and the highest up volume. One must assign some kind of meaning to this. Again one must suspect some version of a selling climax (capitulation) and an upside reversal on the highest up volume yet in history…. again, just chopped liver?

sc-697

Let’s now move onto the RSi. You will note I have expanded the scale so it is easier to see what this chart is telling us. RSI performs the function of limiting a move. On the upside when RSI reaches 90 its just not likely the market can keep extending its upward projection. Well its the same on the downside. We hit RSI 8 on Friday and that is simply extroidinary. That level limits the move! One can see on the chart that it is now acting like Notre Dames four horseman. Just not going to let you through.

Now onto the grasping at straws department. Given a certain amount of artistic license I am redrawing the line that Rambus assigned to the HUI. Maybe a different alternative for a BT may come in around HUI 130. We are just going to have to let the market draw the lines for us in the days ahead

sc-695

 

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FGC this in response to your post…Free Falling…

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HGR 10

10!

hgr

hgr

How low can it go ?

How about the XGR

xaugold

a 20 Year Bear Market !

I was participation in PMs in 1995

That was quite a ride for a year or 2

Junior miners went nucken futz

Who knew…that was the top in PM stocks vs Gold

I heard from all the usual suspects that Gold Stocks were the leveraged place to be during a Gold Bull

They would go up 3 to 5 Times faster than Gold !

I swallowed the koolaide

BUT this hangover is generational

unfreajingbeleivable

What happens when there are NO more support levels of any kind !

Uncharted Waters takes on a whole new meaning

sheesh

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Clive Bullish — Some Good Charts

Gold: http://www.kitco.com/commentaries/2015-07-27/Gold-Market-Update.html

Silver: http://www.kitco.com/commentaries/2015-07-27/Silver-Market-Update.html

His targets might be a little high though…

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Taking a counter trend trade when DUST 60 is parabolic is risky. Parabolic as denoted by the parabola on the DUST 60.  Only when the parabolic line on DUST 60 is breached would I feel comfortable in a NUGT 60 trade…As everyone here realizes, the “easy” money has been made on the DUST trade.  This is KAMIKAZE time!

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JDST Update

We looked to have completed the ‘a’ wave down on this wave 4 for JDST. From the 30 minute chart (see inset), it looks like the ‘b’ wave up is completing. 100% Measured Move target shown around 10.02 for the ‘c’ down but the 62% retrace would satisfy @12.21 or so which would close the gap…

0727_JDST

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GDX Daily Bull trap–closed within upper trend line…

However, the positive divergence continues to build…

So odds are increasing this will break out tomorrow per Mark’s charts; however, keep an eye on the parabola on DUST 60– as Rambus would say, it’s “hot”!

 

GDX

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SPY Phantoms

Forgot to post this from Cobra’s Saturday update (public site: http://bbs.cobrasmarketview.com/viewforum.php?f=2)… Everybody asks how accurate the p-bars are… MrMiyagi the keeper of the p-bar spreadsheet calculated:

SPY: 174 targets 138 hits within 10 days, 79.31% rate. 7 open targets left, all to the upside.

Not Bad!!!!

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GDXJ – Current Trading Plan

Via JNUG, here’s how I’m planning to trade the GDXJ 15-min chart.  We’ll see how it works out. Hoping for 50% profit in a few days.

GDXJ

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DUST 2 Min with Neg Div at $36.21….

36.21 has to breach for me to stay in DUST…Neg div building…

http://stockcharts.com/h-sc/ui?s=DUST&p=2&yr=0&mn=0&dy=2&id=p69491146440&listNum=1&a=417753534

dust2

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JNUG – Entry Idea $8.00

If I can pick up some JNUG before the close today at reasonably close to $8 or better, I will hold it over night.  I think the risk/reward is good for a pop tomorrow.  I would bag the profits tomorrow.  Again, I’m day trading here or just overnight….working well these days.  The only caveat is that I could see an opening gap down to $7.59 area too.  So maybe don’t go too large and use that gap down to add to the position with a very tight stop below.  I’m still formulating my trading thoughts on this one.

JNUG

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EEM

Look Like Oil before the big breakdown

Buying EDZ here

eem

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Dow Threatening Breach of Larger Daily Neckline

DOW H&S

Dow is looking weaker by the day.

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Bollinger constriction on Dust 5 min forming…

Expecting move soon

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DUST 60 Parabola Line holding….

http://stockcharts.com/h-sc/ui?s=DUST&p=60&yr=0&mn=1&dy=15&id=p20910604389&a=388664339&listNum=1

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JDST – Re-Entry Idea

Looking to buy the 50% gap-fill retrace.  $12.50

JDST

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That’s all she wrote – this is significant for all markets

Down 8% so far today in Shanghai. Can the Bank of China save it? Doubt it…unless they close the exchange and that would be the worse thing they could do.

sc

 

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Spock Trading – 27 July

SPOCK 27 JULY 15 sc

Here is a snapshot of Mr Market as at close last Friday. The trade positions shown were entered last week. Not tracking the numbers just yet, until first week in August for new trades, when I should be able to post daily updates. Note GDXJ long is counter the longer term extra-day trade bias. This is a counter-trend trade based on shorter term indicators. Note the AUD chart…everything about commodities is there in one picture.

May go FLAT tomorrow or Wednesday morning, until after the Fed dust has settled, then re-enter as appropriate

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What I’m Looking For in GDX 2HR Chart

Setup marked in yellow:

0726_GDX2HR

I’ll also be counting waves on the 30min and 15 min charts…

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Sunday Nite Rick

$ GCQ15 – August Gold (Last:1098.50)

Posted July 26. 6:15 p.m..EDT

Friday’s rebound looked ever-so-slightly promising, since it followed a moderate selloff that did not quite achieve its ‘D’ target, 1064.00.  Now, if bulls can push this erstwhile cinder block above the two peaks shown, it would generate an impulse leg with enough vigor, perhaps, to power a rally into week’s end. The burden of proof will remain on bulls nonetheless, and it should be noted that the last such impulse leg, in mid-June, sputtered out almost immediately, giving way to a $125 decline.  Traders can position with a bid at 1090.90, but I’d suggest using ‘camouflage’ to initiate the trade rather than using a ‘mechanical’ entry, since the latter tactic would require a 4.50-point stop-loss.  When trading gold futures, our goal with ‘camouflage’ is to pare theoretical risk at entry down to 0.40-0.70 per contract.

0726_Rick

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Teetering on the Edge of an Abyss

wmc150727c

The chart above is from Dr. John Hussman of www.hussmanfunds.com

His most recent piece describes a set of factors that have come together at only a few times in market history.  These factors are listed at the bottom of the chart, but he explains them in more detail at the link.  The red arrows indicate where all these factors have come together in the past 45 years.

Needless to say, a rate hike in September might not be the best idea.

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Seriously…Is there a doctor in the house?

taki072615-1

http://www.gold-eagle.com/article/breakdown-2015-now-fact

Copper is in the process of breaching the monthly trend line that extends back to 2002.  Can I please get some more quantitative easing to stop this bleeding Dr. Yellen?

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Gunner: “US markets on the brink of confirmed sell signal”

http://www.gunner24.com/newsletter-archive/july-2015/26072015/

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Avi Gilberts latest weekend update

Is It Time To Buy Metals?

When the market made it clear three years ago that much lower levels were going to be seen, as the bottoming set up we were tracking was invalidated in June of 2012, I put out the lower targets we have had on our metals charts for the last three years.  And, during those last few years, many of you have questioned me about us being able to strike those targets, as they seemed too unbelievable to most.  In fact, I have been warned by many market participants, as well as other analysts, that if I wait for my targets, I will likely miss the next bull market.  Well, I don’t think we have missed much, and, in fact, have done quite well with our short side trades.

With the markets now dropping towards our long term buying zones, the most common question I am asked is “do we buy now?”  And, much of the answer depends on your risk tolerance perspective.  But, for those that are not trying to perfectly time the market, the answer is “yes,” if you already do not have initial positions in this market.  But, if you do, please do keep in mind that the “potential” still exists that silver can see the as low as the $10 region (ideal target has been 12.75), whereas GLD can still drop as low as the 75 region (ideal target has been 98) in an overemotional capitulation event, which I have warned about for quite some time.

With the break down this past week, the GLD has now moved into the buy zone, and is approaching my “ideal” target at 98.  However, silver is still hovering a little over that buy zone, and many of the miners we have been watching on our list have moved much closer to their buying zones. So, while gold has moved into the target zone, silver still has not, and I would prefer to see them both in the zone together to consider we have a strong long term buying signal.  That has not yet happened.

For those that are trying to time this market, I would have to say that it seems we still need a “rally” in a 4th wave to set up our final run to lower lows.  So, just like shorting the markets from the highs, one has to determine how much risk they want to take down here, and, more importantly, how much “pain” they would feel comfortable in taking if they begin to buy their long term positions now.  But, should you begin to buy now, we still have at least one more opportunity to hedge our positions as we did back in May and June of this year.

How I Am Viewing The “Buying” Opportunities

I am going on record that I still do not believe the final lows have been struck YET.  I know that some analysts in the market are again considering this last drop as the “final capitulation” which precedes the major market turn, but I am still not yet in that camp.  While we have begun to see the masses turning strongly against the metals right now, some even considering them akin to “pet rocks,” as well as seeing some of the lowest sentiment readings for metal bulls on record, our downside pattern does not yet look completed.

If I were to be an absolute purist, I would say that we need another rally in a wave iv of 3, followed by a lower low in a wave v of 3, which would be followed by a second rally in a wave 4, which would then be followed by another lower low in a wave 5.

What this ultimately means is that after a wave 4 rally, which should last between 2-4 weeks, as I expect it to be much larger than wave 2 based upon the theory of alternation, I am going to be “calling” the lows are in at the next lower lows following that wave 4.  But, I want to be clear.  Should we see a lower low within the next week or two, I would only view that lower low as being the completion of wave 3, with us still needing a wave 4 and 5 before the lows are in.  However, at whatever the next lower lows are, even if they are only wave v of 3 within the next week or so, I will personally be buying more metals and miners on those lower lows, and leaving capital available for more buying at the next lower lows I expect.  My intention has always been to layer into my long term positions.

This means that my answer to the question of “is it time to buy?” is to be answered in the affirmative on whatever next lower lows we see.  Should that lower low be seen within the next week or so, it is a good long term buying opportunity, but we still have a high probability of seeing one more lower low below that, even after a rally is seen.  Yet, remember, just as we did our initial buying for the first time in 4 years at the November lows in 2014, and we successfully hedged those longs in May, we can always do the same on the next larger wave 4 rally.

But, the lower low I am still expecting in a month or two, would be a VERY STRONG buying opportunity, and those levels may not be seen again for many decades to come.

Wave Count

Silver is still not providing us with a standard impulsive pattern to the downside, and still strikes me as forming an ending diagonal to complete this final run to lower lows.  Furthermore, we may yet see a little lower to complete this wave (3).  What this likely means, if I am correct, is that the upside in silver’s 4th wave may be relatively limited as compared to that for gold and GDX.  But, it also means that when silver does complete its full 5 waves lower, the move off that 5th wave bottom will likely be one of the more powerful moves we will see in silver.

As far as GDX and GLD, those of you in our Trading Room at Elliottwavetrader.net know that, by the end of this past week, I have gotten out of the significant portions of my puts/hedges which were entered in May and June. Yet, I am struggling with whether the low we saw on Friday was the end of the 3rd wave in this 5th wave, or if it was only wave iii of 3.  Should we see lower lows in the next week, that would suggest to me that the low on Friday was only wave iii of 3, and the next immediate lower lows are wave v of iii.   However, should the market begin a multi-week corrective rally/consolidation, it would confirm that the bottom struck last week was the completion of wave 3.

I want to clearly note that I have reached a point at which my fears may drive my wave count, and I am concerned that this may affect my objectivity.  But, when I look at the long term picture, it is not reasonable for me to be suggesting to those who have been waiting for me to issue the “buy” signal to continue to wait, at least for their initial entries into this market.   But, if I were a complete purist, I would almost have to expect lower lows within the next week or so, which would then complete wave v of 3.  And, as you can see from my GLD chart, this is how I must present the count, as it really makes the most sense, despite my fears.  However, I cannot maintain the same perspective in the GDX at this time.  And, oddly enough, silver also looks like it needs another lower low to complete wave (3).

So, for now, I am going to be looking for a lower low within the next week or so, which would complete wave v of 3, which will then kick off a multi-week corrective rally for wave 4.

EWT Miners Portfolio

As an update on the Elliottwavetrader.net miners portfolio, Larry, Zac, Garrett and I continue to prepare for the final bottom in the miners.  We are meeting this coming week to review all the stocks we have initially picked for that portfolio to re-assess if our initial picks will remain in the final cut.

For those that may not know, we are creating our own miners portfolio within our StockWaves service at Elliottwavetrader.net, with the goal of outperforming the GDX.  We are analyzing all the stocks within the GDX, and taking out the ones that we feel will underperform, and replacing them with stocks we expect to outperform, once the bottom has been struck.  Furthermore, our “committee” will be regularly reviewing all the stocks within the portfolio every two weeks to assure that we maintain an outperforming portfolio.

And, since my expectation is for bottoming to occur no earlier than September, we should have our list and allocation percentages completed by our roll out date of September 1.  And, we thank you, our membership, for constantly pushing us for this over the last year.  Ultimately, we expect this will place us the enviable position of having recommended  exiting the market at the exact top in 2011, and attempting to time the publication of our managed miners portfolio right at the expected bottom.

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Where are we at????

EWO Repeating Pattern may offer insight:

0726_EWO

Do not confuse EW counts with EWO counts but the “EWO Pattern” backs up projected EW count…

Wave 4’s normally retrace 38% which would mean next move up in GDX should end around 15.33 (also would close the gap and pretty close to WW target on 2HR Chart previously posted)… Would then expect to go back down to finish the ‘5’ for a Wave 3… However, with Friday’s COT Report we may get a bigger bounce up!!! Let’s see how it pans out… this is just a guide…. trade the indicators on the 2HR Chart…

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DUST 60 with added Parabola Line…

dustNot only am I watching the gap; but the parabola too…

http://stockcharts.com/h-sc/ui?s=DUST&p=60&yr=0&mn=1&dy=15&id=p20910604389&a=388664339&listNum=1

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Next Stop for $USD: 105

Eventually I think it runs to 125.

USD

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Expectations are Too High for Gold & Miner Bounce

While reading all these commentators call for the likes of 40% rises in gold before year end and that we should be preparing our gold stock shopping list, I decided to look at some charts.  My conclusion is that we are a long way from a meaningful bottom that will start an actual trend change.  In fact I think any decent bounces we get for the rest of the year (at least) will be great shorting opportunities.  I even think $1,100 gold may now be a resistance level….we will see.  Even if gold just stays at $1,100, the miners should still rally a bit but I will be poised to jump on the short train following any decent bounce.  Take a look at the HUI chart I developed in Feb below:

HUI

I’m looking for a solid 3 drives to start carving a bottom donw around 80 or may be lower.  These analysts who think we are in the midst of some V shaped bottom are delusional IMO.  The $CRB has completely broken support and the $USD chart is busting out of another bullish flag on the monthly chart.  I think the HUI still gets cut another 50% from current levels but it will be much trickier to trade than that softball we were handed over the past month or two.  Lot’s of chop and it will frustrate many.  Now is the time to be a short term trader in the metals market I believe.  Don’t fight this trend!  ….not just yet.

Gold

Just my opinion and 2 cents……………….

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Another question…

I was planning to buy and hold GDX (and/or GDXJ) for a longer period of time, according to what Avi Gilbert (elliotwavetrader.net) and Robert McHugh write about a possible bottom.

Even when we go lower, what do you folks think about this idea (especially when you consider that even Martin Armstrong sees gold going to 5000…). Could this be a reasonable place to take a first part of GDX/GDXJ, or is this a stupid tactic?

P.S. Avi Gilbert, who was very bearish on gold for quite some time, sees GDX finishing its long term 5-wave decline, while Robert McHugh writes in his latest weekend-newsletter:

“We believe that a bottom in Mining stocks and precious metals is imminent, ending their long corrective Bear Market since September 2011. Friday July 24th‘s price action formed a Hammer candlestick pattern, which often appears at bottoms. If you look at the chart on page 47, you will see that this week’s sharp decline in Mining stocks is completing a large Declining Bullish Wedge that started back in late 2013. The fifth wave finally reached and dropped slightly below the bottom boundary. We need to see new Buy signals in our key indicators for confirmation. Then it should rise substantially for a long time. The coming rally should coincide with the coming stock market crash.

Gold also may have bottomed this week, but if not, a bottom is imminent. First of all, Gold finished a large Declining Bullish Wedge pattern from early 2013 this week, as its final fifth subwave dropped below the bottom boundary, a textbook finish to this pattern, finishing wave e-down of (2) down (see chart on page 44). For Precious Metals, t ypically, the fifth wave is the most dramatic wave, whereas in stocks the most dramatic is the third wave. Thus the recent plunge in Gold during subwave e-down is typical, and means the completion of the pattern is nigh, and a bottom is imminent.

Further, Gold closed back above its Bottom 2 standard deviation Bollinger Band Friday, July 24th, after closing below its bottom Bollinger Band 2 standard deviation boundary earlier this week, which is a Buy Signal.

Further, in the chart on page 46, we show that the Commitment of Traders Weekly data continues to show that Net Large Speculators have reduced their Futures Long positions to near historic lows, while Insiders’, Net Commercial’s, Futures positions have risen, reflecting increased buying. I have circled each time over the past two years when the narrow spread we see now between the two, this same situation, existed. In each instance, GLD, the ETF that tracks Gold, began a nice rally.

Not only is this a Bullish development, it also sets up the possibility that the coming rally in Gold will be a strong rally, and once that rally begins, those Speculators who are short Gold futures will have to cover those short positions which will provide energy behind the coming rally. There are so many short positions, their need to cover (to buy what they have contracted to sell but do not own as prices rise above their contracted sell price) could be a demand gale force driving Gold higher once the rally begins. Gold could catapult.

Gold has been an alternate choice to sell to raise cash for investors in Chinese stocks that have had their trading halted, or for those who have been prohibited by Chinese edict from selling their Chinese stocks. This has been putting downward pressure on Gold. At some point this selling pressure will cease. 

Big picture, Declining Wedge patterns are termination bottom patterns, and it means Gold is headed much higher during the last 6 months of 2015, headed toward a minimum of 1,425ish by year end. It means that Gold could see a 40 percent rise from current levels this year. This means large degree wave (3) up is just about to start. While inflation is not a likely causal factor initially for Gold’s coming rally, we believe the short-covering mentioned above will be the initial spark, and a secondary fuel for this rally will be a black swan event that drives buyers to Gold as a safe haven, perhaps the same black swan event that will ignite a precipitous stock market decline. Gold has risen sharply during past stock market crashes, so a crash this year could fuel a huge move up in Gold. Then once the stock market plunges, we see central bankers printing money, hyperinflating the economy again, which will fuel Gold as a monetary inflation (devaluation) hedge. So three coming driving forces will push Gold and Mining stocks higher, starting real soon: 1)Short-covering, then 2) a Black Swan event, then 3) fiat monetary devaluation.

Our short-term key trend-finder indicators for the HUI Mining stocks, which also points out trends for Gold and Silver, moved to a Sell signal Tuesday, May 26th, and remain there Friday. The HUI Demand Power / Supply Pressure Indicator generated an Enter Short Positions signal Friday, May 22nd, 2015, however it is now showing a Bullish Divergence (see chart on page 20). On Friday, July 24th, Demand Power rose 12 to 377, while Supply Pressure fell 4 to 453, telling us Friday’s rally was strong, with two-thirds of the buying coming from shorts covering. Get used to this short-covering gale wind behind the push higher for Gold, Silver and Mining stock prices.”

 

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GDX Daily…Agree with Mark–Bull Flag being formed…when does this break out?

GDXhttp://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=0&mn=3&dy=0&id=p12660416483&listNum=1&a=385190219
Back and forth between blue lines till the breakout occurs.  Thus, selling at the top was a prudent move Friday.  I am all over NUGT when the upper blue line is breached…and will buy back into NUGT at the bottom of GDX blue line if a bullish formation on the 2 minute charts presents itself.  Monday could be a pop and drop to fill the gap and retest upper blue line?  Many potential scenarios.  Project, monitor, and adjust.

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