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Sell Gold in May and Go Away?

I don’t expect much upside in the near term but the outlook should brighten later this year.

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Four Year Cycle indicators remain bearish. A cycle low is ideally due xxxx-xxxx (non-subscribers, click here for instant access), but normal variance would allow for an upturn at xxxxx xxxx. However, there’s still risk of a final decline until momentum gives a clear buy signal. A down week this week would break the 6 month cycle moving average with bearish implications for the next xxx-xxx months. Conversely, a weekly close above xxxx would be bullish, particularly if 3-4 year cycle momentum breaks its downtrend. Such a breakout would signal a likely move to xxxx as the next target, with a conventional measured move target of xxxx-xxxx (non-subscribers, click here for instant access).

Swing Trade Screen Picks

Over the week ended April 18, 30 charts of the 52 mining stocks that I track had at least one buy signal. 21 had at least one sell signal. This remains typical of a consolidation phase with no sign of a strong push in either direction.

The signals anticipate swings of 3-5 weeks. But when a market or sector is rangebound, there are lots of whipsaw signals. This is why it’s necessary to look at the charts for the overall pattern.

I rescreened the stocks that had at least one buy signal over the prior 5 day period, for repeat buy signals on over the past two trading days. There were only 5. There were 3 repeat sell signals. Again, these are small numbers reflecting a sector going nowhere.

I looked at the charts of the 5 repeat buy signals. Again I was not enamored with what I saw. Too many charts looked like intermediate term tops, just like the week before. At best it looks like more ping pong ahead. I feel like giving up on the sector. Perhaps that’s a bullish sign. But until the charts give me something more concrete to go on, this week at least, I’m sitting tight and doing nada.

One existing pick hit its stop last week and I’m dropping another as of the opening price this morning. That will leave just one pick on the list this week. One pick hit its trailing stop last week. As of yesterday, including both closeouts and the remaining open pick, last week’s 3 picks had an average gain was 3.4% on an average holding period of 9 calendar days. 8 picks were closed out in March. The average gain was 10.8% on an average holding period of 27 days. Two picks have been closed out in April so far.

Since November, after tweaking the screening methodology to use multiple days in making selections, 25 picks have been added and closed out. The average gain was 6.8% on an average holding period of 29 calendar days. Averages assume 100% cash, no margin, no options. The use of margin or options will magnify both gains and losses. See disclaimer below the charts.

Table and charts below (non-subscribers, click here for instant access).

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The strategy and tactics suggestions in this report are for informational and entertainment purposes, and illustrative of one approach. Nothing in this report is meant as personalized investment advice and you should not construe it as such. No representation is made that it is the best approach, will be profitable, or suitable for you. Past performance does not imply future results. 

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Posted in 3 - Gold Trader
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