Category: 3 – Gold Trader

Still waiting for confirmation of an upturn in the 9-12 month cycle. Until that happens, there’s still downside risk, with limited upside. Here’ are the parameters to watch.

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Mining Picks- As a result of the pullback, and my placement of tight trailing stops, all open picks hit their stops and were closed off the tracking list. The result was an average gain of 12.9% on an average holding period of 3½ weeks. Non-subscribers, click here for access.

I had a bias of expecting to see a few short term buys on visual review of the screens. But when I ran the screens, there were just 2 charts with repeat buy signals and 9 with repeat sell signals. This is better than last week when there were 3 buys and 21 sells, but it’s still not fertile picking grounds for buy side trades. Non-subscribers, click here for access.

These two negative weeks followed a preponderance of buy signals for the prior 4 weeks. Therefore, for now, I consider this a normal corrective phase. However, Thursday alone had 2 buys and 3 sells, not a ringing endorsement of a short term bullish outlook. Non-subscribers, click here for access.

Upon visual review, the two buys did not look at all bullish, so we’ll be sitting out this week with no picks. We wait. Non-subscribers, click here for access.

Averages assume 100% cash, no margin, no options. The use of margin or options will magnify both gains and losses. See disclaimer. Non-subscribers, click here for access.

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The strategy and tactics suggestions in this report are informational and general in nature, and illustrative of one approach. They are not investment advice. No representation is made that it is the best approach, will be profitable, or even suitable for any particular investor.

Nothing in this letter is meant as personalized investment advice and you should not construe it as such. Trading involves risk of loss, and in the case of options, the loss can be 100% of the amount invested. Any trading that you do with reference to strategies and tactics suggested in this report should be done only after consulting with your financial adviser. Trade at your own risk. 

There’s not enough evidence for the umpires to overturn last week’s call on the field, but neither was there enough to confirm. Therefore the call stands.

Until it doesn’t. Meanwhile, gold is making progress toward completing a 9-12 month cycle low. There’s still risk of a pullback toward a test of the lows over the next xxxx xxxxx  xxxxx or so. On the other hand clearing xxxx should get things rolling toward xxxx.

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Over the past week the mining stock sector generated 23 charts with repeat buy signals and still 18 with repeat sell signals. The mining stocks lagged the sharp turn in the metal. But there has been a preponderance of buy signals for the past 3 weeks, so some reduction in buy signals and increase in sell signals is to be expected. The fact that there’s still a preponderance of buy signals is a positive sign. Non-subscribers, click here for access.

Upon visual review, I selected just one chart to add to the list. xxx. I’m not enamored with the idea of buying stocks that are still in downtrends, even if there are hints of reversal. For now, I’m only comfortable with the level of exposure we already have on this list. Non-subscribers, click here for access.

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Gold’s short term cycles have entered up phases but they haven’t shown anything so far and aren’t likely to. The longer swing cycles have yet to indicate that they’ve bottomed, and they still have lower projections. There’s still risk that they’ll be reached over the next month or two.

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Over the past week the mining sector generated 19 charts with a second or third buy signal on Monday, and no multiple sell signals. Sounds good, right? Non-subscribers, click here for access.

Uhh…. Non-subscribers, click here for access.

This market reminds me of the old Perry Como song. “Catch a falling knife and put it in your pocket. Never let it stab your leg.” Bottom picking for counter trend rallies in bear markets is not my favorite pastime. But given that any bottom could lead to a big rally, I will put one big toe in the water, and steel myself for its amputation. So, from my bottom picking perspective, I’ll go with XXX, tracking it as of the opening price on Tuesday. And, what the hell, XXX has room to pop, with nice positive divergences in the indicators, so I’ll add that as well. Non-subscribers, click here for access.

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Last week’s warning signs came to fruition. Here’s how much worse it’s likely to get. Once that happens, it should be a good buying opportunity.

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For the past week, there were 8 charts with multiple buy signals. There are 22 with multiple sell signals. The 8 buy signals were mostly on Friday, and they got soundly reversed on Tuesday, when there were just 3 buys and 22 sells.

The patterns look desperate. Is it a capitulation? Too soon to say, but I’m staying away, for now.

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Gold remains in a state cycle juxtaposition. Cycles facing opposite directions with none having thrust result in trading ranges. We were expecting this, but it’s still surprising. While a breakdown below xxxx would imply a target in the mid xxxx range there’s no sign that that outcome is imminent. But there’s a xxxxx that the longer swing cycles could xxxx xxxx xxxx xxxx in the July-August window.  X xxxxx breakout xxxxx xxxx would be needed to xxxx the likelihood of that happening.

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Last week’s performance among the mining stocks was again underwhelming but it did produce a couple of charts of interest that will be added to the chart pick list as of Wednesday’s opening price. They are xxx, xxx, and xxx. Charts below (in the report).

For the week, there were only 7 charts with multiple buy signals including one in the past 2 trading days. There are 15 with multiple sells including one in the past two trading days. So overall that doesn’t inspire confidence that the sector is ready to move. But, on Tuesday alone, as the whole market rallied, the precious metals sector saw 29 buy signals and only one sell signal. If there are more buy signals this week, the pick list should grow.

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