The prolonged bear market for gold and silver has continued for 4 years now. Over the last year metals and miners have provided some clues to a possible bottom being in but every time the bulls start a rally they fumbled the ball. The action this year has looked good in gold (weaker in silver) but today they both threaten a key breakdown. Bulls need to hold on here or the metals and miners are at risk of heading lower to test the December lows or make new lows... Here are three charts one of gold one of silver and one of the miners themselves. First up here is silver at the lower BB which has opened up to the downside it is sitting on two key supports uptrend support line and the lower trendline from the channel since the March pullback. Bulls need to hold this line.
Next up a chart of gold which is setup a bit better than silver holding the 1180 area currently which is a support. The lower BB has widened lower here and looks to be at risk of rolling over once again the bulls must hold this area....
The senior miners (GDX) are sitting right on the middle of the BB and key support since the February bottom. RSI is right on support as well, Bulls must hold this line or once again the bears will be in control again.
Trade the charts and listen to what they are saying. I wish you all the best of luck have a great evening.
These are the plays that I love if I am wrong I will take a tiny loss, but if I am right I stand to have a big windfall over the next few months. No one is talking about corn wheat soy beans and sugar. They have been beaten up for long time still in a 4 year beat market. But it has had a few sharp 20% rallies in 2 month period off of this lower trendline of support. We are close to lifetime lows going back to the 2009 crash and on a daily chart have put in a triple bottom at the ~22 level. RSI on the weekly is currently just holding over 30. Here is a chance to take a few % downside risk for a possible 20% pop 10-1 Risk/Reward setup, can't ask for much more than that. Wish you all the best of luck have a great evening.
Uranium plays have caught my attention this week with oil and gas plays making a move Uranium is trying to follow. I like URA for a long Idea if it takes out todays highs 10.89 against the recent lows of 10.18. It looks like URA wants to head up to the prolonged downtrend line at ~12. I hope this week has treated you well. Best of luck to you all.
There has been a lot of bullish sentiment and frothiness in the markets as of late. Heading into this week I was watching the major averages to see if we could breakout from some consolidated ranges that we have been trading in. The Dow's chart summed up todays action across the board a rise right into resistance and failure. I started picking up shorts (SPXS TZA) with stops below today's lows. I think we see a few days of pullback and the risk/reward setup is in the bears favor here. The vix had a big reversal today and is up ~10% off of today's lows. Tightening up stops and moving into cash or playing some select shorts on tight leashes looks to be the way to play at this moment. Best of luck to you all!
China has been on tear for a while now and has gone parabolic on a daily time frame. It has broken out of a year long uptrend and has had 2 consecutive gaps higher. It feels like panic buying from everyone who doesn't want to miss the move. The Shanghai index is up 22% in a single month and has almost doubled in 6 months. We can see this week it has broken through resistance going back to 2008 this week. While this move is extreme we can see that the last time things got out of hand the index tripled in a years time, this may not be the end of the move. However when we look at things on a daily basis it is quite out of hand and worth scaling into a short for a mean reversion pop.
When I see charts on a daily basis that are straight up after a prolonged move I immediately think about shorting. Lets look at a few huge moving plays recently that collapsed after parabolic moves up I could post tons of examples but for the sake of room I choose two. Remember when Russia was supposed to collapse a few months ago? When I see action like we had in December I go against the herd and play the other side. Remember BITA it went parabolic and went from 75- 100 in 3 days. Moves like that are unsustainable nothing goes straight up.
Now the tough thing shorting a huge run up or buying a big collapse is you never know how much farther the lunacy will continue. I started shorting bita at 80 and was feeling some pain when it was 100 two days later. However I built that into my plan before taking the short and added to my position every $10 higher with small sizes. You can't take a large position size and try and time the bottom it always falls further than you think possible or goes higher than you thought possible. If you take a huge position you can find yourself in alot of trouble quickly. You have to play small on these types of plays or you risk ruin. If you take small positions and plan to add more to your short the higher it goes and manage your risk through position sizing you can find yourself on the winning side of a trade without ever putting your account at risk.
We started a position in YANG yesterday I thought I might be a bit early but plan to add shares in 4 lots on each 50 cent drop taking into account the overall risk I wanted to take total on the position. We added on today's drop so we have 1/2 our total position here. I would expect to see a sharp rally in YANG with in the next few trading session. To try and catch the bottom or short at the top of a move is dangerous you have to have a concrete plan before going into the trade. All too often I see people take a huge position and get themselves trapped and then right before the trade heads in their direction they throw in the towel because they have lost to much and can't take anymore pain. Even though I am long YANG here I would be fine seeing another 10% gap down tomorrow and welcome it so I can increase my position size. Be careful on trades like these have a plan and stick to it. Best of luck to you all.
I hope you all survived todays carnage in the markets. Our BIS and GASL swings did well. The last week or so I haven’t been posting an everyday chart of the day as there have been less and less trade setups on the long side. As I have been saying for a while there is a lot of risk in this market. We have continued to try a portion of the portfolio on the short side while taking a few select swing setups with tight stops while sitting mostly in cash. Usually we covered the shorts pretty quick like the soxs play 2 weeks ago. Today with the action in the IBB we did take some profits but opted to hold 2/3rds for more upside. Today was a perfect example of markets taking the stairs up but the elevator down in both the semis and biotechs. There is likely more downside for both but as always we locking it some gains and moved up stops.
People have gotten too complacent for a long time with buying the dips its they have consistently been rewarded. Most traders forget what volatility is and have become accustom to straight uptrends over the last few years, that’s not historically normal market conditions. If you always think of risk first days like today will not hurt your portfolio. I am going to be working on some changes to the website with a few new things to come over the next few months. Until then I will try and update the site everyday but there may not be an actionable swing setup based on the overall market. I will leave you with a chart of the SPX today. Be prepared for a bit more downside to come, as always you have to respect this market and the chance for it to v shape rally back to new highs so manage risk, but the underlying issues just keep mounting up… Have a good evening all.