1:24 pm PST
Well that was an interesting close! After dipping into the red at the morning’s open the Dow kept creeping up all day until buyers started to really rocket it higher. The volume is coming back into the indices.
The mining stocks sold sharply off into the close, but GDX, SLV, GLD, and ABX managed to keep their gaps open however slight. SLV closed right on 16.23, and IAU closed right on 11.29. The 21 sma is still resistance for GDX. GDX made its first attempt at the 21 sma yesterday, the second attempt today, and we will see if tomorrow the third attempt will rally through. GDX had a 500,000 print at 21.45, we closed a penny below.
PAAS looks bullish for tomorrow.
The dollar closed weak and we might see continued weakness tomorrow which might help the precious metals. The USO closed lower as did UNG.
The emerging markets etf, VWO, also saw some nice buying. VWO had a 1,332,961 print at 36.50 and closed above. DE also closed above today’s print.
6:01 p.m. update: In answer to SKT’s question, I usually do not like to buy into weakness such as in the case of USO and UNG today at the close unless there is a huge amount of dark pool buying, and even then, I would be cautious. I generally would want to see a clear move to the upside first, then a pullback and higher low which usually provides a lower risk opportunity to go long. That said, UWTI did see some dark pool action at 23.14 with about 1.9 million shares traded at that price. UWTI did close above it, but it also closed red, so it is a mixed signal. UWTI also closed under the 4 ema, but just over the 8. I would like to see a close above the 4 ema to become more bullish. UWTI’s gap down remains open, which generally means more downside.
UNG has had a great run. I almost wish I had bought into it several weeks ago when it broke above 7.55. It definitely looks good for longer term, short-term this is probably a wave iv pullback, with another wave v higher before another consolidation.
Thank you for the questions! I love the questions.
Regarding another question I had from reader C, I use Stockcharts and TOS for charting. I also just looked into DAS Trader Pro. Technology helps with trading but trading well is really about eye training. Jesse Livermore did famously well without a whole lot of software at his disposal. He did well because he knew how to read the tape. He understood the price fluctuations.
Regarding Martin Armstrong, I love him for his vast depth of historical knowledge regarding the markets. He is a walking financial encyclopedia, a good man, hard working, and I admire him. I like to know his overview of capital flows and I like his ECM model. His benchmark targets from his 2014 Gold report absolutely stunned me with their accuracy.
Martin Armstrong also stated at the 2015 WEC that the Dow would rise first as international money seeks a place to park. The S&P is for domestic money, and the Nasdaq would rally last. It looks like his words ring true today. We can see the Dow and the SPX rally much more strongly versus the Nasdaq. The QQQ lags, but it has a very clear pattern to it, which I see, that we have begun the phase transition to the upside that he has written and talked extensively about.
On the flip side, I am not sure that I completely agree with his thesis that gold must break below $1000. I do have the possibility of break down on my radar and so I am cautiously bullish on the mining stocks like PAAS, but his thesis has to fit with what I currently see on the charts. For me, looking at a bunch of different mining stocks, what I see is a higher low, multi-month bull flag, and another buying opportunity here. He has recognized that gold may have bottomed on his first benchmark target December 3, 2015, that is why he set his confirmation level at around 1270. He did also say that gold will be in a bull market when it rises in all currencies. So, we have to look to see whether gold can rally along with the dollar and close the year above $1270. Granted, it is a lot to ask. My own conservative level for gold confirmation of a bottom is about 1250-60. For SLV it is 16.23 and SLV closed right on it today, not above it. Presently the dollar and gold trade inversely. However, there is the possibility that gold can rally here along with the dollar. Gold just needs to prove itself.
The arrays on Socrates are only sometimes useful and I find them more of a distraction as they change often, which can be good but also distracting. The reversals are useful for longer time frames, but not sensitive enough for my daily and intraday transactions. I also do not know how they are generated because he keeps it secret. When I do not fully understand something it is hard to fully make use of it, but I do like to know where the reversal levels are sometimes. Other times like now I do not use them at all because I do not have access to Socrates and I feel fine.
I like my moving averages a lot better. It appears Marty uses his reversals much like how I use my moving averages. 🙂
My Journey Towards Understanding the Markets 