The Uphill Climb

When a climber begins an ascent, they are full of energy and the start of the climb is always easier than when they near the peak. As the climb continues, you may see the climber periodically rest, shake out the tightness, even drop back and pursue a different path to the top. Various stock market sectors, Precious Metals and the Oil sector are experiencing that now (long-term they remain bullish in my opinion).

WTIC – This was June 14 and we were on day 50 of a cycle, so it was already late in crude oil’s daily cycle and I was expecting a low soon.

WTIC – That would make Thursday day 52 and we have a trend line break and possible support on the 50 sma. Of course, we could get a quick shake out, but a reversal here should be from the daily cycle low. I’m expecting that Daily Cycle Low, as the last 2 daily cycles are right translated (R.T. is bullish). I would say that 'long Oil’ is now back in play.

XLE – The Energy sector put in a reversal at the 50 sma on Thursday. XLE did lose the 50 sma, which may have been a shake out. Tight stops at the 50 have not worked in recent years.

GOLD & MINERS

 I wrote this in yesterday’s report, and this is what we saw.

GOLD – This is what a “False Break Out” looks like. People buy the break out in the event that it will just run higher, and then it will try to shake them out. I am still bullish on gold, despite a pause here. We could see a sideways move into Brexit, and it could form an inverse H&S with a drop to the 50 sma.

MINERS –

Since we are in a Bull market and we were in the timing for an ICL, I had been saying that I was buying certain miners 2 -3 weeks ago. I also mentioned that readers should at least buy something to have some skin in the game. Maybe start small and build on those positions later. We saw MUX, VGZ, ASM, and others breaking out strongly, and GDX did break out to new 2016 highs. Could GDX pull back instead of immediate upside follow through? Yes. With the FED and Brexit and jittery hands, the steep climb that miners have made could take a break. We could see GDX pause, do some loosening up and shaking out just like the climber in the opening illustration.

GDX, JUNE 8 – I drew this possibility on June 8th. We already see the pause and the shake out occurring. I thought that we might see a false break out in GDX, but it remains bullish in an uphill climb.

JUNE 13– Would we drop and fill those 2 gaps on Fed week? I actually mentioned that was a possibility, but I did NOT think that the lower gap would fill. These reversals were holding up early in the daily cycle.

GDX JUNE 16 – Reversals. Thursdays reversal is nothing new. I still expect higher prices in time, since I believe that new lows are in place.

I also still like the set ups in various individual miners as mentioned in Thursday's report.

Look at VGZ, MUX, TRQ, SAND, BTG, PVG, GORO, etc. for example.

BTG – This is my chart from yesterday's report; BTG, SAND and a few others looked similar. I was expecting a break out. They did break out with the Fed Decision on Wednesday, but then the reversals occurred. So it was a false break out with reversal. That doesn’t make it bearish to me.

BTG – This was BTG's status on Thursday with the break and reversal. Sand is the same. It may play out as shown.

I am still looking at the big picture.

Many people on Twitter and in public forums got discouraged and even nervous when the reversals took place, while some even got outright bearish, calling THE TOP for gold & miners. I do not see it that way. This is also why I mentioned to start with small positions two weeks ago and build on them as miners climb and dip. As shown in this report, these are really the same old moves that we have always seen. We repeatedly saw these miners shake out buyers all along the run from January to April too. Looking back, staying with the climb was well worth the reward.