While the GLD etf closed up 1% on the week, the GDX miners etf closed down 1% again. I continue to think we are close to a turn higher in miners that could usher in a very significant rally, and Friday might prove to be the start as miners managed to close strong. If members caught my last post mentioning James Flanagan’s analysis at Gann Global, they know the next big rally could be a multi-year, several hundred percent gain. He uses the HUI index (Gold Bugs Index) for analysis and believes the support around 247 could prove very important, a flush lower would be a washout, clearing out stops and setting the stage for the next bull. He has been quite accurate in the past, so I don’t take his projections lightly, it would be great to experience this rally, but also he thinks the HUI goes lower first, breaks below the 247 level in a panic style collapse that gets bought up heavily by the professionals. I’m not wild about riding miners lower first, but at this stage there is more risk in missing the upside bc jumping out, only to try jumping back in at the exact correct moment. I will stick with positions and let our stops decide if we stay in the position or not. Even if we are stopped out, we will look to get back involved on a rise BACK ABOVE that 247 level on the HUI index. Here is the MONTHLY HUI chart with the horizontal trendline at 247. To be exact, the HUI did break below the old lows, but only by about 30 cents, and we would be hoping for a more obvious break to really scare longs out of positions.

The GDX etf will confirm a cycle low with a close abo e $32.87, and closed only a nickel below that on Friday. My hunch is that it’s quite likely, note the stochastics just beginning to exit the oversold zone with force.

So the situation is starting to improve for our miners, now is NOT the time to sell, in my opinion. However, when we hit stop levels, we will exit as our discipline requires. It can hurt at times, for example our recent stop out of FreeGold Ventures (FVL.TO) occurred, only to see the stock rebound 7% on Friday! We are getting close enough to the bottom that we prefer not to be stopped out of any more shares, we want to own as much as possible for the impending rally. Let’s see what the new week brings.

Until now, I have been wrong about the bounce following through. No sooner did we get a great upside day yesterday, and today it reverses! On top of that, we were stopped out of another position in junior explorer FVL.TO (FreeGold Ventures). We were also able to take advantage of the weakness in early trading, once the technicals got oversold about 10 am or a little after, to start buying the SILJ etf (Silver Junior Miners ETF) again, adding to our long-term holdings. While we didn’t surrender all of yesterday’s gains, we don’t have to tell readers how rough a ride it has been overall. I still maintain we should be heading higher before we go much lower, if we go any lower, but there is no denying the weakness persists, it isn’t fully behind us and until it is we will experience pullbacks like today. That said, I am a bit surprised to see 73% of yesterday’s gains given back after the first strong day, so I was careful not to buy heavy when I got the buy signal today. We might have to right this one out for awhile, the way it’s looking. I appreciate those who have had the patience and fortitude to stick with the program thus far, I know it isn’t easy, but I’ve been through it all before and will do what has always worked over time.

Let’s first look at what stopped us out today, FreeGold Ventures (FVL.TO). While I occasionally override a stop level, I generally try not to do it to often. I will admit I was tempted to do it today, but with the group so weak lately, and some junior miners getting annihilated on down days, I decided to ignore my hunch to stay in because I think a big percentage gain day or two might be close at hand. I say this because it’s happened to me a few times over the last several weeks, I stop out of a trade, and a day or two later the junior explorer is up 25%! It can drive one nuts if you let it. lol I am fine with my decision to clip the stock, since on a few occasions the junior miner has proceeded to lose 20-50% not long after I stopped out, so all in all, best to just follow our discipline and move on to the next idea. Here is what FreeGold Ventures looks like, a chart I hate to sell at the moment, but the rules are the rules and they exist for very good reasons.

I bought a little more of the SILJ etf, I don’t have any worries about this one longer term, but still kept my buy orders small since we already own a lot. Since this is a longer term holding, I will post the weekly chart, which despite all the stress and fear in the mining sector, is still a fine looking chart. Nothing is broken here.

One big positive we have going for us, is the mining sector is posting the best earnings reports in history. Something will have to give, because the miners are raising dividends, and have exploding cash flow and profits, all this while the group´s stock prices are performing terribly. Either the quarterly reports will start to reflect just how terrible the fundamentals are, or the fundamentals are awesome and the stock prices will catch up with to the fact. We are betting on the latter, just be prepared that it might take some time. The best thing about trading miners is they make up lost ground very quickly, in fact not many groups can tack on the gains like miners, and they can keep on running after that as well.

I am not subscriber to Gann Global Financial and James Flanagan, but I enjoy hearing what he has to say when he offers material for potential subscribers. I will post a link to a video he released today, for those that are interested. I am in no way compensated or affiliated with Gann Global, I just find their work very worth the time to listen, and I like that he has a longer term approach than many of today’s newsletter writers, who seem to be interested only in calling the next day! Here is the link if you want to listen.

Finally, we get a respite from the non-stop slide in the mining sector. I will go out on a limb and predict more upside near term for a few reasons. First, the daily stochastics are deeply oversold and even with today’s strength, have not yet risen out of the oversold zone. Second, today was the first day in a awhile we saw just about the entire group rise strongly together, a change from the recent action where any strength the group did experience was concentrated in a few names, while other mining stocks continued to make new lows. I also read the DSI is now down around 8, it hasn’t been that low except twice in the last 3 years, if I’m not mistaken. Lastly, the miners were the strongest group on the board today, which will draw eyeballs of the short-term traders that only seek what is in play to trade. Whether this is THE bottom or not remains to be seen, but I think it’s a safe bet we see more upside before we head lower.

Today was easy as far as my trading, my intraday stochastics never reached fully oversold, so I didn’t get the opportunity of an ideal setup to buy or add to any positions. No trades at all. That’s ok, the way things closed today, the miners are working off today’s run and the technicals are approaching the oversold area. The plan is to be ready to add in the first hour or so, but only if the stochastics or other intraday technicals reach oversold, my guess would be about a half hour after trading opens. That is for a flat to weak open, but if we instead get a big gap up in miners, we might have to sit on our hands again until Friday, when we will again look for the technicals to get extended on the downside. In any case, there is no denying we re heavily loaded, so we will be fine with whatever the markets present tomorrow, a position I like to be in.

Let’s take a quick look at the daily chart of GDX to recall how oversold the stochastics are. Keep in mind I use the more sensitive 5,3,3 setting, so another’s charts won’t always look exactly like mine.

We also saw some bigger names that have been terrible lately start to pick up, in fact some had a standout day. This lends more credence to the idea miners have finally turned the corner. Let’s take PAAS (Pan American Silver) for example, also the second largest holding in the SILJ etf. I will post the WEEKLY PAAS chart first, to show what a fine 50% fibonacci retracement the stock has completed…

Now we will go to the DAILY PAAS chart, notice it shows the same technicals as the etfs above, but also note what a big move PAAS had today, normally stock that onl moves a couple of percent at most in a trading session, today was up over 5%.

So tomorrow morning we will wait to see if the intraday technicals can dip a little further from where they closed today, if so we have some buying to do. If they gap higher instead, we will sit with what we have until the afternoon, or Friday morning open works lower to oversold.

Another day, and only a small respite from the pain we have had to endure. It’s ok, we can take lots more, if that is what the market has planned. Since I’m still not feeling all skippy and happy due to what feels like a never-ending drop, I will dedicate today’s post to a “chart-fest” as I didn’t post any charts yesterday.

In the following charts, I am mostly trying to show you similarities in how the miners have come down quick and hard, forming their own downtrends, which have now been broken to the upside. It would be much preferred to see them break higher with force, but we will have to accept how they want to change their trend. Patience is required, but just because it might take longer does not mean the move will be any less significant by the time we decide to exit, and yes, I still think our holdings will be profitable overall.

As a side note, members should have received email alerts on buys made today, they include GDXJ and SILJ while others limit orders were not filled. Again, we waited until the intraday 30 minute bar charts worked their way down to oversold by late morning, before we made any buys. This strategy has worked well during this very difficult time, and did again today, and we were able to bring GDXJ holdings up to a full-risk position, it could turn out to be a very good buy at these levels.

Let’s get to the charts, note they all have a downtrend line that has recently broken to the upside. This does not mean they are going to scream higher, though it typically suggests the downward momentum has no broken. We should find a bottom in here somewhere, in other words. Here we go…

You get the point, I could go on for a long while being there are so many charts that appear almost identical. I like when so many charts in a sector look so similar, it makes it easier to play the group, and give us a chance to hop on some “laggards” at times, once we see a few names in the group start higher. That can be a good sign to do some buying ourselves. Hang tight and stay focused, this will pass and offer up great gains again, just like always.

For everybody, honesty is critical in life, but as far as careers like trading are concerned, honesty with oneself is more important than any other trait. On that note, let me admit we are taking a very hard beating lately. I don’t have too much to say today, other than it will take time to turn this around, not only will this massive, surprise downtrend have to slow down and then reverse, it will take even more time for a full uptrend to kick in and start making us money. Am I worried about making money on our positions, not really, and even if we don’t score big, I am quite sure we will exit at far more favorable prices than what we have today. These are the times that really test a trader, and I can hear the whining from all angles now, in fact it’s the only thing that has me thinking we are close to a bottom, however, that is not enough to go “all in”.

About the only positive I can mention is that I stuck to the plan, and didn’t buy on the open, as I mentioned I would do in the Friday recap. Fortunately, I waited until just after 11 am when the intraday 30 minute stochastics finally reached oversold before I started doing any buying. Make no mistake, this was a very painful two hours to start the week, watching accounts I manage bleed, then bleed some more, expecting them to go even lower before I get a signal to add. I won’t lie, it can be torture, but we must stay true to ourselves and our plan. At times that is all we have to lean on, and more so lately than usual!

I will spare you the charts this afternoon, and please understand that while I am fine and still looking to position for a score, I also need to decompress at times. The beating has been relentless, but my hope is that if readers can see I still come out of this intact (and even wealthier), then they know what is possible in this business. Difficult as it can be, I still maintain this is the best business in the world, and certainly for a person that can think and act on their own.

As the markets just closed, I need to unwind and review everything. I might make another post later tonight or more likely in the morning if anything is worth noting. I hope readers understand the realities of trading, too many sites trumpet their successes, all too often ignoring their losses. In these crazy times with governments printing unlimited money, lies and lockdowns, etc, it’s getting hard to find people that tell the truth. I may be getting spanked hard, but I can handle it, and I tell readers the truth. It is the ONLY way to success, and keep in mind that just like we take merciless beatings as in the last month or two, we also get paid too much and far too fast at times. Just the thought still brings a big smile my face. People need and appreciate the facts more than ever, its my promise to continue to deliver on this. Despite the pain, try and stay with the strategy until we see it through, I am quite sure the results will be nothing like where and how we feel today, it is just another step in the process. I have said it before, but I will not be the least surprised if we cash out with big gains by the time we exit. It is these times like this that show us who we truly are. Can we stick to the plan, or is the pain too great to continue?

Stay tuned (for more beatings, or the turn of a lifetime that ushers in a rip yer nuts off rally!) 🙂

Today brought more weakness to the mining sector, a big enough drop to allow me to bring up my holdings in Hecla Mining (HL) and Equinox Gold (EQX) to full-risk positions, as well as add to McEwen Mining (MUX). I had limit orders in all day bidding for more GDXJ and SILJ, but those did not get filled. Since I still don’t see many people, if any talking about buying into miners, I will probably try again next week but will explain below how I will handle the opening on Monday, I won’t go running to buy right out of the gate.

What allowed me to step in with some larger orders was not only the price being knocked down sufficiently to levels where things like gaps closing occurred, along with 50% fibonacci retracements on various individual stocks, but also we started to see miners hold up better than the metals. Miners usually move around double what the metal does, so when we se gold down 2.5% and silver down close to 4%, we normally expect to see gold miners down 5% and silver miners down 8%, but that was nowhere near what happened. Instead, we saw GDX down 3%, and SILJ really stood out, dropping only 1.93%! Until today, miners have really underperformed the metals, but when the trend changes, it will likely start with miners showing relative strength versus the metals like we saw Friday. We are not out of the woods yet, but the daily stochastics are now reaching oversold as well, something I pointed out yesterday, and after another poor day for the sector.

Lets take a look at the weekly GDX and GDXJ charts with their fibonacci retracement levels, since the etfs are more indicative of a group’s strength or weakness than an individual miner. While I examine the charts of the various individual stocks I am trading or investing in, I always want to first know where the group stands and how it’s performing, as most stocks in that sector will trade similarly. First is GDX…

The WEEKLY chart fibonacci is drawn from the depths of the March 2020 low, all the way to the August 2020 high. It’s hard to believe it, but we have now been in a downtrend for an entire year since that high in August! I would note that is a typical time for a sideways to lower consolidation after a big bull run. For whatever reason, miners seem to run higher sharply for 6 months or so, then go sideways or lower for a whole year, before they mount another sharp rally. In any case, this fibonacci chart suggests GDX could still drop to the $31 for a full 50% retracement, a couple dollars lower from Friday’s close. Also note the horizontal trendline at $31, too, it seems that we might get to that level but also that it should hold, or mount a rally from there. Now let’s see what the GDXJ WEEKLY chart has to say on the matter…

GDXJ confirms what GDX suggests, that they could drop a bit more if they are to complete a full 50% retracement. However, GDXJ also got closer to closing that gap during trading as it dropped to $42.98, only a dollar away from it’s 50% level, before closing at $43.79, leaving it about $1.80 from its 50% level. Both charts tell me that while we are getting very close to bottoming, we might not be there yet and we might have to take a little more pain. For sure, it’s not worth trying to get out here to try and evade any additional downside, because once miners do decide to turn in earnest, they will make up these few last dollars of downside so fast that we are more likely to miss the opportunity than to save from any additional losses. In short, it’s time to be buying or sitting tight, nothing else.

As far as how I will handle trading early next week, as in Monday morning. Because of how my holdings closed on the intraday 30 minute bar charts, with stochastics just barely coming out of overbought, my hunch is we could see some weakness, or at least a cap on any upside or gap higher, for a couple hours after trading opens. So I am still looking to buy/add to positions, but as mentioned in the opening, I am NOT going to do any panic buying on Monday. I will wait for the market to work off the overbought technicals, then assess where my positions sit and decide how much to buy and at what limit prices. This tactic on timing into positions has really helped give and edge, and saved a lot of money over time, even if it’s just 10 or 20 cents per share, it truly adds up over time. We also take the same edge when exiting, so put another 20 cents per share into your account. On many trades, this alone is the difference between making a profit or loss, but even on a $1 gainer per share, an extra 15 cents saved in AND out, is 30 cents to the bottom line. When talking a $1 profit per share, an extra 30 cents is 30% extra! It’s wise to pay attention to detail in this business. I might have an update on the game plan before trading starts on Monday, depending on how the futures markets action is shaping up Sunday night and before the open on Monday. I think we are nearing turn in the markets and the precious metals sector, we just can’t know what minute it will start, but it’s close I believe.

Another day, and more losses. What can I say, other than it happens and as professional traders we must deal with it. We must always look for opportunities to improve. Today is another odd one, with several miners reporting great earnings results, only to see little interest in the group. When rallies start to move up, they haven’t been able to hold the gains. It’s uncomfortable, but we know what to do in any situation.

Some things to note on the daily charts, dare I say they are positive observations? 🙂 For one, we see gaps being closed on the daily charts today for GDX and GDXJ (also closed recently on SIL and SILJ). This alone is not a reason to buy, its more an action trigger for somebody that was already looking for an entry on these names. Another positive is that the daily stochastics I use (5,3,3) are nearing oversold, not quite there yet, but maybe we get there in the next trading day or two.

Lastly, I see the half-hour bar charts are oversold as we close the trading day. What does this mean? Well, a trader could buy this afternoon and then see what the morning brings, either add more, or enjoy a possible gap up. Either way, it looks like in the very, very short term, our holdings are due for a bounce. My preference is to see a lower open tomorrow, or at least a move lower after the open, maybe for the first 45 minutes or so, which would give an ideal opportunity to add to positions, for the trip back up to overbought. This is just a near term timing technique, something I use when it’s time to make the trade, either a buy or a sell, I always check the intraday (30 min bar charts) first.

I did place a few trades today, though nothing to get excited about just yet. Members should have received alerts of various trades, including Equinox Gold and Hecla Mining. As always, the data is posted in the Stops tab and the Daily Account Screenshots for members, which includes total position sizes, stop levels, and unrealized gains and losses which can have some big swings around here! No worries, as long as we keep our total risk controlled and push our winning trades for maximum gains. I’m going to post just a few charts, most look similar at this point anyway, so no need to go through too many. Let’s look at GDX, since I mentioned the gap closing and the daily stochastics approaching oversold (not there quite yet). In addition to closing the gap from the other day, notice GDX also sits right on it’s 10 day moving average. Don’t get me wrong, there is plenty not to like as well, such as the “death cross” kicking in soon as the moving averages cross each other heading lower, and the general downtrend. We have to let the market tell us where it’s headed, all we can do is have contingency plans and then let it play out as it chooses.

Here is a quick look at Hecla Mining, which had a positive earnings report and tried to mount a serious rally, but all it could hold onto was meager gains. This can mean that in the short term that the pullback isn’t quite finished. I added to to my HL today and might buy more in the near future, but I prefer to see the group get some traction before I do any big buys. This market has required lots of patience recently, so I will wait to see if the weak close today in our holdings might give us a better buy setup in the morning, specifically the first 90 minutes of trading. Let’s see what happens.

Since there isn’t much movement in the markets today, and I am just waiting for possible fills on some limit orders to buy or add to positions, I will take a minute to show you what I think happened with miners this morning. After a nice gap up, they sold off all morning until now, actually going into the red on the day. Luckily, we only starting buying a few minutes ago, because we use short term intraday charts to time into and out of trades, and we waited until they got oversold before hitting the buy button, so we got some good prices on a couple items already. Members should have received Trade Alerts to their email which tell them what stocks, how many shares and prices paid, but should also check the Stops tab to see new position sizes, as well as the Daily Account Screenshot we post after the close of trading each day. This is the best way for people to get the most accurate and useful information a trader needs.

Moving on to today’s odd action, I can only figure that it was the gap up leaving GDX right in the face of a double moving average (50 and 200 day) resistance. On top of that, the moving averages are sloping lower which is OK but not ideal. Even worse, the two moving averages are making a death cross lower! Keep in mind all this is occurring on the daily chart, so it can change quickly, as in a few days. We are invested on WEEKLY and MONTHLY signals, so we have to ride through adverse moves on daily charts as we keep our eyes on the prize, the longer term trend higher. Here is the daily chart of GDX with a recently broken steep downtrend line (good), and now starting a small uptrend that we would like to see extend.

So that is my best guess as to why GDX didn’t hold it’s gains today (as of 11:30 am, it could change by the close). Rather than worry or obsess about it, the best thing an experienced trader can do is use the weakness as an opportunity to add, especially when we see a possible reason for the adverse action. It might take a few days to work through this resistance, or it also would not surprise me to see buyers step back in and push miners up again into the afternoon. That is why we took advantage of the push lower to add at overold technicals on the intraday chart.

Today was a very slow day, not much volume traded in most things, even the QQQ’s have traded only a little more than half their average daily volume today. I did manage to use the oversold intraday chart this morning to add to my HL (Hecla Mining) LEAP options, and my EQX LEAPS as well. Members should have received those trade alerts this morning, but I haven’t been filled on any other buy orders, including limit orders to buy in GDXJ, MUX, MGMLF, NOVRF (got close), and a few others. I will spare readers having to see the same charts over again, and instead post some things of interest being we have some down time with Canada’s stock markets closed for a civic holiday.

First, I suppose I will post a chart of MUX (McEwen Mining), since I get this question a lot, about “breakdowns” below supports or moving averages. If you recall a few days ago when we reviewed the MUX DAILY chart, I received several email pointing out how ugly the chart was as it had broken through and was holding below the 200 day MA. Well, those observations were true, but I mentioned how I always assume support and resistance will hold, even repair slight breaches, rather than continue through with the break. MUX is a great example, now that we have the benefit of hindsight to review. Notice how suddenly the chart looks great? It’s above the 200 day MA, and even looks like now it has held that support! Same stock, same chart, all that matters is who is assessing it. Supports and resistances are NOT lines in the sand and always so clear and obvious breakdowns and breakouts when crossed. Just like that, MUX looks like a fine buy candidate!

And for those that have asked why I am so heavy into the precious metals miners right now, I will post some words from others, at the risk of “talking my book”. I don’t start out so heavy, but I can get very, very invested in a group when I have taken initial positions and they start to work for me. I like to get into positions where I can add to a winner, have the big size on when the trade really starts to take flight. Yes, it’s paying up, but it isn’t chasing if we don’t buy into the up-movement. We can add to a winner as it rises, which makes me uncomfortable unless the move up has just started, or we can wait for the eventual pullbacks that occur after we are sitting on nice unrealized gains, which is my preferred situation. This strategy works best for those with the big picture analysis in mind, and trying to capture the long term trends.

Just a quick note, I tried to post some links here but the system won’t let me, yet. I will figure it out, and get it fixed, so you can see and use exactly the same things as me.

To prepare for tomorrow, I noticed some nice “prints”, ie. big buy orders come into some miners at the close, usually a sign somebody with deep pockets is acquiring more shares for a move higher. I have my list ready, and will review the stocks, possibly add a few others, and be ready to buy more in the morning, BUT only once they have gotten oversold on the intraday charts. Near the close, most technicals were in the middle ground, forcing me to sit tight an be patient for the next oversold signal to buy. We should get an opportunity to add tomorrow, but we can’t yet know when the market will push lower enough to get oversold, it could be around 10 am, or it might not happen until the afternoon. When it occurs, we will be ready to add!

Today was the first trading day of the new month, thus we have data for new monthly charts, which are the charts longer term traders use to make their investment decisions as they typically have less “noise”, aka false signals. Today was relatively uneventful, but I did make a few transactions and want to post a few charts of what I’m seeing. Members should have received 3 trade alerts today, sent to their email in real-time just after the trade is made.

On a very short term basis, some charts of miners are looking overbought on the daily time frame. That is not a problem or something we try to sidestep, as long as the time frame we originally used for the buy signal is still intact. At times we have to prepare for possible pullbacks, without fear so great that it forces us to sell and try waiting on the sidelines. If you watch new traders or ones that can never seem to learn, they will often react to every little wiggle or gyration, they try to get out before any dinky pullback they anticipate, but often lose focus of the bigger picture and potential, then lose their positions! We are in a confusing area for the very near term, as we have been in a down trend in miners for example, yet have now also had a rally out of the lows. This confuses traders, some think the bull is back and want to buy in, others think the trend is clearly lower now, and this bounce is a perfect contra-move to get short. Personally, the largest and longest trend is still long in miners and metals, so I am in the camp looking to get long this sector even more than I am already.

There wasn’t too much particularly noteworthy to report today, instead I am looking forward to tomorrow morning when the 30 minute bar charts reach oversold stochastics, so that I can add to positions. Today, I did add to both EQX (Equinox Gold) and HL (Hecla Mining). Members should check their trade alerts, as well as the Stops tab and Daily Account Screenshots tab above for all the specifics, including prices paid, total position sizes and unrealized gains and losses, all the most important details to a trader. Here is EQX…

We also added to HL (Hecla Mining) today on a couple occasions….

I could have been more active buying today, but I prefer to have the intraday charts (half-hour bar charts, for example) oversold before I buy, just as I wait for the signal on a daily, weekly or monthly chart. It’s just an additional edge, and the savings on good fills really add up over time. I intended to show readers some chart annotations I made on some monthly charts, but my charting service was screwy today and didn’t allow me to save the charts along with annotations. I will look into it, so that I can show readers some of the things I’m seeing longer term, some setups, trend lines and fibonacci levels we should keep an eye on as they get closer.

Trying to get my charting service working correctly, let me post this weekly chart of Silver with a simple trend line and see if it comes up correctly. Silver closed last month right on the trend line, or maybe even slightly below, but members will recall that I don’t view a trend line as a line in the sand, more an area that is likely to hold rather than not. To me, so far it looks like the Silver bull has held it’s ground and remains intact.