[edit] It’s a majority of the way through the day and while the miners are slightly positive volume has not ticked up. At some point on a theoretical right side shoulder we’d want to see volume start to come in.
Using the first stock I looked at, watch list item SILV, as an example, and with all due caveats about chartists staring at patterns, I am mindful of the potential for some of these gold/silver stocks to put in short-term bottom patterns. Of course, there are a lot of ifs going on here with the primary one being ‘if’ the pullback is arrested around current levels and the stock turns up to form a right side shoulder, ‘then’…
Here are a few stocks on my watch list and/or currently held.
As for SILV (on watch), it made a surge on good volume and is forming a potential right side shoulder of a would-be inverted Head & Shoulders pattern on lower volume. If it finds support in this general area and turns up the odds would increase for a rally. Even a short-term rally that is not yet THE rally (let’s also recall seasonals that bottom in December, on average) could then bounce to and test the SMA 200 (actual measurement is around 7.80 for SILV).
MAG is a silver stock I have on watch and it is similar but in slightly better shape than the above with RSI and MACD still positive.
SGSVF (SBB.TO) is not in a pattern but it does sport positive RSI and MACD and is nesting atop the SMA 50. It’s a watch list item.
AEM (currently held) is in the potential inverted H&S posture as per SILV.
As is GOLD.
Final Notes
Gold stock ETFs GDX and GDXJ are in similar patterns with similar volume characteristics.
With the counter-cyclical macro fundamentals grinding toward improvement the sector is primary on my watch. Hence the micromanagement of daily chart patterns like the above.
@Gary, I saw in the weekend report that you have a position in natgas. Can I ask you what you think of its COT? Commercials increasingly long, large specs short, widening. .
The reason I held UNG was per an update, the seasonal and the drop to the SMA 200. But I released it today as it’s grinding the SMA 200 and due to my counter-cyclical view. That said, an Energy/Gas bull should not have sold it yet going by the chart.
As to your point Bart, the CoT is another positive to go with the seasonal. I may buy it back, may look elsewhere in the sector or may leave well enough alone. At this point I am taking the markets week to week.
Thanks Maestro. And I understand your counter cyclical mood. GSR and SMH underperformance seems to suggest S&P goes lower … but you also said at the time – if I remember correctly – that natgas could have a life of its own.
Exactly! And why I am not giving up on it.
Gary, I noticed the IMF is out screaming that the fed is gonna blow up the world economy if it doesn’t change course. Would you say this is the beginning of “vampire invites” going out ? Thanks
IMO the Fed is just praying that inflation signals will start to back down. Meanwhile, they hawk to script.