Bear Cave 2 (Bull Allowed)

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The Market’s Sold the Rumor… Is It Time to Buy the News?
Imre Gams | Jan 26, 2022 | Market Minute | 3 min read
Last Wednesday, I pointed out a bearish price pattern in the S&P 500.

I warned that if the index were to break below the support line of that price pattern, we’d likely be looking at a selloff back to around 4306, the lows from October 2021.
nvestors are worried about inflation, and since the start of the year, have been pricing in what they think will be a more hawkish turn by the Fed…

This is what I mean by selling the rumor.

Now for the second half of the equation: buying the news… When the Fed delivers their updated guidance, the market could realize that they overreacted and that stocks should indeed be priced higher.

Of course, we’ll just have to wait and see how the market will react later today.

But don’t be surprised if we get a fierce rally… even if on the surface it would make more sense for the market to sell off based on the actual news.

Happy trading,

Imre Gams
Analyst, Market Minute
https://www.jeffclarktrader.com/market-minute/the-markets-sold-the-rumor-is-t-time-to-buy-the-news/

 

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GLD/Miner daily Divergence: As I pointed out earlier today. This divergence should correct in the days ahead. Either GLD is moving lower ( very possible) or the miners should bounce....

LOL...... I lost some new truck money today.....


Getting There:

https://money.cnn.com/data/fear-and-greed/

 

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EQX daily: An updated chart as the one above was a tad long. See comments above.

 

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Well decided to hold off on the EQX last night. So maybe got a little lucky there. I am really liking this GDXJ price. Think I will jump in there at $38.87.

I think GDXJ will go much higher in the months ahead, but for now a move back up to the upper BB is what I will be watching. Not sure the move down is over as the sell the news after Fed Speak pushed the gold miners down hard. I will probably buy some more EQX tomorrow, but not sure just yet. I only added shares today and sold nothing. That doesn't mean the miners are not moving lower. This is a tough sector to trade Brother and that is why I scale in using small tranches.....

The beat-down of the miners caused an under cut of EQX's $6.00 low marker. I would say some traders probably had stops around that area. That means once we bounce they will have to buy back shares at higher prices. The low of the day was $5.92 so the $5.90 market held.

Bottom Line: The move down for the miners continues...... I'm holding for now, and still adding some tranches as GDXJ continues lower.

 

[Guest]

Well decided to hold off on the EQX last night. So maybe got a little lucky there. I am really liking this GDXJ price. Think I will jump in there at $38.87.

 

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EQX daily: As we head into the last hour of trading stocks did NOT like the Fed Speak.... Rate increases coming..... LOL.... Gold and the miners really didn't like it.

We shall see how the last hour of trading goes and what investors think about 2022. These moves right after Fed Speak can change in the days ahead, but one never knows for sure. Some will just sell the news. TSPer's still have until next week before they can get back into index funds if they sold.....

SPY daily: Watching the 200 dma to see if buyers can move it back above before the close. Most indexes moving lower as the market reacts to the coming rate increases.....

I will be adding to my GDXJ position..... I still have less then a 10% position total in this sector. NOT going well for my EQX position...... Trading the miners is not for MOST and this is why you have to keep positions small and stay away from leverage.

 

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IAU and EQX daily: EQX pushing on and moving below the lower BB.

 

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GLD/Gold and the Gold Miner's current Divergence: Why are we seeing this divergence? Note how they all peaked in November and bottom in December together...... Hmmmmm...... Depending on who you ask they will give you different answers. Maybe the miners are leading and gold will follow or the other way, or, or, or.... LOL.... We shall see!

Bottom Line for me: LOL..... My EQX trade really sucks right now..... GDXJ remains a winner overall based on my average share price.....

EQX hitting a new low for today......

GLD = Candlesticks
GDXJ = Purple solid line
EQX = Orange solid line

Oh boy: Long EQX and GDXJ

 

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EQX daily: Remains ugly and close to the lows of the day..... I still haven't said Uncle...... Waiting to see if the $6.00 low holds as the insiders have been dumping their shares too. NOT GOOD! I like to trade the lower BB crash trades. But with the Fed talking about higher rates, it has many in this sector selling the gold miner shares. Gold moving lower too.

SPY daily: Back above the 200 dma which is a good sign. We shall see how we close.

SPY weekly: Back above the 50 week sma and "MAYBE" an ICL be happening soon. STBD!

 

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Hmmmm...... Not happy at all with my EQX position...... Still holding and added another small tranche..... Tagging the lower BB..... We shall see if the $6.00 low marker holds. I'm still a tad concerned that the insiders have been selling their shares. That is why I usually only trade GDXJ, but have been trying to ST trade this one lately....

We shall see how it plays out!

 

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So far by playing small ball in this trading account I'm up YTD close to $500.00 dollars.... LOL.... I'll take it in this damn market... This account is NOT a IRA, and is taxable. I currently call it my New Truck Money account. Saving $1000.00 a month for a new truck in this account, and will be paying cash. Tired of getting close to zero rates at the local credit union for ST funds that I will be using in the next year. Waiting on the chip problem to go away and maybe prices come back down some for new trucks. This is an Ameritrade taxable account, and hasn't been opened long.
Filter:

YTD |Select tax year: 2022


from: January 1 to: January 26 Adj gain ($ 447.11)

 

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EQX daily: I added another small tranche..... However, it looks ugly and remains in a downtrend. Tagged the lower BB.....

Gold Miners - Long GDXJ and EQX.....

EQX remains a losing trade.... 01/26/2022 09:39:47 Bought 200 EQX @ 6.3282

Added some shares of GDXJ @ $40.15ish...... "NOT" liking the action for EQX.... GDXJ moving up, but EQX still moving lower.

I'm going to keep holding EQX for now and see how it plays out. I don't use stops on these small miner positions. I usually add once I start buying tranches if we move lower.

Stocks looking much better this morning. We shall see how we close....

 

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Gold and the Miners: Moving down this morning. GDXJ remains below its 3 ema and the 10 sma on the daily. No confirmed trend trading buy signal for me. I remain a ST trader until I get a confirmed buy signal and can see the next daily trend. GDXJ looks to move lower at the open. We shall see how ugly it gets for gold today... Dollar on the move UP!

Long VXF, GDXJ and EQX. ( Playing small ball with these positions) I still have a 25% position in the S Fund. We shall see if we bottom soon (ICL) and we have our two monthly moves again. Well, for those of us that moved in to early. Catching the falling knife...... Using the weekly chart there was never a buy signal and a sell signal weeks ago. But as I pointed out I trade the daily cycles. I took more risk and it hasn't went my way so far.


SPY weekly: See chart below - Back above the 50 sma on the weekly chart which some use as a buy signal..... We shall see how it plays out....

 

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The open looks good so far with a nice gap up!

SPY daily (C Fund): Maybe the Buyers can move the SPY back above the 200 sma on the daily. Looks like a green open....

VXF daily ( S Fund): From the high in November down over (-20%)

VTI daiy ( The total stock market - A mix of the C and S funds)

We wait for an ICL as all 3 remain below their 200 sma's on the daily. Also called the 200 dma....

Maybe we will bottom and get an ICL soon. If so that COULD mean we will start a nice trending move for several weeks. However, this year could be full of huge swings in both directions.... I will be playing small ball! Still, I wait for an ICL and a confirmed buy signal. I don't care about the first 10% or the the last 10% of the move. I will take THE MIDDLE with the BEEF, and the lower risk trade. That still doesn't mean it will be a winner, but it sure improves my odds of making money.

So whay is an ICL? – Intermediate Cycle Low: I will post some weekly cycle charts this weekend, but I trade the daily cycles.

Intermediate Cycles Low (ICL)/ Intermediate Cycle (IC)
ICL – Intermediate Cycle Low

Intermediate Cycle Low’s (ICL’s), happen about 2 or 3 times a year. They show up in both the General Stock market and the Gold and Gold Mining shares as well. These times of the year are the best time to buy at nice discounts.

The SP500 usually has an ICL every 16-25 weeks. The average being 22 weeks.

The Gold market usually has an ICL every 16-23 weeks, with the average being 18 weeks.

The USD market usually has an ICL every 16-23 weeks, with the average being 19 weeks.

The Bond market usually has an ICL every 16-28 weeks, with the average being 21 weeks.

When looking at the charts, use weekly data. This means that each bar on the chart is 1 week’s worth of trading of that security. I look at both Candlestick charts and Line charts. Looking at weekly charts, it is more easily discernible as to where the ICL’s sit on the chart, as depicted below.
https://jorntabel.com/intermediate-cycles-low-icl-intermediate-cycle-ic/

 

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Gold volatility - the forgotten convexity trade?
It is hard to find superlatives for the recent move higher in equity volatility. Sure, equities are all over the place as people suddenly woke up to the Fed "dilemma", rates moving, Russia possibly invading etc, but does that justify gold continuing to be boring? Gold volatility is up small over past sessions, but the gap vs VIX is now beyond huge.
https://themarketear.com/

 

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Oversoooold
RSI on NASDAQ and SPX is in extreme territory, but oversold can stay oversold for long. The most "disturbing" fact is that everybody still talks about when to buy the dip...

 

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Gold daily cycle:

Gold Uptrend

Prior to printing the late December DCL, gold was in a pattern of printing lows below the lower daily cycle band. That is characteristic of a daily downtrend. Since the late December low that pattern has changed. Gold is now forming highs above the upper daily cycle band and lows are now forming above the lower daily cycle band. This is characteristic of gold being in a daily uptrend. Gold will remain in its daily uptrend unless it closes below the lower daily cycle band.

 

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I'm gonna follow you on the EQX, last time worked well. :smile:

Note that GDXJ and EQX tend to move together. Since GDXJ is an index with many companies it has a much lower Risk when trading. When I'm trading the gold miners they are small positions due to huge swings. Trading this sector is NOT easy so I use Risk Management. "Smaller bites and not big moves."

A move below the 3 ema and the 10 sma on the daily is a go to cash position when I'm trend-trading. However, I'm trading the oversold tag of the lower BB on this trade. We shall see how it plays out. I like to trade GDXJ under $40.00ish and sometimes I buy EQX too. EQX was down around (-6%) this morning so I bought some shares. We shall see if we bounce or the miners continue lower. Unlike many others I HAVE NO IDEA what the miners will do next, and that is why I keep it small until a confirmed trend is in play.

As you can see I was buying GDXJ at the same time. I bought several small tranches. Why not buy one big tranche? Because I don't know how it will play out so I scale in even during ST trades. To me there is NO SUCH THING as missing out. FOMO......something that just doesn't matter to me.

01/25/2022 09:40:51 Bought 20 GDXJ @ 39.4499

01/25/2022 09:44:22 Bought 100 EQX @ 6.495

01/25/2022 10:56:57 Bought 100 EQX @ 6.515

01/25/2022 11:44:19 Bought 75 EQX @ 6.4942



The insiders have been selling EQX lately and that is NOT a good thing. Keeping my eye on that as that is NOT what we want to see when buying a stock. I don't plan on holding this very long as it is a ST trade only.


https://www.tipranks.com/stocks/eqx/insider-trading

https://www.marketbeat.com/stocks/CVE/EQX/insider-trades/

EQX closed at $6.57 so up a few bucks on this trade. I bought around 500 shares..... Like I said I'm playing small ball right now..... Base hits are fine.....

This is a tough market to trade in right now - Danger will Robertson!


I agree with Gary on this one! Stay away from leverage right now, and keep the positions smaller....
Gold update and leverage for 2022

https://blog.smartmoneytrackerpremium.com/2022/01/gold-update-and-leverage-for-2022.html

 

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I'm gonna follow you on the EQX, last time worked well. :smile:

Good luck to both of us...... I bought GDXJ and EQX after the morning beat down. I will post some charts later. Currently using an IPad.....

 

[Guest]

I'm gonna follow you on the EQX, last time worked well. :smile: