thirdeyeopentrades newsletter 5. may 2016 issue #347.b

8/17/2019 Thirdeyeopentrades Newsletter 5. May 2016 Issue #347.b

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Precious Metals & General Market Review

May 2016 – Issue #347.b

5-8-16

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"Mom’s Rock!"

We’re heading into the seasonally merry months of May and June, where gold likes to peak and pull back into early summer doldrums. General markets have issued bullish percent sell signals,so we need to pay attention.



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Gold’s putting in a small flag consolidation, more often than not, bullish. Money flow has roomto rise even further. The ADX signal remains bullish. The bullish percent has reached 94 in the past, but over 70 presents heightened risk to be long. But it does have room to rise even further, ifit chooses so. The stochastic indicator is reaching an overbought condition.

Gold stocks, as measured by the GDX ETF, are riding up the 40 day simple moving average assupport. Current support comes in just under $22. We’ll watch that area during the next pullback.

The Federal Reserve is in a bit of a pickle. The economy doesn’t appear to be strong enough toraise rates in, as it transitions into the latter phase of the business cycle.

One and done this year?



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Wherever the Yen is going, gold’s going too.



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Gold also likes to travel along with oil, however the steepness of the ascent can’t last that wayforever. At some point, price will fall out of the fork.



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GLD appears to require a bit more sideways consolidating, perhaps even filling Friday’s gap. Itlikes to fill gaps.



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I’m a bit confused with the Aden Sister’s current labeling. It has been my experience to label new bull market rises off the bottom as A-rises, not C-rises.

Be that as it may, let’s watch the RSI 50 area to see if gold can hold it while GLD consolidatesabove the March high.

In other words, I think gold can move a bit higher before the next correction – but don’t hold meto that.



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I may break ranks with the Aden’s and label the gold rise differently. This being the A-rise, thenan upcoming B-decline into the 90 week EMA, and then a new C-rise up into the 2012 lows.

Future history will be the judge of that. For me, this makes more sense.

In the grand scheme of things, the recent rise hasn’t been as big a deal as some folks make it outto be. Look how deep and long the bear market was. The 2016 rise is a blip on the map.



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Last week, the dollar caught a bid. If it starts rising again, that will place some pressure on gold.



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That’s the fly in gold’s ointment. If the dollar rises, the Yen and gold fall.



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The $NASI indicator went on a sell signal from a lofty altitude.



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The S&P 500 Index went on a $BPSPX sell signal.



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I’m not interested in going long until stocks are really overbought. I have long term (years) equityand fixed income exposure, but the shorter term account is in cash, which represents around 15%cash.

I like to put cash to work when everyone’s freaking out. It’s also better when the indicators, suchas the weekly stochastic and RSI, are in the oversold zones.



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The S&P 500 Index has been consolidating sideways for nearly a couple years between 1800-2100, and that’s going to last longer.



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I’ve repositioned the dome across many SPX charts on the Thirdeyeopentrades Public List atStockcharts.com.

This chart illustrates that resistance as well as how the 200 week exponential moving average hasacted as technical support this year. It suggests that one might keep some tinder dry for the potential of another test.

Dips into moving average support along with an oversold stochastic and relative strengthindicator ought be embraced by one with some cash to put to work.

Equally so, rises into the dome ought be considered a logical place to raise cash and take profits.



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The red Andrew’s Pitchfork defines resistance nicely as well. You can see how 2100 is resistanceand will remain so until the bulls can break up thru that area.

Remember the 2040 stop from last year? It’s back…



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It showed up on Friday’s two hour chart, so I added it to the public list. It’s safe, short term, tohave gone long on Friday, so long as the SPX avoids a daily close below 2040.

But you decide.

We now have a sixty point trading range established between 2040-2100. My question is do wehave a right shoulder carving out next, with a neckline firmly established underneath?

Something to consider.



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This is a very interesting chart, exploring the echo of 2008 and the election/market cycle. It wasthe end of a two term Presidency, and Hillary Clinton was rejected as a candidate.

It’s now the end of President Obama’s term and Hillary has returned (echo).

Everything changes yet nothing changes.

So, we’ll see what the markets do. I suggest, for anything not long term, a stop under 2040. But,you decide.



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Silver has strong technical support across $16.00. If it gets back there this summer, I think thatcould be quite a gift for a buyer.

I think silver should hold the now rising 65 week EMA as support.



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The Global Manufacturing Purchasing Manager’s Index continues to decline. I don’t see theFederal Reserve raising rates in this environment.

That’s a scary looking chart for the beginning of the latter phase of the business cycle.



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Copper is having a tough go of it and may not be ready for prime time.



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Gold stocks are stretched, but I see the potential for as high as $30 before a correction sets in. Atsome point they’ll correct, and I think the 175 day exponential moving average would be areasonable area to watch for once that event kicks in this summer.

Right back into the March consolidation area, somewhere between $19-21. That’s where I wouldlike to load NUGT again. Other technicians are calling for more than a 62% pullback.

The bullish percent is on a sell signal, having whipsawed quite a bit. That’s a warning signal andwhy I chose one fib grid to end at last week’s high.



That being said, I could argue that GDX is still capable of doing a 5 wave up before a summercorrection. The moving averages relationship remains on a buy signal. Keep your eye on that.

Well, that’s it for this weekend. Happy Mother’s Day!

Thirdeyeopentrades wishes you Health, Wealth, Wisdom and Happiness!

Thirdeyeopentrades is not a registered financial advisory service and is not a broker dealer. We do not and cannot give

individualized market advice. The information in the newsletter is only intended for informational and educational purposes. It should not be considered a solicitation of an offer or sale of any security. The reader assumes all risk when

trading in securities and Thirdeyeopentrades advises consulting a licensed professional financial advisor before proceeding with any trade or idea presented in this newsletter. Thirdeyeopentrades may take a position and sell a

position in any security mentioned in this newsletter. We share our ideas and opinions for informational andeducational purposes only and expect the reader to perform due diligence before considering taking a position in any

security. That includes consulting with your own licensed professional financial advisor.

thirdeyeopentrades newsletter 5. may 2016 issue #347.b

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