- GCRUWeekly Trading Service ●●● GCRU #690 ●●● May 25, 2016 (in its 15th year) IN THIS EDITION D' DECLINE HAS STARTED

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Open Positions

19

Abbreviations

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MARKET LEADERS

US Dollar Index

5 6 7

Crude (futures)

8

Interest Rate 10 Yr T No (TNX)

9

Copper (futures)

10

D. Industrials & D. Transports

11 12

Gold (futures) Silver (futures)

HUI & Adv/Dec Line

STOCKS Agnico Eagle Mines Limited (AEM)

14

ProShares Ultrashort S&P500 (SDS)

15

Direxion Gold Miners Bear (DUST)

16

McEwen Mining Inc (MUX)

17

Hecla Mining Co (HL)

18

“The great thing in this world is not so much where we stand, as in what direction we are moving” – Oliver Wendell Holmes–

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GOLD'S D DECLINE IS FINALLY HERE!

T

he downward correction has begun!

It took U.S. Dollar strength to push gold, silver and this sector down in an overdue correction. The Fed is at the helm, and this will likely be the case until their next meeting in mid-June. th

Gold fell for the 5 session in a row while the Dollar bounced up to a 7 week high. Upbeat U.S. economic data raised expectations for a Fed rate hike in June. Plus 4 out of 12 Fed banks want to raise rates, according to the latest minutes. Ongoing expectations of rising rates next month will keep upward pressure on the U.S. dollar, and indeed the dollar has room to rise further, technically speaking.

Silver is similar. The Chart on page 3 shows silver on the decline ever since resisting at its May 2015 highs. It's weak ST below $17 its 5 week MA, and it could decline to its 65 week MA at $15.50. Gold shares are most impressive. We sold AEM and GG at the highs, and the decline has finally begun. The HUI index ended up breaking clearly below its 5 week MA for the first time since the rise began this year. The chart shows the HUI index is now forming a two year bottom... That is, a head and shoulders bottom, and the right shoulder is just getting started!

Our Chart of the Week on the front page shows how gold and the U.S. dollar are moving clearly in opposite positions and they're set to continue this pattern. The dollar index could rise further to possibly as high as the 98-100 level, while gold declines to possibly its 23 month MA (not shown) now at $1186. Gold is in a decline we call 'D', and if this MA holds during current weakness, gold will be very strong within a bottoming area. We have open positions to buy gold in the $1210-$1190 level. This will be a good buying opportunity.

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This means HUI is now weak below the MA at 215. And most impressive, it could decline to the 150 level, and still be forming a full shoulder. Plus 150 is the level of HUI's 65 week MA.

But we'll see. The verdict is still out because the stock market is still in a rolling over mode, and looking vulnerable. We'll keep our short position in SDS. If you're not in, you can buy but only below 19. The top out parade we mentioned last week is still underway. Crude oil has been the wild one, but it looks poised to decline and we'll continue to keep our put spread. The stock market and metals market remain below their April and May highs.

In other words, HUI could decline to as low as 150 and still be in a very bullish setting. Plus its indicator has plenty of room to decline further from the extreme. This also implies a strong correction. We're looking forward to picking up more gold and silver shares during this upcoming weakness. And meanwhile, we'll once again buy DUST. You'll remember it moves opposite to gold shares: when gold shares decline, DUST rises. On the other hand, the stock market jumped up on strong housing data and rising oil. This helped investor confidence believe that rising rates will not undermine the market.

Our Strategy for this Week is to keep an eye on key ST levels. If the U.S. Dollar index rises and stays above 96, it's set to rise further which will keep pressure on the gold price. Gold could decline to the $1190 level and still be bullish. If HUI breaks below 200, and especially below 190, it's 75 day MA, it'll then be on its way to the 150 level. We'll buy DUST to take advantage of this decline. And most important, we'll be waiting and ready to buy select gold shares on further weakness. Good luck and good trading, P.S. Next week's GCRU edition will be postponed by one day to Thursday June 2 instead of the regular Wednesday, the first.

Omar Ayales Chief Trading Strategist GCRU www.goldchartsrus.net A division of Aden Research Group 3

MARKET LEADERS

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GOLD JUNE 2016 (GCM16) 5/24/2016 CLOSE = 1229.2 MAR

APPROACHING KEY SUPPORT FEB

A

DEC UPTREND CONVERGING WITH KEY SUPPORT AT 1200

JAN DEC SPINNER (3, 16, 16)

1320 1300 1280 1260 1240 1220 1200 1180 1160 1140 1120 1100 1080 1060 1040

BELOW MT MA, BUT IS BULLISH ABOVE UPTREND 80 60 40 20 0 -20 -40 -60

O

N

D

J

F

M

A

Long

1260 (Mar-4 & 7 - 16) (GLD: 121)

Stops

2dc below 1186 (GLD: 116).

Profit Targets

1400 & 1500 (GLD: 133 & 143).

New Long Recom

Buy long positions again near 1210 and more near 1190.

M

Gold declined below its 15wk MA today after failing to rise above its resistance at 1300 earlier this week. Gold's break below the 15wk MA was the first since Nov, and it's signaling the start of further downside. Moreover, gold broke below a bearish upside wedge with a downside target near 1190 as Spinner crossed below the zero line. This tells us gold is poised to decline further as its bull market correction unfolds. The Dec uptrend is now converging with a key support in gold and its 75 day MA exposing a strong support level for gold. Gold will remain very bullish by holding above it at the 1190-1210 level. Keep in mind, however, if gold breaks below 1190 on a 2dc it'll show renewed weakness that could push gold down in a further leg down to the lower 1100s. Keep your positions and buy more on weakness. 5

SILVER JULY 2016 (SIN16) 5/24/2016 CLOSE= 16.254 18.5

MAY

APPROACHING JAN UPTREND & SUPPORT

18 17.5 17

16.5 FEB

16 15.5 15 APR

14.5 14

DEC SPINNER (3, 16, 16)

JAN

13.5

DECLINED TO AN EXTREME OVERSOLD AREA

0.75 0 -0.75

D New Recom:

J

F

M

A

M

Buy again below 16. Place stops at 2dc below 15.50. Profit targets at 18 and 21.

Silver weakness continued to unravel as gold declined further and resources remained depressed. Notice silver's Spinner. It's at an extreme oversold level showing the downside may be limited ST. This tells us the Jan uprend for silver is strong and as long as silver holds above 15.50, and it'll remain poised to rise further. However, a break below 15.50 on a 2dc could then push silver to the 14 level. We recommend buying some more on further weakness as silver inches closer to its Jan uptrend & support.

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U.S. DOLLAR INDEX JUNE 2016 (DXM16) 5/24/2016 CLOSE= 95.576 DEC

APPROACHING TOP SIDE OF JAN DOWNCHANNEL

JAN

100

MAR

98

96

94 JAN DOWNTREND IS DOLLAR'S NEXT TARGET BROKE ABOVE DOWNTREND FOR FIRST TIME = SIGNS OF STRENGTH!

SPINNER (3, 16, 16)

92 2

0

0.5

-1 -2.5

D J New Recom

F

M

A

M

Stay out.

Speculation the Fed will move to raise rates during Jun propelled the U.S. dollar index in a great rebound rise. The dollar broke above its 15 wk MA as it approached the top side of the Jan downchannel showing strength. Moreover, Spinner rose above a year long downtrend showing momentum shifting to the upside. The dollar must now follow through by rising above 96 on a 2dc to reconfirm strength that could push the dollar to the Dec downtrend near 98. Is the dollar fueling a "sell in May" mantra? Too soon to tell, but one thing is for sure, dollar strength will continue to put downside pressure on gold, currencies, stocks and assets across the board.

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LIGHT CRUDE OIL JULY 2015 (CLN16) 5/24/2016 CLOSE= 48.62 ROSE TO TOP SIDE OF BULLISH UPCHANNEL

49 47

BEARISH UPSIDE WEDGE STILL VALID

45 43

41 39 37

APR

JAN UPTREND IS KEY NEAR $41.50 JAN SPINNER (3, 16, 16)

LACKLUSTER

35 33

31 5 2.5 0 -2.5 -5

J

F

M

A

M

Put Spread Nov 2016 33/30 Bear Put Spread at $600 (Mar-30-16).

Recom:

Keep your put spread.

Crude held at the top side of the Jan upchannel showing impressive strength. Spinner lackluster but above zero and its MT MA which tends to signal rising momentum. However, crude continues to form a bearish upside wedge with downside target near 41. A break below the Apr uptrend on a 2dc below 47 would confirm the wedge pattern. Moreover, if crude declines below the Jan uptrend (41.50), we could see a trend reversal and a decline to the Jan lows. Overall downside pressure remains strong and downside risk outweighs upside potential for now. Stay out. 8

CBOE Interest Rate 10 Year T No (^TNX) 5/24/2016 CLOSE= 1.86 US$ 2.45 TESTING MIDDLE CHANNEL NEAR 1.90

DEC

2.35

2.25 2.15 2.05

MAR

1.95 1.85

1.75 APR

1.65

1.55

FEB SPINNER (3, 16, 16)

BURST OF STRENGTH! 0.1 0 -0.1 -0.2

D

J

F

M

A

M

CBOE Interest Rate 10 Year T No (^TNX) - Chicago options

Interest rates jumped up this past week on speculation the Fed will move to raise rates. Spinner jumped above zero and its MT MA with strength showing upside potential. However, TNX must now break clearly above the mid-channel line on a 2dc above 1.90 to confirm strength in TNX's recent rebound. Failing to rise above 1.90 would expose weakness that could push TNX lower. Keep in mind, on a larger scale, TNX must rise above 2.10 to see a complete reversal in trend.

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COPPER JULY 2016 (HGN16) 5/24/2016 CLOSE= 2.0665 HOLDING AT ADJUSTED JAN UPTREND

SEPT

2.420

MAR

2.320

2.220

2.120

2.020

JAN

1.920

SPINNER (3, 16, 16)

BOTTOMING 0.15 0.05

0

-0.05 -0.15

O

N

D

J

F

M

A

M

Bottom's are in? Copper put a halt to its decline this past week. Spinner has started to rise after reaching an extreme oversold level. This tell us we could see copper resume its Jan rise. If copper can hold above 2.045, it'll show strength and could then boost copper to test the Sept downtrend near 2.30. A rebound in copper will most likely add to silver's support above 15.50. Keep in mind, however, copper must rise above the Sept downtrend to see a clear trend reversal. Otherwise, pressure will remain to the downside.

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SPDR DOW JONES INDUSTRIAL (DIA) 5/24/2016 CLOSE= 176.86 APR

Shares Transportation Average (^IYT) 5/24/2016 CLOSE= 137.85 DOUBLE TOP RESISTANCE

182

MAR

180

STILL FORMING H&S TOP

148

APR

144

178 176

140

174

NL

172

136

170 MAY

168

132

166

128

164

BEAR FLAG FORMING

162

124

160 158

120

156 JAN SPINNER (3, 16, 16)

FEB

154 UNDER PRESSURE

J

F

M

A

New Recom

F

M

A

TESTING ZERO

6 3 0 -3 -6 -9

M BEARISH

MACD (12, 26, 9)

J

116 SPINNER (3, 16, 16) 6 3 0 -3 -6 -9

J 3.5 1.75 0 -1.75 -3.5

M

F

M

MACD (12, 26, 9)

J

A

M

OVERSOLD - WEAK BELOW ZERO

F

M

A

5.25 3.5 1.75 0 -1.75 -3.5

M

Stay out.

The stock market continued to rebound today. The Industrial average jumped up with strength after testing its neckline support level near 175. If the Industrials fail to maintain upside momentum, they will continue to decline to the H&S top target near 170 (DIA: 17,000). The Transports on the other hand, continue to rise. However, they have strong resistance below the Mar/Apr double top pattern near 145 (8,100). Moreover, the Transports are forming a bearish flag pattern telling us more downside is likely if IYT breaks below the May lows near 134.50 (DJT: 7,500). Spinner and indicators continue to show weakness. We continue to hold on to our position in SDS as stock market weakness is likely to continue.

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ADEN GOLD STOCKS ADV/DEC LINE 5/24/2016 CLOSE = 4477

HUI GOLD BUGS INDEX (HUI) 5/24/2016 CLOSE= 201.1 JUN

4550 MAY

BULL TRAP?

APR MAR

4500

DECLINED TO 1 MO LOW!

4450 4400

75 DAY MA IS SUPPORT

4350 4300 4250 JAN

75 DAY MA IS KEY SUPPORT

NOV

N

DEC

REMAINS BULL

4200

4150 D

J

F

M

A

J

M

RESISTING AT DOWNTREND = DOWNSIDE PRESSURE RISING

SPINNER (3, 16, 16)

JAN

F

M

A

M BROKE DOWN AFTER RESISTING AT MT MA

SPINNER (3, 16, 16)

30

75 50 25 0 -25 -50

ROSE TO APR HIGHS... WATCH FOR RESISTANCE

MACD (12, 26, 9)

20 10

0 -10

WEAKNESS

MACD (12, 26, 9) 30 15 0 -15 -30

N

D

J

F

M

A

M

240 230 220 210 200 190 180 170 160 150 140 130 120 110 100

10 4 0 -2 -8

J

F

M

A

M

HUI failed to rise above its resistance at 233.46 last week igniting the start of the bull market correction we´ve been waiting for. Weakness was confirmed when HUI broke below its critical 5wk MA. We showed last week how the A/D Line rose to a new high, but needed HUI to rise above the Apr high to confirm strength. By HUI failing to rise above 233.46, it showed the A/D Line´s rise was a mere overshoot of the current bull run in gold shares. At this point, gold shares have declined an approximate 13%. However, our indicators are telling us we could see HUI decline further. Initially to HUI's 75 day MA near 185 and then to its to its longer term support at the 65wk MA near 150. We're currently out of gold shares and holding on to profits built over the past 5 months. However, we do believe a bull market correction is in the works and poised to continue evolving. We recommend taking advantage of the downside by buying DUST.

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STOCKS

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Agnico Eagle Mines Limited (AEM) 5/24/2016 CLOSE= 44.15

BREAKING DOWN FROM RISING WEDGE

APR

JAN

JAN UPTREND IS KEY ST AT 42 SEPT

SPINNER (3, 16, 16)

S

O

ON THE DECLINE

N

D

J

F

M

A

50 48 46 44 42 40 38 36 34 32 30 28 26 24 22 20 4.5 3 1.5 0 -1.5 -3

M

Agnico Eagle Mines Limited (AEM) - Nyse New Recom: Stay out for now. Buy at 33 or lower.

AEM remains in a sideways band after reaching highs for the move. AEM broke below the upside wedge and it's now poised to test the Jan uptrend near 42. A break below this level could push AEM to its 75 day MA at 39 or lower, to the Mar low and support near 33. Topping action continues. We recommend staying on the sidelines for now unless AEM tests 33.

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PROSHARES ULTRASHORT S&P500 (SDS) 5/24/2016 CLOSE= 18.43 HIGHER LOWS LEAD THE WAY JAN

25.5

FEB

24.5 23.5

22.5 21.5 20.5 19.5

18.5 APR SPINNER (3, 16, 16)

17.5

RESISTING = BEARISH 3 1.5 0

-1.5

J

F

M

A

M

ProShares UltraShort S&P500 (SDS)-NYSEArca Long at:

18.90 (May-4-16), 18.55 (May-11-16), 18.85 (May-18-16).

Stop:

2dc below 18.

Profit Target: 21.50 & 23.50 New Recom: Keep your positions. Sell half at first profit target.

SDS continues to chug upward showing higher lows from its low in Apr. SDS must break above 19.50 on a 2dc to see renewed strength that could push SDS to the Jan downtrend. Stock market overall is showing signs of weakness. Keep your position in SDS for now as we'll be looking to gain from downside pressure in stocks. 15

DIREXION GOLD MINERS BEAR 3X Shrs (DUST) 5/24/2016 CLOSE= 17.4

50

MAR

TESTING KEY RESISTANCE

40

30

20

10 SPINNER (3, 16, 16)

PEEKING ABOVE ZERO 0 -15

-30

M

A

M

GOLD MINER BEAR 3X DIREXION (NYSE: DUST)

New Recom:

Buy some at mkt and more on a pull back to 16.50. Place stops at 2dc below 13.75. Targets at 30 & 50.

For the past month, DUST has been consolidating a bearish decline since the start of the year. However, DUST is showing it has good support at the bottom side of the band and Spinner is peeking above zero and MT MA showing momentum rising. Today, DUST broke above its 5wk MA for the first time since Jan. Moreover, gold shares have broken below a 5 wk of their own while gold broke below its 15 wk MA today. All signs showing weakness at the start of what seems to be a bull market correction. This trade is for speculators only and its designed to profit from ST weakness.

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McEwen Mining Inc. (MUX) 5/24/2016 CLOSE= 2.29 2.90

BREAKDOWN

2.70 2.50 2.30

2.10 1.90 1.70 1.50 1.30 1.10 0.90

JAN

SPINNER (3, 16, 16)

BEARISH 0.35 0.2

0.05 -0.1

J

F

M

A

M

McEwen Mining Inc. (MUX) -NYSE

New Recom:

You are out. Some may have bought and sold last week, essentially breaking even.

MUX broke below the Jan uptrend showing weakness, increasing its downside risk. Spinner showed exhaustion when it failed to rise above zero and its MT MA and is confirming weakness today as it declined to an extreme oversold level. MUX is now poised to decline to its next support near 2.10 (the 75 day MA). Stay out for now.

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Hecla Mining Co. (HL) 5/24/2016 CLOSE= 3.87 5.00 4.60

EXHAUSTION TURNS TO WEAKNESS

4.20

3.80 3.40 3.00

2.60 2.20 1.80

1.40

JAN

BEARISH

SPINNER (3, 16, 16)

0.6 0.3 0 -0.3

J

F

M

A

M

Hecla Mining Co. (HL) - NYSE

New Recom: Stay out for now.

Continued weakness… HL failed to rise to new highs this past week and broke down. Its decline has started and its Spinner is showing room for more downside. The key now remains with the Jan uptrend near 3.60. If HL holds at this level, it'll resume its bullish rise. However, if HL breaks below the 3.80 support, it'll decline to its first support near 2.60. Stay out for now.

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OPEN POSITIONS Status (L=Long, S= Symbol

Trade Update &/or Current Position

Short, O=

Initial

Initial Entry

Traders re-

Out

Entry Date

Price

bot/ -sold at

P= Put

Last Closing

Stops

Price

Target

Target

#1

#2

21.50

23.50

C= Call)

SHARES DUST

Buy some at mkt and more on a pull back to 16.50. Place stops at 2dc below 13.75. Targets at 30 & 50.

O

17.40

HL

Stay out for now.

O

3.87

AEM

Stay out for now. Buy at 33 or lower.

O

44.15

MUX

You are out. Some may have bought and sold last week, essentially breaking even.

O

2.29

SDS

Keep your positions. Sell half at first profit target.

L

May-4-16

18.90

18.55, 18.85

18.43

2dc below 18.

MARKET LEADERS Gold GCM16

CrudeCLM16

Silver SIN16

US Dollar DXM16

COPPER HGN16

Mar-4 & 7-

Buy long positions again near 1210 and more near 1190.

L

Keep your put spread.

P

Buy again below 16. Place stops at 2dc below 15.50. Profit targets at 18 and 21.

L

Stay out.

O

95.58

Stay out.

O

2.09

16

1260.00

1229.20

2dc below 1186

1400.00 1500.00

48.62

Dec-17-15

13.75

13.9, 13.90, 14.75, 14.90

16.25

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Quoting GCRU is permitted provided GCRU name, website address & subscription price are given. All charts in GCRU are daily prices. Fax subscribers please note this week’s password to access GCRU daily edition via our website is: (declining). Subscribers can obtain free online chart updates for all gold shares in GCRU via: www.bigcharts.com. To view Canadian stks please use CA as prefix (ie, to view Agnico Eagle (Toronto) you must use CA:AEM). Note: U should NOT feel our recommended prices are set in concrete. If mkts suddenly feel hot or cold to U, or dramatic news occurs, U can buy or sell, or stop at slightly higher or slightly lower prices. It also hinges on your experience level. Some people can use our prices as guides & know when they can take bigger risks.

1dc 2dc bot CAD$ H&S LOC LT MT NL PF PO Recom RH&S RS ST Sym/tri Tgt Unch Vol Wk Ystdy C

ABBREVIATIONS 1-day close (the share price must close above or below the indicated price level, before our recommendation is activated) 2-day close (consecutive) bought Canadian dollar head & shoulder line on close long term medium term neckline portfolio price objective recommended reverse head & shoulder relative strength short term symmetrical triangle target unchanged volume week yesterday close

Spinner: Spinner is an in-house momentum indicator (not always shown on charts). Momentum indicators use the rate of change in price to determine predominant energy flows. Spinner trading signals are generated when the faster timing line crosses above or below the slower confirming line. Upside crosses in the lower range of positive territory offer the most reliable signals for longs; downside crosses in the top range of negative territory for shorts. Avoid trading against the timing line, ie, buying/selling if the timing line is in corrective mode (against direction of trade) unless the confirming line is positioning for a new 'confirming cycle'. It's important to always be aware of location, direction & cycling phase of the confirming line. Spinner signals are more effective in trending mkt's than in trading ranges where indicators such as Stochastics & Williams %R should be used.

NOTE: payments for GCRU services should be made payable to MAP CUSTOMER SERVICE. Gold (& mkts) Charts R Us is published weekly. You may sign up for 3-mos at $300, 6-mos at $585, 9-mos at $855 or 12-mos $1,110. E-mail: [email protected]

- DISCLAIMER Due to the electronic nature of e-mails, there is a risk that the information contained in this message has been modified. Consequently Gold (& mkts) Charts R Us can accept no responsibility or liability as to the completeness or accuracy of the information. Whilst efforts are made to safeguard messages and attachments, Gold (& mkts) Charts R Us cannot guarantee that messages or attachments are virus free, do not contain malicious code or are compatible with your electronic systems and does not accept liability in respect of viruses, malicious code or any related problems that you may experience. Information in Gold (& mkts) Charts R Us is for general information only & is not intended to be relied upon by individual readers in making specific investment decisions. Appropriate independent advice should be obtained before making any such decisions. Gold (& mkts) Charts R Us do not guarantee or assure that readers will make money, or accept liability for any loss suffered by readers as a result of any such decision. Futures and share trading involves risk and is not for all investors. Past performance is NOT indicative of future results. Trading involves risk and should be pursued with risk capital only!

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