Jan 29- WHY?

DJIA – Monday was a down day.  let’s see if we can get 2 days down in a row, since we haven’t seen that for weeks.  🙂

 

SOX  ( Or SOXL) – The Semi s have formed a cup and seem to have done a back test and a reversal. This looks like it wants to run higher, so when we look at a couple Semi Stocks , we’ll see if they look bullish too.

AMD  – AMD pushed higher and here it is inside of that $9 to $15 run that I pointed out a while ago.

 

CY  – Cy looks bullish, because it also looks like a cup with high handle. The reversal on Monday puts it above the 10sma, and if I was buying this, I’d put a tight stop under Mondays lows.

 

WTIC  – Oil is going sideways above the 10sma so far. We are looking for a deeper dip to contemplate buying. A drop to the 50sma is possible, since we have seen that in October & December.

 

9 NEW CHARTS OF THE USD –   WHY?

I have been discussing the possibility of this being a DCL or an ICL in the USD.  I have leaned on the side of a DCL for several reasons, and it has been explained in my weekend and recent reports already.   At this time, I need to explain this again, so I’ll try to be clear as to what I am looking at.

 

NOTE #1: When someone is using cycles and they say , “We are within the timing for an ICL”,  that does NOT mean the same thing as  “This is going to be an ICL”.  It means that we had an ICL in  SEPTEMBER and now  4 months have passed.  Since we have had ICLs in the USD that were 4 months apart in the past,  that does put us  ‘ within that timing that it could possibly be an ICL.’  So at this point, we could have a DCL or an ICL.  Then we look further.  We cannot tell yet.

NOTE #2:  We have also had ICLs 5 months apart, 6 months apart, and more.  I have shown this in my big picture reports already,  it needs to be pointed out again.

 

DO YOU SEE ICLs EVERY 4 MONTHS FROM THE SUMMER OF 2016 to SEPT 2017? No, but you could say that it was ‘within the timing to look for an ICL’, but instead we had bounces that were weak dcls for months.

NOTE #3 :  Oversold does Not Mean an automatic ICL. Let’s discuss that.

 

USD – The USD shows up as quite oversold. Does that automatically mean that we are looking at an ICL?  See the oversold signs on this chart. Does this mean, “Yes, we have an ICL- it is deeply oversold” ?

 

USD – Last JULY we had the  same type of oversold markings, but it was only at a dcl.  We had a sideways move in AUGUST with the USD, and GOLD RALLIED to a Sept Peak as the USD rolled over to the real ICL.

 

ADDITIONAL THOUGHTS:

 

USD – NOTICE: The DCL in November peaked at day 11.  If that was a DCL in the USD in Late December, it peaked on day 5.  Currently we are on day 2 and it is not even a confirmed swing low yet, so there is NO CONFIRMATION of an ICL.  The USD remains below the 10sma.  This needs time to show if it is a strong ICL or another weak dcl, and…

USD – The FOMC Meeting falls on Day 4. It COULD peak on day 4 or 5 again, since the last one peaked on day 5.  At this point,  we will have to wait and see. We do have an ‘unconfirmed swing low’  in place.

Note: If you are heavily leveraged and nervous about a drop, use a stop or lighten up and wait and see how this unfolds.

 

USD – Please note on this chart that an ICL in AUGUST 2015 was followed by an ICL ( 4 months later? -No…) in May of the next year, 8 months later. IF that was one in February,  it was still 5 months later and did not rally very strongly.  The SEPT ICL was 4 months ago.

 

USD –  How far apart were the ICLs in 2017?  So again,  4 months & oversold is NOT an automatic ICL.  The USD could bounce & Back test that break down after the FOMC meeting, so if you hold leverage and are nervous,  lighten up & watch to see what happens.  I own leverage from Dec 13th- I am fine at this point.

USD – So this is probably what we can expect from a dcl bounce.  I think it could TOP around the FED. Notice how weak other bounces were, they mostly went sideways for 5-12 days.

NOTE:   If you hold leverage and are anxious about a further pull back in Precious metals,  lighten up & watch to see what happens.  I own leverage from Dec 13th- I am fine at this point.

 

 

USD – IF we did have an ICL, I would expect 2 daily cycles higher, a break of the intermediate cycle trend line is necessary, and then it should roll over.

USD – If the USD has bottomed and moves higher after the FOMC meeting, it may do a back test of the recent break down. This would send Gold lower, so if you are highly leveraged, do what you think is necessary.

 

FXE –  The EURO looks bullish and it broke out and back tested already. It could move as shown if the USD rises out of a dcl or ICL.   If we have a weak bounce in the USD ( Dcl) The EURO may pause or just go sideways, similar to Gold.

 

GOLD & MINERS

 

 

GOLD  – If this is day 31, then the FOMC MTG is on day 33.  Under this scenario, Gold could drop to the 50sma and yes,  it could drag Miners down too. We will discuss that. If the USD put in an ICL,  and there is No WAY to know but it has put one in place over a 4 month span in the past, then GOLD could drop & consolidate further.

 

GOLD – Gold has not even given us a 38.2  or 50% retrace, and these are totally normal. Look at the drop so far,  it is extremely minimal. If Gold tops here & falls after the FOMC, these are areas that I am looking at.  The daily cycle can be 30 days, on occasion they have been 38-40 days.  As I have mentioned- This is a cup and may form a handle.

 

GOLD –  so far this is a cup and we are putting on the handle. I have been stating this as a possibility for weeks.  If you have been adding leverage late in the daily cycle, a dip can hurt.  I add after a confirmed swing low is in place, I am still holding most of the JNUG that I bought at the DEC lows, and added to Miners on the dips.

 

Take a look at a giant cup & handle. The handle is usually a sideways move and it had a slam down in the middle.  Once it broke out, that slam down was long forgotten.

 

MINERS

 

GDX – A reminder, are you holding too much leverage?  I keep asking this, because this pull back is very mild so far,  and since it is not even 38% total, it can drop further.  Some are saying that they are experiencing pain on the drops.  I don’t like giving back what I have made either,  but if you are over leveraged during dips, it can cause one to think the worst rather than be unbiased.  SO far, this is a bullish chart.

GDX –   I hate to say this, but this could drop 50% or even 61.8% as a ‘shake out’ at the 50sma and be a normal pull back.  It has been choppy and not easy to ride if you are highly leveraged.  If this is all the first daily cycle, it should break to new highs on the 2nd daily cycle.

 

In Conclusion:

So far the above chart looks like the count that we have.  If this is the case, I have never seen an intermediate Cycle top on the first daily cycles peak out of an ICL. That argues in favor of a USD DCL.   Compare this run to the July run on the left, and this one is shorter time-wise and length wise, this looks about mid point.  Can it dip during the FOMC?  Yes.  I do not think that the USD has put in an ICL, but time will tell.

 

Since the first daily cycle out of an ICL is never the peak of the Intermediate Cycle, the only way that I could see the USD as an ICL and Gold as having peaked would have to be that we are on the 2nd daily cycle for Gold & Miners.   Miners and Silver did look like they could have put in a dcl,  but Gold never really closed below that 10sma and broke the trend line until now.  It seems that Gold is dropping into a dcl near the FOMC meeting around day 30+

 

You can’t tell if the USD put in an ICL or a DCL until time goes by and things are confirmed.  4 months looks a bit short.   I am not expecting an ICL, but if the USD rallies very strongly out of the FOMC meeting, that would be chard for those holding Leverage. The December FOMC meeting is where Gold put in the ICL and the USD peaked, but we had a rate hike.  I do not expect a rate hike here, but talk of one may be all we need to help Gold.   It wouldn’t surprise me to see GOLD put in a DCL near this  FOMC meeting,

I am holding current positions, but if you feel that you are over leveraged looking at a 50% pull back on GDX GDXJ,  you can sell and watch as this dcl unfolds.  You can always get back in.  AT this point the set up still looks Bullish in the Big picture.  We’ll see what the markets bring our way on Tuesday, the day before the FOMC ANNOUNCEMENT.

.

 

~ALEX

 

TWTR #1 –  This was twitter pointed out as a buy in October.  It has NOT been an easy ride, but I mentioned that I recall when FaceBook sold off as an IPO,  and eventually ran from $20 to almost $180 now.

TWTR #2 – Twitter announced what was supposed to be bad news last week, and it sold off daily, until Friday when a strong reversal bought back 6 of those sell off days. Monday brought it right back to the highs.   TWTR is a buy & hold for long term investors…

TWTR #3 weekly – Twitter is trying to break from that base

FB –  When FB broke out,  it was on its way, and people Hated FB back then too, it spent a bumpy year going sideways after selling off.

HMNY  – HMNY popped yesterday and is now on the 50sma. I like the long base and have been watching this.   It just ran from the $5 area to almost $10 and looks like it might break out and run.  It could be bought for a trade here above the $50 sma,  use a stop, and see if this keeps climbing  or just scalp a quick gainer  (Again,  use a stop)

 

GDX INTRADAY –  AT the close,  we saw that huge amount of volume pile in and I see divergence at the MACD.   We could get an UP day or at least a start higher in the morning.  If you are heavily into JNUG / NUGT and want to lighten up going into the FOMC Meeting,  we may get a bounce to do so.