WEDNESDAY MAY 23rd – Hump Day

REVIEW:  SPX looked like a Bull Flag Last Friday, I expected a break higher.

After that break higher, This is copy pasted from yesterdays report.  We should expect a possible gap fill.  Markets could ‘stall’ to fill that gap.

SPX – The markets did move higher in the morning and then closed down, partially filling the gap.  I am seeing short term weakness in some of my other indicators (Not shown), so I’m wondering if this is going to tag that 50sma again? The weakness at this point is nothing too serious and a push higher will help turn those back upward.

NASDAQ –  I’d like to see a good push higher soon.  I do not own any tech stocks, unless you include ENPH in that group.  I had it under Solar supplier.

WTIC  – Day 31 and the climb pushing along the upper trend line continued. Wednesday is Oil inventory report day. That could start a drop into a dcl.

NATGAS –  I stopped covering NATGAS, because it spent Months going sideways.  It looks like a break out and should run higher.  Remember that we had a similar set up as this set up on the XLE.  When a flat base finally breaks out, they usually run quickly.

USD  – The USD hit $94 on Monday and sold off, that was an area of resistance that I pointed out.  Tuesday it also formed an unconfirmed  swing high.  We are in the timing for a dcl, so this could break down below the down trend line & 10sma and seek out a dcl, BUT THIS WILL BE A Right Translated Daily Cycle –  and therefore I would then expect a bounce out of that DCL and hopefully a L.T. Daily peak on the next one.  Let me show you this…

So this builds a case for Gold & the USD acting inversely.

USD –  Let’s just throw an educated guess out there to show how this could play out with a USD Peak on day 24 & drop to a dcl now.  THIS IS NOT A GUARANTEE, JUST an idea for a visual that fits cycles. Read the chart.

THIS IS WHAT I CAN PICTURE FOR GOLD WITH THAT USD SET UP.   TIME WILL TELL, BUT THIS GIVES US SOMETHING TO LOOK FOR GOING FORWARD.

GOLD  – While the USD dips to a dcl, GOLD could bounce to the 200sma.  The USD then puts in a dcl and bounces back to $94+ as shown above, and GOLD drops to Its ICL.  The USD then tops and drops lower and GOLD rises out of that ICL.   That could take weeks,  so will we be near the F.O.M.C. in June for that time period?

If GOLD Bounces, Miners may continue to go sideways.

GDX DAY 15 –  Yesterday we discussed that the Miners looked bullish regaining the 50sma on Monday, and it didn’t match my expectations for a drop in Gold. I mentioned that they were out of SYNC with Gold.  Now they may sync up.  GDX was rejected at the 10sma and almost made new lows with Gold higher.

GDXJ  – GDXJ also ran up to the 10sma and was rejected, and it too almost broke to new lows, with Gold higher.

Patience continues to pay off in the Precious Metals sector when it comes to leverage.  That said, some individual Miners have been doing their own bullish moves.  We’ve discussed TRX, THM, GORO, KL, etc etc .

EGO was one of those yesterday. I saw it up slightly in the first 15 minutes, but volume was really heavy, so I mentioned it. When I got back after 12 it was up 10% and I grabbed this chart  shortly after.  I looked , but I could not find any news…

EGO  – Up 12+%

EGO  – It closed the day up almost 17% and I still couldn’t find any news on it, but  one of our readers  ‘AKOS54′ found news & posted that it was pertaining to their Greek Mine, which has been their major source of pain for EGO.  THX AKOS54.  It may be time to buy a dip or bull flag if we see one form in EGO, but the real meat of the news is to be released later. I’m thinking that THIS MAY BE INSIDERS /COMPANY MANAGEMENT  THAT KNOW THE NEWS WILL BE GOOD.

The GENERAL MARKETS are rather early in their daily cycle, and need more time to play out. At this point they remain bullish, because they broke out from a triangle type down trend.  I’d like to see a move higher soon, since my short term indicators show weakness.

Wednesday is when the Oil inventory report is released, so we’ll see if Oils selling finally starts this week.

The USD has an unconfirmed swing high late in a daily cycle, and Gold looks ready to  bounce.  As Gold went higher,  Miners were rejected at the 10sma and dropped,  despite a bullish move on Monday.  Things do look to be getting clearer in the bigger picture, and that means that Gold should still drop to an ICL head after a bounce.  SIDE NOTE:  We also discussed that a break above the 200sma by GOLD might prove to be a shake out, and GOLD could have that longer daily cycle idea with a day 43 low in place.  I am watching that area closely. Each day will help to clear this picture up.

Enjoy your Wednesday trading, I have a few charts below.

~ALEX

ENPH CHART #1– By request, this is acting bullishly.  This looks like a BUY Reversal actually.  It is a ‘W’ Pattern break out and is forming a handle.  It reversed at the 10sma, so this may be the end of the sideways move.

ENPH CHART #2 – When you see a stock acting bullishly,  look for a pattern and as long as that is playing out, enjoy the ride. Pull backs & consolidations are normal and healthy in Bullish Stocks.

OGRMF –  And I see a similar pattern here too, and I have actually pointed this one out in the past. This is normal bullish action so far.  Pop , sideways, Pop, sideways, POP, etc.

BY REQUEST:

CBWTF  – This fell and the volume was bigger than I like to see too, but it did that 2 days ago and so far held support. It COULD drop to the 200sma, but hopefully it is just dropping to the blue trend line support & reverses again.  It is a nice base at this point, even if it dropped to the 200sma.

I POSTED A REPORT ON BITCOIN LAST YEAR.  IN IT, I SHOWED THAT THIS WAS BITCOIN AFTER A PARABOLIC RAMP HIGHER IN 2013, it formed a long rounding base. I EXPECTED THAT TO REPEAT AFTER THE PARABOLIC RUN TO ALMOST $2000.

BITCOIN – SO FAR, IT IS BASING OUT IN SIMILAR FASHION.  I am viewing BITCOIN in cycles.  The cycles for Bitcoin are similar to OIL , in my observation.  They tend to run for 50 or 60 days  dcl to dcl. So here, I see that another drop started & may have further to go, and then it continues to bounce & base out.

Side Note: Blockchain and Bitcoin

These cycles tend to affect the block chain stocks like MARA, MGTI, SSC, SRAX, DPW, XNET, etc.,  that is why I was buying them in March & April as BITCOIN bottomed.  They bounce with bitcoin.  So if BITCOIN drops, they could dip down too, and then they’ll be a buy when Bitcoin is ready to move higher again this summer.   Some stocks may hold up  ( SSC seems to be going sideways)  others may dip down.  As a trader, I Sold all of mine gradually to enter other trades a while ago, and I mentioned selling some  in the comments section.  I do NOT like to have 15 – 20 positions open, so I will often take profit on one to enter another, and I started adding the Medical Marijuana sector over a month ago.

SO THESE, FOR EXAMPLE,  HAVE PULLED BACK , BUT THEY CAN DIP FURTHER IF BITCOIN HAS MORE OF A PULL BACK AHEAD. Read the charts…

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