WEDNESDAY – FOMC DECISION
Today is the FOMC Decision, and even though the rate hike is supposed to be figured in, These markets are stretching out and could see a sharp reaction when the time comes. Let’s take a look at Tuesdays market action…
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SPX – This small candle with a new low on day 34 allows for a swing low with a move above Tuesdays highs (2573.99). If the FOMC Decision changes the markets direction, it is possible that we will have a DCL & even an ICL.
USD – This is a reversal candle after slightly breaking below the 50sma. Past reversal candles were followed by higher price ( That may be bad for Gold).
WTIC – Wednesdays inventory report may help us to identify whether this is a false break down or a continuation . I mentioned in the weekend report that I did not like the low in oil at that time. We do have divergence here and a shake out is the only thing that may save this. Oil stocks look very weak & beaten down.
GOLD #1 – No big change on Gold, this was day 23.
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It seems quite bullish that in a 3rd daily cycle, we have a new high on day 17 ( and in after hrs as I write, on day 24 Wednesday). DAY 24 Highs in a 3rd daily cycle.
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GOLD #2 – This is the Bullish ‘Post Fed’ reaction idea from yesterdays report. I view this as less likely, but not impossible.
GOLD #3 – This was the Bearish Post Fed Idea, and is MOST LIKELY in my opinion
SILVER – Silver is at the top of the base.
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GDX & GDXJ have had 2 nice days this week. Let’s take a look.
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GDX #1 – GDX broke above the 200sma (I accidentally wrote the 50 on the chart), but this channel has been what I am watching.
GDX #2 – False break outs have been common, so I don’t get too excited about the 200sma break yet. We have a FED MTG later Wednesday, and we have seen these fail before.
GDX #3 – I pointed out the 2 boxes yesterday, showing how a burst higher in the first box didn’t lead to a major rally. This may not either. I will discuss why soon…
GDXJ – I have been saying that GDX was playing catch up, LAST WEEK the Juniors were NEAR THE LOWS IN A BASE. Well, the past 2 days we have seen the Juniors playing catch up. Notice where prior tops formed in the stochastics.
GDXJ – NOTICE THAT THIS DAILY CYCLE BROKE OUT HIGHER IN JUST THE PAST 2 DAYS. THIS draws in the bulls, but…
GDXJ – Do you remember when I pointed out that in 2016, before the big rally, we had a complex base, a break out higher to 2 month highs Above the 50 sma, and then a rapid sell off. We just broke out above the 50sma too. I can’t say that this is what will happen, but these set ups do still look the same.
GDX – From yesterdays report.
PASS OR FAIL: I THINK THAT A WEEKLY CHART WILL SUM IT ALL UP,
BUT WE WONT KNOW UNTIL FRIDAY
We are at the weekly recovery or just a “Back Test” of that break down.
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The Markets have been selling off, and the Miners have been taking off. Today the FOMC Meeting decision on interest rates will be released, and we’ll see if that reverses everything? Or causes a continuation. Remember that ‘Knee jerk false reactions’ can also occur. It may just take a little time for things to shake out and become clear. We also have the Oil Inventory report shortly after the open, and we’ll see how that affects oil.
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I’ll have a few additional thoughts below, Enjoy your Wednesday trading!
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~ALEX
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I mentioned that I Bought AG for a quick 2 or 3 day trade. I own 3 Miners that I just wanted to hold for 2 or 3 days. Now I have to decide whether to sell or ride it through the FOMC Meeting. If you bought any Miners ( or ETF) , you too may need to decide whether to hold on, or step aside.
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AG – This is what I wrote about AG in the last report…
AG – I then wrote this…
AG – Ag did break out Tuesday, and I am still hoping that Wednesday it stretches even further, but this is my point… Now I need to decide like some kind of a game show in the U.S. –
1. DO I want to take the money and go home with a guaranteed gain? Or
2. Do I want to hold on for ‘door #3, the FOMC Surprise’, and take a chance at another POP Higher or a quick sell off that takes the gains back to a stop? The choice is mine, and if you own Miners….the choice is yours too. I own 3 Miners, I will at least sell one .
LOOK AT THIS CHART OF AU THAT I POSTED IN MY NOVEMBER REPORTS.
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AU – I was pointing out that AU & a few others like it were BULLISH in these consolidations. This was AU as of November, and this is a bullish consolidation …
AU – Do you see the results of that consolidation? Well…
BTG – This is very similar and I have pointed it out several times. I bought it, and sold it last week, but now this is also trying to break out and COULD run like AU. Also…
AEM #1 – I have been posting this as a bullish set up similar to AU, only it is a shorter ‘bull flag ‘ type of a sell up.
AEM #2 – It too started breaking out Tuesday, and COULD run like AU. In technical analysis, these are actually BUYS with a tight stop under the flag.
RANDGOLD – And this is also a bullish break out. My point is, if the FOMC MTG ends up Bullish for Gold, we have LONG choices to enter after these consolidations, and AU has shown how these can run. We also have SILVER stocks, Many of which are still at their lows. If the FOMC causes a sell down into a dcl, we will look for entries if it plays out into an ICL.
GPL – I posted this as a Silver stock in the comments today, still at the lows of a long tight base. Since many Silver stocks are now popping like CDE, AG, HL, FSM, – GPL is possibly going to be next, IF THE FOMC MTG turns out bullish for Gold & Silver.
So I just wanted to put these ideas out there, in case the FOMC Decision gives Gold & Silver an additional boost. I Don’t want anyone not holding a Miner or 2 to despair, because there will be many bullish set ups when the trending higher stage begins. Right now, GDX & GDXJ are still in a base, and this weekend will help us to see if the Miners are back testing or recovering.
We are at the weekly recovery or just a “Back Test” of that break down. PASS OR FAIL.
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I really think that we are getting extended and that we will see POST FED Selling at this time.
I MUST SAY that AU has been a real break out and run, so it will be worth keeping an eye on the other similar set ups like BTG, and see if they resist the selling. Enjoy your Wednesday!
