Wednesday February 25th
SPX – Let’s just say that the crash has had some follow through as the SPX dropped another 100 points. The Dow dropped over 1000 points on Monday and another 900 on Tuesday. Notice if you will that ALL GAINS FOR THE 2020 BULL AND EVEN DECEMBER HAVE QUICKLY BEEN ERASED IN just 2 DAYs, yet this is not even really oversold yet.
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SPX – In OCT 2018 at the first red box, a similar drop crashed to the 200sma, bounced & dropped again.
SPX – Also look at the drop in July 2019. Even that crash dropped and just chopped between the 50 & 200 sma for weeks.
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WE ARE EARLY IN THE DAILY CYCLE, since this is day 15 of what could be a 30 or 40 day daily cycle. I see people dying to buy this dip, but it is probably only going to put in a bounce & then roll over to the ICL. It is best to be patient.
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The Oil inventory comes out Wednesday. This may break those lows, but that would be a failure. That would signal a deeper drop in a left translated daily cycle. Oil would get real cheap again,dropping well below $50
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GOLD – We had a reversal candle and we are coming due timing-wise for a dcl, and this is not our of the question. An a-b-c down could drop Gold like this over a few days.
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SILVER – Silver actually dropped sharply Tuesday and bounced off of the 50 sma. I’m looking at this as an inverse H&S and would like to see it remain above the recent lows.
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GDX MONDAY – THIS WAS MEANT TO BE IN YESTERDAYS REPORT.
We had a reversal Candle Monday on day 27, and daily cycle can drop into a dcl at anytime from here, so I drew a correction that would be very similar to the one with the reversal candle in January. Notice that it isn’t straight down, but it bounced here & there in January.
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GDX – Day 28 saw GDX drop sharply ( 3.5%). It can bounce at the 10sma, but still have further downside, because on a dip into a dcl, we get a break of the 10sma.
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GDX – A drop in January bounced around too. We could see a drop like that (a bit choppy).
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GDX – Or an a-b-c drop that could form a back test of the recent break out. This would happen with a gold bounce.
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GDXJ – Well GDXJ came down fast, dropping 5%! I honestly expected a drop, but not that sharp and that fast. We’ll just have to see how this plays out. It could bounce Wednesday and then slowly chop down into a final low or something along those lines. An eventual tag of the 50 sma & blue trend line is very possible.
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JNUG FOR PERSPECTIVE – JNUG gapped open Monday to $105, and dropped in 2 days to $81.50. THIS IS WHY I ALWAYS WARN ABOUT PROPER ENTRY (Not chasing & buying high) and position size and stops. Look at this drop. That is a big 2 day drop, with 14% down yesterday alone.
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The general Markets may bounce, but I am not buying it. I might take a short position after I see how a bounce plays out. I am expecting a dcl in Precious metals maybe this week but it seems more likely to come next week. We would watch for a break below the 10sma, a reversal, and a swing low to form. After a dcl, I do think that we will then move higher to new highs again. I will cover the action daily in the reports. With the current market set ups being so volatile and unpredictable, it may be best to sit and wait for the proper low risk set ups to form. That could take some time.
I sold everything in the General Markets when they started trading under the 13 sma Thursday & then again Friday eventually closing there. Unfortunately I didn’t sell CSIQ on time and took a big drop Monday on a gap down & exited it for a loss. I also sold leverage ( JNUG) with the reversal & black reversal candles in Miners, but I did hold on to a few Miners. I even added AKG & FSM, but I should have waited for the dust to settle a bit. AKG looks fine, FSM did drop to the 50sma with Silver yesterday. I will discuss just a couple of stocks below.
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EDIT 6:30 a.m. Eastern time: As I proof read, this is Gold. It sold off from $1690 to $1630ish, that was the reversal candle and now it may form a cup. I do not think that this is a dcl, but more of a ‘continuation’ of the 2nd daily cycle, because….
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THIS is the daily and it looks to be a continuation of the daily cycle. A little more Chop and gradual drop to a dcl. I am still going to wait for that dcl.
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It can still do as discussed in this chart
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~ALEX
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ISVLF – So I drew this yesterday & mentioned that some of these extended stocks ( ISLVF, NEM, AUY, ELYGF, etc) could pull back quite a bit, and that may become a buy opportunity. Well let me explain something with ISVLF…
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ISVLF – Well, that was an 18% drop!! I will not buy a plunging stock like this, but if it bounces, slows down, and firms up as I have drawn it here, then it can be a low risk entry. So far this dropped too quickly.
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PLG WKLY – I own PLG and started to look at it in various ways. I said that it can drop to $2.00 yesterday with a chart like this, showing support at $2.
PLG – I also looked at it making higher lows and thought that maybe it will form a long boring triangle (Choppy). We’ll see, but really PLG still looks bullish above the $2 area.
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USAS – I bought FSM & USAS yesterday, just in case Silver took off. Well Silver crashed down, and some of the silver stocks dropped too. So it is possible that as we seek out a dcl, these may drop to the green line & not just the red line. We’ll see, but I still like the set ups in the big picture…
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This was the Big Picture weekly chart of USAS from last week.
