Friday April 21st
Yesterday I used this chart to discuss the length of the last 2 cycles (roughly 50 days) and the ‘Peak’ being at day 27 on the last daily cycle and 42 on the first one. Even though the first was the strongest and it peaked on day 42, that peak was choppy and not much higher than 2 other peaks at day 23 and 34. So this might be where our current highs come in. We’ll see.
SPX – So again, the ‘Peak’ may be in place for the markets, but that doesn’t necessarily mean that they’ll just drop straight down from here. We may see some sideways topping action or maybe a choppy drop lower. The last sell off was choppy.
WTIC – Oil has dropped down into the gap, and I think that we’re seeing a 1/2 cycle low. I am expecting price to be supported in the $75 – $76 area (50 sma).
It would seem that The USD put in a dcl where I have day 35 marked. That would make this day 9 and so far the USD is above the 10sma, but chopping sideways.
GOLD has been choppy and is due to form a dcl. Will it drop further or is that dip to the triangle trend line enough? Well, this is starting to remind me of the last run higher when it was choppy and it became very hard to see where a dcl formed. We can say this: This will be very Right Translated.
SO let me show you the similarities that I am seeing here with GOLD: Take a look at the October ICL with the Yellow and Green arrows vs now…
1. Gold shot straight up out of the lows for a few days similar to our recent rally.
2. Price formed a choppy triangle like move for 2 weeks. After that…
3. We did not see a clear dcl. The yellow box shows choppy price action when a dcl was due. Next we saw price suddenly take off higher. That chop made it very hard to see any dcl form in real time. We may see that again here.
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So again, that day 35 reversal may be the dcl. You could buy Gold there with a stop under that low.
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SILVER has a day 30 low and reversal at support. Was that a dcl? It is hard to know because…
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I can still picture an a-b-c type of a drop to the 38% Fib if the USD doesn’t sell off yet.
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Again, similar to Gold, what stands out is that I remember with the last strong run higher our cycle counts became very difficult.
Take a look at the first daily cycle in the box September to October for Silver. That was 30 days long and that is Normal. After that, however, the next visible dip was only on day 26 and only to the 20sma (similar to now). No other dip after that fits what a dcl would look like.
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GDX has a mild dip so far too, just above support. If the USD chops a little high, this can dip a bit lower.
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Let’s just look at a few Miners right now:
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Different Miners are acting differently. The stronger ones like GFI have barely had a dip, so if you sold this hoping to buy back at the dcl, it may not work out.
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Other Miners, like HL for example, have been selling off and even broke the 20sma yesterday. One thing about this kind of price action is that when Miners bottom and recover, they can often make this drop back in just a couple of days.
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AG dropped to the 20 & 34 sma, but released a good report pre-market and reversed to green. We’ll see if it can hold up in this area. AG may be a buy here.
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EXK has had more of a mild dip so far, and is above the 20sma.
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KGC – Many of the S. African Miners like KGC, AU, HMY, GFI, etc are still up at the high, so they remain the strongest Miners as a group.
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It can be a little boring waiting for a dcl to form, but some of these Miners can be bought if you don’t mind a little choppiness. For others, it may be best to wait until the USD rolls over a sells off. I hope that the review or comparison of this current choppy period in Gold, Silver, and The Miners vs the move out of the ICL in September -October helps you as much as it helped me. The DCLs were not clear on that last run, because price was strong and the dips were mild. We may be seeing that again. It’s all about the USD at this point. When it decides to drop, I think we’ll see a move higher in many sectors again. Today is Friday, the last trading day of the week, enjoy your trading.
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~ALEX
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This weekend I am going to be out of town through Sunday morning, so I will try to release the weekend report sometime in the early part of Sunday when I get back home. Thanks!
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BITCOIN: I also feel that BITCOIN has been performing as the opposite of the USD too. If the USD drops it can push higher, but with the current choppiness of the USD, Bitcoin is dropping and crypto stocks are too. Bitcoin is in a resistance area and this can remain choppy or even drop lower, so be careful with Crypto stocks and let them bottom.
