Tuesday May 9th
It seems like these markets need a little push. Mondays trading didn’t really change anything, but we can still do a sector by sector review…
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The SPX dipped down in the morning and then closed slightly up. This still has time to run up to the top of the bullhorn before it starts to drop down into a dcl. Again, it looks similar to the first daily cycle in Oct – Dec.
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The NASDAQ actually looks pretty good and it looks like it wants to break out higher. We may get a false break out and then a pullback, but because this is not overbought, it could run for a few days too, before pulling back again.
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It is possible that The Nasdaq could run for several days and then pull back as a back test. I may have drawn the run a bit too far, but basically a breakout and dip back for a dcl (back test).
WTIC – Oil had some follow through after that strong reversal was put in place. I mentioned in the weekend report that that slight break could be a shakeout low and an ICL, because I thought that the last low in March also could have been an ICL timing-wise, but this is interesting …
This is interesting: This chart doesn’t show that Oil broke the last low. This gave us a higher low. This would make it possible to have a 5 wave move higher out of an ICL last month, and The XOP did this too. Usually, a reversal at the lows like that is a buy, and that is fine, but at this point Oil has just been very choppy and it might stay that way, so that is the risk.
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XOP – You can see the higher low here with Oil Stocks too. There was a high volume capitulation-like low in March and that is what I thought could be the ICL (intermediate Cycle low), at that time. The XOP is oversold and should move higher, but on Monday it Popped open and dropped to only up 33 cents, with Oil up 2.5%. They aren’t quite in sync yet.
USD – I see a wedge and that is often bullish short term, so it needs to be watched. I’d like to see the USD just roll over and sell off right here, since Gold and Silver have their daily cycle lows in place.
GOLD chopped sideways to the 34 sma after putting in a dcl. Last week it suddenly burst higher for 3 days around Fed Wednesday, but then it dropped sharply on Friday. Monday gave us a weak bounce.
SILVER also ran up for 3 days last week around that FOMC Mtg, but it dropped and bounced back a bit on Friday, day 8.
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SILVER Day 9 gave us a small candle range of trading on Monday, day 9. This still looks excellent as a bullish set up.
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GDX was down 4 cents by the close, and it resembles Silvers bullish chart.
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So we didn’t see any solid action or great movement at all on Monday, but that happens sometimes. I do own a couple of Crypto stocks and they dropped enough for me to feel it (8-10%), but they do have a tendency to do that, as mentioned in past reports. I hate holding them on a down day, Love owning them on a green day. The Precious Metals sector moved nicely last week around the fed Mtg and now they stalled. This sector may be waiting for the USD to drop. I’ll discuss a reminder on Bitcoin below. We’ll see what Tuesday has to bring, enjoy your Tuesday trading. 🙂
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~ALEX
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Note: I am releasing this report on Monday night and will be away for a while on Tuesday morning, because I have to go get some blood work done for a physical. I will likely be back after I stop for a big breakfast, because I have to fast for 12 hrs before the blood work. 🙂
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BITCOIN : On May 5th I discussed that day 45 dip as a possible dcl(?). It MIGHT be a dcl, because we then had a triangle form, and that is often bullish, but I stated on the chart that we usually get a dip around day 60 as the real dcl. SO we could still get a dip as day 60 approached. I drew it as a false break down.
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Bitcoin was on day 59 this weekend and that dip started to appear. So I grabbed this on Monday morning as Bitcoin started to drop down toward that day 45 low.
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Bitcoin does appear to be dropping down into day 60 and we should expect price to go under that day 45 low. Is day 60 a guarantee to be the exact bottom? Now, but the next reversal higher should take place around day 60 (this week), and we should start a new daily cycle move higher.
I mentioned in the live commenting area this morning that I was looking at Cruise ships, after seeing a report on the news that they are making a big comeback. If you are the buy and hold type of investor, stocks like Royal Carribean and Carnival Corp may offer nice recovery gains over time. CCL & RCL.
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CCL DAILY – Cruise ship stocks got crushed when Covid broke out, but you can see the recovery after basing out. This has moved from $6 to $12 and is now at $10.60.
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CCL WEEKLY is a large base and it has a lot of upside potential if people are ready to sail away on vacations again.
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RCL DAILY – This one has been running and may need a pullback before it offers a low risk entry. You can put it on a watch list and maybe it’ll be a buy when we get our next dcl.
