Tuesday June 27th – It’s Just a Dip
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THE NASDAQ put in a DCL in late April, and was due to dip into the next dcl, so we discussed that with the reversal at the highs. Losing the 10sma on Friday was a sign that we might be starting that drop, and now we can see that selling picking up a bit. I actually did go short near the top, but that reversal at the 10sma had me close my short position. I may go short again for part 2 of this drop ( I should have shorted on Monday, but unfortunately, I was not ‘focused’ on trading after the morning eye exam that I had).
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So The SPX should also be dropping into its dcl. It can bounce (that would be short-able), but I’m thinking that we’ll see the 50sma before a real dcl is in place.
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So stepping back, you can see that the 50sma looks like a reasonable target, with or without a bounce.
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WTIC – What can I say here that I haven’t already said? 🙂
Oil has been very choppy and it is currently pinched between the 50sma and the lower support line.
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THE USD AND THE PRECIOUS METALS ARE GIVING SLIGHTLY MIXED SIGNALS:
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THE USD broke higher at the end of last week and stalled on Monday, but a low does seem to be in place. This can push higher from here. It was noteworthy that Gold ignored that push higher, but it also ignored the stall at resistance here. Gold did not take advantage of the USD day of weakness…
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GOLD has been a little choppy and sideways. It is oversold, but it can stay that way, like it did in February. Can Gold bounce though? Yes, I would say that it could bounce as high as the 50sma, but I do not think that the lows are in place yet. Why? The COT is nowhere near ICL levels and the USD looks ready to push higher. 🙁 We need to be patient.
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Now SILVER is interesting because on a few occasions, it has bottomed ahead of Gold. Last year, when Golds ICL was in Oct 2022, Silver bottomed at the end of August, first day of September. It did that a-b-c drop into the ICL, as seen here into September. We do have a similar set up now, but …
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We do have a similar set up now compared to what we saw in August/September 2022, and Silver is reversing at the 200sma support, HOWEVER Notice that when Silver bottomed ahead of Gold, it did NOT just take off and run away higher. It chopped around at the lows with higher lows until Gold bottomed, so let’s just watch how this plays out. I still think that we have time to chop lower in this sector.
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GDX is interesting here too. It slightly breaks that lower trend line and bounces. It is there now. I also currently do see good divergence with the MACD and price at new lows. That usually calls for a good bounce. This actually looks ready to bounce higher. If I was holding JDST as a hedge, I think I’d close it for now, until I see what this wants to do.
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During pullbacks into a dcl, it can be a little boring as we watch prices drop day by day, but if we can be patient and buy closer to the lows, it often pays off when things turn around. Whether you are waiting for Miners or Tech stocks, the pull backs offer better entries when a bullish set up is acting correctly.
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Take TSLA for example:
TSLA #1 – It was a buy at the last choppy dip under the 200sma or as it crossed the 200sma. I drew this on June 9th to show that this run should top and then the next dip would be a buy too.
TSLA #2 -Last Wednesday I showed a possible a-b-c style drop that we could watch for when the DCL comes due. This would have us buying near that 200sma or 50sma.
TSLA #3 – The drop has started with this sell off, so if we patiently allow that dip to continue, we may find price at support as a buy later.
AMD was also a buy on the dip after each small rally. As you can see, those ‘dips’ were not just 3 day sell offs, but they were a bit long and choppy, however each of those ‘small’ rallies really added up over time. AMD ran from $55 in October to over $130. AMD is close to the 50sma, so it may be worth watching this week to see if that acts as support ( or a shake out).
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So we are seeing the various sectors experiencing a pullback, and this may not be the best time to over trade, unless you are comfortable shorting or day trading. For the majority, it may be best to patiently allow the markets to come back to us and give us some sale prices as they do. Enjoy your Tuesday markets.
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~ALEX
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In the Crypto sector, we also saw pullbacks, but Bitcoin looks earlier in the move out of a dcl, not dropping into one, so we may see shallow dips in that sector. I drew this for HIVE as an example of a short dip to the 10sma.
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Is Bitcoin about to reverse at the 8 ema? I posted this in the commenting area yesterday, showing that when price reaches the 8 ema, it will be worth watching, because it has found support and reversed there in the past. So…
LIVE BITCOIN 7 a.m. ET: Is Bitcoin about to reverse at the 8 ema? That is possible since it just put in a new low about 13 days ago. SO Crypto stocks could reverse higher if it does.
NKLA: It may be another story for some that ran quickly. They can fall quickly too, and that is why I always warn against ‘chasing’ a stock that is taking off quickly, and buying when it is well off of the support areas. This is especially the case when a dcl comes due. NKLA is an example of that. It ran up from 50 cents to over $1.80 in days, but now it is pulling back quickly too. It MIGHT become a buy opportunity if it lands, reverses, and acts correctly at the 50sma.
We saw several Energy Stocks break higher and they’ve already dipped back to possible support areas. I am not entering positions yet until they reverse and show a sign of strength, but you may recall seeing OPTT, CBAT, PLUG, FCEL, CLNE, etc. So those would be possible opportunities after the selling or choppiness slows down.
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PLUG moved from $8 to $12. It has already pulled back over the past several days and is already at the 50sma, so this may be worth watching. It is not completely oversold, but this may be a support area and it could bounce around here as a buying opportunity if you were interested in this sector.
