Thursday August 10th – CPI
Thursday is the release of the inflation numbers (CPI), and on Friday we have the PPI release, and these can move the markets. In the past the markets were very bullish and rallied on any news, but this time the markets have been due for a dip into a dcl and possibly even the next ICL. Often any negative news is what the markets can use as a catalyst for a drop too. Increased inflation can be perceived as “Another Rate Hike’ coming and we could sell off.
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I expected this drop, and only shorted it 1 day at a time – twice. Why?
1. Bull markets are hard to short with ‘surprises to the upside’, as seen in this long run.
2. I find it hard to stay ‘short’, because I am by nature a more ‘positive’ person and I think that gets in my way 🙂 I really am not great at shorting for a long period of time and I know it. So…
It has been difficult day by day to short this drop, because it is slow and choppy, but we are seeing The SPX dip down into a dcl. We could get a dcl after Thursday & Friday and then move higher – or – we could sell off for another week or 2 also, since ‘timing’ allows for it. We really just have to allow this to play out.
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YESTERDAY I POSTED THIS: A possible choppy drop lower
The NASDAQ can bounce here, yet still be capped by the 10 & 20sma and drop even lower. Or…
THE NASDAQ dropped and is starting to break the 50sma.
It is day 31, but this is the hard part. I have seen the general markets dcl at 40 days, 50 days, 35 days, etc. So here I am showing a short 30 day daily cycle followed by a 50 day daily cycle. WHAT IS NEXT? Even if we had a 40+ day daily cycle, this could drop for 2-3 more weeks, couldnt it? Yes, and since an ICL may be coming due too, we need to be aware of that.
THE NASDAQ is obviously having a bull run and surprises can come to the upside, so the next step is what happens with the CPI Numbers at the 50sma on day 32 today.
YESTERDAY I DISCUSSED THAT DROP & RECOVERY ON TUESDAY : IT Looks like it wants to break out. I wrote:
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OIL really did drop that much and recovered. I think that OIL is trying to break out above this prior high with that price action. Oil & Oil stocks have been strong lately.
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OIL has been in a new bull run out of the lows and it did break to new 2023 highs. Oil stocks that I had on my watchlist and in the reports like APA, NOG, ERF, etc are doing very well. Oil was a buy at the 50sma and 200sma. It will be a buy at the next dcl too.
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NOG was pointed out as bullish back in JUNE at $33, along with APA, ERF, and others.
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NOG has had a nice run and has been in the reports several times since it started to move out of the lows. I will discuss a few more Oil companies later in the report.
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SIDEPOINT: Notice how tight the 50 & 200 sma got during the choppy consolidation. That is very bullish and I mention that because you may see some Miners or other stocks aligned like that in the future.
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THE USD stalled yesterday. I have to admit that it looks bullish on this run above the 50sma, but it also looked bullish on the May and June runs too, right? It then rolled over. We’ll see if the CPI & PPI affect the USD.
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THIS WAS GOLD IN YESTERDAYS REPORT:
GOLD had a day 28 low and day 29 is Wednesday. A dcl can form at any time here, because buyers can step in in a Bull run, but usually we see them around day 32. Thursday is day 30 and Friday is day 31. We do see inflation data released on both of those days.
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GOLD made a new low yesterday on day 29. The green candle is day 30, Thursday at 5 am ET, as I wrote the report. A dcl can come at anytime and we have CPI numbers today. Notice how Gold dropped, because GDX closed green.
SILVER stayed at the lows after losing the 200sma. This is day 31 for Silver. This could be a shake out.
GDX closed green with Gold & Silver down, so is it trying to bottom ahead of the CPI numbers as a double bottom low? A dcl is due at anytime, but being patient and waiting for confirmed a swing low is the safer option, just in case we get a quick 2 day slam down or something like that.
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AG – I do like how some of these Miners are setting up however. AG already released earnings 4 days ago and is still trying to hold or gain the 50sma, with Gold and Silver down yesterday. This may become a silver miner leader on the next run, since EXK, GATO, and HL slammed down on the release of their earnings reports.
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HMY broke a downtrend and is now back testing it and the 200sma.
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Honestly, I never really allow news or other events shape my thinking on trading, unless it is a Fed Mtg or especially when it comes in at a time when the ‘timing’ of cycles comes into play too. When a daily cycle becomes late in the timing, then certain events could very well become the catalyst that we are looking for to cause either a change or acceleration in a sell off or rally. With that in mind, we are definitely within the timing for dcls and even ICLs in some cases, so let’s see what Thursday (& Friday) does
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~ALEX
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As mentioned , NOG has had a nice run, and…
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I have had APA & NOG and a few others in the reports since May and June as they based out.
Recently I pointed out that APA and NOG had good earnings reports.
APA was also in the reports back when this base shown started breaking out, and then it was discussed again near the 50sma as it puled back to break out. The earnings at the 50sma caused a shake out and recovery, so now this has had a solid move higher too, and…
Yesterday APA hit $45.31 and then dipped lower. Is it going to pullback? If so keep it on your watch list, these are now buy the dip set ups trending higher.
ERF is running along the 10sma now too. Buy the dips if you get them.
NINE is lagging recently with that base. Notice that we had a breakout of the 50sma in June and it has now back tested that area with the release of earnings last week. I like this set up for a longer term trade.
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PUMP has had a nice run too, but recently it dropped sharply with their earnings report, but then started to recover. This is still a bullish set up with a speed bump from earnings.
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CPE is certainly a lagger, but they released earnings a few days ago and since they did I see volume increasing on the upside. This can be a buy and hold now for the long term trader.
