Tuesday August 15th – Where is the Bounce?
FROM THE WEEKEND REPORT: POSSIBLE DCL FORMING AT THE 10 WEEK MA?
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So on The SPX WEEKLY Chart, we see that during bull runs, the 10 week ma often acted as support (Red arrows), but it was the ICL that often broke below that 10sma. Right now we are at the 10 week ma, so we have to be aware of the idea that the markets can dcl here, since we are also on day 33.
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Monday did give us a bounce in The SPX, so now we watch for a break of that 10sma or a rejection. This is the reason why it is hard to short a bull market, because we may get another short daily cycle and just run higher (For now).
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And it is the same story with The NASDAQ: We’ll have to see if it can break back above the 50sma, or does it get rejected here as the 10sma curls lower too. I wanted to try a small ‘short’ position, but then I saw…
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I wanted to try a small ‘short’ position, but then I saw NVDA and I decided that we might be at the dcl, so I will watch and see what happens next.
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MSFT I looked at MSFT, AAPL, GOOG, NFLX , etc to get an idea of whether all of the former leaders were suddenly looking bullish and it remains a mixture of good and not so good. We could put in a dcl and still get that rolling over into an ICL as seen here with MSFT.
WTIC dipped down to the 13 sma, and that has acted as support, so if that breaks down it might be ready to back test the 50sma as a dcl(?). We’ll see. If so, Oil stocks become a ‘Buy the Dip’ again.
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You may recall that in the weekend report I pointed out that Oil was at resistance too, with a weekly doji. The weekly RSI is almost at 60, so we have a nice run taking place here, but a dip is possible.
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I had mentioned that I didn’t want The USD to trade above $103, because it breaks a downtrend line. Well, on this chart 103.44 is actually the downward sloping 200sma, and it seems to have rejected The USD so far. I have also drawn a Magenta trend line that matches Mondays highs too. If the USD starts to sell down here, the timing is right for a dcl in Precious Metals.
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GOLD put in a reversal on day 32 when we look at spot gold. Daily cycle lows often come along on or around …day 32.
GOLD also seems to be reversing at an uptrend line.
SILVER dropped and put in a reversal candle on Monday. It is almost back down to the June lows and really needs to start moving higher sooner than later.
THE GDX ETF also put in another reversal candle, so hopefully we have the USD topping here and Gold, Silver, and the Miners finally bottoming here. There is a lot of overhead resistance above, with the 10, 20, 34, 50, & 200 sma above price, so it may start out as choppy here at the lows as it tries to break back through that area.
With Silver down, SSRM started to break above the 200sam. By the end of the day it closed a bit lower than where it was here, right at the 200sma.
I noticed that TRX started to push higher, up 5% in the first hour, with Gold down. By the close…
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By the close TRX had run all the way up to the 50 & 200sma and then pulled back to ‘Up 9.47 %’. I couldn’t find any news that caused this burst higher.
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On Monday morning everything looked to be selling off, but as the day went forward, we started to see reversals everywhere.
– Reversals in SPX, QQQ, & IWM as they reversed at the lows.
– The USD reversed at the highs.
– And Gold, Silver, and Miners started reversing at the lows. Now we need to see some follow through buying higher, but
Take another look at TRX. Did you notice that before it burst higher it put in 4 or 5 reversal candles along the lows? That is a ‘Bottoming Process’ and it can be frustrating, but it did lead to a nice move off of the lows, so…
Now we’ll see if these reversals that formed on Monday can find some follow-through higher on Tuesday. We do have the release of the FOMC Minutes on Wednesday. Maybe that will be the catalyst needed to get things going? Enjoy your Tuesday trading.
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~ALEX
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Side point: When we are experiencing a sell off into a dcl ( like we are in the General Markets, Precious Metals markets, Bitcoin, etc), it is a time to start looking for bullish set ups that may be forming. Once the dcl is in place, it will be time to buy and I will be able to post more set ups with entry points.
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The Crypto Stocks mentioned in prior reports are still hanging around the 50sma, and bitcoin itself should be on day 60 today. It looks to have already bottomed, but we all know that Bitcoin can easily plunge and recover quickly, so I am a bit cautious for now.
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Oddly, Steel stocks like X, CLF, BOOM, STLD, and others all broke strongly higher. USX-US STEEL GROUP shot up 32%. All I could find for news was that CLF offered a 7 billion buyout and US STEEL reject that offer. CLF was up almost 10%. Boom is a break out (not really steel, but clad metals).
