Thursday September 14th
With the release of the CPI Numbers, we saw that inflation did creep up a little, so it is possible that the Fed will do another rate increase sooner than later. The release of the Jobless Claims & PPI Numbers (Producer Price Index) is due out at 8:30 am ET Thursday. The market reaction to the CPI Numbers was a drop, a pop, and more chop, but Thursdays data could do more than that, we’ll see. Let’s take a look…
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SPX – We have a small doji or indecision candle in the general markets, so we didn’t get a solid push higher or lower. The markets chopped sideways all day long. This means that we also have not been able to get bullishly back above that 50sma, but the Jobless Claims and PPI Numbers may change that.
SAME CHART:
This set up is rather neutral and needs to pick a direction, but on day 17 we still have time to do that. A breakout higher would indicate that the last low was the ICL. If we drop from here we have a day 10 peak, and that is left translated. We would likely drop to the 200sma as an ICL.
So while we are currently waiting for a break out higher over the 50sma or a more pronounced drop, it does not seem unlikely that we would drop into an ICL in September maybe even into the month of October. We have seen weak September – October time periods in the past. Again, it would likely drop to the 200sma area as an ICL. I have been saying that MSFT, AMZN, GOOG, CVNA, CRM, and other stocks that I watch do look bullish though, so we’ll see what jobless claims and PPI Numbers do for the markets.
WTIC – Oil has climbed up along the 13 sma, then it dipped below it when it dropped into a dcl. It is now climbing higher above the 13 sma again.
USD – I have been discussing that we’d like to see the USD get choppy and start to roll over here, and not break above the prior high at the $1.06 area. It is starting to chop, but this is still a bullish set up at this point. If this breaks down, Gold can break out higher more easily.
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IMPORTANT, PLEASE READ THIS:
When a low forms in Gold, We buy that swing low as a dcl or in some cases a possible ICL. We are looking to buy the lows and ride it higher out of an ICL. I want to discuss Gold in detail here as it chops sideways. WHY? I do have short term concerns, since it is still having trouble breaking out higher and Miners have not been leading the way. I always look for signs or clues as things unfold and that is what I am doing now, around day 18 of this daily cycle. The concern is ‘time’. Gold ran to prior all-time highs and pulled back as though it were ready to break out after a brief pause. As time went on, I now see a larger consolidation taking place that may need more ‘time’ to complete? Consolidations often start to form a pattern of some sort over time, and I see a possible wedge or triangle. So…
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GOLD seems to be forming a large wedge and that wedge allows for another possible drop to the lower trendline. If that happens, it means that we do not have an ICL in place here with the August lows, instead we have another daily cycle that could roll over into an ICL drop. That said, We also COULD still break out higher if that USD rolls over, so let me draw both scenarios…
GOLD could be putting in a 1/2 cycle low now around day 18, and then it would break out higher soon, as shown here. This is still possible, but…
GOLD had an ICL in March and they come roughly every 6 months or so, give or take a little ‘time’. We just had that relentless day after day after day sell off in July, and that was thought to be a possible drop into an ICL in early August. That would only be 5 months after the March ICL, but I have seen 5 month intermediate cycles in the past. However, if this was going to drop into a 6 or 7 month time period, then it could look more like this price path.
And that means that basically this is a 50 / 50 chart of gold right here and now.
Gold could go either way, higher or lower as shown in the 2 different charts above. You and I cannot make it go one way or the other, we just need to buy the lows when they appear using cycles and then watch to see what kind of a daily cycle we get, strong or weak. So far Gold and Silver started strong, but the Miners were weak, right? Even when Gold and Silver rallied, the Miners were weak, and now Gold and especially Silvers rally are starting to decay. To me, this means that we may be getting some signs or clues that this August dcl may not be the ICL yet.
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This is SILVER on Thursday at 5 a.m. ET before the PPI Numbers. Silver has dropped overnight.
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Notice that Silver certainly had a very strong rally out of those August lows and it really looked Bullish in early August. Silver Miners did not follow with the same strength and vigor though, they popped and chopped. Silver has now dipped back down here and looks to simply be in a large sideways consolidation of its own. We’d need to see the Miners start to take over the lead the way higher soon or this may just remain one large sideways consolidation.
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Applying Golds set up here and knowing that Gold could go either way, we know tht GDX could go either way too.
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GDX -The important point here is that we are now 1/2 way through this daily cycle, so we look for clues.
1. I do like the MACD, but
2. It was rejected at the 50sma. 3. This is neutral or 50/50 also at this point in time. So …
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So this could definitely be a 1/2 cycle dip that rallies higher like that green arrow and breaks out above the 50sma. The USD rolling over could help with that, but this also could stay lack luster and roll over in time.
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I have to report exactly what I am seeing over time, and as you can see, sometimes things do take time to develop and give us a clearer picture. We buy lows (dcls) and then we have to watch how things unfold. That always takes time. You cannot tell how good a daily cycle will be by day 5 or day 9, because we could retest the lows and then take off. Well right now we are around day 18, 1/2 way through this daily cycle, so I look for clues. Even right now, we are still not getting an entirely clear picture here at the midpoint of the daily cycle, but ‘clues’ along the way may reflect bullishness or weakness. I don’t like that we are seeing weaker silver miners in a strong Silver rally, and then Silver dropped. I see a wedge formation in golds choppy consolidation. I see a strong USD and that doesn’t help Golds case either, so 1/2 way through the daily cycle I am seeing reasons to become maybe a bit more cautious. We do still have time to break higher, but if I don’t see that soon, I may start to look at JDST as a trade as we get closer to day 25 or so.
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This is todays Data scheduled to be released. These do move the markets. We have seen the General Markets rally after the jobless claims. We’ve seen Gold move higher too. We’ll see, but right now I wanted to report that I am starting to see things as fairly neutral, lack luster, and possibly weak in the precious metals sector as we approach the halfway point of this daily cycle. 8:30 a.m. may give us another clue! Enjoy your Thursday trading!
