Tuesday October 24th – It’s Just a Pause
From Oct 20: If we are at day 43, a dcl could form any time after we break below day 30. So I expected a drop below that seemingly early day 30 low and a reversal somewhere soon after.
.
THE SPX broke below day 30 and the 200sma and then it gave us a doji, an indecision candle. A swing low could form at the lower blue trend line or anywhere in this area really. The one short term BAD possibility would be if that day 30 low actually WAS a dcl, because then this would only be day 14 of a new and likely final daily cycle. I do see that we have divergence on the MACD, so I think that this should be a drop into a final low.
.
The NASDAQ dropped and reversed midday, so I captured this candle with the boxes showing 4 daily cycles and this could be a dcl forming, however the candle sold off into the close…
So this is The NASDAQ at the close. It is basically also a doji candle and this could also fall further to the 200sma.
.
WTIC – Oil dropped and I’ve been viewing this churning sideways as a bounce due to the war that broke out in Israel, but it can still drop into an ICL. If it breaks out higher due to geopolitical events, we’ll have to call that last swing low as a dcl.
.
The USD actually broke down yesterday, so this is playing out as hoped for. The USD back tested that trend line and rolled over along with the MACD. We’d like to see this become a left translated daily cycle that has already ‘peaked’, and then it should sell off lower into the 3 yr cycle low. This would help to push Gold to new all-time highs.
In the weekend report, I mentioned that GOLD had a ‘topping’ candle, so it could drop down into a 1/2 cycle low. On Monday it did drop, but then it started to recover with the USD dropping. Now we actually possibly have 2 topping candles in a row, so that means that Gold could still pull back a bit more this week. We’ll have to see if it has any downside left in it or will it just chop sideways?
SILVER is pinched in between the 50 & 200sma, so it is in a resistance area. It actually sold off in premarket, tagged the 10sma, and reversed higher, which is a sign of bullishness. We are early in the process of breaking out from an ICL, so we should have several weeks of upside in the future, even if this chops sideways for now.
GDX has also surged out of the lows, but as expected or mentioned in the weekend report, we are getting a pullback that could be the 1/2 cycle low. On Monday the GDX dropped sharply at the open and then started to bounce back, so…
So The GDX bounced around the 10sma and gave us a doji, or indecision candle too.
.
We still might gradually drift lower until we get to the 50sma, but it is not necessary. If the USD drops lower and Gold & Silver hold up or even rally this week, the miners could also hold up and churn sideways or just continue higher in this first daily cycle out of the ICL.
.
So the set up in the General Markets is one that is breaking down and in the search for a swing low or daily cycle low. Oil is chopping sideways, and The Precious Metals sector is a very bullish run out of an ICL, but we are at the point where a pause or pullback can be expected, and a 1/2 cycle dip may be forming. If the GDX clearly drops to the 50sma and other Miners dip down to support areas like their 50sma, 200sma, or 10sma, we will discuss the buying opportunity that is presenting itself. We also may just see what we saw on Monday repeat itself, and that was a sharp drop that recovered into a doji. What do I hope to see with this current price action? Maybe a nice long 1-2-3-4-5 wave higher?
.
GDX could have a 1/2 cycle low end at ‘#2’ and then rally again into ‘#3’. The next dcl could be ‘#4’ and then the rally breaks out in the 2nd daily cycle.
.
With Gold, Silver, and The Miners just recently coming out of an Intermediate Cycle low, they should have weeks and even months of bullish action, so any pauses along the way should not be a major concern. They are actually buy the dip opportunities this early in the cycles move. Bitcoin took off like a rocket yesterday, and even though the Crypto stocks popped roughly 10%, they are still near the lows and that is hard to understand. I’ll discuss that briefly below. Enjoy your Tuesday trading!
.
~ALEX
.
BITCOIN was racing higher throughout the day, but in the final hour, it really started to move, so I grabbed this chart before 3 p.m. ET to show that Bitcoin was AT THE HIGHS, and RIOT, MARA, etc were still at the lows. It is a bit puzzling to see Bitcoin move like this and to see the crypto stocks pop & drop…
It is puzzling when Bitcoin surged and RIOT is still basing out at the lows. I posted this in the comments area at 3p.m. yesterday too, and mentioned the bullish MACD & volume, but it is nowhere near it’s recent highs like bitcoin. It was up 11% here an hour before the close and even sold down a bit, closing up 9%. Again, that was really puzzling to me with Bitcoin at the highs & Crypto Stocks based out at the lows. Well…
,
Well Bitcoin really broke out to new 2023 highs in after hours!
.
I saw RIOT up an additional 5% in afterhours as Bitcoin surged ( 14% total for the day), so it will be interesting to see if this Bitcoin ‘breakout’ rolls over as a fast fake out and then drops(?), or do those Crypto stocks platy catch up? I don’t know, but this was a very nice rally in Bitcoin over the weekend, Monday and Monday night. It is possible that…
It is possible that we see a Gap over resistance today now that Bitcoin broke out, followed by a move higher that leaves this base behind. We’ll see.
