Wednesday November 22 – Breakouts

They’re releasing the initial jobless claims on Wednesday this week, due to the U.S. Holiday on Thursday. This can affect the markets, but today is the last full day of trading in the U.S. , with Thursday off and Friday scheduled to be a 1/2 day of trading, so it should simply be lighter trading as many are traveling for the holiday. When it is a lighter day of trading, the markets can be pushed around easier, so keep that in mind. It may just continue to be a choppy week.

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The General Markets paused yesterday, and it is day only 17 out of an ICL. Since the markets can easily run from dcl to dcl in a period of 40 days, we know that this can ‘dip lower’ or simply ‘pause’ or even just pause for a day or 2 and then continue higher. So with that understanding, let me mention something:

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When I say that the markets could ‘dip’ or they could drop down for a day or 2 and fill a gap near the 10sma, etc, I am not saying that so that you can trade out and back in. If you are a day trader, I am sure that you can decide how to day trade it, but I am saying it so that everyone understands that markets breath in and out, and a dip for a couple of days in normal – nothing to worry about. No action is really necessary if we are on day 17 out of an ICL, except maybe beef up positions at the next dcl. With a strong move out of an ICL, we should have a 2nd and maybe even a 3rd daily cycle that continues higher. If you want to trade it(?), then that is fine.  I am not really encouraging readers to micromanage their positions on day 17 out of an ICL, unless that is your style.  I would encourage buying the dip or adding at the dcl when it comes, with such a strong move out of an ICL, since this is still the first daily cycle. So…

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This is the SPX on day 17 and it paused on Tuesday. It can dip, pause, or continue higher 🙂  NVDA released great earnings again, so that may cause the markets to push higher.

WTIC – Oil sold off for almost 2 months and this should be over 60 days long as it reached that last low, so normally that should be the dcl or ICL. This would be day 3, and it has closed for 2 days above the 10sma, but it hit resistance at the 200sma. A break above that is further confirmation that a dcl is in place. The MACD is crossing upward too, so we are seeing slow progress at the lows.

USD – The USD used to regularly put in daily cycles that were only 22-25 days long, but count the candles and you’ll see that recently things have really stretched in these cycles. We could have a dcl forming here, but I only expect it to be choppy, left translated, and then fail. Gold may even ignore any upside action that the USD gives us.

GOLD did ignore the USD yesterday when it started pushing higher by around $30 at one point. It reached prior highs and pulled back as the day moved on, closing up $21. This is the 2nd daily cycle and we are only on day 6, so Gold looks like it wants to break out to new highs sooner or later. Volume was strong for a holiday week too. This is a bullish chart.

SILVER is also a bullish chart that is on day 6 of the 2nd daily cycle. It moved above the 10, 50, and 200sma and is crawling along the 200sma now.

The GDX gapped open unfortunately, but we have to expect that when Gold & Silver start to take off higher pre-market. The GDX Popped and sold off a little as the day went on, but that doesn’t mean that this gap will fill (we still have an open gap at day 2). It may or may not fill, probably depending on whether or not Gold & Silver want to just continue to run higher or stall to build energy for a strong break out.

 

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TAKE A LOOK AT MY OPENING PICTURE, THE THEME PIC FOR THIS REPORT AGAIN.  COMPARE IT TO THE GDX. WE ARE CLOSE TO SEEING A NICE BREAKOUT:

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The GDX in the bigger picture is a solid looking base and price is preparing to rally above this resistance are. A break out above the 200sma will begin that break out.

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Today is the last day of trading in the US before the holiday on Thursday. If we see what looks to be normal trading volumes in the morning, I expect things to lighten up as traders start to take time off for the holiday (and they may take Friday off completely too). Friday is a 1/2 day of trading in the US, so basically the rest of this week may be lighter volume and easy to push around. I will be covering  BITCOIN in the weekend report.  Enjoy your Wednesday trading, and I’ll have a little more below.

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~ALEX

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I had pointed out Aftermath Silver (AAGFF) recently as a Silver miner that I bought and held in the past and it made very good gains on. In fact, in 2020 it ran from 6 cents to over $1.30!  Recently it was back at 11 & 12 cents in October.  I mentioned that I am buying and holding a small position in Aftermath again. Well here it was riding along the 50sma after a breakout, and then it started to break higher again, so I put this in a recent report. Now what’s next?…

 

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Now AAGFF climbed to 18 cents and broke above the 200sma too. If it falls back onto and crawls along that 200sma as a support area, I will probably try to double my position around 16 cents.  I mention this because this one is very hard to get into. I put in a buy at 12 cents once and it took all day long to fill that order, even though it was reading 12 cents as the ask price, so if anyone wanted to buy near the 200sma, you may need an order in place ahead of time. AAGFF dipped into the close and is 17 cents now.

MARA & RIOT (& a few others) were trying to move back above the 200sma yesterday, with the General Markets and bitcoin down. Bitcoin was down quite a bit, so this helps me to see that strength building up as these base out and likely prepare to break out. They lagged a lot and may play catch up in 2024 in a big way.

 

TSLA – I like to look for strength by looking through my ‘watchlists’ during a market red day. I noticed midday yesterday that TSLA was actually trying to break out above the 50sma with the general markets selling down. This may be a good buy & hold going forward.

I pointed out XPEV recently and it is starting to pull back too. I see support as being near the $16.50 area (50sma and uptrend line), so these are the things that I look for when markets pull back (bull markets). It is the same with Precious Metals and the Miners.