Weekend Review January 27th
To begin with, there really aren’t a lot of major changes to report this week, despite that theme title in the opening picture. The Bullish sectors do remain Bullish, but they may pull back. Oil finally followed through, and showed a little more of its’ bullish side. During the FOMC WEEK ahead, it looks like we could see a bounce in Precious Metals and a dip in the USD for a small or short-term change. The real change, however, may be what I am seeing with Bitcoin, so stay tuned and let’s get started…
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SPX WEEKLY – The bear market correction became a large bullish weekly Cup & Handle. The run out of the ICL has brought us up to new all-time highs and since this is only midway through the 2nd daily cycle, we can see higher prices over time. We may dip lower soon first though, I’ll show you why…
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SOXX WEEKLY – The SOXX ran higher and then sold off. That is often considered a reversal candle or the start of a small pull back. Also…
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Also, we have the F.O.M.C. Meeting this week. It is possible that the Fed will not discuss future rate cuts or he may even say something contrary to that idea, and the markets could sell down. I will add that inflation did come in lower again, so over time it is becoming more & more likely that they will have to cut rates to cool off that inflation squeeze, despite whatever they may say.
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WTIC WEEKLY -Oil was a ‘buy’ at the lows, but it had been crawling along the lows for weeks with no gains. That can be frustrating. Oil finally ‘popped’ this week and was up 6.5%. The upper trend line meets at Oils price of roughly $83-$85. Price may run there for starters and Oil is still oversold.
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USD WEEKLY – The USD has been moving higher out of an ICL. A run to the downtrend line is likely, but it could dip into a dcl first. I did draw a green arrow as one possibility of a breakout too, but last week I discussed the likelihood of future Fed Rate Cuts dampening the USDs energy. I lean toward that idea. Please read this chart and notice that the magenta line shows that the stochastics does not always have to get overbought. I said last week that…
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USD WEEKLY – I feel that the Fed Rapid Rate Hikes rallied the USD early of out of the sell off to a 3 yr cycle low. With that idea, this would just be a man-made blip, and future rate cuts would continue to the drop into that 3 yr cycle low, which was due in 2024.
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AUG 2023 USD 3 YR CYCLE LOW: I had been saying since 2022 during the USD strong rally, that the USD would begin to roll over & sell off and bottom in 2024. This is one of the charts that I used after that sell off started. It was designed to show you how reliable these 3 yr dips are (see the Red Arrows).
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GOLD WEEKLY – Gold lost $12 this week, because it was choppy ( up & down). The uptrend is broken and in the next daily cycle it should become weaker and descend into the next ICL. That ICL could come at the end of the next daily cycle or a 5th one. So what I am saying in the big picture is that we should not expect a run to the all-time highs and a breakout quite yet. This needs further consolidation. I mentioned these things over the past couple of weeks and…
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I drew this idea last week, showing that Gold would only be choppy and eventually dip down into an ICL.
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Gold could then put in the ICL as shown here and start a rally that allows it to break out to all-time highs, ESPECIALLY if we get rate cuts and the USD drops.
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SILVER WEEKLY – Silver has been very weak, but it surprisingly put in a solid reversal last week, and it does form an uptrend from last Aug to now. This will often be followed by some upside, so at this point I’d just have to expect a bounce with the FOMC this week. Maybe the USD will dip into a dcl too.
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GDX WEEKLY – GDX was only up 38 cents for the week, but that is what I’ve been expecting – choppiness and not a big rally. On this weekly chart I do see a gravestone Doji now though, and those also can be followed by a bounce. So…
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I would say that with the Fed week, we may get a push higher in Precious Metals and a dip by the USD into a dcl. I am NOT expecting a strong rally though, so I have drawn a daily cycle loop on this chart as a possible expectation. I may even short the bounce later in time.
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LAST WEEK: The GDX reality right now is that it is all over the place. Very Choppy. If and When Gold takes out all-time highs, I really would expect a rally out of this massive consolidation.
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I hope everyone is having a good weekend, nice and relaxing. We know that an F.O.M.C. Week can be active and volatile, so rest up and enjoy your time away from the markets! Thank you for being here too! 🙂
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~ALEX
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THIS IS THE SECTOR WHERE I WANT TO DISCUSS THE POSSIBILITY OF A CHANGE:
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BITCOIN – Last week I questioned whether this was a day 59 low (on time) and we were at day 11, OR – was that a day 70 low (a little late). I concluded that it was probably a day 59 low, and the continuation of the drop was taking out prior lows. Why? Well, I also used the beating that MARA, RIOT, WULF, IREN, CLSK, etc took as a sign that the top was in for now.
BITCOIN – Then I said that if we see a bounce like this, it may only be the ‘B’ part of an ‘A-B-C’ drop. Bitcoin/Crypto stocks could also bounce a-b-c. Well, we are seeing that bounce now, but one thing is currently bothering me here…
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BITCOIN – The volume that came in on that ‘bounce’ Friday was stronger than I’d have expected. Well, I’m going to keep an eye on things, because both ideas for the placement of the last dcl are now valid, in my opinion, but here is something else that really changed last week. When I look at the weekly chart? It looks like we have a bullish low…
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BITCOIN WEEKLY – THIS looks like a bullish weekly reversal to me. You know that I have been comparing the 2020 run week after week and now it looks to be at the point of the weekly reversal there too (Orange arrow). This looks like Bitcoin is ready to make another run higher out of that dcl, and if so? Crypto related stocks will follow, and they did start their bounce last week too.
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Crypto related stocks will follow, and they did start their bounce last week too.
Both MARA and RIOT were up 10% for the week. I expected an a-b-c drop to get this oversold, but that may not happen if Bitcoin just bottomed. These stocks have been crushed, so use caution if you trade them, they can and will be volatile going forward.
My Buddy Bill 🙂
I gave Bill a bit of a hard time in the commenting area this week, but I just want to say that Billy and I go way back. He is a fellow New Englander and has been with me for a long time. Back in the early days of Chartfreak, Bill and Maria used to pick on each other a lot and we, along with many other long-time subscribers had some laughs and some really funny times while we managed the markets. So I just wanted to say, Thanks for being here William & really, all of the longtime & newer subscribers!
