Tuesday March 12th – The Markets Are Running
Todays data is a measure of inflation. I would say that this data can easily move any of the sectors one way or the other. At this point, the Bull Markets in Bitcoin, Gold, and The General Markets have been running like a cheetah, but as time goes on, a slow down or a dip should be coming due. Let’s watch the CPI Numbers at 8:30 for a clue, and I’ll discuss each sector below.
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SPX – This daily cycle is getting extended, and it has been very bullish. With Fridays reversal it would seem that we were ready to drop down into a dcl, but with Mondays candle we see that buyers stepped in again at support and it looks like the markets will bounce again. So…
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We could make another run to new highs, or this could still do an a-b-c down from here, by selling off after a quick bounce. Todays inflation data could honestly cause that bounce or a sell off.
XBI – After a strong gap open 2 weeks ago, the Biotech sector has meandered sideways and is now filling that gap. Price landed on the 20 ema on Monday and the gap is now filled, but it could also drop a bit more to the 50sma. Biotechs have done very well, but I honestly am concerned by that MACD now.
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Just a simple Cautionary Note:
TWST – I’m starting to see divergence in the new highs of some of my favorite Biotech Stocks, like TWST, CRSP, etc. This usually leads to a consolidation, so I am now becoming a little cautious in Biotechs. Some of the smaller ones are still moving nicely, but a few of the larger companies that already ran higher are looking like TWST. I think that the sector needs to be monitored short term for any possible weakness as the General Markets dip into a dcl.
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MRNA – Even with what I noted above though, some Biotech stocks have consolidated and can remain bullish. MRNA, BNTX, and a couple of others broke out yesterday and they had bullishly aligned MACD’s. So I’m caution on some set ups showing divergence, but the bullish set ups may still break out.
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WTIC – Guess what? Oil has been choppy and remains choppy. That sharp sell off into day 35 looks like a capitulation low, so I marked that as the dcl. We are now on day 24 and Oil really hasn’t made any good progress, but Oil Stocks have done better than Oil.
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Oil Stocks have done better than Oil by chopping higher after breaking through that 200 sma.
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THE USD has been selling off, but it looks due for a dcl. I am thinking that CPI Inflation numbers could turn The USD and Gold in either direction, but we do now have a swing low in the USD. A bounce here could dip Gold into a dcl. We’ll see.
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GOLD does not have a swing high, but it is extended and could pull back. Obviously Inflation numbers could send this even higher, but it also could start the drop into a dcl too. The last Intermediate cycle had shorter (25 day) daily cycles, and this is day 18, so it is possible that these will be shorter too. The advice has been to just ride these sectors with a trailing stop on a larger chunk and eventually a dip will come and lock you in. You will still have a basket of Miners and You then would want to buy the dip too.
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SILVER also could go either way. Dip or continue higher? We’ll see.
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GDX is similar to Silver too. Monday was a good day and gave us a new daily cycle peak, and that is expected coming out of an ICL.
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We have Bull Markets running strong, but the General Markets are due for a dip into a dcl, and The Precious Metals also may be ready to start a dip at any time, especially if we are going to have shorter daily cycles going forward (roughly 25 days instead of 33+). That remains to be seen. All eyes will be on the CPI Numbers at 8:30 am ET (inflation), since those numbers could send the USD or Gold in either direction. Enjoy your Wednesday trading!
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~ALEX
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BITCOIN was up nicely on Monday and made new all-time highs above $72,000. A dcl would be due around day 60, so this could start to roll over at any time, but it can also travel even higher before starting to dip. It has been EXTREMELY Bullish.
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CLSK was down 14.5% in the final hour of trading yesterday, as Bitcoin made new all-time highs. My advice has been to just stay away from these at this point, and we’ll see if they stabilize at the Bitcoin dcl.
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MARA was down 12% and it made a new recent low. Again, this was with Bitcoin breaking to new all-time highs above $72,000. The MACD actually predicted this with the second high being divergent.
