Wednesday March 6th
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Chairman Powell testifies before Congress at 10 a.m. today. What might that do to the General Markets? What might that do to Gold? 🙂
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NASDAQ – We are now on day 40 and the drop down into the dcl has likely started.
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THE SPX – We do see obvious support at the 20 ema, but I would expect that we will see that broken as we dip lower into that dcl. Today Chairman Powell testifies before congress at 10 a.m.
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Nothing has changed with the USD, it is crawling along the 200sma, which has been acting as support.
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GOLD rallied up yesterday and then started to sell off, so I grabbed this 4 hr chart, which had a reversal candle on top. I drew that it could pullback, but it actually stated to chop sideways. I’ll give you the live shot in the morning…
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GOLD actually may now have a bullish pennant on the 4 hr chart now. I do need to discuss what I see on the daily chart though, since this is the 4 hr chart.
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When I look at the daily GOLD chart, I can’t help but to notice that with the last intermediate cycle, we had shorter daily cycles and therefore they peaked at day 15 twice. Today we are on day 15, so…
1. Are we close to a peak and will continue to see shorter daily cycles? Or…
2. Is pure bullish buying power going to stretch the daily cycles to maybe 36 days, and they’ll peak later in those daily cycles?
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Unfortunately, we just won’t know until the first daily cycle finishes playing out.
I have drawn the 2 possibilities here and you can see that this would dictate whether or not buying now would be short term beneficial or not. I am holding my basket either way, but buying now MIGHT be buying as we slowly chop down into a dcl. I do want to point out something that I mentioned in the commenting area yesterday about buying though…
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Using the 2016 bull rally for precious metals, you can see that the dips were VERY SHALLOW for a long time. If you didn’t own Miners near the lows (even by the day 12 mark, which is about where we are now), it never pulled back below that price. Buyers just kept jumping in and possibly we saw short covering taking place, and Miners ran away from those without any position. So for this reason, I do think that a dip should be bought so that you at least own ‘something’ if this runs away.
SILVER popped and dropped and again, we can’t tell if this is just a pause, and the rally will continue imminently(?) or will we chop sideways into a dcl here too. Silver also had shorter daily cycles in the last intermediate cycle.
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GDX popped and dropped too.
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Going back to that 2016 chart and the decision to buy now(?) or to wait for the next larger dip? That dip just may not develop for more than a day or 2 if Gold breaks out and runs to new all-time highs. So how do you buy?
It may just be safer or easier to deal with if you start buying a small basket for starters and then add on the next dcl. This way, if you enter now and price chops and drops into a dcl by day 25 again, the damage is minimal, it will be erased on the next rally to a daily cycle #2 peak, and you can add on that dip knowing that.
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You also can buy a lagger , because they are still moving up and off of the lows. ESKYF Popped yesterday and held the gains. It may pull back today, so I’m not saying to buy this one now, I am just saying that on a red day, some of the laggers may continue to rise. Yesterday my basket was both red & green, with GFI & HMY staying green for example.
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So in conclusion I’ll just say that I personally think that we will see the daily cycles become stronger in this Intermediate Cycle for the Precious metals, and I do think that buying power will pressure price into rising higher. I feel that we will see what we used to see, and that was the day 14 or so dip was actually a half cycle dip, and then price ran up into a day 25 or so peak, with a milder dcl dip to follow. Why do I feel that way? As I pointed out in past reports, GOLD was hanging around at the highs and did not pull back much. We were due for an ICL, and it barely dropped, instead it put in a stealth ICL. THAT is a sign of Golds strength to me, so if we saw that in the 4th daily cycle, what should we see coming out of an ICL? I just have to believe that it will be strength. I think you should own Miners.
We’ll see, but since there is no real way to tell, I can’t pound the table and scream BUY HEAVILY NOW, knowing that the last few daily cycles were short and peaked on day 15 (today). I will say this, the next dcl will be obvious, and will be a strong buy after seeing the strong start that we have had to this first Daily cycle out of the ICL. Any way you look at it, I think that it is best to own a basket (big or small) so that you can capture any upside if this sector just takes off again. Last Fridays strong surge came out of nowhere, and the USD was up when it happened, so surprises to the upside may be in the future here. Also, Powell testifies before congress at 10 a.m. ET—ANYTHING can happen with that one. 🙂 Enjoy your Wednesday trading.
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~ALEX
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BITCOIN actually surged to $69, 210 yesterday! This is Bitcoin live right now. With this strong move to almost $70,000…
RIOT, MARA, CLSK, etc all crashed lower??? Now is not the time to be in Crypto stocks, but they will start to stabilize and after a bitcoin pullback, and at that time they may be set up for another run higher. This is very disappointing though. With Bitcoin at new highs, These should be MUCH HIGHER. It is a huge disappointment at this point.
