Friday April 19th – Knee Jerk Reaction Pops?
No meaningful Data is being released on Friday, however there were explosions in Iran overnight, and it was announced that Israel likely attacked Iran. As I write the report, that DID already cause a sharp ‘knee-jerk’ reaction in the Precious Metals (Gold was about $40 Higher) and General Market futures (Sharply lower), but often an overnight reaction that is news driven can fade quickly. We’ll see how things play out soon enough. It is 11:30 p.m. ET as I write…
.
The SPX ran higher, but then sold off again. We are due for a half cycle low or bounce, so I do still expect that bounce sooner than later.
.
THE NASDAQ is also oversold and due for a bounce soon. The futures sold off sharply with the possible Israel attach on Iran, but that might exhaust the selling.
..
With Oil, I have been waiting for a DCL. I wrote:
WTIC – Oil dropped below the 20 ema and is now looking more like the drop into a dcl, and at day 50, any reversal /swing low would likely be that dcl. The 50sma is currently right below price. USO & UCO are Oil trades, along with the Oil Stocks.
.
WTIC– I was expecting a dcl and this reversal on day 51 at the 50 sma looked like the dcl. And then…
.
OIL AFTER THE ATTACK – Oil really surged overnight with the explosions in Iran. This really looks like the dcl now.
.
GOLD also ‘Popped’ overnight with the situation in Iran, but that POP has already started to pullback by now as I write the report (now midnight Eastern Time). We are expecting a dcl in Gold soon, this was day 21.
.
SILVER has been rising the 10sma and it also popped and dropped, so we’ll see where things are in the morning. Silver closed at $28.38, however…
.
SILVER popped to almost $29 overnight with the explosions in Iran, but then it sold back off so far, right back to that $28.31 area. We now have 3 ‘Pop & Drop’ days in a row.
.
GDX APRIL 17 : I’ve been talking about an a-b-c style drop, with a pop this week followed by a dip into the dcl. We want to buy Miners after that dip.
GDX has moved higher, and so far this is what I expected, but we need a drop into a new low to complete what I expected. A dcl dip.
.
Our expectations would still remain the same, even with the overnight attack by Israel on Iran. I’m going to go ahead and release this report after midnight my time, because I have a few things to do in the morning, and I should be back as early as 8 am ET. I look forward to seeing how this plays out. At this point we did get some large knee-jerk reactions, but if there is no follow through, that could even exhaust the move higher in Precious Metals and the selling in the General Markets. At this point, it’s hard to believe that the markets could be up tomorrow after this sharp sell off and a $40 pop in Gold, but I’ve seen this before with news driven events. Let’s see what Friday brings our way. Enjoy your Friday trading! 🙂
.
~ALEX
.
BITCOIN – The Day 24 lows were broken on day 28, but then the day 28 lows were also slightly broken on day 30. This would be perfect timing for a half cycle low, so we should be due for a bounce. This IS a failed daily cycle, so be aware that the strength of the bounce may be limited.
