Wednesday April 24th
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DATA – I don’t think that we have real ‘market moving data’ today. Yes, Durable goods, which includes big ticket items like Jet Planes, Autos, Ships, etc can tell us a little about the future of the economy, but this doesn’t usually cause the markets to go one way or another unless maybe the numbers were very unexpected.
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SOXX – So we are getting the bounce that I anticipated but is it a dcl or a half cycle low (Just a bounce). I still have to view this as a half cycle low when I review the ‘count’ for the SOXX. Follow along on the chart and you’ll see 2 long daily cycles 45 & 49 days long. If that is the case, we are on day 22, and that should be a half cycle low. IF YOU DOUBT THIS, you can simply go long and use a stop. I did see MANY nice reversals in MJ Stocks (See CGC, ACB, SNDL, OGI) and in other sectors, so buying with a stop is fine.
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SPX – With that in mind however, what if I am thinking of ‘shorting’ the bounce? I was watching overhead resistance at maybe the 50sma. It looks like we would be there for tomorrows data (Jobless Claims). We may see a 5 wave drop as drawn.
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WTIC – Oil has reversed at day 53 and I already mentioned that this should be the dcl forming in this area. I think that Tuesday was day 1. I like Oil Stocks too…
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GUSH – So I pointed out THE XOP (GUSH as the leveraged trade) and this was it yesterday. It started out slightly red each day and then recovers.
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NOG – Take a look at one of my favorite Oil Stocks NOG. It barely pulled back below the 10sma when Oil dropped and is already back at the highs.
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OKE pulled back, but it is already back at the highs too, so I have mentioned stocks like NOG, OKE, APA, ERF, MRO, VLO, VET, etc.
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GOLD – We saw a nice reversal at the 20 ema yesterday for Gold and if you look at the count on the first daily cycle, you see that it was 23 days if we go by the low, 25 days if we go by the wedge break out. So that means that we are in that shorter timing that has been common lately for a dcl. Yes, this MIGHT be the dcl, confirmation would be follow through higher.
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SILVER is tricky, because it only looks like it is on day 18, so try to follow along with me as I explain.
1. Take a look at the day 25 for Silver in the last daily cycle- THAT is also the breakout from the wedge that Gold did on day 25 too. That was what started the 2nd daily cycle, but
2. Silver then kept dropping for 4 days to a new low, didn’t it? That is why our counts are off.
3. We only had 23 or 25 days for Gold, when it popped and the lows were in place. Silver dropped for 4 more days after that wedge breakout to the 20 ema, and THAT drop is leaving us short now.
4. So if Gold & Silver will bottom on the same day this time, then yes, this could become a very short daily cycle.
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GDX is also on the shorter side at day 23. So my thinking is this: As much as we hate it, it would be best for Gold to drop a little lower and give us maybe a day 28, 29, or 30 day low, to allow Silver to get into the 20’s day count and GDX to the later day 20’s count. I DO SEE BULLISH LOOKING MINERS THOUGH…
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I DO SEE BULLISH LOOKING MINERS THOUGH. In fact, many look bullish, so if you sold EVERYTHING and are looking to start that basket of miners again? Buying in this area would probably only be slightly painful if we do drop further, but that would be temporary. Let me show you something…
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IAG has chopped sideways and lower for weeks, but in 1 day (yesterday) it started to undo all of that selling. 3 weeks of maybe frustrating choppy selling undone in 1 good day.
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EXK has been selling off for 2 weeks, but again, once these are ready for a run again, it could take only 1 or 2 days to erase that selling.
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EGO has been selling down a bit deeper, and they really do all vary, but this was a great run from $10 to $16 and it recovered quickly in the last rally from that deep slam down, so again, if you have NO MINERS and wanted to start a small basket just in case we are at or very close to the lows, I don’t think that it would hurt.
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HL Again, some of these do look like they want to drop a bit more, but it also looks like we are now very close to the next dcl.
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We are getting our ‘bounce’ in the General Markets and it looks like a half cycle low, but if it breaks above the 50sma and just keeps running, we could have an early dcl. If it reverses at the 50sma as a resistance point? That may make a good point to try a short position (small?) and add after the drop starts. Miners look close to a dcl, but a confirmation is a close back above the 10sma. Even without that, the downside seems limited. Enjoy your Wednesday trading.
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~ALEX
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BITCOIN – I needed to show you this, but please read this part of the report all the way to the end. This report was saying that despite the recent halving, demand is now so high with institutional buying, large buyers of Bitcoin, that demand will send prices rocketing higher. Now I do understand that this could be true, so COULD THIS CAUSE AN ANOMOLY? Well…
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BITCOIN – I still hold the view that using ‘cycle analysis’, this was a very easy to see 57 day daily cycle. It is also easy to see that day 57 was broken by the next daily cycle on day 28, 29, & again on day 30. That Should be a failed daily cycle and we should see day 60 dcl lower than day 57 again. AN ANOMOLY would be extreme buying pressure breaking the highs and causing this to just run higher now and not later.
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CLSK – I have also entertained the idea that Miners may be getting accumulated after the halving and they could possibly make a higher low at the 50sma, even if Bitcoin does drop below the lows again. Accumulation of these ‘Miners’ now could prevent excess selling later. We’ll see.
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Yesterday I was showing how MARA was breaking the 50sma. These can run 10-20% a day, so it would have at least made a good day trade since cryptos have been bouncing out of the lows…
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MARA closed up over 11% and broke a downtrend.
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NOW AFTER READING THAT FIRST HEADLINE AT THE START OF THE BITCOIN SECTION, saying that demand far outweighs supply and Bitcoin will rocket, I also see headlines like this: So what do we believe?
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The Bigger buyers known as ‘Whales’ are actually selling Bitcoin into the rallies lately. That often causes a topping action if it continues. That could explain this choppy sideways action, as they need to sell into the rallies. It also may explain why Bitcoin broke the day 57 dcl and this selling may also be what causes a sell off into day 60 that brings us to the $48,000-$52,000 area, that I have been discussing too. Selling can overwhelm buying when The Whales are no longer buyers.
