Friday May 31st
DATA – The PCE Numbers are inflationary numbers, so I would expect that this, plus the ‘timing’ of the markets, will move the futures at 8:30 a.m. ET.
.
THE SPX has started that drop discussed in recent reports. Yesterday I showed how the DJIA was already dropping in harmony with the Transports. We also saw a bearish engulfing last week, so we were expecting that the markets might start to get ‘heavy’ and dip lower. So…
.
IF THINGS REMAIN BULLISH:
We are getting close to the time when a dcl can form, but it would be quite early. We have seen DCLs come in at day 40-50 at times.
1. So it is possible that the CPE causes a bounce and this was a half cycle dip?
2. We would then finish the drop into a dcl, maybe around the 50sma.
3. If things get bearish due to the Dow Theory in play, we might break below the 50sma for our DCL.
4. The Fomc Mtg is in 9 days, and that could be perfect timing for a dcl actually. Time will tell.
.
With Oils push higher, I said in part Wednesday: That was day 25 of possible 45-50 days!
…I have to think that it will stall at the 50sma and roll over later, but the MACD is bullish and it will be interesting to see how this plays out. I am personally not playing it in either direction.
.
So this is only day 27: WTIC – Oil is still chopping and dropping and was again rejected at the 200sma. This bullhorn might be a continuation consolidation for price to continue lower. Oil could drop to the $70 area by day 45 or so.
..
THE USD dropped on Thursday and I have been saying that I expect it to roll over into the next dcl. The USD’s path has not been affecting Gold very much like it used to.
..
Important: I just want to mention that mentally I am trying to visualize where the Precious Metals Sector will be on June 12th, because that is the next Fomc Mtg. That is only 9 trading days away, so we COULD get a dcl after 8 or 9 days of choppiness. Let’s keep THAT in mind. If the drop is deep, it may be an ICL. I will discuss that in the weekend report.
.
With a USD drop, GOLD would usually Pop, but at this point it is day 18 of the 3rd daily cycle and Gold may be starting to naturally get heavy here. It is holding up on the 50sma and basically it is starting to chop sideways, so now we’ll see what the inflationary data can do for Gold! Maybe it’ll send it higher and this sideways chop will reduce the dip into the next dcl (by that I mean we could run to $2400 again by day 22, and then a milder dcl on the next drop down).
SILVER looks like a possible ‘double top’ and I see divergence at the RSI. I mention a possible ‘double top’ based mainly on the ‘timing’ though, not because a set up like this cannot move higher. It can move higher. This means that Silver could surge higher with the release of the inflationary data (CPE), or it could start a drop into the next dcl. THE FOMC Mtg is in 9 days.
.
GDX– Add 8 or 9 days to the GDX and we’d be at day 34 or 35 when the FOMC Mtg arrives. Where it goes from here may be dictated by todays PCE Report, but I expect it to finally go lower over time, heading into that Mtg.
..
We are starting to move into the later side of the daily cycles for the General Markets and the Precious Metals sectors, and we have an important FOMC Mtg coming up in 9 days. I am keeping that close in mind when I think about the possible ‘timing’ of things. The good news is that the Mtg might line up perfectly for Gold and Silvers lows. The bad news for me is that my wife, somehow has done it again – 8 months ago she booked a small 1 week vacation for us and it falls on the week of the Fed (again). 🙂 Most of you here know that when I am on vacation I still do my reports and many wouldn’t even know that I am gone, except for the fact that I am away from the live commenting much more. I will be around on that Wednesday though. Especially since the timing might lead to a nice buying opportunity in the Precious Metals Sector. 10 trading days from now Gold would be on day 28, and a dcl could form that week. I’ll discuss that in the weekend report.
.
As for today, it is Friday, the last day of the week. We do have possible market moving data , so we’ll keep an eye on that for 8:30 am. and see what happen to the futures and go from there. Enjoy your Friday trading and your upcoming weekend!
.
~ALEX
.
Yesterday I discussed the count with Bitcoin. It is a tough situation. I said:
.
DO I GO BACK TO THE VISIBLE LOW AND COUNT? IF SO THE SELLING COULD BE ALL DONE.
.
If I count from THE LAST VISIBLE LOW, we are on day 29 out of that lowest low, and that is the timing for a half cycle low and then we can move higher off of the 20 ema. IF I have to count from the triangle low though, it adds almost 10 days to the count, we’d ONLY be on day 20ish.
.
At this point, I think that until we break from this downtrend line, Bitcoin remains choppy. I posted this as it was pushing on that line, and then it backed off yesterday.
.
JUST TO KEEP IT SIMPLE: This is Bitcoin at 6:30 a.m. Today, and I don’t think that the Crypto related stocks will run until this breaks out. We have several pop & drops to that area lately.
When BITCOIN ran up to that trendline yesterday, Crypto stocks took off higher, but when it failed to break out, they sold off just as quickly. This was RIOT as it ran from roughly $10 to $10.67….and back.
.
THIS IS WHY I HAVE SAID THAT THESE CAN CONSISTANTLY BE THE HARDEST (YET MOST REWARDING) TRADES THAT I’VE SEEN. For example, If you owned 5 different crypto stocks and they all did this, your account could go from down, to up $3000, and back to down in 1 hr (or more depending on position size).
