Friday May 3rd
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SOXX – So far, post Fed price action was a reversal higher, so we could have had an a-b-c down into a dcl complete, and now we’d be on day 9, but the cycle count for that drop from ‘a’ to ‘c’ just seems too short at 22 days, so …
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SOXX – We could still be trying to finish a 5 wave drop after being rejected at the 50sma.
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SPX – To be honest, I was expecting the ‘5 waves down’ and I was going to go short at the 50sma, but at this point, it does look like a dcl may have formed at the oversold area on the stochastics. The Fed did not give us bad news and the markets held up here under the 50sma. Normally you would go long with a stop, but I’d really like to see if this can get over the resistance overhead first, because so far it is just choppy sideways price action.
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WTIC – Oil was doing fine until this week. It rolled over and now it looks like we were in the 3rd daily cycle and it broke down very early. There is a chance that this is a very long 2nd daily cycle, because the first one put in a very short dcl (Day 35, remember?). If this is a very long 2nd daily cycle it should bottom soon and show strength, but right now the selling is high volume and Oil is choppy.
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GOLD is due for a dcl with this low at day 31. It is pinched between the upper 10sma and lower 34 sma, but it Could still drop to the 50sma (not shown), so let me draw up 2 scenarios while mentioning that we are very close to a bottom here…
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GOLD #1 – I have a bullish wedge drawn here at the 34 sma, and we could break higher at any time, leaving behind the dcl. Or…
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GOLD #2 – If I open the wedge up a little, we could drop to the 50sma next week and then put in a dcl, so at this point we do not have a dcl confirmed, but we should be very close. Gold is now oversold.
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SILVER actually dipped to a new low and put in a nice reversal. Gold & Silver are not showing the same cycle count, but they could both bottom at the same time here, and this could be Silvers lows. Time will tell.
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GDX bottomed 7 days ago and did not follow Gold or Silver as they sold off to new lows. This really looks like the dcl, but it refused to break to new highs with Gold and Silver still selling off, so it has chopped sideways. Many individual Miners have chopped sideways at the highs too.
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Today is Friday, 2 days after the F.O.M.C. Meeting and we are still waiting to see what direction things want to pursue. The Fed discussed rate cuts instead of rate hikes, so things stabilized with the General Markets and the sell off into a dcl may have ended as a result. We do know that the cycle count shows us that the Precious Metals Sector should bottom soon too, so we can expect that dcl in Gold and Silver any day now, and that confirms itself by closing above the 10sma. At day 32 for Gold, I would think that any downside dip would be short lived. Enjoy your Friday trading and you weekend!
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~ALEX
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BITCOIN is doing as expected. It broke down and failed, so that tells me that price will be choppy and lower until we get closer to day 60. Can it bounce to the 50sma again and then roll over? Yes, it is only on day 44 so it could, but I just want to be patient and be ready to trade long when it gets to a final low closer to day 60. The last dcl came at day 57.
