Wednesday May 22
We know that the Markets have rallied since the Fed Mtg and Speech discussed inflation and possible Rate Cuts. Today at 2 p.m. we want to be aware that the DATA being released will be the ‘minutes’ of that May 1 F.O.M.C. meeting.
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SPX – Notice the rally since that May 1 Fed Mtg. This is Day 22 of this daily cycle and we see the markets still up near the all-time highs. The rise has been so steep that the 9 sma has not even been tagged since day 9. You could use a stop at the 13 sma, so that a half cycle dip would stop you out. You can see that on the run up from Jan to April.
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NASDAQ – The Fed Speech was on day 9, and here we are at Day 22 making new all-time highs, so at this point the markets remain bullish. Today we’ll see if the Fed minutes cause a pullback or a continuation to the rally.
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WTIC – Oil is crawling & chopping along under the 200 sma. The MACD is improving, but this looks like the 3rd daily cycle and I actually wonder if oil can recover the 50sma. It looks like a failed 3rd daily cycle.
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The USD rallied for 3 days after the Fed Mtg, but then it rolled over. It is oversold and is also due for a dcl here, and that may be a dcl already in place right now. Price is struggling under the 10sma and the 50sma, so we’ll see if it can push above that area when the Fed Minutes are released.
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I just wanted to show you the last intermediate cycles 4 daily cycles for Gold and then the next 2, which were steeper. GOLD is on the 3rd daily cycle now and is at or near all-time highs.
1. During that last 4 daily cycle ‘intermediate cycle’, Gold rallied, but then when it came time to drop into an ICL, notice that it chopped sideways and didn’t have a very steep drop. We may drop deeper this time, since the run was steeper.
2. Gold started to rally in an even steeper path from February onward and we are now on daily cycle 3.
Let’s zoom in…
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NOTE: Yesterday I discussed that Gold spiked on Sunday into Monday, so that leaves us with 2 ideas (these 2 ideas were already on the table though). Yesterday I said…
1. Could Gold top here as L.T.? Maybe, but also…
2. Instead of just calling a top, we may get a dip into a half cycle low and then a continuation higher in this 3rd daily cycle, forming a small cup & handle, so we have to let it play out.
GOLD SPOT has rallied out of that May 1 Fed Mtg time period (day 4) and peaked on day 11 so far with that spike on Monday. Today we will see if the Fed Mtg can give us a new high(?), or will it cause a dip and leave us with a day 11 high so far.
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SILVER bottomed after that May 1 Fed Mtg.
Silver has actually peaked on day 12, but day 13 was very close to tagging the highs too. We will see what happens, if anything, with the FOME MINUTES being released at 2 p.m.
I do want to say this: The last daily cycle was L.T. , but Golds was not. That is likely why we have a strong rally to new highs. When you look at Gold, it bottomed before that late March spike, but Silver continued to drop to a new low while Gold did not. This is why I try to go by Golds daily cycle count.
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Did you notice that Gold & Silver bottomed after the May 1 Fed Meeting? The GDX bottomed in April.
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GDX has peaked on day 19 of its daily cycle so far, so we would look at this as R.T., but I still prefer to go by Golds count. Why? If Gold remained L.T. and sold off, I don’t think that Miners would rally to new highs.
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We’ll see what Wednesday brings, but we do have the Fed minutes release at 2 p.m., so we want to stay mindful of that. Enjoy your Wednesday trading.
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~ALEX
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Bitcoin has reached what could be an overhead trendline. It stalled there, so now price could realistically move anywhere inside of the circle that I have drawn. That means that
1. Bitcoin could drop and then breakout, or
2. Bitcoin could just surge higher from here too.
3. Both ideas are drawn below.
