June 12th – Fed Wednesday
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SPX – We have arrived at the Fed Wednesday and we now do see 5 waves up, the question becomes:
“Is this fifth leg up complete?” Could that 5th leg extend? Yes, and since it is day 36, it could also continue a little higher due to that cycle count. We have had 50 day daily cycles in the past. That being said, we must conclude that we are due for a drop now or very soon.
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WTIC -Oil is at the resistance of a downtrend and the 34 sma. On day 35, this can chop & drop for 10-15 more days. Some like to use DRIP to short it, but it is choppy and may not be worth the trouble.
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Yesterday I discussed a possible sideways chop into the Fed, using this chart, but the FED DECISION almost always affects the USD one way or another. Yesterday I said:
You can see that past moves became choppy and sideways often, so I drew a pink flag as the possible path for the USD. The USD WILL BE affected by the Fed.
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THE USD is chopping sideways, so far.
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GOLD could be crawling to form a ‘bear flag’ as we head into the Fed. That slam down MIGHT be a dcl on day 25, if the Fed Speech sends this higher, but it is risky here with a weak MACD and RSI. Gold is due for a dcl and …
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Gold is due for a dcl and that low could be 5-10 days away, so I’ve been out of Miners for a while thinking that this Intermediate Cycle has likely peaked. Notice how close Gold is to making a ‘failed Daily Cycle’, by breaking below the last DCL. If that happens, it starts the decent into an ICL Over time.
SILVER reversed on Monday day 26 at the 34 sma, but it rolled over to a new low on Tuesday. Silver is finally reaching oversold, but on day 27 it could also drop lower.
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When I look at the chart of The GDX ETF, I noticed that we haven’t even broken below the last dcl to give us a ‘Failed Daily Cycle’. I am guessing that we will break down lower from here, with a peak in mid-May. IF WE RALLY STRONGLY, then the Fed Decision has bullishly prevented a failed daily cycle in Miners.
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We all know the drill by now. Fed Wednesday can be fairly normal in the morning, things may start to get ‘heavy’ in the early afternoon, and then the Fed Decision at 2 p.m. followed by his speech can give us nauseating volatility! Fasten your seatbelts and we’ll see if the latest data has altered the Feds thoughts on rate cuts in 2024. Enjoy your Wednesday Fed Day (Yeah, right!) 🙂
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~ALEX
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BITCOIN 2 hr chart: We saw a sharp drop followed by a sideways consolidation and then another sharp drop into Tuesday. That does look like an a-b-c complete and now the Fed Decision could cause a breakout rally, since we do have a good amount of time left, but yesterday I raised a thought about a long consolidation. THAT would mean that we are possibly seeing a 5 wave drop with 1-3 completed.
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YESTERDAY I SHARED THIS POSSIBILITY. I would say that we are 50/50 right now with a chance of a breakout or a chance that we get this longer consolidation…
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Bitcoin could form a massive inverse H&S pattern with the entire 60 day cycle. These are very bullish longterm, but riding it down to a day 60 drop from here would take a couple of weeks and could cause the crypto related stocks to drop considerably, so I wanted to point this out as Bullish, but short term difficult or painful. I don’t know if this will happen or not, but the possibility exists.
BITCOIN DAILY WEDNESDAY 6:30 a.m. –
So really this could go either way, with a half cycle low in place and a rally from here, or more chop. The crypto stocks all look good and they dropped and rallied back yesterday even though Bitcoin did NOT rally back, but if the USD runs on Fed ‘No rate cuts soon”, and Gold drops on a Feds ‘No rate cuts soon”, does Bitcoin need to drop and consolidate further? THAT is my dilemma.
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One thought or reason that I had to look for a bullish breakout (but I am just a little Biased), is
1. When the General Markets could pull back and Gold pulls back and money needs somewhere to go other than the USD, does it find its way to Bitcoin?
2. What about all the new ETFS? Where are their buyers? Would they show up with money to invest if the markets start to pull back and give us a breakout?
3. Again, I’d like to see that, but I need to remain unbiased and realize that Bitcoin has, in the past, done 60 day sideways moves too.
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THOUGHTS FOR DAY TRADERS ONLY:
IREN -Yesterday I saw some crypto stocks drop and start to recover with bitcoin down, so I started to mention it. I saw IREN when it was up 3% with an intraday V-Bottom. The daily was at the 8 ema or 10sma, so I doubled my position. Here it was up 6% with Bitcoin still at the lows. Volume was big
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IREN by midday was up 15% with almost ‘all day volume’. I sold 1/3 of my new position.
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IREN was up 20%plus late in the day and I sold all the rest of my new position. That was a Big Scalp, and you can do that with these using intraday charts and a trailing stop.
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MARA dropped and lost the 50sma, but after 20 minutes or the first half hr, it reversed and started to climb back too. So…
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MARA lost and regained the 50sma, with Bitcoin still at the lows all day. Let’s go to intraday.
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MARA 10 minute chart: Mara dropped for the first 20 minutes with huge volume (exhaustion selling), then it reversed at 10 am. You can buy that with a tight stop if you day-trade. It runs to resistance, stalls and then ‘breaks out’, and you can add a little more, because it is recovering on the daily chart now. It ran to up along the blue 9 sma, and it gained $2. I posted the next chart to show that…
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MARA 10 minute chart: I posted this in the comments to show that slam down and then the move higher was from $17.60 to $19.77. That is a $2 move/share. To be honest, No one can really catch the $17.60 low, but even $18 or $18.50 to $19.77 is $1.50 or $1 / share. Buy 1000 shares, get $1000 to $1500 as a day trader. The good thing was that these recovered smoothly. Sometimes you get stopped out, but yesterday was an exhaustion slam down and most sellers were out, so it ran smoothly with buyers.
WULF – I pointed out WULF as a reversal after 1/2 hr too. It was down 7% or so and here it was still down 2.5% and a recersal at the 8 ema is buulish.
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WULF – Midday it was up 2.5%
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WULF closed up over 12%, so buying that reversal would have given 14-18% gains. THIS DOES NOT ALWAYS WORK…
DAY TRADERS DELIGHT, BUT….THIS DOES NOT ALWAYS WORK.
I have entered at the lows after a solid reversal and still been stopped out on days when the selling doesn’t exhaust. Also these can move FAST, so they can bounce convincingly for 5 minutes and then drop for a second leg down. You don’t want to buy early, you need to wait for a reversal and then if it just keeps climbing up that 8ema/9sma , you raise your stops and enjoy the ride, but it does take experience and the trade can go against you if Bitcoin does another drop too.
