Friday June 21st
DATA – Inflation and the economy will be highlighted with todays data release. Will we finally start to get a little more of a pullback?
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THE SPX does look like it may dip into a dcl, but we have seen these 1 to 2 day dips on the way up, so we’ll just have to wait and see. A drop to fill that gap at the 20 ema is possible.
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WTIC – Oil continued higher, but yesterday I mentioned that oil is moving up rather quickly, but the XLE and XOP are not really following. That is strange to me, because Oil has moved up from $72 to about $82, and for Oil, that is a big move. Also the General Markets are up at the all-time highs, so I would have expected the XOP to be running higher too, but it made a new low just 2 days ago. Look again at this run with Oil over the last 2 weeks…
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THE XOP made a new low 2 days ago during Oils strong run. Is it ready to go now, with a fresh swing low in place? You can buy it with a stop, just in case it starts to run now.
Recently The USD made a strong sharp reversal, but I said that I expected the USD to probably just chop sideways, and I used this chart on June 11th to show that path highlighted in Pink.
The USD has chopped sideways, but it looks like a bullish pennant, so we see a drop and push higher yesterday. There is a little more room in the apex, so we could chop a little more or now we might see more upside from this chop around the 50sma. NOTICE that the dollar dropped, but then it was moving up. Well, Gold also moved up.
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TODAY I WANT TO SHARE AN IDEA OR AT LEAST A NOTEWORTHY THOUGHT IN THIS SECTOR THAT PERTAINS TO THE 2016 BULL RUN:
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GOLD popped back above the 50sma, which seems to indicate that we did get an early dcl with the day 24 slam down. That seems early, but that is in line with what we have been seeing in the Bull Run when the run got stronger. The problem is that this also would make it more likely that we are in a fourth daily cycle that will drop even lower. Why?
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It is likely that we are in a fourth daily cycle that will drop even lower. Why? We have a L.T. 3rd Daily cycle, but it didn’t undercut the last dcl, to give us a failed daily cycle. We really should see that weakness and sentiment change with a break below the dcl, so now I’ll be looking for that to happen in July.
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SILVER looks like a dcl at the 50sma, and this would be day 4. Silver really looks strong and as shown in yesterdays report, some of the Silver miners also look very good, and that is what happens with a nice strong bull market.
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SILVER did not even break the uptrend, so it doesn’t appear to have an ICL, but it does appear to have a dcl.
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GDX #1- GDX tried to close above the 50sma, but then it started to sell down lower. It DID, however, close slightly above the 50sma and also looks to have a dcl, as mentioned yesterday.
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GDX #2 –
The GDX also didn’t give us a failed daily cycle yet, so we usually do need to expect that, and it could look something like this, HOWEVER: One time that I remember, something different happened. WHAT WAS THAT?
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IMPORTANT!
HOWEVER: One time that I remember, something different happened. WHAT WAS THAT? I think that everyone remembers that 8-9 month Bull Run in 2016. During that time, GOLD & SILVER put in an ICL in Dec 2015, GDX & GDXJ gave us one in January 2016. At that time, Gold did give us a failed daily cycle in May, but Silver and The Miners did NOT break the prior lows as they ran higher. So Gold gave us a failed daily cycle, while GDX , GDXJ, and SILVER did not. They ran strong from January into August, with a dip similar to what we see now, but no failed daily cycle. I will show you that with GOLD, Silver, and GDXJ here:
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GOLD 2016 had an ICL in December and then a failed daily cycle a-b-c drop in late May, so I called it an ICL. IT WAS EXTREMELY MILD (Choppy) and barely broke that low.
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SILVER 2016 Did NOT Break the prior lows (failed daily cycle) from December 2015 ICL to August 2016. Gold broke it in May, but Silvers rise was so steep that it didn’t drop enough to break that prior low. That is noteworthy, because I see Silver as being that strong now.
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GDX & GDXJ also did NOT break Their prior lows on that last dcls. From March to May, I can’t even see a dcl in April, and they usually come monthly, so this strong run dipped, but not in a very deep manner. In fact, the May dip is probably similar to our current dip. This run from January to August peak was 8 months long and even though I called an ICL in May, that dip was not breaking the prior dcl, and THIS IS WHY I don’t always use cycles on Miners. I go by Gold.
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It’s a tough call when I, on RARE occasion, see a different kind of follow through, like I saw in 2016. It leaves us wondering if we could see the same thing now (?), or was that so rare that we will definitely drop in the 4th daily cycle and undercut recent lows for a visible ICL? I do have to expect that. Silver & Silver miners do look healthy after this pullback, so if you want to, you can always buy with a stop, just in case the move higher in some of these individual miners turns out better than expected.
Keep in mind that todays Data is released AFTER THE MARKETS ARE ALREADY OPEN. Enjoy your Friday trading!
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~ALEX
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Bitcoin Wednesday Night:
1. I have mentioned that as Bitcoin sells off into the next dcl, it could form a large inverse H&S, as shown here. SO A DROP TO $60,000 IS POSSIBLE, AS SHOWN.
2. That said, I also took a closer look again at some Crypto-related stocks on a weekly basis and daily basis, because as Bitcoin is dropping, some cryptos look to be under accumulation, some are rallying, and some may be holding up rather nicely. So see yesterdays report for that view.
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Bitcoin dropped to another new low as expected. This appears to be day 51, since Bitcoin traded through the weekend and then every day this week. The last low came in early…
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I am starting to see a possible wedge forming (Bull Wedge) with Bitcoin. We can still get a false break down to that $60,000 area as a shakeout and a right shoulder on the inverse H&S, and then an ICL. I like to think of the possibilities as these play out, but with a fast mover like Bitcoin, we should just expect more selling until we get a breakout above this recent downtrend (orange line). It still has ‘time’ left to fall lower.
