July 12th – Inflation Surprise
DATA – Todays data is PPI (inflation). Did you see what happened Thursday? Yesterdays CPI Inflation Data was very Bullish, and it was the kind of data that moves markets. The inflation numbers came in showing less than expected inflation and the futures took off higher with expectations of a rate cut in September rising to 80-%. The General Markets, Precious Metals, and even Bitcoin immediately took off higher at 8:30 a.m. ET. It was mentioned by analysts that Inflation came in less than expected, and if the Fed waits too long to cut rates, we could run into a recession. The September Rate Cut is now estimated to be an 80% chance of happening. Would it hold or was that a knee jerk reaction, “Sell the news” event?
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Would those gains hold or was that a knee jerk reaction, a “Sell the news” event? I honestly think that you are going to be quite surprised by what I show you next. No, really, I think this might surprise you…
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The SPX rallied in pre-market, but it obviously sold off all day long as a ‘sell the news event. This was quite overbought and could pull back, but this isn’t the ‘surprise’ that I was thinking about.
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The NASDAQ also rallied in pre-market, but it too sold off all day long as a ‘sell the news’ event. This was also very overbought and could pull back further, but also this isn’t the ‘surprise’ that I was thinking about.
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I’m pointing out the SOXX slam down, and also a few other candles that were very similar to Thursdays sell off.
One candle sent the selling into a 3 day drop, the other sent it down to a 2 week dip. This was a SHARP sell off. Now, do you want to see the surprise chart that I mentioned earlier??
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SURPRISE!…
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The SPX, NASDAQ, and SOXX crashed down.
NOW Take a look at The IWM. Recently I have mentioned that EV, EV related stocks, and MJ stocks are bullish looking set ups. BLDP, WKHS, EVGO, PLUG, FCEL, and more- are popping and running. I’ll discuss this more at the end of the report, but take a look at the IWM yesterday.
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The IWM gapped up and continued higher, as the General Markets sold off? VERY INTERESTING.
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GOLD shot up over $42 with the inflation numbers and the likelihood of a rate cut. Unlike the General Markets, Gold did not sell off into the close. This large consolidation continues to develop as Gold chops along.
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SILVER pushed higher by 2% and broke from that mini-pennant that I was pointing out.
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GDX made a new high on day 16, and it is above the May highs now! That could be viewed as a topping candle, but usually it depends on what Gold & Silver do when it comes to the Miners. If Gold pulls back, Miners will pull back too. I have an arrow pointing to a similar candle that was not a ‘top’, but we’ll just have to see how things play out here. Many individual miners still look like they could go higher over time.
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YESTERDAY I SAID:
HL looks just like EXK and GATO did over the past 4 days when they broke their downtrend. Now that it broke the 50sma, it COULD take off too. It is a bullish set up.
HL shot up over 7% as it plays catch up, running to former highs and making a cup formation too.
FSM was pointed out as lagging a bit, since EXK, CDE, GATO and others where now breaking to new highs. It did move above the 50sma yesterday and should continue higher over time too.
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AG gapped open, filled that gap, and then pushed higher, but it is still under the 50sma as a lagger.
EGO I showed how many Miners formed a cup and some were breaking to new highs, and EGO followed that pattern yesterday, with new highs, so…
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SAND – I was looking for ‘laggers’ that look like they may form a cup and SAND gapped up, filled that gap, and then continued higher. This could form a cup ( & more) over time.
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It was last week that things changed back to a more bullishly active precious metals market when the Fed Chairman Powell spoke of inflation cooling, and then the numbers that came out on Wednesday looked to indicate a rate cut sooner than later. That continued yesterday with inflation numbers showing more improvement than expected, and today we have the PPI Numbers that could show that too. Below I will discuss Bitcoin and some more of the small cap EV and MJ Stocks that I have been discussing lately. Enjoy your Friday markets.
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~ALEX
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Bitcoin does still seem to have bottomed out on day 65. It has been moving slowly higher, and yet as mentioned yesterday, Crypto related stocks are dropping and not moving higher with Bitcoin. All we can do is watch this situation, use or raise stops if you are in any of these stocks, and see if it changes with Bitcoin breaking the downtrend. MAYBE A BREAK OF THAT DOWNTREND LINE will kick the crypto stocks into gear? We’ll see.
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YESTERDAY I SAID:
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I have noticed some of the EV or EV Related (Battery, lithium, etc) Stocks seem to be bottoming and moving higher. These can be short term moves off of the lows/ base, or they can be the start of a move higher. Time will tell, but they may make for some good short term trades & gains. You can keep an eye on stocks like EVGO, BLNK, CHPT, LCID, POLA, OPTT, NKLA, NIO, AYRO, WKHS, etc . I will try to cover some below and in future reports.
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Well our old friend JOBY took off by 20% yesterday too.
As a reminder, POLA has a long base and it just Popped on Wednesday. This was a 20% pop.
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EVGO was actually mentioned by me in the comments 3 days ago, as a bullish set up that I liked. Unfortunately I didn’t buy this one and it continued to run out of that base and even had a nice Pop yesterday. These do look to be moving out of their bases and heading for recent highs.
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GP – So I found this set up that looks like it could Pop and move higher. It is currently pushing from $1 to $1.30, but ran into resistance of the 50sma, so this may break out and run higher soon.
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YESTERDAY I SAID:
WKHS – This is not ‘healthy’ yet, but it did a reverse split and SOMETIMES these will gain buyers in a bullish sector and just take off higher. Consider this one a little higher risk, possible big reward.
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WKHS then ran up 20% at one point yesterday and closed up 18%. It may stall at the 20ema, but it also could keep running, due to that reverse split.
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So then I found SPCE and it also has done a reverse split. Price has been selling down while the MACD is starting to rise and Volume is swelling. SPCE was up 9%, so this also might start to run, since this sector is heating up.
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I’ve been seeing the MJ Stocks start to look bullish again too.
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OGI crawled along under the 200sma and Popped yesterday in a bullish manner. The RSI crossed over 50% and the MACD is in bullish alignment, but add to that the idea that many others in this sector are also turning bullish.
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SNDL was crawling along higher day by day and suddenly Popped yesterday too.
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ACB actually climbed up 8% on Tuesday, again on Wednesday, and on Thursday it tried to break through that 50sma, so this is bullish too.
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So take a look at the MJ ETF Chart, and CRON, TLRY, CGC, GRWG, etc and it does look like this sector is trying to move up and out of their consolidations and bases too. With the Pop in the IWM yesterday, as the QQQ & SPY sold off, this may be the next bullish sectors to pay attention to.
