Friday August 30th – Long Weekend Ahead
Todays DATA shows inflation, but I just want to mention that yesterday the markets rallied in the morning and sold off into the close (again). What will happen as we head into a long holiday weekend in the U.S.? That is often a sign of weakness, so let’s take a look…
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NASDAQ – After the NVDA earnings and Jobless claims, we got a rally that brought price back up above the 50sma on the Nasdaq, but then it suddenly sold off in the final 2 hrs of the day. This DOES look like a ‘bull flag’, but it also looks like it can’t hold the gains, and the sellers are selling into the buying, as the struggle at the 50sma continues.
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The SOXX still cannot recover yet. Yesterday the SOXX rallied too, but closed near the lows of the day after selling off all afternoon. This looks a bit less like a bull flag and more like an inability to regain the 50sma (& also a rejection at the 10sma for 3 days in a row. This looks weak.
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WTIC – Oil popped again, but this is quite choppy and difficult to endure lately.
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XOP – Oil stocks actually did look good though, despite the General Market sell off. The XOP looks like it’s ‘crawling’ under the 50 sma and 200sma to build energy for a breakout. If someone was interested in this set up, they could…
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If someone was interested in this XOP set up, they could buy with a stop at the lows if it drops & reverses again in this crawl, or buy the breakout if or when that happens.
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GOLD moved higher yesterday and ALMOST made a new high above day 18. I have pointed out the rising wedge this week, and they do usually break down, but we also know that we are coming due for a dcl soon. We are on day 25. COULD THIS BREAK TO A NEW HIGH FIRST? Yes.
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COULD THIS BREAK TO A NEW HIGH FIRST? Yes. When I look at Gold spot this morning, it shows price holding along the 13 sma and forming a little triangle ( I didn’t draw the bottom line so that you could see the 13 sma). This could break out and then dip into a dcl. That would be a very Right Translated 2nd daily cycle and bodes well for a 3rd daily cycle that makes new all-time highs.
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SILVER made a new peak on Wednesday, day 14 and then dipped to the 50sma. That didn’t look very good, but Silver has a trendline forming and that helped price to reverse right at the 50 sma. So Silver does look pretty good here, holding the 50sma and slowly climbing up and along a fairly steep trendline.
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Gold and Silver look good, but if I had any concern at all, my concern would be with the Miners. Why? GDX looks perfectly fine as is, right? It does, but I noticed that Gold is at the highs and Silver is at the daily cycle highs, but GDX really isn’t. So I have to wonder, “Would Miners get caught up in the selling if the General Markets sold off?” That remains to be seen, and also the General Markets may not sell off, they are just currently having trouble holding daily gains, but that could change, so what do we have with the miners right now? It is a bullish set up…
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GDX looks like a bull flag and dipped to the 20ema and reversed there. It has a day 11 peak though, so I really want to see another push higher to give us a new peak in this daily cycle. We are only about $1 from new highs at $40.
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I do want to say 1 more thing about GDX Cycles.
If this did NOT make another new peak and formed as L.T., I usually take note of that but because it can follow Gold & Silver, I put more weight in what they are doing. In other words, I take note of a L.T. Daily as a possible sign of weakness, but I believe that The GDX could dip from here and still go on to make new highs later if Gold & Silver rally.
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With the General Markets, they are struggling to hold daily gains lately, as they pop and drop sideways. This is the Friday before a 3 day weekend in the U.S. Markets, and we do have important data released today, so we’ll see if that helps or hurts the markets. With the Precious Metals, Gold and Silver are near their highs, Miners are also doing better than the General Markes, so we’ll keep that in mind, but Gold is due for a dcl soon since it is on day 26. We may see a dcl in Gold next week. Bitcoin is setting up nicely, and likely we’ll see one more dip and then a buying opportunity next week. I’ll cover that below, enjoy your weekend (Or long weekend in the U.S. ).
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~ALEX
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FROM YESTERDAYS REPORT:
BITCOIN – So now we got a new low and that would give us a day 54 low so far. COULD THIS BE THE LOW THAT WE LOOK FOR AROUND DAY 60? It is possible, but for now I have to count this mornings green candle as day 55. If you were just buying Bitcoin ETFs, you could try a small starter with a stop, but crypto stocks can breakdown so fast and lose 10%, so it may not be a great time to try those yet. Keep in mind that…
Keep in mind that if this dropped to a low at day 62 for example, that would be next Thursday. Cryptos can drop ALOT in a week, so play it the way you want to if you like this sector but it is always good to remember the risks. ONE GOOD THING was that when I saw the General Markets futures selling off, Bitcoin didn’t follow it.
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BITCOIN – Bitcoin rallied yesterday, but it also sold off into the end of the day. So now we are on day 56, and each pop couldn’t hold the gains . I do think that we’ll see one more dip to a new low, and then we might have a good buying opportunity.
