Friday August 23rd – Jackson Who?
Todays DATA speaks for itself, but we’ll have to see what really happens to the Markets when Chairman Powells speaks at Jackson Hole. Many are guessing that a rally will follow due to interest rate cuts, but it could go the other way too. We had a selloff 3 weeks ago that took many by surprise, and now we saw a sell off start yesterday out of the blue too. We saw a sell down, then we got a small midday bounce, and then the selling resumed into the close. If we get continuation selling, it could be that sell off that I have been putting before us for weeks. Let’s go to the charts!…
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So after a gap open higher, I saw a sell off that almost had a bearish engulfing on the QQQ, so I posted this chart in the comments at 11:30 a.m.
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QQQ – The sell off dropped it down to almost the 50sma, but 1 hour later a bounce or buyers started to step in. Would this reversal candle hold up?
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QQQ – Only 1 hour later and we saw the sellers selling again, and now the QQQ was again almost at the 50sma. With a gap open higher, it means that we opened green and developed into a bearish engulfing. Did we at least close with a strong bounce by the close?
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No! The NASDAQ is now pressing down on the 50sma and the 8 ema is right below it. I have been warning that as believable as this 12 day rally has been, it could still sell off, so now stops are raised and in place … just in case.
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REMINDER:
NASDAQ 2022 – I have pointed this 2022 rally out several times, and it was in yesterdays report because of the Jobless Claims. This very real looking rally out of the 2022 lows was straight up and lasted about 11 days.
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Take a look at The SOXX: You likely remember that the Soxx broke down first and this was what alerted me to watch for failed daily cycles in the SPX & NASDAQ too. Well, it didn’t bounce as much as the NASDAQ either.
THE SOXX had a weaker bounce, and it turned south right at the 50sma.
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I WILL LEAVE US WITH THIS MORE BULLISH THOUGHT:
There are times when we sell off for just one day or 2, and then it continues higher. Also notice that the first 2 arrows on the left are also pointing to bearish engulfing candles, but even that didn’t have follow-through, so we’ll see what The Feds Speech at Jackson Hole does with our current set up after 10 a.m.
WTIC – The Markets sold off and Oil decided to bounce. The bounce right here is important because…
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The bounce right here is important because we are at the lower trendline and threatening to break down. Oils chop between $70 & roughly $80 is the apex of the triangle, so I’ll be watching for a breakout 1 way or the other.
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GOLD broke through the 10sma, but then it recovered. This sell down is not damaging at this point. Gold was on day 20 Thursday, with a day 18 peak. I’d love to see it make another peak before a dip into a dcl. Maybe Jackson Hole will help.
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SILVER dropped to the 20 ema on day 10. This is normal looking so far, but it would make me happier to see it up on a day that the Markets sold off, to lend to the idea that they may not follow the markets if they do get into a sell off.
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GDX is on day 13 and this drop was also a normal dip so far. It’s day 13, so it could even go deeper as a half cycle low, but we’ll see what happens. You can easily see the 2 sharp selloff days when the Markets sold off 13 days ago.
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With yesterday’s gap open being followed by a prolonged sell off, we were left with a bearish engulfing candle. I did show that in the past, we’ve seen those and they didn’t have follow through, so it is possible that what Chairman Powell says in his speech satisfies the masses and we avoid a prolonged sell off. We do have to wonder if what I have been mentioning about another sell off to a deeper ICL could also happen though. The selling just seems to start for no reason and continues all day. So why did it sell off? The Jobless Claims didn’t cause the sell off, because we gapped open higher and futures were up before the selling kicked in. No, the selling just seemed to have started and continued through the day with no news, and that could be big money cashing out on the bounce. Will they cash out of Precious Metals, or will they be accumulating there? We should get a clue on that too, if we see more follow through today.
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As I write at 6 am,
NASDAQ Futures are up 150 and
THE SPX Futures are up 28
GOLD is up $14 and
Silver is up $0.45
So Raise stops, step to the sidelines, or make a decision in real-time, whatever you choose, but I think that todays market action could be very telling when it is all said and done. We have the Fed Speech at 10 a.m. Fasten your seatbelts and enjoy your Friday trading!
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~ALEX
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From recent reports:
BITCOIN – This looks like a capitulation low on day 31, but those are often THE low, so even though this would be day 47, I want to keep an eye on it, because it could break higher and then put in a higher low simply due to the capitulation nature of the last drop. At the same time, some of the Crypto miners are starting to look as though they want to try to bottom out.
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Then YESTERDAY I SAID: Bitcoins’ triangle is breaking out higher currently.
BITCOIN – This is Bitcoin at 11:45 p.m. Thursday. I think that it is safe to say that at this point, Bitcoin didn’t really sell off sharply with the General Markets selling down. Now let’s see if this can continue after the Jackson hole speech.
