Friday September 6th – Still Choppy
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DATA – Thursdays Data caused….more Choppiness. Todays numbers are important, so we’ll have to see what happens after 8:30 again, but I do expect a sell off to come sometime in the near future.
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THE SPX is on day 22, it is crawling at support after a sharp drop, but it did this in July too, right before the bigger break down. As I said back in July, The Nasdaq is weaker, but it is The SOXX that really gives us a clue…
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THE SOXX is struggling UNDER resistance, the MACD crossed down, the RSI is weak, and it has a ‘peak’ on day 13. On top of that, it was rejected at the 50sma on that day 13 peak too. I am expecting another wave of selling soon and this could be a bear flag. Price may continue to chop toward the 10sma.
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WTIC – Oil is dripping lower and as was seen earlier in the week, the triangle is broken to the downside…
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Closing down here on Friday gives us a weekly closing breakdown. It is too early for an ICL, so any bounce from here may only tag the underside of the triangle and then selling could resume.
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During the recent drop, each bounce for The USD was weak, lasted 8-10 days, and rolled over. The USD is due for an ICL and this might be the ICL in late August. Notice the difference that the MACD is showing on this bounce compared to the last few. The USD has been dipping lower, but it may put in a higher low and then move higher toward that 50sma if this is the ICL. I’ll discuss this more in the weekend report.
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GOLD is in its 2nd daily cycle and it MIGHT have a dcl here in the day 29 area. I say that because Gold did just close above the 10sma again (not shown). If the USD bounces though, Gold could struggle going forward until that USD pulls back again. If the USD keeps dropping and struggles with 1 more weak daily cycle, then Gold could continue higher in the 3rd daily cycle. Right now I have said all week long that Gold is impressive and bullish looking with price not crashing down on day 27, 28, 29, etc. Gold has even held up above the 20ema, but it did dip lower as the USD rallied out of that low this time.
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Yesterdays report used ‘Spot Silver’, so let me show you what I said then.
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SILVER SPOT is on day 20 (my chart yesterday didn’t include holidays, but Spot does). Silver now has 2 days in a row with ‘wicks’ below the candles and that is often a rejection of lower price, so Silver may be trying to bottom here as a half cycle low or an a-b-c down into the next dcl (As though an ICL is in place).
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So yesterday SILVER did push higher, but by the close it had popped and dropped as it tried to get above the 50sma and 10sma. Some of this weakness may be attributed to that USD forming a low.
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GDX peaked on day 11 so far, and that is often a L.T. daily cycle, unless it bottoms on day 22 or less. That said, we do have a low at day 21, but is that the dcl? It doesn’t look like it is, since it didn’t bounce as much as Gold and Silver did yesterday. I will often say that I FOLLOW GOLDS CYCLE COUNT, and not the Miners, because at times they exaggerate a move and their cycles play out differently.
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Same Chart: Right now I see the following with GDX:
1. GDX did not bounce as much as Gold and Silver.
2. The MACD had divergence when it made a new high on day 11, and it crossed down on the drop.
3. GDX looks like it could become choppy, similar to how it acted with the last few sell offs.
4. Look where I placed an Orange line, and we could be at that point in the GDX, where we saw a MACD cross, a bounce, and a final drop.
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A note about these choppy markets. Choppy markets can be traded if, for example, the chop is 3 days up, 2 days down, 4 days up, 3 days down, but these markets are very choppy Intraday, and THAT can be very hard or impossible to trade successfully. There are times when the choppiness makes trading difficult, and I am seeing that now. Each ‘Pop’ drops and each ‘Drop’ pops on an intraday basis, so if you were to take a position long or short, that trade can quickly go against you and it stops you out. As an example: This is SOXL for the week. Each trade would chop & change direction, so there is no good trade, because the direction is sideways.
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At times like that, it is often best to just sit and watch how things play out, allowing the next solid trade to develop more clearly. If you bought Miners at the ICL and were still holding on, you would still be in profits, but IF someone Buys a pop and sells a drop over and over, that causes losses to add up. GDX has been very choppy too. That is called ‘buying high and selling the low’. As a day trader, there are some individual stocks that can run more steadily, and I’ve seen that with XPEV, NIO, PSNY, and other EV/Clean Energy stocks, but the trades with SOXS, SOXL, GDX, GDXU, JNUG, DUST, etc have been intraday choppy and too difficult to profit from here in the choppier more volatile part of the daily cycles. I am waiting for a low to develop with Bitcoin, and then I might find an ETF to ride, but if the markets are selling off at that point, it may get tricky there too. We’ll see, but Bitcoin is discussed below and on the weekend I’ll discuss the bigger picture. If you are trading in this environment, I would keep it small until the chop stops and we see the markets pick a direction. We may see the General Markets chop over to the 10sma an then continue to sell off if todays data doesn’t start a sell off. I will be away this morning, but I will be back around noon. Enjoy your Friday and Weekend!
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~ALEX
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FROM WEDNESDAYS REPORT AS A REVIEW: To show the cycle count.
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BITCOIN – Notice the rejection right at the 20 ema blue line. That is what I’m using as a guide but now look where we are cycle timing wise. We have arrived at Day 61. This is Bitcoin at midnight Tuesday into Wednesday, and we do have a reversal at the day 61 low.
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BITCOIN – So we can see that Bitcoin made a new low overnight, and we are now on day 63. I am…
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I am a little concerned that Bitcoin would have to try and run higher at a time when I am expecting that The General Markets would be dropping lower. Can they separate, with Bitcoin running higher as the markets sell off? Well, it is possible, but that high volume capitulation low took place as a result of the last Markets sell off, so we’ll have to just wait and see how this plays out.
