Wednesday October 16th – Watch Your Step

The General Markets crashed at one point yesterday, and even though the SPX still looks fine, we need to watch the SOX and NASDAQ.  Let’s discuss why.

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THE SPX looks to have reached a peak with the upper trend line of the first daily cycle or a bearish rising wedge. I would expect a pull back for those reasons , but it doesn’t have to be a big pullback, however  watch that 20 ema…

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I see something similar with THE NASDAQ. I see the upper trendline of the daily cycle is where price reversed, and this doesn’t look all that bad, but many times you will hear that “The Semiconductors lead the markets’.  Weakness or strength in the semiconductor sector is often a tell tale sign of what is coming in the Tech Sector (Nasdaq). That is what is concerning.

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THE SOXX dropped almost 6% and then started to bounce back a little. The problem is that this is almost taking out the dcl on day 10! Do you remember when it started the correction back in July, it lost the 50sma, took out the dcl, and back then I said that the other sectors would likely follow? They did. SO we need to view this as fairly negative if it doesn’t resolve quickly.

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I was looking at AMD, MU, NVDA, etc as a buy, but they obviously took a hit. AMD & MU lost the recently recovered 200 sma and may be heading to test the 50sma. We’ll msee what happens there.

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   WHAT I NOW SEE:

 That drop was blamed on the accidental early release of earnings (Miss) by ASML, but when the SPX, NASDAQ, SOXX,  etc all drop all at once due to one company? It is a sign to me of the fragility of the markets ‘bull market set up’. If one company can warn of weakness with a miss and the entire market slams down, then what would happen with a bad jobless claims or a ‘pause’ in interest rate cuts? This could be a sign that this intermediate cycle is going to peak earlier than past runs, and we could see some choppy ‘topping action’ going forward, so while it is still a decent set up and can be invested in with a rising stop—I would be cautious and look for signs going forward too. THAT is what I am seeing now and it is a slight adjustment UNTIL the markets show us a little more (weakness or strength).

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WTIC – Oil dropped over 4% again. So Oil ran up to the 200sma and was rejected at this point and now it is threatening the 50sma. It is only day 25 of a possible 40+ and as I’ve mentioned, I don’t like the way Oil is trading right now.

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Also, if this ‘peaked’ on day 20 and then it extends to day 40+, it is L.T. and will end as a weak daily cycle, possibly breaking the lows.

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I have been saying that THE USD is on a mission to tag that 200sma. It has been rising day after day after day and is almost there. SO far this has caused a small pullback in Gold and Silver, but they have now turned higher. After the USD tags the 200sma, it should then pullback, and that may help the precious metals bull even more.

 

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So here we see that Gold had a mild sideways dip into a dcl and now it is starting to push up to the all-time highs. When the USD finds resistance at the 200sma and starts to dip lower, that may help Gold to run even higher. This is day 5.

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SILVER is on day 4 and when the USD pulls back, I would think that Silver could break out. It hasn’t had a nice strong run yet, it has been choppy up here at resistance, but that can change if it gets above resistance.

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SILVER has been chopping at various resistance points, but this can run to $35 or more once it gets going. When it gets over $35, there is minimal resistance, and Silver could ramp up very quickly.  Also, in the bigger picture, this is a very long bullish consolidation that can add to a powerful move higher at the right time.

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GDX has been rising up out of the dcl too (despite the USD). Day 4.

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NEM is a nice example of the slow and steady gains being made coming out of this dcl.

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I am still seeing bullishness in the General Markets, but the SOXX is turning bearish and needs to bounce almost immediately. This could be a sign of a less vertical and choppier run for the General Markets. Oil is very difficult, with price swings that are extremely challenging. I am not trading that area. The Precious Metals look good, despite a strong USD Run.  When the USD finally starts to pull back, it makes me think that the Precious Metals sector could benefit even further.  It is only day 4 or 5. Bitcoin remains bullish too, I’ll discuss that below. Enjoy your Wednesday trading.

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~ALEX

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YESTERDAY I WAS WATCHING THE NEXT PRIOR HIGH ON THE LEFT. The yellow lines would represent possible resistance, so I expected a possible pullback, but it is bullish. I said…

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 Since we are at a prior high and that can act as resistance, today may be a choppy day for Bitcoin.  We’ll see, since this could also break out and pull back later.

 

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 Bitcoin 7 a.m. Wednesday:

Bitcoin actually pulled back half as far as I expected, but then it pushed higher and broke out above that yellow line (prior highs). This is bullish price action as Bitcoin heads for that $70,000 area. Crypto stocks are making progress, but they are choppy and very difficult to ride if you constantly watch them.

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Crypto stocks are making progress, but they are choppy and very difficult to ride if you constantly watch them.

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CLSK – almost $8 to almost $12 in 3 days.

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IREN really doesn’t look like much, but that’s $7 – over $9 and has plenty of upside if these get running. It DID do a pop and drop and several of them did this, so it makes them very hard to ride.  Why?  Well, if they drop 50 cents and if you have 2000 shares, that is a $1000 move up – or – down. That said, these have great potential if they get running.