Friday November 1 – Cracks
YESTERDAYS REPORT STARTED WITH THIS STATEMENT:
I feel like I might have some bad news for the General Markets Bulls, but Good News still remains strong for the Precious Metals Bulls and the Crypto Bulls. Let’s take a look at the charts and let me show you what I am seeing.
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SPX – This is part of the bearish move that I was mentioning yesterday and in the recent week. I have pointed out the bearish rising wedge nd it broke down in a big drop yesterday.
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NASDAQ – The Nasdaq broke down with a 500 point sell off too. The real bad news, however, was the SOXX…
YESTERDAY I SHOWED CHARTS OF AMD AND SMCI & THEN SAID THIS:
The SOXX: Volume increased with the selling, The RSI & MACD are weakening, and losing the 50sma and a break of the dcl are becoming a threat again. This has been turning bearish as time goes on and that is the bad news. The semiconductors often lead the markets, and the SOXX is struggling to move higher consistently.
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The SOXX: broke below the dcl and that gives us a failed daily cycle. The last time we had that I warned that the other sectors would likely follow and they did. This time, the markets dropped all at once, but this marks a failure and calls for bear market price action. It is very early for this to happen, so we could see a lot of selling ahead.
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The SOXX: If I had to guess, I can now see this as a H&S pattern and the drop could chop lower, similar to the July-August drop. We are quite early in the Intermediate Cycle, so it is also possible that we chop sideways for a while before the real selling kicks in, but for now I am just seeing warning sign and yesterdays selling seemed real (as opposed to a healthy dip).
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THE USD dipped to the 200sma and then bounced. I’ve been calling for a dip into a dcl, and I don’t know if this was enough of a dip(?), so we still may bounce and drop from here.
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GOLD dropped rather sharply, but this had to be expected. We are in a 4th daily cycle and we really are due for a ‘peak’ and a drop lower. I have been saying this for a few days and I’ll discuss this further in our weekend report. Here I have drawn an idea of what we could see for this daily cycle.
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SILVER dropped sharply too.
I noticed that each time it starts to drop into a dcl, it slams down (Red arrows), and then chops around for a bit. We may see that here. I’ll draw it for you.
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SILVER – It is day 17, so it should be a little too early for a dcl, so I would expect more downside. We may see a bounce and final dip, like we’ve seen in some of the other drops. See the chart below.
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GDX dropped and bounced right at the 50sma. This is day 16 with a day 9 peak and I don’t think that these are the lows (too early for a dcl?), so that means to me that we may bounce drop and get a L.T. Daily cycle.
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I want to start with this important reminder: Markets hate uncertainty! Next week is the U.S. Elections on Tuesday, results likely on Wednesday and then The FOMC Meeting/rate cut decision Thursday. It could get very rough out there. We could see dcl’s then, but we are almost guaranteed volatility in between now and next Friday.
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‘Yesterday we saw selling across all Sectors that I was trading, and the sell off was so sharp that it was painful. Some of it really was to be expected, with Gold in the 4th daily cycle and Bitcoin right at all-time highs. We almost always see a ‘reaction’ at the highs, but the problem is that when Gold, Silver, or Bitcoin drops, those ‘Miners’ really drop too. With more selling likely, it could be a matter of lightening up on the bounce if you weren’t planning on a ‘Buy & Hold’. Let’s discuss Bitcoin below.
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~ALEX
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BITCOIN dropped yesterday too, but really this was expected. I mentioned that we usually run up to the highs and possibly see a false breakout and a pullback. Yesterday I said…
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If Bitcoin repeats what we saw in February, it could look like this. NOTICE THAT I MENTIONED THAT IN PAST SELL OFFS, IT DROPPED TO THE 60 EMA on a 4 hr chart.
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Bitcoin dropped yesterday and then fell further overnight, so using a 4 hr chart, it is actually already almost at that 60 ema. I’m Interested in seeing if that area contains the selling or not.
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BITCOIN -This daily chart shows a large selloff candle for Thursday and the smaller one was some overnight selling. It is hard to say if the selling is complete or will this become choppy, because we have the elections and FED next week. I have drawn a small bounce and a drop into the elections. I’ll discuss this further in the weekend report.
