Thursday November 7th – Jobless Claims and the Fed Mtg
DATA – Today we have the Jobless claims at 8:30 a.m., and then we get the 2 p.m. Fed Decision on a rate cut. So far we had a large POP Higher in the General Markets and Bitcoin after the election on Tuesday, so now we’ll see if these data points can contribute to some follow through, or will they cause a negative reaction? A Rate cut may even put in a low for precious metals.
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Heading into this week I have been saying that we will have market moving data with the elections, Fed Mtg, and other data like the jobless claims report (economy), and any of those could make the markets quite volatile.
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When the results of the election came out, the futures shot up in the General Markets and Bitcoin. The SPX landed on the 50sma and then gapped up higher, so this did not give us a failed daily cycle like the SOXX did.
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THE NASDAQ broke down below a bearish rising wedge and was then saved by the election results. We’re just going to have to see if the jobless claims report and the Fed rate cut decision gives it more upside or will it fill the gap. I have been saying that this week has market moving data and could be quite volatile.
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WTIC – Oil sold off and bounced back off of the 50sma area.
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THE USD is quickly moving out of the ICL and it is already up at the downtrend line. It can run to the $107.5 area, but I was expecting it to roll over further with rate cuts. We’ll see. We are supposed to get a 1/4 point cut today.
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GOLD – We saw a sharp drop lower with Gold yesterday. It would help to have a slight undercut and then a swing low could form more quickly, so a quick drop below the 50sma would help lower the parameters for a swing low and then a rate cut may pull Gold higher again. I am thinking that $2800 is the ‘peak’ for this intermediate cycle.
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SILVER dropped sharply and I know that this looks bad, but…
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I do often see a sharp drop followed by a little chop right before a low forms in SILVER. We may see that again with the Fed Mtg today. Yesterday was day 21 for Silver, so a low could form or we get a sharp drop, a bounce, and then a slight undercut next low week.
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GDX crashed down below the 50sma and tried to put in a reversal candle at the lower trendline area. It is oversold and…
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GDX is oversold and this does look very much like the reversal in early August too. A fed cut may start to form the low here too. A large gap open higher that doesn’t fill the gap would give us an abandoned baby, but the fed cut isn’t due until well after the open, so this may chop around until that 2 pm decision.
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That was a strong market reaction on Wednesday to the election results and next we have the Jobless Claims report due out at 8:30 am ET. followed by a rate cut and more importantly, the Fed Speech. That speech could hint at whether or not the committee will stop cutting rates for a while after this, or whether they’ll continue to cut rates at the next meeting. This may be a volatile day of trading too. Enjoy your Thursday trading.
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~ALEX
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Last week I stated a few times that this week we would be due for a new low in Bitcoin. YESTERDAY I DISCUSSED THE ‘COUNT’ IN BITCOIN: I only used ’30-day cycle counts’ to show that we were in the area where we could expect a low.
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I started Counting from the slam down capitulation low as if it were an ICL: So from that deepest low forward we’d have a day 32 half cycle low and then add the next 34 day period to get a day 66 low dcl where it says 34. We would now only be on day 27 if I count from the day 34 low, or we could be on day 2. This low is likely in place.
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BITCOIN: We have a massive consolidation period, similar to what we saw in 2023. At that time we also saw the Price breakout and rally after the 50sma crossed above the 200sma. We have similar conditions right now and we have now broken out to new all-time highs. In 2023, when Bitcoin broke out, it was choppy, but Bitcoin continued to push higher and eventually put in a very strong rally for months (Oct to March).
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I also stated yesterday that many Crypto stocks like CIFR, WULF, HUT, etc did a large Pop & Drop, likely due to the uncertainty.
I said: “Now, even if they gap open on Wednesday, the gap is not the kind that needs to be filled. We could see gap & go moves.”
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CIFR was up 31% and it certainly was a ‘Gap & Go’ day for Crypto stocks. These types of gaps do not usually fill right away. We bought many of these down at the 50sma, but I cut my positions much smaller with this weeks uncertainty, so I had to add on the gap open as these climbed all morning long.
