March 19th – F.O.M.C. and Clues from the Markets
Today we have the FOMC Meeting at 2 and his speech at 2:30. Jobless Claims Thursday and no data Friday. There is not much to say in this report that you don’t already know. This report will be more of a review.
1. Expect volatility, we always get it at least from 2p.m. to 3 p.m.
2. We are due for an ICL, and we may already have the lows in place with day 41 low.
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SPX – So we had our first 2 day bounce, rather than those 1 day reversals that failed. Yesterday the markets dropped, but the lows are still in place and there is still room to drop more today without failure, so we just have to see what happens. We may still have the lows in place. A break of the lows REALLY just puts us further into timing for that low.
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And so the same can be said of the NASDAQ, except that I’ll add #4.
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1. We had our first 2 day bounce, rather than those 1 day reversals that failed.
2. Yesterday the markets dropped, but the lows are still in place and there is still room to drop more today without failure.
3. We may still have the lows in place….or
4. A slight new low would extend the count to day 45, then the Jobless claims may cause a rally
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PLTR – So yesterday I said that we watch our ‘watchlists’ and look for formerly Strong Bullish Companies to start to perk up. I showed charts of PLTR, SPFI, RKLB, CELH, CRWD. RR, TGB, AA, CENX and more. There is still nothing wrong with these charts, they may be in a bottoming process, so like I said yesterday: “Buy a break out of the 50sma, buy on a drop back to support (some like RR had reversed at the 200sma), etc.
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This was my chart of GOLD in yesterdays report. I mentioned that
1. It is continuing higher after putting in a dcl at the 34 sma.
2. At day 11, this can continue higher.
3. This sector has been us a very good trade, and the Miners are doing well.
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Let’s discuss a couple of logical possibilities for Gold
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GOLD ran up and now it has reached my longtime target of $3040 (It hit $3045 yesterday on spot gold). YES, it certainly can run higher, but let’s just discuss a couple of thoughts…
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VERY BULLISH GOLD: GOLD is on day 13 for spot and often we’ve seen a drop into a half cycle low around there, so I drew that this way. 1. We dip post fed to the 30 sma and back test the recent breakout.
2. Then we rally again into day 25 or so of this daily cycle. Very Bullish and it is possible.
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GOLD -The other though is that we are now 4 months ahead of the last lowest low in November, and often we may start to peak around the 4th month and dip into the next ICL by month 5 or 6 (At times month 7 though). So with that thought, we have had a very nice strong run and would peak with a L.T. 3rd daily cycle and begin our dip into the next dcl/ Icl. So the Fed could ‘peak’ Gold with that thought.
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GOLD THE BEST SCENARIO of a 6-7 month Intermediate Cycle:
I remember waiting for Gold to pull back in that first run, and it would only give us 1 or 2 day dips. WHAT IF THAT HAPPENS HERE TOO? I have copied the first run and placed it over our current run.
GOLD: This chart actually looks very nice, but even if I expect it to keep running, stops would be raised to the support area anyway. If I see Gold breaking down, Miners will likely follow.
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SILVER: I’m a little disappointed with Silver so far, but some of the Silver sticks did give us some decent gains. Silver itself was choppy while Gold stretched higher, that was my disappointment.
Take a look at the move out of the lows and you’ll see a very choppy move to the October highs. IS THIS MOVE DONE? IT MAY NOT BE, since Gold bottomed in November and Silver bottomed in late December. So…
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SILVER: Trying to find daily cycles in this massive chop was tough. I do see 2 with 23 day daily cycles, so that is a possibility that we are on the 3rd daily cycle.
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GDX: All I’m going to say about GDX is that it has done very well, but my expectations for several reasons is that we should honestly still be going higher. Measured moves, Cycles, etc. pointed to higher price, so we’ll just have to see if Gold can continue higher after a possible half cycle dip. If Gold does a half cycle dip, Miners may too.
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GDX: Miners sold off heavily into the Dec lows, so when it rallied out of there, it really stretched. You can count along with me and you’ll see on this chart that it rode the 10sma and the only visible dcl came on day 40! Now we have 6 straight days of high-volume buying-as the general markets sold off. Miners finally became the safe haven. Let me discuss this just a little further.
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Let me discuss this just a little further.
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Of that 40 day rally, we saw a very mild sideways dip along the 10sma around day 13-19. That is all we saw for a half cycle dip, so if we do something similar soon, then the reversal yesterday may just dip to the 10sma and chop and then run again. You could even add on that dip, unless Gold breaks down.
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Today is the FOMC MEETING, and we all know what that means: We have to expect some knee jerk reactions and volatility, but we are due for a low in the General Markets (that low may already be in place). I think that we could find some excellent set ups coming out of the lows if we are finding an ICL. The Precious Metals sector ran throughout the market sell off as a safe haven, and the Miners have done very well. Is it due for a rest or pause with a half cycle dip? Maybe, but that first run with hardly a rest may repeat here too. I feel that Silver and the Miners should continue higher, and Gold can too, especially if we look back later and see a 7 month Intermediate Cycle, so for now the Bulls in the Precious Metals are running.
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I honestly think that we know where interest rates stand, so there should be No Real Surprises with the Fed, but we can still get a little volatility and then it should stabilize. Enjoy your Wednesday trading!
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~ALEX
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FROM YESTERDAY:
BITCOIN is struggling at the 200sma and it is also still under the 20 ema. That gives us a current low at day 57 and we would either be at day 64 if one more drop takes place, or we have the lows and we are at day 7. The MACD improved but I’d really like to see Bitcoin get above these 2 areas (& then the downtrend line) to show us some sign of strength.
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BITCOIN had no real change, so the wait continues. Day 65? Or day 8?
