Tuesday March 11th
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The VIX & SENTIMENT can be used as an indicator of extremes, and both are in areas that the lows usually form.
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On this chart, the VIX is at the bottom in that yellow area and price of the SPX is above. The prior Vix Spikes to the blue line were often used to call a market ‘low’ as being close or in place (when the Vix spike reached the blue line at the top of the yellow area). Occasionally we get an EXTREME SPIKE and we are at that point now, so a low in the markets really is coming due at any time. Extreme bearish sentiment, like we have now, is also a good indicator that this heavy selling should begin to exhaust and short covering can cause a rally out of the lows.
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Using our cycle counts, we also see that The SPX is on day 38, and the selling is in a cascade lower, since we have pretty much dropped straight down. We are due for a dcl/ ICL any day now. Once we get a reversal, often ‘short covering’ starts and then buyers step in and a move higher can become as sharp as the drop (V-Bottom).
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Is the Bull Market still intact or is a larger correction going to take place. Well…
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I will draw what a weaker bounce out of an ICL for the NASDAQ might look like:
1. We would see the first and 2nd daily cycle struggle to get to new all-time highs and would need to sell the 3rd or short it.
2. If we can run to new highs in the first or 2nd daily cycle, then the Bull may still be with us and wed just keep raising stops and buying the dips.
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WTIC – Oil has time to really sell off and it lost another 1.5% on Monday. Notice that it is being capped under the 10sma now, and this daily cycle only looks half finished.
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GOLD – I’m watching the MACD, and I have actually already pointed out that it slightly concerns me. Gold needs to push higher and show us the strength that it had in January and February. My concern is that we are actually 4 months out of the very lowest point. ICLs come roughly every 6 months, but they’ve been known to come earlier, so Gold needs to start running soon and make a new high.
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GOLD LIVE 6 am – This report was written on Monday night, so this is now Gold at 6 a.m., and things look good in both Gold and Silver today.
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SILVER – Now Silvers MACD is stalling? That doesn’t really mean very much at this point, because 2 or 3 UP Days could change that, but this chop is frustrating, and I would NOT want to see Silver lose the red line (50sma). Silver is still more oversold than overbought, so Silver still looks good to me, so far.
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SILVER LIVE 6 am – Silver had dropped below Mondays lows, but it has erased yesterdays loss overnight.
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GDX dropped 2.7% with the markets yesterday. Since I have been using the Fibonacci Arch, I’ll just point out the $39 area as a place that I would not want to see price lose. Obviously losing the recent lows would be very concerning.
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In pre-market so far, I see the General Markets are green and Gold, Silver, and Bitcoin have also reversed higher. I know that this can change and the selling could continue, but we are due for a low for many reasons (Pointed out already). We may be seeing the lows being put into place, but to be safe you would usually wait for a swing low to form and then a close above the 10sma in the General Markets. We are already long Gold & Silver. I will discuss Bitcoin below, enjoy your Tuesday trading!
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~ALEX
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BITCOIN has dropping to a new low here on day 56 (as expected here at Chartfreak). This chart was captured midday and shows a large support area that may be a target for Bitcoin in the $75,000 Area. Note: Any reversal in this area could become the low, since we are very close to my day 60 count.
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BITCOIN DAY 57 Reversal: This is Bitcoin at 6 am Tuesday and as you can see, we do have a reversal candle at day 57 with a new low of $76,600. This has the possibility of becoming the low that I have been looking for, since the timing is very close and I do see a slight divergence in the MACD as price made a new low. I still have to point out as a cautionary note that we might still see Bitcoin bounce and drop one more time to a new low on day 61 for example, but the timing is very close for a low and another drop would likely be short lived.
