Tuesday March 4th – Here Again
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NASDAQ – I’ll start by pointing out again that the NASDAQ has a day 8 peak (L.T.) and it broke the dcl a week ago. That indicates that an ICL still lies ahead. On Monday the markets gapped up and opened higher, but wow did they sell off into the close. This does not fit the pattern of a first daily cycle, it fits the pattern of the last one dropping into an ICL. Once it bottoms, we should get a nice buy & hold run higher. We should wait for a swing low and confirmation before jumping in.
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Oddly enough, The SPX is slightly different, but only because it made a slight new high on day 25. If this breaks the dcl, it is in the same boat at the Nasdaq – it seems to be heading to the 200sma.
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And then we have The SOXX: We are seeing volatility here in the land of uncertainty. That said, it looks to be heading down into an ICL too. To be honest, I’d like to see it break the August lows with half of the volume, because that is usually a false breakdown, and it could be the sign of an ICL shortly after that.
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The volatility, the indecision and uncertainty, Tariffs, Inflation fears, War games, and so on…has been very disruptive to the 2025 markets so far. This violent chopping seems to be leading us down into the abyss known as the ICL. However! That will actually do its’ job by cleansing the markets and killing sentiment. We’ve seen ICL sell offs SO MANY times before, where they bottom & flip around higher, Markets start to rise, and suddenly we will be able to withstand any bad news. All Political surprises will be ignored, and the markets then ‘climb that wall of worry’ as they leave the ICL behind. We just aren’t there yet. At day 33, we could bottom any time, but some daily cycles go over 35-40 days, so it is best to wait for confirmation after we get a swing low. A swing low and a move above the 10sma is a safer start. My trades on Monday all looked very good in the morning, and yet they all sold off again into the end of the day. We should be close to the lows though.
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WTIC – Oil did a nice rally in Dec-Jan, but then it rolled over giving is a false breakout above the 200sma. It has been weak and has chopped lower ever since, and it threats to break down in the big picture. Oil is too choppy to trade right now.
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THE XOP is now back at the lows. If Oil breaks down, then this will likely follow. That was a big 5% drop today.
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USD – I have been pointing out
1. Three bullish daily cycles higher
2. The 4th daily cycle was L.T. and peaked on day 5.
3. I then thought that we would get a 5th daily cycle that peaks with a back test of the 50sma. I expected a tag of the 50sma, and then a roll over with price, but it is possible that we may have just finished the upside move under the 50sma.
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USD – Using this chart, I did show a double top at the 50sma on Feb 27, and that is possible too, but basically I think that the USD will roll over under the 50sma.
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GOLD reversed right at the 34 sma and is actually quite overdue for a dcl, so this may be a dcl.
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SILVER reversed at the 50 sma and moving any higher from here would break that sharp downtrend line.
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GDX is also overdue for a dcl, with a day 40 low. Miners rallied on Monday, but they couldn’t hold onto the gains when the markets started to sell off. If we finally have a clear dcl in Gold & Silver though, I’m thinking that this swing low is identifying the dcl.
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We have seen how fast things can change from Bearishly falling into an ICL to suddenly turning Bullish. After that ICL is in place, the markets start to shrug off bad news and have a tendency to climb that wall of worry. That gives us the hope that the stocks that are currently holding up rather well with really outperform, and other stocks can play catch up too. That includes Crypto stocks, which have dropped so much, they are back to their lows from which they doubled on prior runs. So take a look at GOOG & MSFT- They look weak. Take a look at PLTR, AFRM, LMND, GRRR, SMCI, PINS, EXPE, and others (That had good earnings reports), and you see a drop to support or normal pullback verses the market drop. I want to buy stronger stocks when the time is right and I will put this list & others in the report.
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Bitcoin gave us a reversal last week and then popped higher on the weekend with a Trump Announcement about Crypto, but could it hold the gains? I’ll discuss Bitcoin below, stay safe and be patient and enjoy your Tuesday trading.
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~ALEX
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In the weekend report I said:
Well, at day 46, we are a tad early for a dcl. Now take a look at the reversal candle at the 50sma. Bitcoin still dropped to a new low and it was even a shakeout below that 50sma. That pop and drop took about 10 days, and if we saw that at the 200sma, we’d be at day 56. Things that make me say ‘Hmmm?”. Please see the chart. You can buy the reversal and ride it, but just know that we MIGHT come back to the lows, but it should be fairly quick. And…
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I have now had 5 people tell me that ‘Maybe Dec 30 is the low and then the reversal would be day 60.’
Well, the Dec 30 lows were broken 14 days later. Would THAT Dec 30 low be ‘the lowest point of the daily cycle’? Bitcoin made that new low where the red arrow is and then it ran to new highs. If I call this the low, and it breaks below this low, do I still call this ‘The Low’ if a lower low appeared later this week? I usually call the low of the daily cycle—the low of that daily cycle 🙂
I actually see a Similarity here though. The POP and then the Drop the following day looked like a trap, drawing in the bulls and then it sold off to that new low. I do not know if that will happen, but we could be headed down to make a new low soon. Crypto stocks sold off (i’ll discuss that soon).
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UPDATE 6 a.m. Tuesday
BITCOIN continued to sell off overnight. I want to mention that Trump is scheduled to host a crypto summit on Friday. I can picture a possible drop and shake out below last weeks low and then a post Summit rally next week. It doesn’t have to do a shake out, but this quick surge and drop looks like bearish train tracks. Crypto stocks sold off yesterday.
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If I continue my count, and all I’ll say here is that my lows were the lowest point of the prior daily cycle, I would have BITCOIN entering the day 50+ area, and I have seen lows develop in the 50+ area, but usually closer to 60. I just have to wonder if Fridays summit will push Bitcoin one way or the other.
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I have always said that when you get a reversal candle after selling down, you can buy that reversal with a stop, and then raise the stop just in case it drops on you. Well Friday I bought a couple of small crypto reversals too, and I was already stopped out after a great Sunday with Bitcoin. BTDR was one of my stocks…
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BTDR was one of my stocks for example: I did not have to sell it, but it just kept selling down and my gains evaporated and then I was in the red quite a bit. I started to think about the Friday summit and the Bitcoin reversal lows being back tested—that might mean BTDR lows get re-tested. Thats a drop from $14 to $9.
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WULF was up 16% Friday on earnings, so I owned that, but…
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WULF – WHAT?? Wulf gaps open with the Bitcoin POP and sells off all day too. I know that WULF could be a $9 stock, even up in the teens if Bitcoin starts running, but to be up 16% on earnings Friday and then sell off taking back almost that whole Friday candle? I can’t risk this selling off another 12-20 % if Bitcoin makes new lows later this week.
