Thursday April 3rd – Here We Go
I have a small special write up that will be at the end of today’s report, so please read right down to the end.
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I must say, The NASDAQ was looking pretty good here, almost like we had an ICL in place and a recovery was going to develop. Volume was increasing, the MACD looked good, and I was thinking that maybe some shorts started to panic and cover. AFTER HRS, Trump started to speak and the markets actually rallied hard, but…
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The shaded area is after hrs trading for the QQQ:
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The markets shot straight up and held those gains for 10 minutes (This is a 5 minute chart), but his speech went on and on and on, and suddenly the futures collapsed. The General Markets futures actually just crashed as he kept talking and stayed near the lows by the end of that speech, so now we’ll have to see if todays DATA (Jobless Claims, etc ) can help the futures rise back up in the morning?… or not?
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This is the QQQ as of 6 a.m. Thursday. That was quite the ‘Trump-Dump’. The shaded area is after hrs trading and you can see that the markets sold off and if they open here they’ll gap down open to new lows. We need to see if Jobless claims can help…or not.
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THE SPX was also climbing up this week and looking like that possibility where we got a small shakeout low on Monday, and then recover. It looked like maybe the ICL could be in place, but the futures are not looking good. We need to see what happens as trading goes on. Do we plunge and eventually capitulate? Or will it drop and recover on Thursday?
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THE USD remained weak on Wednesday, as expected.
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THE USD: This was my weekend chart and the weakness in the USD was what I am favoring, for a final weak daily cycle into an ICL.
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GOLD is strong, but we still have a pause and a day 22 peak. If the general markets sell off, Gold may rally higher, because Gold did the opposite of the general markets while Trump spoke, but we are coming due for a dip timing-wise.
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SILVER has been choppy and unfortunately it tagged the top of that rising channel and still cannot breakout like Gold did, so at this point it is pulling back.
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GDX is hugging the highs, but we do want to recognize that it is getting somewhat late in daily cycle too. Can this go higher? It could if the markets tank and gold Pops, but we are on day 23, so it also could start to pullback from the upper trend line.
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UAMY – Of course, I cannot guarantee that this is going to repeat, but I took a longer-term look of one of the Rare Earth stocks that I have been discussing, and I noticed a pattern of similar consolidations and then a breakout. It could pull back from here briefly and then breakout if the pattern repeats.
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NEXT I WANT TO SHARE SOMETHING WITH YOU THAT WE SHOULD KEEP IN MIND: CRISIS MARKETS. I know that it seems like the selling will never end, but I just want to remind us what happens when it does, and sometimes it ends RIGHT IN THE MIDDLE OF THE CRISIS!
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NASDAQ 2008 Housing Crisis, Banking Crisis:
Yes, we had a crash September to November and then a final bounce and drop November to March, but if you can remember this time period, we had banks holding bundles of bad loans, foreclosures rolled in one after the other and there was constant talks of an entire economic collapse. Do you see that March 2009 rally back to the highs? THAT was during the worst of it. Banks were closing, merging, etc, but the markets ignored it. Now take a look at…
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Now take a look at a more recent event: The Covid Crisis.
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NASDAQ during the ‘COVID VIRUS CRISIS’ . I want you to remember what was happening in March 2020 through 2021. Businesses had to close down, people all went to lockdown. In the summer of 2020, we heard about refrigerator trucks holding hundreds of frozen bodies of victims in NYC with nowhere to go, tens of thousands were on respirators, the virus was extremely contagious, and it was global. With this uncertainty, there was no eating out, no more vacations, no more cruise ships, hotels and airlines would surely collapse, right? Spending was dropping fast, for people and companies. It doesn’t matter what you believed was happening, everything was shutting down and rumors of a complete collapse was spreading as fast as Covid, BUT…..Look at the stock market. It rallied ALL THROUGH that time period of the shutdown.
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My point in showing the above is that we are currently hearing that the tariffs could cause runaway inflation, families will pay thousands per year out of pocket, companies will raise prices worldwide, companies will not take out loans, so growth will stagnate, etc, etc, etc. The uncertainty has caused the bull market to go into correction territory. Yes, the correction could give us bear action for a while, but an ICL will come due and the next intermediate cycle could be that one that rallies out of the ashes, even while the bad news still spreads like wild fire. The markets rallied during a banking/ housing crisis. The markets rallied during the worst part of the Covid Crisis. We’ll just have to wait and see how this plays out, but patience is important when you hit the choppiness that these markets are giving us. We want to have funds to deploy if the markets and bitcoin go on to another bull rally higher. And even in bear markets, the first 2 daily cycles bounce nicely, but you want to avoid the last 2 daily cycles, unless you are shorting.
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I am writing this last sentence as of 7 a.m. on Thursday and I see NASDAQ futures down 800 points, the Dow down 1200 points, and the S&P down 200 points. I see a global sell off taking place right now. Bitcoin is the only thing that looks fairly normal, so keep an eye on that. This could be the capitulation stage – the bloodbath stage that comes right before or into the lows, but it also could last a bit longer.
I have put ‘We could be here’ on this chart to show where capitulation type crashes took place. It was a final daily cycle down.
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Today and each day we just have to look for clues to see when things might bottom.
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~ALEX
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LET ME REVIEW MY BITCOIN THOUGHTS:
BITCOIN was on day 22 and since we often see a mild dip around day 30, I have just put in a bullish idea of a breakout and back test around day 30. ALSO…
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I also drew this as a possibility Tuesday: I said…
I will give one cautionary note here, and that is that Bitcoin often dips into a day 30 low. Is day 20 as a low enough of a dip? We’ll see, but if we go by the 30 day count, it could look a little something like this with more of a dip.
Bitcoin actually looks rather normal this morning, and this is a live shot as of 7 a.m. ET.
