Tuesday August 5th

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LAST WEEK I DISCUSSED THAT THE GENERAL MARKETS could drop further to fulfill a longer daily cycle, so Friday could be day 47 and we have had 50+ day ‘daily cycles’ in the past too.

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THE SPX dipped right to the 34sma on day 47 and then the markets turned higher on Monday. This looks to be a more visible dcl and we’ll be looking for follow through higher as a 3rd daily cycle.

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Various stocks that we follow got caught up in the selling, and they also seemed to turn back up at support levels.

QBTS, for example, Lost the 50sma on Friday and then regained it yesterday, so that might be a shakeout or a stop run.

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RR acted the same way with the 200sma. It had been riding along the 200sma, but it lost it and regained it in July and now August.

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BBAI actually reversed on the Friday crash day, and then found buyers and follow through on Monday, where it was up over 12% at one point.

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WTIC – Oil actually lost the 50sma a few times and I was thinking that we have a dcl in place where the boxes have been drawn, but these are 2 ‘short’ daily cycles for Oil (in the 35 day range, when Oil can go 50 days). So with Oil, I’m seeing weakness as coverage and intensity of the war that broke out with Iran that caused the POP in Oil begins to fade. In other words, Oil is becoming choppy again.

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THE XOP broke down below the 50sma Friday and did not recover yet. The MACD & RSI are actually now showing extended weakness so far, but it is also almost oversold.

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IF Oil sells off though, we go back to the big picture and see that Oil is threatening to continue the breakdown, so I’ll be watching Oil in this situation.

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THE USD dropped sharply, but it is reversing at support. This may be a dcl, as mentioned in the weekend report. Here it appears to be reversing at the 20 ema, but…

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THIS LIVE VIEW OF THE USD does also show a tag of the 50sma. So we’ll have to see how this plays out, but I already discussed the higher low and higher high as bullish.

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In the weekend report:

I mentioned that The USD  remains a bullish set up. I said that this could drop lower to the 50sma and then stabilize there as a dcl, since the breakout has already back-tested the wedge. So now the USD may have a dcl.

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YOU MAY WANT TO RVIEW WHAT I WROTE IN THE WEEKEND REPORT:

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Part of what I wrote was this:

THE GOLD DAILY CHART : In harmony with what I have been saying about that a-b-c being the ICL drop, this may be the start of a very strong 3rd daily cycle. That is the opposite of a weak 4th like some may think, if they counted April as the ICL. And now we have a triangle with price near the apex.

GOLD has recovered the 50sma after reaching the oversold area. While Gold pushed higher, several Gold Miners actually shot up to new highs, so the sector is finding buyers and it has been a strong bull run.

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SILVER reversed higher too, but I have to at least recommend using stops here, because this should actually be a 4th daily cycle starting. We MIGHT see 4 strong daily cycles and a 5th that drops us into an ICL, but in this situation caution is recommended by using a stop, but any early surprises to the upside could be captured.

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You can see that The GDX ETF did great, making new cycle highs with a 4.75% push higher. The MACD followed price and it’ s possible that this break from the box consolidation can push higher and back test later, but gain, it does seem to be getting late in this intermediate cycle.

 

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KGC shot up to new highs…

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SCZMF -has been selling off to the 50sma, but it sure did put in a strong reversal. I posted this when it was up 13% and then it ran up over 25%. It closed up 17%.

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AEM pushed to new highs…

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AU lost the 50sma and looked like it was failing last week, but suddenly it burst higher to new highs in just 2 days.

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HMY has been noticeably weak lately, not following Golds cycles higher. HMY basically lost the 50sma for weeks, but it really popped on Friday and Monday and suddenly looks ready to run higher. So various Miners may start to do their own thing as buyers step in.

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Last week after the weak jobs report was released, we saw a lot of weakness and on Friday the General markets dropped sharply. On Monday we saw a nice reversal and it is possible that we put in a dcl at the 34 sma.  Many stocks reversed near support, so they can be bought with a stop as we look for follow through buying this week. Gold miners ran to new cycle highs and I discussed the bullish set up in Gold in the weekend report. You may want to review that, just in case Gold decides to breakout from the triangle and run. It looks like Bulls are trying to remain in control, so far. Enjoy your Tuesday trading!

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~ALEX

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BITCOIN reversed right at the 50sma and right at a back test of the May consolidation highs. This could be a dcl if we go back to the original cycle count and the last reversal at the 50sma. With that we would have to view the most recent low in July as a shake out, but I have a hard time mentally NOT calling that July low ‘THE LOW’. IF that was THE LOW and the DCL, we’d only be on day roughly day 423, but it CAN still run higher for a week or more from day 43 too. So this can be viewed as a buy with a stop.