Friday October 10th – The Balancing Act
.
IWM – Using the August 1st low as a dcl, we would be on day 48 and due for a dip into a dcl in the next week or so, unless somehow day 38 was a very mild dcl. The divergence that I pointed out also remains in place.
.
THE SPX (and the Nasdaq) both made new all-time highs before closing red.
.
Update: On Oct 1 I pointed out SGML as a lagging Lithium stock. I used this chart when it was breaking from a triangle at the $6.75 are…
.
It has a bullish weekly chart too, so I then pointed it out again after it was at the $7.50 area. The volume is good…
.
As of yesterday, it has tagged that overhead 200sma at $8.00 twice since then, but so far it gets rejected each time. With the Lithium sector remaining hot, I would expect this to break out sooner or later. If you bought it at $6 or $6.50 area, We are up $1to $1.50/share with our opening position.
.
SNDL (& CGC) were MJs Stock that I pointed out this week with bullish set ups. TLRY released earnings and popped 20%, so CGC and SNDL both moved higher too.
.
CGC – popped and was up over 10%, but then sellers took profit. I actually think that this will drop and fill that gap before moving higher, but so far the set up remains bullish and the buy near $1.40 is in the green.
.
Did you buy WWR when I recommended it as a lagger? It reversed at the 200sma at 67 cents and began breaking out at $0.70 to $0.75. This was at 11 am and I pointed out that the volume was already a full days worth of volume…
.
WWR was now riding the 50sma and looked ready to build a ‘cup’, so I posted this midday. Did it build that cup?
.
WWR -Built a cup (or a pan) and handle and then took off to $2 as of yesterday. That is almost a triple. Congrats if you bought and held on! I sold mine early, near the handle, unfortunately. That was still 35% gains, but it made 30% yesterday alone for those that held the trade. BLNK, PLUG, BLDP, FCEL, WWR, etc have been great trades. I’m hopeful for SGML if it can break out.
.
WTIC – Oil dropped 2% yesterday and is still at the lows. Oil remains weak.
.
FROM YESTERDAY:
THE USD moved higher again, and I have been drawing these boxes to show prior runs higher were pretty strong looking, but they still gave us lower highs that were Left Translated. I’ll be watching to see if that changes on this run, but the USD price moving higher IS NOT affecting Gold , Silver, or the Miners,
.
THE USD continued to surge higher on Thursday, as expected. I have been showing the last 2 lows and the small rallies that unfolded from those lows for a while now. The prior rallies remained L.T. and made lower highs, so I’ve been watching to see if the USD continues to make lower highs.
.
GOLD dropped on Thursday, day 15. It is very overbought and could be due for a dcl dip. The dcls have been arriving earlier during the bull market. We used to expect them to come in around day 32, but some have been simple mild dips showing up somewhere closer to day 25ish. This may just chop sideways and then put in a dip after day 20.
.
SILVER spiked and dropped and these are ‘usually’ a topping candle, but we’ll see. This bull market has been strong, and surprises do continue to come to the upside. At day 16, however, we could dip into an early dcl, as mentioned in the commentary for Gold above. My Silver stocks popped and then sold off to red yesterday.
.
GDX dropped over 4% yesterday, and notice that the RSI broke the 70 area for the first time in over a month, so it too may be starting to slow down and chop or dip toward the next dcl. We also see a MACD cross and high volume, so it does look a it different than what we’ve seen lately. It is only day 15 and if we were to get a 32 day dcl, then this could also show up as a half cycle dip and just start more choppiness, but that RSI caught my eye.
.
Here is where it becomes a balancing act. At this point of my report, I usually look at the charts and I say, ‘The Bulls remain fully in control’.
.
Well, they still do, and I see many charts bullishly set up in the general markets, but at this time I am also starting to take note of the ‘timing’ and small signs of change that may be showing up in both the general markets and precious metals. The Charts are still very bullish, but using the IWM chart for cycle timing, I showed in todays report above that we hit day 48 out of the dcl. That means that a dip into a dcl is coming due. Maybe in the day 55ish area. That being said…
The general markets should also be coming due for a dip into another ICL soon too. Why? Well, ICLs usually come in 5-7 months after the last ICL, and we had an ICL in April 7th. We are on Month 6.
The precious metals are on day 16 or 17 and also had an ICL on April 7, but they have been defying any weakness that would have been due by now. They can start to chop or dip at any time now too, so we’ll keep that in mind, but f they go parabolic, they’ll just keep pushing higher and then crash down later. This is the balancing act. Do I lighten up? Do I just use stops? Should I close my leverage? I think that these are now prudent questions that each will answer for himself/ herself knowing where we are in the stream of time. For some it simply means that using stops is important going forward and for others, maybe smaller position sizes would be more comfortable if we chop & dip lower. Along with that, I think that WE MIGHT SEE OTHER BULLISHNESS despite the selling. Will MJS\’s start to remain strong? Will Energy Stocks remain strong too? Rare Earth? Crypto? It is a possibility, especially since Bitcoin has more ‘time’ left in the daily cycle. I’ll continue to monitor things going forward. I will sat invested and trading until I see bigger cracks appear. 🙂 Enjoy your Friday trading.
.
~ALEX
.
BITCOIN looks like a large pan consolidation with a handle. It has time to move higher and the crypto stocks have been bullish, so this sector may still have more upside. If the general markets start to dip, we may even see some of that money enter Crypto stocks. We’ll see.
