Tuesday October 28th – At This Point

As you know, this is a big Fed Week, with a rate cut likely in the works. We have seen very bullish moves with both the general markets and precious metals following the last rate cut, so will it be the same? At this point, we cannot know for sure, so all we can do is continue to discuss possibilities and likelihoods.

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QQQ – We should be in a 4th daily cycle and the general markets are due for a dip into an ICL, yet the markets are heading straight up as we go into Fed Wednesday…

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On day 11 The SPX has gapped up twice and looks very bullish, but it is still due for an ICL as we head into month 7, so we’ll keep that in mind. If the Fed doesn’t cut rates, I think we crash down, but even if we get that cut, it could start to fill these gaps and just keep dropping.  It is not an easy call to know for sure, because certain stocks and the precious metals sector have made parabolic type runs higher. It is possible that the general markets do that into the end of the year.

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IWM did not do as the Nasdaq and SPX have, but it is still near the highs at day 11.

AT THIS POINT: I honestly feel that the general markets should pull back into an ICL sooner than later. This would normally become a L.T. Daily cycle, so it could start to see some selling with the Fed speech or a day or 2 after. Again, that is based on the fact that we are heading into the 7th month out of the April ICL, but the markets sure do look stronger than weak. I had mentioned that you could buy that dcl with a stop and so far, you now have ‘cushion’ under your trade. We really just have to wait and see how things go, but the Fed Wednesday never is tame or steady. The initial reaction may not be the follow through action so continue to use stops.

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WTIC – Oil remains trapped under the 50sm, but these often become bullish ‘crawling’ periods, to build energy to break out higher. I pointed out that this was an a-b-c drop in September-October, so it could be an ICL. It is only day 5 out of that low, so it should be able to get above the 50sma and run to the 200sma. Then we’ll look for a higher low or lower low in this daily cycle.

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The USD ran up nicely out of that low, but it is starting to stall out. It still resembles the last 2 daily cycles that rolled over as L.T. lower highs and At This Point, it looks to be weakening, but a rate cut COULD change that, since the last rally came out of a rate cut on Sept. 17th.

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GOLD – Let me show you something interesting.

 Do you remember what Gold did on September 17th, with the last rate cut? It closed red and was also red on Thursday, and that became an extremely mild dcl. It showed up more clearly with Silver & GDX. It then rallied up to day 22 after that, so…

We now have a rally out of that rate cut, a peak on day 22, and a pullback heading into the next Fed Mtg. Gold is on day 27 – and that is within the time when a dcl can form. Will Gold drop to the 50sma? It might, since it was actually red a day after the last fed mtg and it is not oversold, so we’ll see. At This Point, we have the lowest day on day 27 as we head into the Fed Wednesday.

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SILVER – Do you see Sept 17th here? Silver dropped as though it didn’t like the rate cut too, but then on Thursday it dropped and started to reverse into the end of the day. Silver started a rally out of that dcl. It also peaked on day 22. Will Silver tag the 50sma on this drop?

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SILVER could drop to the 50sma, if it does what it did on September 17th with that rate cut, but to be honest, we cannot know for sure. We are coming due for a dcl though.

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GDX – Miners often lead the way, so here we may be seeing a shake out at the 50sma.

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GDX looks like an a-b-c drop and that could give us more downside.

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We just saw that The GDX ETF lost the 50sma and The GDXJ ETF also lost it yesterday, however it almost recovered. That said, I noticed this…

SILJ bounced at the 50sma. Yes, this is as of now and it COULD break down further, but it is worth noting because while EGO, KGC, HMY, AU, AEM, etc are now under the 50sma…

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CDE bounced at the 50sma too (so far)…

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EXK is above the 50sma and the longer-term uptrend line…

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HL is also actually well above the 50sma. So, the observation is that MAYBE silver stocks are holding up better, because

1. Maybe they are not being sold as much? Or

2. Maybe they are getting some buying now?

3. The Silver stocks look just a bit stronger at this point, and that is always good to take note of. 🙂

 With the above charts of the Silver stocks, I am just pointing out that they may be holding up just a little better than Silver itself, and that may be because they are not being sold off as much as the Metal is or maybe they are even seeing some buying now. They look stronger at this point above the 50sma, and that is always good to take note of during a sell off. That being said, they CAN sell off further with the Fed Day ahead.

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 We have Tuesday and most of Wednesday to trade before that Fed Speech tomorrow and so far, most of the price action is bullish in general markets and corrective in the Precious Metals. Bitcoin is covered below. Enjoy your Tuesday trading!

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~ALEX

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BITCOIN is getting tricky. The cycle count calls for a drop to a new low around day 60, but it looks bullish with a day 46 low (that really seems much too early for a low) and stocks like CIFR, IREN, DGXX, HUT, RIOT, etc are bullish looking too. At This Point, it looks like this should drop quickly to a new low and then rally, so I have to go with that.

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CIFR is rising back to the highs. I do see divergence with the RSI & MACD, so it is possible that Bitcoin sells off and this dips again too, but so far, some crypto stocks are at the highs again.

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IREN is also showing divergence at the highs, so I still feel that Bitcoin should drop into day 60 and that drop may come with the fed mtg.

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DGXX has also been running quickly to new highs too, but I have been feeling that it has something to do with the new report that came out on October 1st about the AI Certification. After that report, it broke the downtrend and hasn’t looked back yet. This strength could be attributed to its’ Crypto and AI.